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The Earl of Mar and Kellie: A point comes to my mind which the Minister may like to straighten out now. Does the Bill allow the United Kingdom Parliament to withhold supply from the Scottish parliament?

Lord Sewel: At the extreme edge of theoretical possibility, the answer must be yes. But I cannot imagine a situation where that would even begin to come into the realm of practical politics.

The Earl of Mar and Kellie: That means that the devolution scheme is based on good will.

Lord Mackay of Ardbrecknish: I understand the points that the Minister has made to me. It is something of a dilemma but it is a quite difficult dilemma to resolve. The other place will be raising the money and voting the supply, but someone else will be spending it. In the other place Back-Bench Members can, by using various methods, raise questions when they vote supply. Normally, the debates are of a fairly general nature. Members, in the usual way that the other place works, take part in a raffle to see who should be allowed to speak. They can speak about any matter, as long as it falls within the broad aspects of whatever government spending is being voted.

I am in some difficulty when it comes to accepting the Minister's point that these matters will not be raised in the other place. I think that they may be raised. My problem is that I am not entirely sure how the Treasury--it would probably be the Treasury--would answer unless it had some information. I equally see the problem that one could be led into the accusation of double guessing the parliament. I am not in the business of doing that. I am just concerned about the tie-up between the parliament which raises the money and the other parliament which spends it.

I am pleased to hear from the Minister that the Government will make transitional rules about accounting and auditing and that those rules will continue in existence until the parliament substitutes them with its own rules. We shall come later to how the parliament will do that and who must agree the rules that it makes. That brings me back to the problem, which is a real one, of the difference between those who raise the

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money and those who spend the money. However, I am pleased to hear about the transitional arrangements. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 275C not moved.]

8.45 p.m.

Lord Mackay of Ardbrecknish moved Amendment No. 275D:

Page 27, line 11, leave out subsections (5) to (7).

The noble Lord said: This is very much a probing amendment. I am suggesting in my amendment that subsections (5) to (7) of Clause 61 are left out, but I do so more as a means of asking what they mean. Subsection (5) states:

    "The Treasury may, after consulting with Scottish Ministers, by order designate receipts of any description specified in the order which are payable into the Fund".

Where will the receipts come from? Are these receipts other than the block grant? I am going to have some trouble not calling it the block grant despite the fact that I am supposed to say departmental expenditure limits. I think that I shall go on calling it the block grant for the remainder of the proceedings on the Bill. Presumably, this will involve receipts other than the block grant which will go into the Scottish consolidated fund. I wonder what is envisaged there.

Will it be the proceeds of privatisation, if I may whisper that to the Government? Will it be the proceeds of the privatisation of the air traffic control service, which I gather the Government are going to privatise? There is a Scottish part to that service. Will the consolidated fund get a share of the privatisation proceeds of the air traffic control service? What about the Tote? Some of the Tote shops are in Scotland. A percentage from the privatisation proceeds of the Tote might have to be paid. I really wonder what is envisaged. What might be paid in other than the extra 3p? If that is it, then that is the answer. But, from the way the provision is drafted, it does not sound like the extra 3p. I should like to know what is envisaged there.

In subsection (5) we have Scottish Ministers paying into the fund and in subsection (6) Scottish Ministers may be paying to the Secretary of State--back to the UK Government--the money from certain designated receipts. What do the Government envisage there? What money would the Scottish consolidated fund and the Scottish executive be collecting that they would then need to remit to the Parliament at Westminster? I am a little puzzled. I am sure that there are perfectly good explanations and I look forward to hearing them. I beg to move.

Baroness Ramsay of Cartvale: This amendment would have the effect of overturning the provisions in Clause 61 which deal with certain receipts payable to the Scottish consolidated fund. Under these provisions receipts designated by the Treasury are to be paid to

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the Secretary of State and on to the UK Consolidated Fund. These provisions provide for the continuation of the current position.

At the moment certain receipts are surrendered annually by the Scottish Office to the UK Consolidated Fund. I am advised that the receipts affected consist primarily of court fines and interest payments; mainly from NHS trusts. One of the key principles of the devolution settlement is that the financial framework should be based on existing block arrangements. As these receipts do not add to the Scottish Office's budget at the moment, they should not add to the parliament's in future. The provisions in question merely provide a statutory framework for surrender.

The noble Lord, Lord Mackay of Ardbrecknish, asked about the Tote and the air traffic control service. The answer is no. Neither of those comes under devolved headings. I hope that my explanation was sufficient. I ask the noble Lord to withdraw his amendment.

Lord Rowallan: May I ask a very stupid question? I thought that court fines went to the local authority. Are we talking about the High Court as opposed to the sheriff courts?

Lord Hardie: Perhaps I may assist. District court fines would go to the Consolidated Fund although a proportion is retained by the local authority for administrative purposes under an arrangement with the Treasury. Sheriff court fines and High Court fines all go to the Consolidated Fund.

Lord Mackay of Ardbrecknish: I am grateful to the noble Baroness, Lady Ramsay of Cartvale, for explaining to me the provisions of subsections (6) and (7) on court funds and interest from NHS trusts. I am not entirely sure what that means, but I accept it in good faith. I understand that they are not part of the Scottish Office budget at the moment; they are transferred to the UK Consolidated Fund. I can follow that. I am not sure, however, whether the noble Baroness gave me any examples about subsection (5) on designated receipts which, if I read the provisions correctly, would go into the fund and stay there. Perhaps I am not reading it correctly. Perhaps those receipts go into the fund and then, under subsection (6), are paid out. Is that what is meant? I believe that it may well be, and if that is what is meant by the provisions, I am satisfied. If it is not what is meant, perhaps somebody will write to me.

Baroness Ramsay of Cartvale: The answer is yes. That is what is meant. However, if by any chance I am not correct, I shall immediately write to the noble Lord to correct what I have said.

Lord Mackay of Ardbrecknish: I am most impressed by the confidence of the noble Baroness and I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

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Clause 61 agreed to.

Clause 62 [Payments out of the Fund]:

Lord Mackay of Ardbrecknish moved Amendment No. 275E:

Page 27, leave out lines 32 and 33.

The noble Lord said: Amendments Nos. 275E and 275F are probing amendments. I understand from Clause 62(2)(a) that the purposes are,

    "meeting expenditure of the Scottish Administration".

However, I should like an explanation of paragraph (b) on lines 32 and 33.

Amendment No. 275F is perhaps a little more than a probing amendment because it enshrines the concept of a balanced budget. It states that the Scottish parliament will not be able to pay out any more in any year than it receives. I could wax fairly eloquently about the need to ensure that the Scottish parliament balances its budget. I suspect that I shall be told that I need not worry because elsewhere in the Bill are provisions which mean that the Scottish parliament could not go out of balance by more than the £500 million which it is allowed to borrow. I should be grateful for a quick explanation of what sort of mechanism will be put in place by the UK Parliament, which, after all, will have to pick up the tab, to make sure that the Scottish parliament will not go out of balance and go very much into the red.

My obvious fear is that, having seen what has happened in some parts of Scotland, I am not entirely convinced that we can be utterly confident that those elected will be responsible with the money that they receive from this Parliament. I believe that this Parliament should have at least some oversight. I must not use the word "oversight" because it suggests the nanny state and the Government Benches, I am happy to say, no longer believe in the nanny state. I do not want to be able to double-guess the Scottish parliament, but I believe that we should include in the Bill some provisions to ensure that we do not have to oversee the parliament. The Bill needs provisions to prevent the budget going badly into deficit and which will ensure that that parliament will not expect this other place to pick up the bill. That is why I have tabled Amendment No. 275F. I beg to move Amendment No. 275E.

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