 Yn meddwl, hwnnw'n cael ei gwybodaeth yma, ac mae'n ei fod yn brifau bod yn eich iawn, hwnnw dweud wedi'u gweld. Aiant i gyda ni'n rhoi eu rhai o bair yn profiwr? Dryziadau gwtarn. Mae'n dweud bod fyrdd ar unrhyw o'r dweud yn grannu'r sefydliwr ac rwy'n meddwl yw'n edrych am y llyfr yn byw ddaeth gael ni'n meddwl. Rwy'n nodi'n ôl i'r gweithio. Mae'n ddangos i gael eu gweld o'r Maxville. Mae'n ddifo. Felly, wrth gwrs, gydag i'n gwybod i'r ffordd a Llywodraeth Cymru, yng Nghymru, yng Nghymru, y Statistau Cyfnodol, ac mae'n ddifos o'r Llywodraeth Cymru. Mae'r ddifos i'n ddifos i'r Prinsbryd Arfer, mae'n ddifos i'n ddifos i'r Rheiddiol. Yn ddifos i'n ddifos i'n ddifos i'n ddifos i'r Rhaglion Cyfnodol, yw cyvelydd cynllun gyda Y Smyth Cymru yw'r Prifysgol yw 21 oherwydd i ddim yn bwynton tyfu'r Cyfrifysgol cysylltu'r gyflifiadol ynggrifesol a'r Cyfrifysgol Cymru yw'r Cyfrifysgol, ac yw'r Cysylltu Cyfrifysgol i ddim yn yma. Ond y gallwn yn gweithio'r cyfrifysgol gyda'r Panc Watrych, wel, oherwydd gan defnyddio'r cyfrifysgol. Mae'n digwydd i'r cyflifysgol oherwydd i'n gair i'n cael ei fath. Mae'r ddweud o'r ddefnyddio yn cwestiynau ei ddigonwys ar y gyllidol, a'r ddweud o'r ddweud o'r ddweud o'r ddweudio sydd ar y gwyllgor a parlymyn, ond rydych chi'n gweithio eich ddweud o'r ddweud i'r strategaidd, ac mae'n cydweithio'r ddweud o'r ddweud i'r ddweud o'r ddweud i'r ddweud? Rhaid, fel gweithi'n gyfnodd. Rhyw gyd-dweud i'r ddweud i'r ddweud i'r ddweud. I hope that you have the chance to make an opening statement if you want to. Well, I apologise, do that first if you wish. No, in fact, given that I know that the committee has pressed for time this morning, I'll waive that. I'm sure we can just cut to the chase. So, to speak beyond perhaps just putting on record my appreciation of Lord Smith and those who assisted him from the party representatives, I see we have a couple of them here this morning and the Secretariat. I used to be here today at this stage because, as you say, it is early days since the report was received, but we are working to a tight timetable here and I recognise that for you to give this the proper scrutiny that you will want to do as parliamentarians, that it's necessary that we all make a special effort in this regard. And I anticipate that there will be further occasions of this nature for myself and other ministers in the future. And just perhaps one of the things that I thought was very useful in the Smith report was his observation about the opportunity that there is for better joint working between the parliaments. We've always had different mechanisms for joint working between the governments, and occasionally you get instances like today where I'm here as a minister talking to you as parliamentarians and in the past we've had Scottish government ministers in London before parliamentary committees there. But parliament to parliament dialogue I think is something that we've never quite got right, and I think that's one of the opportunities as we look at that. To come to your question about the entrenchment, in fact I think the answer to your question is contained within your question. De facto, the permanence of the Scottish Parliament is guaranteed by the will of the Scottish people. That was the claim of right that was signed up to in the 90s as part of the constitutional convention, and for all practical purposes it's unthinkable that you would not now have within the United Kingdom a Scottish Parliament. I fully accept the point though that whatever the de facto position is, the jury one is a rather more challenging prospect because within the current United Kingdom constitution you only really have the mechanism of primary legislation. Now I think if nothing else is clear at the moment it's pretty clear that you have an emerging constitutional position, not just in Scotland but across the whole of the United Kingdom, you will be aware that the Labour Party and my own party are both committed to having a UK-wide constitutional convention, and I think that that is exactly the sort of issue that could be dealt with there. Ultimately it might require us coming to a position of having some sort of written constitution, something for which I have always been something of an enthusiast. But in the meantime do you really want to get too hooked up on the jury position when you consider that in fact the permanence of the UK's position within the European Union was down to a piece of primary legislation. The European Communities Act 1972 which has maintained our position and the position of the communities and then the Union subsequently. So I'm open to different ways that you could achieve that. I think it would be healthy as part of a wider piece of constitutional reform if we could entrench it in legislation, but as I say I think the biggest guarantee is the will of the Scottish people. It was interesting, Lord Smith's perspective on this and he claimed that obviously if anything like that was to happen and it wasn't continued along the will of the Scottish people then there would be a plague of boils and nothing will break out. Now obviously we don't want that to happen. There's a suggestion being made to me and I'm glad you said you're open to suggestions that might be a possibility and I'd just like to explore that and you might not be able to give it a detail today. It might be something worth looking at though. In the post-colonial period when the autonomy acts were passed for post-colonial areas they also contained a charter of autonomy and obviously we're not in a post-colonial situation. I don't understand that, but if there was an autonomy act that had a charter of autonomy in it that would reserve certain functions and powers to the institutions in the UK then it's been suggested to me certainly that that's a potential avenue to be able to entrench the Scottish Parliament powers because we may have to wait some time obviously and we don't know how long we'd have to wait, we might never get it to the written constitution position so all I'm asking is, is that something you've prepared to explore and have a look at? Let me be prepared to explore it. I mean a Secretary of State for Scotland I'm constitutionally the guardian of the devolution settlements so this is something that I can legitimately have a look at. The immediate question that comes to my mind is how do you entrench the charter and it seems to come back to primary legislation at that point. This is something and the nature of sovereignty is something that has exercised jurists for centuries and many years ago I had the great good fortune perhaps to have to study as an undergraduate jurisprudence and the point at which sovereignty shifts and crystallises but a charter perhaps might draw on the way in which the Treaty of Union was then enacted in the Act of Union so all these things can be looked at but for the moment I think my priority is working to the timetable that we've got for the implementation of Smith and if there's a way of achieving the higher level stuff then I'm in the market for it, it's very helpful. If you could write this at some time, just let us know what the response to that would be most useful. Lewis Macdonald. Thanks very much and good morning Secretary of State. I was interested in partly following on Bruce's line of questioning because clearly the Smith Agreement is implicitly and explicitly about a stronger Scottish Parliament within the United Kingdom and I wondered as Secretary of State for Scotland within the UK Cabinet what discussions you've had with colleagues about any implications there may be from the agreement for devolved arrangements elsewhere in the UK or indeed for the wider UK constitutional position. Well, within the Cabinet the conversations surrounding the Smith Commission report have been pretty brief along the lines of we committed to implementing the conclusions of Lord Smith's inquiries and deliberations. We now have these and we will implement them and I don't think an awful lot more conversation is necessary than that. There are other aspects of the wider UK constitution though that is or that are very much in play. You will have heard the comments of the Prime Minister in regard to the question of English votes for English laws. For example, you will know that the Cabinet now has a Cabinet subcommittee chaired by the leader of the House of Commons and Vice-Chair is the Chief Secretary to Treasury that is looking at that question. The parties within the coalition have different views on that and your own party has been invited to contribute to that discussion. We have anticipated command paper setting out the different options on that sometime before Christmas I believe and the discussions will proceed after that. Ultimately I think it will be more of an issue to be determined at the next general election in May and possibly even thereafter. One of the things that was clear from Lord Smith's evidence on Tuesday was that both the UK Government and the Scottish Government played a significant role in relation to the Smith Commission in terms of the provision of expert advice and information. Clearly while the headlines have been written a lot of the detail remains to be worked through. What is your role in ensuring that input continues and that dialogue continues at expert level and at an official level to ensure that the detail is worked through in the most effective way? My job to deliver the draft clauses according to the timetable which takes us to the 25th of January and that's my responsibility. It's my head that's on the block if we were not to meet that target. Obviously it's going to be important that we maintain the best closest dialogue with the Scottish Government and their officials, ministers. These discussions are already on going especially at an official level. I myself am meeting the First Minister this afternoon and I would anticipate that this will form a significant part of the discussions that we will be having. I also announced last week that to assist with the implementation and the business thereafter where the scrutiny once we have the draft clauses will be setting up a stakeholder group so that we keep the wider range of engagement that we had in the course of the Smith Commission as we move towards the formulation of the draft clauses. Thank you very much. Thank you very much. Some of the powers that are outlined in the Smith Commission report will require primary legislation but some will not. There are some which could be transferred by section 30 orders some which could be done through other arrangements. For example, votes at 16 which obviously there is an expectation of that being in place in time for the 2016 Scottish elections. Also air passenger duty for example would not necessarily require primary legislation in order for that to be transferred. Does the UK government have a view on whether there should be a disaggregation of some of the recommendations and some should be fast tracked where possible? Obviously that could be viewed as a gesture of good faith and a down payment on future powers. What's the view on that? Well, I think the expectation at the moment is still that this will proceed as a package given the range of issues with which we are dealing here and the somewhat tight time frame on which we are working. Having said that, however, since you mentioned votes at 16 you may have seen that I was speaking about this on Monday. It is clear that if we were to meet the deadline for an extended franchise for the 2016 elections to the Scottish Parliament that it would require to be done more quickly. I have tasked the officials within the Scotland office to come forward with proposals about how I could do that. So that would be one obvious exception to the general principle. Air passenger duty, you're right, wouldn't necessarily need primary legislation but once you're talking about the transfer of taxation powers and the budgetary consequences that come with that I think there is probably a greater interest in ensuring that you get the whole thing as a package rather than taking it in drips and draps. Obviously the question around votes at 16, one of the ways that it could be resolved obviously is a UK-wide approach given that we've got a UK election coming up in six months' time and speaking to a modern studies class in my constituency their question was why were we trusted to vote on Scotland's constitutional future but we don't seem to be trusted to vote on who's the Prime Minister. Is there a UK Government view on votes at 16 on a pan UK basis? There's a range of views within the government and I think within that range of views my own and yours are pretty similar. I would like to see votes at 16 across the whole of the United Kingdom. The answer to your modern studies class of course is that it would require primary legislation. That's not going to happen now in time to do the necessary legwork in terms of extending the register for a general election in May so realistically that's not going to happen. But I think it could be done both in terms of legislation if you were to take for example a section 30 order route and the necessary renewal of the registration process in time for 2016 and I would be very keen that that should happen so I can't sit here and give you a cast iron guarantee this morning as the convener said we're still in the very early days of the Smith report but with goodwill and joint working because of course section 30 does require the two governments to work together I would think that that should be achievable. On the wider issue then is there a timescale envisaged in relation to, I mean we know we're out 25th January for the clauses but when would you envisage these powers being on the statute books when would we expect to see them in place in this Parliament at our disposal? The implementation of a Smith bill. Well you'll have the general election in May and a Queen's speech I would imagine before the end of May if we have the work done on the draft clauses and there has been some pre-legislative scrutiny I would suggest probably by a committee or committees here and in the House of Commons that would make a degree of sense to my mind I would not see any barrier to there being an early introduction of that bill and indeed I think the expectation would be that there would be an early introduction of that bill but being a constitutional bill it would require to go through the House of Commons on the floor it wouldn't be taken in committee so that will add a bit to the timescale that is given over to it but I would anticipate that you would have a bill that would be through both houses by the end of next year maybe early 2016 it's difficult always to predict I think the important thing about the passage of the bill if I go back to my own recent past as one of the party's business managers in the Commons the fact that you've got a mandate for a bill of this sort having been through a general election and a commitment from the three parties means that it would be very difficult for any party in either house to resist it Mark, I'll come back to you but I've got to try and make some progress here Tavish Scott, please I wonder if you could just clarify the thinking on intergovernmental machinery that was a major recommendation of the Smith Agreement and Linda and I spent many a happy hour I'm deliberating on that but we discussed it just in terms of transparency because the convener's earlier point about Parliament to Parliament your earlier observations about Parliament to Parliament a lot of this actually reflects on Parliament's scrutiny of joint ministerial committees and that kind of thing there's frankly none of that at the moment and I know it's early but has the UK Government and I'll ask the same question of John Swinney has the UK Government given some thought yet to that process This perhaps does tie in to Mark McDonald's earlier point about those things that you can bring forward earlier there's no need for primary legislation to improve the workings between the two governments you do need a bit of political goodwill obviously and sometimes you get that, sometimes you don't but I see no reason why you couldn't improve and strengthen the joint government working and that's one of the things I will want to stop to be talking to Nicola Sturgeon about and again I think your point Tavish is on the money this should not just be about stitch-ups between governments in London and Edinburgh the role of Parliament in scrutinising the joint workings is great to be absolutely fundamental and I think that there's a job of work to be done there by Parliament be it here or in the House of Commons So you'd be open to such ideas as publication of Minutes and so on and so forth subject of course to agreement of both governments and indeed Welsh and Northern Irish governments not just about Scotland and London as well I would be open to that sort of suggestion with the obvious caveat that experience teaches me that when Minutes are going to be published then they tend to be less revealing that they might otherwise be and I think if we're to be serious about this then we will need to find more robust mechanisms and more extensive mechanisms than that I think that Parliament both in London and Edinburgh being told where meetings are would be a start That would be the sort of thing that you'd easily start OK, I'm going to do another couple of questions in this area then we'll move on to tax but Rob Gibson then I'm going to come to Drew Thank you, convener Good morning, Secretary of State In the light of strengthened Scottish devolution settlement within the United Kingdom Lord Smith expressed the opinion that Scottish Parliament committees could be strengthened Do you agree that the powers to compel the attendance of witnesses which applies in Westminster should be extended to the Scottish Parliament's committees? In principle, yes the reason that I hesitate slightly here, Rob is that you invite me into commenting on what is essentially a matter for the Scottish Parliament that really should be for your own standing orders and I think that under Smith that's the sort of thing that you will have complete control of and as a Scottish citizen as a UK system living in and born and bred in Scotland I can see the merit in that but it's for you to decide your own procedures Well that wasn't decided by us it was decided for us primarily David Cameron has offered to meet the MSPs in a formal setting in Holyrood Should other ministers of the UK have requested a pair before Scottish Parliament committees? That's always something for individual ministers to make the decision for themselves I've always attended when I've been asked and I would certainly expect to do so and if I'm not available then I have a junior minister who attends in my place but that really is for ministers to decide for themselves Thank you Drew Smith Thanks very much Lord Kelvin on Tuesday I asked him around this whole issue of the public's understanding of the devolution settlement and the extent to which the public having a good understanding of the settlement was one of the criteria by which we would have a successful implementation and he expressed that he was surprised by the lack of public understanding of essentially who did what in Scotland at the moment How do you see the UK government being involved in taking forward a solution to that concern? Yeah Lord Smith may have been surprised I think that maybe reflects the fact that Lord Smith is a businessman and not a politician Those of us who've spent time on the doorsteps over the years I'm afraid have become rather weirdly resigned to that and I don't think you will ever get to an ideal solution Most people in their lives have better things to do than to become intimately acquainted with the constitutional niceties of government Having said that though I think that there is an opportunity for us all as politicians to sort of stick more or less to the area where we have legislative or constitutional competence Tavish and I within our constituency generally Tavish will speak on matters that are devolved and I will speak on matters that are reserved and we not exclusively occasionally we sort of stray but generally it helps if MPs talk about reserved matters and MSPs talk about devolved matters there might be some scope for a public information campaign especially once we get to an implementation of the new settlement on the Smith proposals Could I just press you on that a little bit further Secretary of State because I accept the point I think it was a frustration that we all understand locally and it was certainly an issue that was discussed a lot in referendum debates where there was confusion quite often around we'll be actually talking about a transfer of power what was actually about how the power has been exercised at the moment because it seems to me there's maybe a need for something more than just the potential of perhaps at some stage of public information campaign about it it is a problem which we as politicians have maybe just come to accept and I accept that you don't necessarily envisage that the public is going to be interested in the detail of this but there is a responsibility for both governments to be clear about what it is they do and lots of Smith specifically said I think on Tuesday that there have been a tendency and I think he was referring to the UK government and successive UK governments here to devolve and then essentially ignore that a power was transferred to Scotland and then the UK government just simply stepped back so I suppose it's a question about how active essentially the Scotland office is on these issues I see now sorry for you we're wanting to take the question and yes I think there's a lot more that can be done by the Scotland office as the voice in the face of the United Kingdom Government in Scotland and I think that in many ways after the Scottish Parliament was set up in 1999 the Scottish or the UK government did kind of leave the field in Scotland and we didn't do enough to remind people here of the continuing quite substantial responsibilities that we have as a government and there's more that now requires to be done in that regard one of the things that the referendum campaign brought about was a beefing up with the Scotland office operation in terms of stakeholder engagement loosely called and that involved in fact a better engagement not just in the Scotland office but from UK government departments across the field and just at my own business board a few weeks ago one of the members there said to me look it's been great for the last couple of years we've had people like the permanent secretary to the Department for Transport coming up here and talking to us and engaging with us directly promise me that that sort of engagement will continue and I can give them that promise because I'm determined that it will and there's no denying the fact that that we did somewhat we I say the UK government in a previous skies did somewhat take the eye off the ball no point in getting excited about it now but we'll do it differently in the future general issues and of course institutional issues there and we've actually gone into the constitutional stuff a bit earlier than expected however that's where we are so we've got about 40 minutes left now just to get into the stuff and tax and welfare can I just hand over to Lewis Macdonald at this stage and others who want to get involved in the tax issues let me know thank you very much and I'm interested Secretary of State in your view on the practicalities of the tax devolution proposals that are agreed by Smith and how they will be taken forward how do you envisage that process being managed in a practical sense in terms of the actual transfer of responsibility and the consequences that might have across the tax revenue raising responsibilities the transfer or what happens hereafter in terms of what happens hereafter you'll know it's in the Smith report that HMRC will continue to operate as the tax collecting body for the Scottish and the UK governments in Scotland I think that's a sensible and workable arrangement the best practical one the actual business of the tax devolution is being led on by the Treasury self evidently and I mean it is going to require a degree of close working these lines of communication though are already open and the communication and the joint working has been close since the passing of the 2012 act in relation to the Scottish rate of income tax which will be coming into force in 2016 and do you think that the continuing collection of income tax particularly on a UK wide basis is that in itself a protection against the risk of damaging tax competition of people disguising their domicile or disguising their place of work in order to benefit from a lower rate of tax the basis on which the tax collection will be done I think is residents rather than domicile so forgive me for being a picky lawyer for a second it's old habits die hard but I think it's an important point and the the use of the HMRC yes I would hope that that would eliminate any opportunity for sort of tax avoidance by stipulating your residences being in one place or another you can't discount the possibility that there will always be people who will want to play the system in that regard but I think that the continuation of the HMRC as the single UK wide collecting body is the best guard that there can be for the overall integrity of the system thanks very much my name is Donald and then Stuart Millan my name moves on to VAT convenience I don't know if you want to take those who want to cover income tax or does anyone else want to go into the income tax areas we'll do that that way good point secretary of state the evolution of income tax doesn't devolve the personal allowance why is that because the income tax continues to be a shared tax you would have to ask the Smith commission I guess why they reached the decision that they did I can see good reasons for it of course it is also open to the Scottish Government post evolution to use the creation of a zero rate band if they chose to vary the personal allowance effectively upwards the only end that would be achieved I think by devolving the personal allowance or the setting of the personal allowance would be to allow the Government here to cut the personal allowance effectively to increase taxes but you know Scottish Government could set a zero rate in the top personal allowance if they wanted so why not just transfer the personal allowance I'm sorry Mr Gibson I didn't quite catch that well if we could set a zero rate above the personal allowance why not just transfer the personal allowance because the income tax remains as I say a shared tax and this is one aspect of the tax that the Smith commission decided and all parties agreed should be reserved and there are others the taxation of savings and dividends income for example is also to remain reserved and I don't know unless you're wanting to cut the personal tax allowance that's maybe what you've got in mind is it not what I've got in mind personal allowance interacts with the welfare system what would happen to someone's universal credit or benefit entitlement if the Scottish Government sets a zero rate higher than the UK meaning that they get to keep it more of their income would the UK reduce its universal credit or the working tax credits that's the sort of detail that still have to be out and out between the two governments it's pretty clear from Smith that there's a lot of that sort of work to be done here OK, we'll look forward to it being done but what government would get the benefits of that saving, would that be transferred to the Scottish Government? The same answer I'll say it in my moment we'll be next Thank you convener, obviously control of that will remain at UK level but there will be an assignment of revenue to Scotland at the first 10 pence which at the moment is 50% but who knows what the future holds if the UK Government were to take a decision in the future to lower that on a specific sector below that 10p threshold that's been done in other areas what would be the consequential impact on the Scottish Government's budget and would there be advanced negotiation given that there would be that impact or would it be that the Scottish Government would find out about it when it was announced by the Chancellor in the budget? I think this is a good example of joint working arrangements that we're going to have and it illustrates the imperative of having a more robust and effective mechanism for regulating the business between the two Governments we've managed to get through with what we've had hitherto because the areas of overlap have been less pronounced than they are going to be so in the future that would clearly in my view require to be something in which there was consultation between the two Governments and that consultation would work in more ways than just the UK Government saying to the Scottish Government we propose to do this on VAT the Scottish Government would be open to make approaches to the UK Government on approaches to take on VAT as well the whole point of it being a shared tax ask a question about tax something came up with Lord Smith about VAT as well Secretary of State because in evidence to the committee on Tuesday the head of the Smith Commission Secretary Jenny Bates stated that if VAT revenues increased due to increased economic activity then the Scottish Government will keep these increased revenues and vice versa just for the record so I want to meet you because I wasn't once you gave me that answer I was a slightly surprised because we were talking about assigned budgets is that your understanding as well sorry if you have more VAT coming in from VAT peers in Scotland then you will get half of that yes that's my understanding that's helped just to get that clarified stupid moment and then Tamish Scott good morning Secretary of State on page 9 of the Smith Commission report there are 7 principles there and principles 4, 5 and 6 I believe are extremely important particularly in the issue of taxation and certainly not the standing 4, 5 and 6 what are your thoughts on the Smith Commission recommendations to keep corporation tax reserved whilst only yesterday the Chancellor announced that the corporation tax has to be devolved to rather mild well it's subject obviously to the very important provisos that there will be progress made in the Northern Ireland budget being set and also that you know there are implications for this in the peace process and you know I think you heard Lord Smith on this say that this was not something that he thought would be of benefit to Scotland certainly it was the submissions that Smith got from the business organisations and from the trade unions were very much in line with that view and if that happens and I stress the if at this time it's a recognition of the fact that Northern Ireland stands in a very different position from the rest of the United Kingdom for reasons that are historic and you know largely not very happy ones if that happens it will be a recognition of the recent and troubled past of Northern Ireland certainly I accept that the Northern Irish situation because of the past is somewhat different from the situation that we have but certainly in your own submission to the Smith commission I mean you do recommend that corporation tax also should be operated and collected at the UK level but that obviously with what's going to happen to Northern Ireland certainly it's in contradiction to your own submission to Smith for the situation for Scotland see my own submission talking about the Campbell commission or the Liberal Democrats to the Smith commission I mean I don't know what I can really add to the fact that there are particular circumstances in Northern Ireland having a land border with the rest of the island the island of Ireland and a very particular set of economic circumstances that come from its very troubled past and that if the judgement of the government says that this will be a necessary part of stabilising that constitutional settlement I don't think many people in Scotland would want to interfere with that I just wonder how relevant really a land border is given that obviously there are great many firms in Scotland do export import work between Scotland and the Republic of Ireland and across a very narrow strip of water I mean it's relevant in as much as that has a much greater impact on the business and commercial activity in Northern Ireland a very different impact from the impact that it has on trade with England, Scotland and Wales Davish Scott Thank you convener Can I take the Secretary of State to powers 32 onwards of the Smith agreement on the Crown of State and I just wonder, I know it's early and it's only weekend but have the UK government plan to give effect to those paragraphs notably the one on 33 which we might have a particular interest in in regard to the islands Yeah I mean I think the committee will know my views on reform of the Crown of State since I became Secretary of State I've referred to it on a number of occasions as being unfinished business and I think this part of the Smith agreement allows us to go ahead and to finish that business I was particularly interested in the the further, the onward devolution to the island groups in particular that's something which the three islands councils have been pursuing as part of our islands our future campaign and you know I think that there is a real opportunity for the island communities there to move on it sees areas such as Orkney Shetland and the western Isles on my construction that would mean areas that have island or coastal communities and again this is something which I think could profitably be discussed between the two governments but I would also want to be talking to the local authorities themselves you know to come back to Mark McDonald's point about early engagement and you know what can you do early well in fact looking at how you would just, how you would effect the transfer to the island communities is something that can start now I have a framework for engagement with the islands councils a working group which is next due to meet in January I would want to be talking to them about it and indeed I'm open to discussions between ourselves the Scottish government and the local authorities themselves even at this stage if there is a neater way of getting transfer of power direct from Westminster to the coastal and island communities of Scotland that want it then I don't see any reason why we wouldn't if all three parties can agree to do that Thank you and just on paragraph 34 which was the other I think main requirement here which is again a memorand of understanding between the UK and Scottish governments in respect of the wider interest that the oil and gas industry particularly exercised by this again do you see that coming through as part of the overall package you talked about in your earlier remarks as part of a package or again do you think that that particular paragraph could be given effect much more quickly in terms of working between the governments you would see it as being an essential prerequisite actually and again it highlights in fact the way in which Smith offers us the opportunity to strengthen the workings of Scotland's two governments at a Scottish level and at a United Kingdom level because it creates a greater imperative for a joint a genuine joint working relationship a genuine joint working relationship Rob a very brief supplementary if you will and then I'll come and tell us I'm curious Secretary of State to know if the local authorities would share in the Crown Estate seabed out to the 200 mile limit as well as urban assets etc and if the coastal communities and the island authorities would actually benefit from these The Crown Estate ownership of the seabed goes out to 12 miles and believe I don't think it goes out to the 200 mile limit The devolution of the Crown Estate's economic assets to local communities is warmly welcomed it's a subject that's been discussed far and wide but do you think that they should be the beginning of a process to see local communities empowered more generally I mean for example I believe it's the case that Angela Merkel could not freeze council texts in the way that the Scottish Government is able to do so to impose that on local authorities Do you think that there has been such a fixation with powers developed to the Scottish Parliament that perhaps opportunities have been missed to genuinely devolve greater powers to local authorities Sadly that's the case I think that's certainly my experience living and working in Orkney and representing Orkney in Shetland Lord Smith does actually make reference to this and the way in which this did come out with a whole range of the representations that he received when he was taking evidence and it's in the nature sometimes of government to centralise control so it does require a determined political effort to ensure that a localism agenda is actually driven through I'm completely committed to that agenda that's why I was delighted for example the UK Government, the Scottish Government and Glasgow City Council and other west coast local authorities were able to agree the city deal for Glasgow city deals have been a good mechanism in other parts of the United Kingdom for promoting that agenda of localism it does come down though to a pretty fundamental point that we can sit and we can talk about the location of power and the structures of government and all the rest of it but ultimately what matters what will be felt in our communities and by the people that we represent is how these powers are used to bring them I'm going to have to move on to the welfare area I'll come to Linda Fabian in a moment but there was one question I was concerned about the interplay between reserved benefits the benefits that will come to Scotland through the extended devolution package and universal credit I went and I asked Spice to look at it and I circulated that paper around this morning from Spice I've seen that I apologise you've not seen that but I can tell you roughly what it says it states that if the Scottish Parliament were to top up reserved benefits then a recipient of your universal credit would receive a corresponding reduction in the universal credit payment now that surprised me and therefore I just wonder it's maybe a technical question at this stage to be explored because obviously by extension that would probably mean the same to the devolved powers then in these circumstances I mean it would be helpful if you could let me have that briefing because I've not seen it and I struggle off the top of my head to think of anything in Smith that would justify an assertion of that sort and I can't think of any first principle that would apply that would mean that it should so if you let me have that briefing I will write to you I will make the necessary enquiry with colleagues the reason I ask it is because you actually look at what the Smith Commission report actually says at paragraph 55 any new benefits or discretionary payments introduced by the Scottish Parliament must provide additional income for a recipient not result in automatic offsettings so it doesn't actually talk about the top-up process or the devolved powers so I think we need a bit of clarity around that area otherwise what would be the point of having the powers or to do that a fundamental point without hearing the reasoning behind that conclusion I couldn't really offer you any explanation for it, it doesn't make sense to me but it may be that our old friend the law of undaunted consequences is at play here and if that is the case then all the more reason that we have proper scrutiny of the draft clauses when they're coming forward OK, thank you very much Wanda Thank you very much, convener good morning Secretary of State convener, I'd like to first of all get something Secretary of State said earlier and clarify it for the record I think Secretary of State actually said about the personal allowance all parties agreed giving the impression that that was a starting point for everyone I'd just like to put it on the record that recommendation in the Smith report doesn't mean that everyone agreed with the proposition itself or that it was in fact the best solution we had discussion we reached compromises and made agreement on what could be included in the report so it's a very different thing thanks very much in relation to the substance what I want to ask one of the things that everyone I think and Tavish will correct me if I'm wrong no doubt agreed upon as did Civic Scotland and their submissions was that the work programme wasn't working particularly well for Scotland quite a bit of confusion and that in fact if we had control over the work programme to meet our specific circumstances we could use it much more effectively I was quite disheartened to hear that the UK Government had signed extensions to the current work programme contractors and I just wonder if you could outline for us what that actually means in terms of powers transferred for the work programme how it will come over to us and whether in fact Scotland will have to stick with the UK Government's methodology and just administer it and for how long that would be the case I've seen some of the coverage on this and I saw the letter last night from Secretary of State for Work and Pensions to Rosanna Cunningham first of all I think it's important to put out front and centre the decision that was taken in August so some of this breathless commentary about this being a dreadful decision that was designed to thwart the will of the Smith Commission is not justified because frankly this decision was taken long before the Smith Commission was even set up come back to the earlier point when we were discussing the procedures that follow here you will have a bill which as I said to you will clear the House of Commons and House of Lords by late 2015 early 2016 that would need constitutionally to be finished by March I think at the latest that then takes you into the spring of 2016 so in practical terms what would be achieved in terms of new systems and designs and the point at which they could administratively as well as legislatively be dissolved I think remains still to be seen so what I would say is that although these contracts have been extended to from 2016 to 2017 this again is an area where the two governments should be sitting down and the Scottish government should be saying to the UK government we have done some thinking on this this is what we want to do with our new welfare system now how can that be represented with the contractual arrangements that you are putting in place with political will there is no reason why that can't actually be done what you have signed up to takes it to 2017 that is what I understand thank you very much I do have something slightly related if I carry on one of the things that hasn't been raised so far is an extra part of the commission report which was about additional policy matters that there weren't firm recommendations put in on student visas some welfare issues like trafficking, asylum other matters such as red meat and fisheries levies I just wondered if you had a view on whether in fact these additional policy matters would be considered seriously in the same time scale as the package that you mentioned earlier or whether indeed there are issues in there that could be dealt with very quickly because many of them don't actually need that legislation this is an interesting part and as you see it comes right at the end I think that Lord Smith was given a remit he set his own principles we've referred to them already this morning and what he's come up with was something which reflects a need for further devolution in those areas where it makes sense because there is a distinctive Scottish need I look at this list and some of it just looks like issues where people might not like the policy of the existing UK government rather than something where there is a distinctive Scottish need on the other hand though being able to lodge from within Scotland an asylum claim to the home office I don't see any reason why with a bit of political goodwill and attention that sort of thing couldn't be accommodated that's administrative you don't need to pass a law for that rather than having people traipsing down to Croydon just in closing then could I just suggest something that we discussed very seriously and has a very distinctive Scottish element to it and I don't think there's anybody who would complain if you were to see as a matter of goodwill today that you would take that very seriously I'll certainly take that seriously I know the issues I've talked to the universities themselves and it's a concern across the whole of the United Kingdom it's not exclusive to Scotland I've got the quick supplementaries I'm told they're quick so they'll need to be because I want to get into the last I'll try and be quick for my answer so Drew, the tabish and then Alejandro? Thanks convener I hope to raise the same points and grateful to Linda for doing it and allowing us the chance to I think these are important issues that Lord Smith has put at the end of his report that do need some resolution I think we need some reassurance that although they're outside the formal agreement that doesn't mean that they're just simply put back on the shelf and you talked about where there is a difference I mean health and safety I would have to say to you Secretary that we do have an anomaly in Scotland and we do have an interaction between health and safety legislation and prosecution services and indeed the promotion of health in the workplace through other devolved areas that there are big issues in here and I wonder if you could undertake certainly to discuss those issues further with the stakeholders that are concerned about them particularly the STC but indeed of course business would want to be involved in those discussions because my concern would be that the barrier to progress on that issue is perhaps that the expertise comes from the HSE that we have at the moment which clearly has an interest in continuing the status quo and there needs to be a wider discussion around some of those issues and as Linda says that it isn't put on the back burner Just to take the point you make about HSE and having a different prosecution regime that's something I know from my own professional background having both prosecuted and defended HSE cases over many years and you know that was always a concern that there was not that understanding across the whole of the HSE that different considerations applied due to different criminal justice system and the role of the procurator's fiscal was very different in terms of bringing prosecutions forward Having said that though it worked more often than it didn't nearly always worked very rarely did prosecutions fail because of these sort of minor tensions I still think though not standing the interaction between inspection and prosecution there's an obvious UK interest in having a uniform system of inspection and regulation across the country I mean all these issues are ones where there is clearly work to be done between the two governments and again I come back to it between the two parliaments as well and you know if distinctive arrangements are to be made they will make it by building consensus okay Tavish we're not going through this as quick as I need to because I don't know if I'll get through everybody Tavish and then Alec Johnson On Linda Fabian's first point about the work programme which I agree with if I understood your answer to Linda Fabian you were saying that subject to the government's working together there's a way to get that to happen more quickly it doesn't need to wait until 2017 I think Linda asked a very fair question which I agree with but if the Scottish Government can come up with a programme of employability then it can happen more quickly is that what you were saying Alec? Yes, back on the subject of welfare having arrived here this morning after three years in the welfare reform committee I've seen the process of divergence which has happened in relation to welfare in Scotland already and the proposals under the Smith commission opened that up quite significantly now there's been a determination to cling to the Barnett formula almost a white knuckle death grip in some cases but as we as we go towards the proposals contained in the Smith commission particularly in relation to working age benefits there is a significant divergence in policy already where there is a south of the border a policy is reducing dependency of demand reduction in order to limit cost whereas there is a priority to do something different rather the opposite in Scotland as we move forward with this towards a Barnett formula elephant trap where the amount of money allocated in UK budgets for working age benefits in particular will fall away while Scotland may simply pile on demand and find itself underfunded Well, I mean that's the beauty of devolution isn't it? You make your spending decisions and now you're going to have to account for that in your funding decisions as well and you can only spend the money once if we've learnt nothing else in the last 10 years we should surely have learnt that Now Stuart Millan a question is just regarding the DLA and PIPs but just before I go into that just in terms of the work programme was Lord Smith made a way of the extension when he was going through the process? I don't know Thank you Was under paragraph 49 of the Smith report the DLA and PIP has to be evolved but also with the transition from DLA to PIP being delayed it's reasonable to request a halt to the rollout so that it doesn't actually create any difficulties to Scotland Is this something that you would agree with? No I don't You saw yesterday for example instances where there were changes made to taxes stamp duty land tax in particular that's going to continue across the whole of the United Kingdom until stamp duty is devolved formally at the beginning of the next financial year the rollout across the United Kingdom will have to continue across the United Kingdom if however as I keep coming back to saying the Scottish Government as they emerge with a welfare policy because not liking change is not just the same as having a welfare policy they should be talking to the department for work and pensions and making sure that when devolution of these elements comes that it is something that can be done properly and sensibly and smoothly Certainly with the UK Government's target of reducing the expenditure by 20% and that potentially having a negative effect to people in Scotland of some £310 million then surely if there's going to be this devolution of the power to Scotland then it would actually be worthwhile to actually have that consideration of ceasing the rollout so that there is that better implementation process in Scotland What I'm saying to you is that if you have a policy for doing it differently then you should be talking to the department for working pension about that pensions about that now I'm not seeing that policy coming forward Well I'm sure that the Scottish Government would certainly welcome the opportunity to actually have those discussions with the UK Government if that opportunity actually is there I think if your committee wants to take any message from this morning's session convener you might take the message that I am an enthusiast for improved communication between Holyrood and Whitehall in these matters Who do you want us to start with? Goodwill Thank you On the subject of welfare earlier on corporation tax you mentioned submissions to the Smith commission and the fact that they had directed the approach that was to be taken on welfare there was almost universal support from Civic Scotland for a much more radical transfer of welfare powers than that which is contained within the Smith commission Various news outlets including Gary Gibbon, the channel for news political editor himself says At Tuesday's cabinet when Alistair Carmichael read out the plans taking shape at the Smith commission table one after another English Tory cabinet ministers challenged the plans and their implications for their brief in their department and he says that Ian Duncan Smith was the sharpest critic of what was being cooked up in Scotland fearing his entire universal credit fabric was being unraveled Is that an accurate representation of events? No, no, okay In that case did the UK Government have any input in relation to the welfare proposals that were being drafted at the Smith commission? We were asked and we provided briefing and information for the commission on a number of occasions, yes I believe so Okay, in terms of the input then of Civic Scotland and obviously their comments in the aftermath do you take the view that the recommendations in the Smith commission report are a floor or a ceiling? I'm sorry There have been calls from many in Civic Scotland to feel overwhelmed by some of the welfare powers that are being proposed and we'd like to see some of them perhaps being revised or advanced further post the Smith commission report Is it your view that the recommendations of Smith are a floor or a ceiling? I don't think that's a sensible way to proceed in terms of the implementation they're substantial, it's between £2.5 and £3 billion of welfare power you can do a lot of good with that sort of money if you take if you concentrate your mind on it as I said already I have a stakeholder group which is being formed I would expect that in fact I know that Citizens Advice Scotland for example are very keen to be part of that and I will work with them and anybody else Two more and then we'll have to draw this to the conclusion I'll go to Bill Kidd and then Lewis MacDonald Thank you very much Thank you Minister You said earlier that you can't spend money twice and I think that's a trueism however the Smith commission according to most commentators was supposed to provide a sufficient range of powers to provide the Scottish Government with the financial means to create new benefits in areas of devolved responsibility Do you or can you tell us with the new powers over taxation and other areas which the Scottish Government is to deliver on whether that money which may be raised in those ways will be balanced out by a reduction in the Barnett formula which would mean that there's greater need to deliver on powers but there's no greater financial base with which to do so I'm sorry I don't quite understand the premise behind your question It seems to me that you have an adjustment to the Barnett formula because you're taking money directly and if you want then to provide benefits of a different nature on a different level than the rest of the United Kingdom then that's a spending decision for which you now have a consequential taxation decision Yes, we have a consequential taxation decision to make but in the end result there will be no greater there will be no greater budget for the Scottish Parliament to operate with or the Scottish Government to operate with Well there is if you choose to create one that's the whole point of having tax-raising powers surely What about the reduction the question I thought was fairly straight forward is the reduction in the Barnett formula to balance out these taxation There's no reduction in the Barnett formula but there's an adjustment to recognise the fact that we take some taxes directly in Scotland instead of them coming through the Treasury There's no reduction then, thank you What part of there is no reduction was difficult The post-study entitlement for international students to remain for two years because of employment was initially introduced in Scotland as the fresh talent initiative rolled out across the United Kingdom then it ceased to exist Given what the Smith Agreement says about this is something that's worthy of future consideration Is this something that the Scottish Government have raised with the Scotland office since the abolition of the UK-wide entitlement or is it something that the UK Government could open discussions with the Scottish Government about? You mean the creation of a new fresh talent equivalent or whatever Certainly not in my time I'm not aware of a direct approach of that sort The Government has raised concerns on a number The Scottish Government has raised concerns on a number of occasions with us about that but in terms of bringing forward a direct proposal to be honest Lewis, it's not the sort of thing that there's been an awful lot of in the last couple of years in the run-up to the referendum Who knows it's quite possible we might be into different water now The Smith Agreement now allows for consideration and if the Scottish Government was to make such a suggestion is it one that you anticipate? It was something that we were able to work through in the past with the previous administrations in both Edinburgh and London You have to make the case for it and let's not be let's not forget that although the fresh talent initiative did work it did bring with it a number of issues and some challenges Thank you very much Okay, Secretary, thank you very much that's been a full session we've had this morning there may be some things that members will want to raise with us afterwards that we may fall up in writing with you Give me that briefing, we will try and get you the fullest possible answer for you Thank you very much, very grateful Thank you very much, your time Spend for five minutes Okay, colleagues We'll recommence the evidence-taking session this morning and I very much warmly welcome John Swinney MSP who is the Deputy First Minister and his officials to the meeting who are Gerald Byrn who is the Elections and Constitution Division and Sean Neil who is from the Fiscal Responsibility Division of the Scottish Government Mr Swinney, would you like to make any open statement or would you want to go straight to questions? Quite happy to go to questions, convener Okay, can I just open up with a general question to yourself because I know you've made comment in the chamber Deputy First Minister the extent to which the Smith Commission recommendations provided sufficient revenue raising and employment creation powers to provide the Scottish Government with enough policy discretion to tackle the socio-economic challenges of Scotland What would you say about the Smith Commission proposals in that regard? How in that way? I think at the outset, I'd want to reiterate what I said in the Parliamentary Chamber what I said in the National Museum last Thursday on Tuesday which was that I welcome the contents of the Smith Commission recommendations I think they represent the acquisition of new powers to the Scottish Parliament and in that respect they are welcome to me as Government I think the committee will not be surprised to hear me say that the Smith Commission does not deliver everything that I want on the constitutional agenda and particularly on the issue that you raised with me, convener, about the extent of powers to create further economic opportunity in Scotland to deliver the type of flexibility that I think is required to strengthen economic performance in Scotland I don't believe the Smith Commission provided the necessary powers to enable us to do that what powers it has provided the Scottish Government has committed itself and I reaffirm that point today to utilise those powers effectively in the interests of people in Scotland but I don't think that the type of influence that members of the public would have hoped to have come out of the Smith Commission has been realised as a consequence of its decisions where do you think it would have been relatively simple for them to have gone further in terms of the recommendations that would have helped you with job creating powers I think there could have been movement on issues such as employers' national insurance contributions the power to control and to vary employers' national insurance contributions which are seen by employers as a crucial factor in determining the cost of employment and therefore the ability to recruit additional staff secondly I think the ability to exercise some discretion over research and development tax credits to encourage investment by the private sector and one of the recurring pieces of analysis over Scottish economic history over the last 25, 30 years has been the relatively poorer performance on private sector research and development that we've experienced in our economy and I think we have to do something distinctive to improve that obviously another element of how that could be taken forward is powers over co-operation tax which has been a long standing position of the Scottish Government and our belief that these issues could be delivered for the Scottish Government a greater degree of flexibility to enhance and improve economic performance Thank you Thank you very much and good morning You've made this morning to reflect what you said in the chamber but you would accept the fundamental point that the Smith Agreement is an agreement and it's one that you have signed on behalf of your party and of the Scottish Government and that by doing so you accept that it is a coherent, logical and welcome package of powers even if it's not quite the package that you yourself would have designed If I work my way through all the descriptors in Mr McDonald's question Let me take the one by one I certainly think there are welcome new powers there are additional powers I'd have to part company with Mr McDonald on the question of coherence I think the powers could have been my answer to Mr Crawford essentially made my point about coherence that I think there are one of the points I would make about coherence I think the agreement could have been more coherent because I think there could have been more complete job creating powers on the tax base of Scotland Why does that matter? That matters because it would create the opportunities to generate the revenues in Scotland that would enable us to take forward some of the other measures that are in the Smith Commission particularly on the question of welfare because as I made the point in my parliamentary statement and in response to questions on Tuesday if we want to extend the welfare arrangements in Scotland we have to have some means for economic expansion and growth in the tax revenue base is a fundamental consideration in that respect and then finally on the question of coherence I think much greater scope and responsibility could have been devolved around the area of welfare which would have enabled us to establish much better interaction between the welfare system and the tax system which for me is an absolutely crucial point for individuals to make their journey into employability now those are some of my observations but Mr McDonald is absolutely correct to characterise this as an agreement to which the Scottish National Party and I are party that I endorse its contents I will work in good faith to implement its contents but I do think there are significant limitations in the agreement and significant constraints that will mean that we will achieve less as a consequence of the terms of the agreement that would have been the case if we had more responsibilities very much welcome what you say about endorsement and about approaching the matter with good will I think that's critical can I finally ask what you would say to members of your own party who appear to treat the agreement with contempt and not to show the good will that you have indicated this morning I presume Mr McDonald is referring to the incident in Paysley on this week and I just simply say that I do not believe that that was in any way an appropriate or justifiable way to act and I think my party has dealt with the issue in an appropriate way Mark McDonald Thank you it falls within the area around the coherence and Deputy First Minister you've outlined some of the areas that you would have liked to have seen going further just before you came to give evidence the Secretary of State appeared to indicate that he viewed the Smith proposals as being a floor rather than a ceiling and said he was open to input on ways in which perhaps improvement could be made would that open up do you think the opportunity for further constructive discussion as the clauses are drafted and potential new powers come to this Parliament I'm all for constructive discussion as I have demonstrated over the last few weeks to a number of people around the table so I think if there's one of the points I made in my statement on Tuesday is that I think the implementation of the Smith commission recommendations would be enhanced if we had joint working on the design and drafting of the clauses so we could turn the Smith commission recommendations into practice in an efficient and in a transparent fashion so that we are all clear about the details that are involved and I certainly commit myself and the Scottish Government to work in that fashion to try to secure that necessary progress you've outlined a number of areas where there could be early transfer of power because legislation is not required and we explored that earlier with the Secretary of State he appeared to rule out anything beyond votes at 16 being delivered outside of what he referred to as a package is that something that you would want to see further discussion on are there powers that you think beyond the votes at 16 which obviously we want to have in place to allow 16 and 17 year olds to vote in 2016 are there other powers which you would like to see being transferred early in order that the Scottish Government could make effect of them and effectively it could be seen as a down payment on future powers I think essentially I come from the point of view that the sooner we get on with this the better I take Mr McDonald's point this is an agreement so we should get on with implementing the agreement as swiftly and as timuously as we can I'm reminded that during the referendum campaign the former Prime Minister Gordon Brown said that the additional powers that would be offered by the three UK parties would be delivered quicker than Scottish independence and Scottish independence was to be delivered by March 2016 so that's quite an urgent pressing timetable so I'm certainly very committed to working to the timetable set out by the former Prime Minister who made such a decisive contribution and has made a decisive contribution to Scottish politics that I pay warm tribute to him here today but I think the sooner we can get on with implementing these powers the better and I would I would look already at the Smith Commission clause by clause to look at what would be the necessary instruments required to take this forward and not all of them require to wait for primary legislation lots of them could be taken forward through section 30 orders and legislation within this institution lots of them could be taken forward by intergovernmental working and I don't quite understand the rationale if we want to make progress in these questions why we have to wait to implement this as one package there have been different numbers banded around in terms of the control of taxation and revenue that would exist within this Parliament post-implementation of the Smith proposals can you outline the Scottish Government's position in terms of what element of this Parliament's revenue would be in direct control of any Scottish Government the Scottish Government has undertaken this assessment using the detail of Government expenditure and revenues in Scotland as the base which is of course a national statistics approved publication it is the authority on the public finances in Scotland so we've used the GERS analysis as the basis of our calculations and what that demonstrates that the devolved taxes under Smith as a percentage of total Scottish tax revenues will be 29% under the control of the Scottish Parliament if the asignation of AET is taken into account that figure would be 37% so there are some who have suggested a figure of close to 50% do you have any idea of where they are arriving at that position from not in terms of tax revenues no I can see no basis for that there is a devolved and assigned taxes as a percentage of devolved expenditure under a post Smith environment looks to me to be at 48% that's the closest I could get to 50% but in terms of tax revenues the devolved taxes as a percentage of total Scottish tax revenues are 29% and with asignation 37% so the 48% figure includes revenues which are assigned but over which this Parliament and the Scottish Government would exercise no control there is a difference between the two figures that I was given there, devolved taxes are taxes under the control and the decision making of the Scottish Parliament which would be 29% but the asignation of AET we would have no ability to control that it's an accounting transaction over which we have no control Davish Scott Thank you very much convener Minister, I wonder if I could take you to the point you just made there on intergovernmental machinery I absolutely respect the manner and tone and the way in which you personally have described this process and also in more latter days as well I suspect you might agree with me that that tone is quite important in terms of how intergovernmental relationships work in a constructive way for the future and therefore do you think using phrases like breathtaking arrogance help any of us get anything done in life? Well there's always words used in politics that are that are let me say livelier than others That was used by one of your cabinet colleagues last night in a context of an issue which I think Linda Fabiani and I were agreeing with earlier on needs to be tackled which is the work programme but a colleague of yours used that phrase to describe the UK Government I take your point about politics but that is a pretty strong way of describing the sort of that between governments Now that I know the context of it I quite understand why the words were used because the Smith Commission recommended that on the completion of the work programme contracts they should be devolved to the Scottish Parliament and that's in the spring of 2016 and we are now being advised without our consent that that's been delayed a year in a process which is not yet complete so we have the Smith Commission recommendations which are saying that we should have control over the work programme devolved to us at the end of the contracts The Smith Commission Mr Scott and I sat there in good faith believing that to be March 2016 and we are now being told it's going to be a year later without the consent of the Scottish Government in territory that's been absolutely material to the debate about employability so I think I quite understand why the remarks were made in that fashion and I think those remarks are understandable and appropriate I think what we get to in all of this analysis is the whole question of good faith and one of the things which I think undermines that good faith is seeing the goalposts being moved on an important issue that the Smith Commission has judged upon More except I think the record says that decision was taken before the Smith Commission was even a factor so I think it needs to be important about when that happened but can I just press you on it's interesting that you've made those remarks and I'm very grateful for your clarity and your very clear clarity about the appropriate minister of those remarks Could I take you on to the importance of the intergovernmental machinery being transparent to Parliament subject I raised with the Secretary of State earlier on Would you agree with his contention that in the Parliament to Parliament relationship there must be much more scrutiny of how those mechanisms are to work in the future so that Parliament can adequately scrutinise Government here in terms of how that relationship is to work for the future I think Parliament should be able to scrutinise Government to whatever extent Parliament believes to be appropriate and Government should make itself available to undertake that scrutiny Do you have any thoughts in that sense as to how that could best be done in the context of publication of meeting dates and what the agendas may be given these are very clearly Government-to-government relationships I have no difficulty with a very open transparent approach to these issues Morning Deputy First Minister I'm going back to the early exchange on the issue of early transfer of powers The Secretary of State actually said that he was concerned about power being transferred in dribs and drabs I think was his expression Presumably you would accept that there is a need for a comprehensive Scotland Bill and you could also see advantages to that and I wonder if we could just ask you specifically were there any other issues in the agreement that you signed other than votes at 16 that suggested that the package would not be taken forward in a comprehensive way I don't actually think that the Smith Commission particularly came to a view that there had to be a comprehensive one-bill implementation of its propositions, I don't think that was something that we came to a conclusion about In the timetable that was set out in advance of the process if we are going to talk about the timetable that was set out in advance then Gordon Brown said that all of this would be done and dusted and implemented before Scotland could have become an independent country which is March 2016 so that's a timetable which was advertised before the process started I stand to be corrected but I cannot recall the Smith Commission coming to a conclusion that all of this had to be implemented as one package there has been a lot of commentary about 16 and 17 year olds I completely associate the government with that and that we would take early steps within our responsibilities to advance those arguments but I don't see I don't recall anything in the Smith Commission that suggested to me this had to await one legislative proposition because as I've said to the committee already there are a number of different routes by which the recommendations of the Smith Commission could be could be implemented I think to use the terminology dribs and drabs has a certain conveys a certain incoherence I think I could perhaps put some more elegance into that by saying we could have an orderly staged process to implementation to coin a phrase that my civil service colleagues would probably approve of and we could do that over a reasonable timescale and I think that's perhaps a slightly more elegant way to talk about it Nicely done Deputy First Minister I don't have a strong view about this one way or the other but I suppose one of the issues that Lord Smith highlighted to us on Tuesday discussed for the sexy state earlier is understanding around our whole constitutional framework for me I would presumably see that there would be advantages in having a legislative framework around the powers of this parliament that is more easily understood and that would be for me a revised Scotland Act would seem to be the sensible way to do it but regardless of whether or not you took a different view on that point presumably you would accept that if there were to be areas where you wanted early transfer or separate discussions around particular powers the onus would be to a large extent on the Scottish Government to set out what its objective would be in using a certain power because that would impact on the manner of its devolution presumably so on an issue like the work programme you would need to come forward with a greater degree of detail than exists from the Scottish Government at the moment as to how you would envisage that programme working because that would impact on the contractual arrangements and perhaps on how the power would be devolved I don't share that view at all I think the devolution of power is an absolute concept it's not a it's not a conditional concept it's not conditional on what we decide to do with the power it would not be better to deal with it through a constitutional bill rather than through a separate process let me come on to that in a moment I think let me just address that first point for me if we decide to devolve a power we'd devolve a power and we're then free to do with it what we wish consistent with the democratic consent of parliament how all of us found our view on the powers and the responsibilities of the parliament so I don't think there's any necessity for that to be the case on the wider issue about public understanding which is a point about which Lord Smith is very exorcised he made that absolutely crystal clear to us during the process I do think there is a lack of understanding about where responsibilities rest for particular issues between the Scottish Parliament and the United Kingdom Parliament with the greatest respect I don't think that's solved by a constitutional bill I'm not aware of many of my constituents I can think of a few of my constituents who worked their way through the Scotland Act 1998 and the Scotland Act 2012 but there won't be many of them I think there's a much wider question which the which Lord Smith has correctly pointed in the direction of the Presiding Officer in the Parliamentary Authorities as to how we increase awareness of what are the powers and the responsibilities of the parliament and that's achieved by much wider approaches than just simply the passing of statute Stuart Mill Thank you, the current Deputy First Minister I wasn't actually intending to ask a question in this particular section but it was one of your comments earlier when you mentioned that you've looked through each cause what would actually require primary legislation and what doesn't Paragraph 39 and Paragraph 74 of the Smith Commission on the MCA and the fixed-odd spetting terminals would they require primary legislation but particularly the issue of the MCA bearing in mind the effect, the negative effect upon service provision in Scotland as a consequence of the UK Government's cuts 39 and which was almost the number 174 I'm sorry to convey to Mr McMillan that on my estimation both of them require primary legislation Thank you I'd stress perhaps just placing the record this is the first attempt that we've had to go through cause by cause to just to be absent and it's a first site analysis that's been done by the Government's lawyers and we will look at this with even greater scrutiny in the days to come Nobody else has indicated they want to ask a question but I'd like a few other areas I'd like to examine the Deputy First Minister The Smith Commission considered that the operation of additional boring powers beyond the Scotland Act in 2012 obviously got to be a matter between the UK and Scottish Governments to agree and therefore I'm looking for your view about how you see that the boring powers that should be available to the Scottish Government should operate in practice and whether the UK Government need to underwrite a move to potential borrowings and how you see that process going from here I see the requirement for borrowing to essentially be in place for two purposes one is to support capital investment and for us to be more significantly empowered to procure that borrowing as it suits our requirements to support capital investment and secondly borrowing requires to be put in place to provide us with sufficient ability to manage the flows of revenues that will become an increasingly significant part of the revenue base of the Scottish public of Scottish public finances we will be in a situation where a larger proportion of our budget is dependent on tax revenues that emerge we have to have the ability to manage those flows and to manage the different performance that can take place on the revenue base so those are the two purposes for which I see borrowing being required I would accept that that borrowing has to be undertaken within a clearly articulated fiscal framework both at the Scottish level and also at United Kingdom level now at the Scottish level we already have the the foundations of that fiscal framework in the fact that I already publish the proportion of the budget there is required to support revenue financed investment to censure repayments from which we have absolutely no escape and I've set a ceiling on that of 5% of our Dell budget so there is an acceptance within our existing fiscal arrangements that there must be limitations on what we can do to guarantee sustainability which begins to address the issue that you've raised convener about a prudential framework the second element is the United Kingdom framework and I have to accept and I accept this as part of the constitutional arrangements that whatever steps we take on borrowing must be undertaken within the wider United Kingdom fiscal framework because the actions that we take will have a consequence on the fiscal framework of the United Kingdom and the fiscal mandate for which the Chancellor is quite within his rights entirely within his rights within the United Kingdom economy and the management of its public finances so whilst I would like to see us having the flexibility to to commission whatever borrowing we wish to take forward for capital investment purposes whilst I think it's essential that we have borrowing capacity to deal with the fluctuation in tax revenues I do accept that that has to be done within an agreed fiscal framework as part of the United Kingdom for the current constitutional arrangements Thank you Linda Fabiani Thank you Hello again I was interested in what Secretary of State for Scotland was saying about the additional policy matters that have been put into the Smith Commission agreement and what he did say was that yes he would be looked at and I'm paraphrasing him but I think he said that they looked like just some additional things that were thrown into the pot or words similar I said too that or the impression he gave me was that before they would be discussed in any great detail they would have to have a particular relevance to Scotland and on the question of post-study student visas he felt that that was a UK issue rather than a particularly Scottish one and in that University Scotland submission was very strong in this in that many other civic Scotland submissions mentioned it too I wonder if you could outline for us why you would feel this would be of particular relevance to Scotland and what kind of approaches you will be making to the Scotland office on this for early implementation The points that Linda Fabiano raises are contained in section 96 of the Smith Commission report and I certainly don't think it's appropriate to characterise these as things just added on at the end these were these are substantive issues that emerged during the Smith Commission process I'd have to say that they attracted more support or interest from different players around the table but nonetheless they were important issues that were raised Crucially on the issue of post-study visas that was an issue for which the Smith Commission took very substantial evidence from external organisations particularly within the university community and I think there's a very significant issue in there it's an issue that there's an aspiration in Scotland to address and I think as a consequence of that it would be beneficial for us to advance those discussions with the United Kingdom Government that is exactly what ministers will do to take forward these issues and we look forward to having further discussions with UK ministers on how these can be taken forward to some form of resolution Once what small supplementary and I'll need to continue back into the tax arena simply in relation to what Linda raised I asked the Secretary of State whether he'd had representations from the Scottish Government on post-study work visas he said he thought not in the last couple of years but is that something you would be willing and able to make representations on given the indication in the Smith Agreement that is a matter for further consideration It's certainly one that we will take forward because we very much welcome the contribution to debate from University Scotland who welcomed the fact that the Smith Commission recommended that Scotland should be able to introduce a formal post-study work scheme for international students and I think it's been a pretty persistent aspiration from the university sector to advance on this issue Thank you very much to come back to the issue of taxation there's been some discussion again in the earlier session around what the consequences are of decisions to use additional devolved powers in ways that involved additional expenditure Are you quite clear and are you clear that you signed up to a proposition that where additional powers are devolved and decisions are taken to use those powers to increase expenditure those are decisions for which the responsibility will lie fairly and squarely here and not in any way impact upon the Barnett formula I think I could perhaps do with just hearing that once again from Mr McDonald because he ended up somewhere but I didn't expect him to end up with that question Certainly There was an exchange while the Secretary of State was here around the question of whether Barnett would in some way compensate for spending decisions taken by the devolved government in devolved areas My understanding is that once the responsibility is devolved then the decisions are for the Scottish Government to take and the tax consequences of that are borne within Scotland Would the Deputy First Minister agree that that's his understanding too? I'm not sure I didn't hear the exchange to which Mr McDonald refers with the Secretary of State so I'll go back and look at exactly what the Secretary of State has said but I think it's important to remember that in the agreement at section 951 the agreement says that the block grant from the UK Government to Scotland will continue to be determined via the operation of the Barnett formula so that's the clear continuation of the Barnett formula as it applies to changes in public expenditure in England as they affect Scotland there is subsequent to clause 951 there is clause 953a which deals with the arrangements around the initial devolution and assignation of tax receipts which will obviously lead to an adjustment on the block grant and all of these questions will be the subject of negotiation between the Scottish and UK Governments and I should add that for the benefit of the committee that these issues in my experience are not easy issues to take forward given that I still do not have an agreement around the block grant adjustment for land and buildings transaction tax or landfill tax with the UK Government which is not for the want of trying over a two-year period I recognise the complexity of it and indeed of course the confirmation of the Barnett formula in this agreement is very important indeed my point is if a future Scottish Government chose to use the power to create for example additional benefits that are not in existence in the rest of the UK that would be a decision for which the responsibility would lie with the Scottish Government I accept that yes sir Rob Gibson and Tawish Scott to ask a question about the Crown Estate the Secretary of State for Scotland suggested that local authorities would actually benefit and coastal authorities would benefit from the Crown Estate's sea bed but he made it quite clear that that was up to the 12 mile limit now in the beginning of paragraph 32 Smith report it says that the responsibility for the management of the Crown Estate's economic assets in Scotland and the revenue generated from these assets et cetera would be transferred to the Scottish Parliament you know the area beyond the 12 mile limit may contain a lot of offshore infrastructure is it your understanding that revenues from these would come to Parliament my very clear understanding of the purpose and the import of section 32 is that that would extend to the 200 miles limit around the coastline of Scotland so the situation is that when I questioned the Crown Estate in September last year on this matter Ronnie Quinn gave the Racky Committee an estimate that the income on 2020 figures from 3 sites in the round 3 in other words in the areas which we expect to see built producing 1000 megawatts would have an income of around 7.6 million per annum to the Crown Estate so that would be generated beyond the 12 mile limit would you expect any of that to be shared with the local authorities? I think there are two distinctive points here point one is that my very clear understanding of clause 32 is that it extends to the management of the Crown Estate's economic assets in Scotland and the revenue generated from these assets and that would be transferred to the Scottish Parliament and that would extend to the 200 mile limit and it's an important fundamental point that was implicit in the agreement because the Smith Commission took a long time to address the question of whether it was the foreshore or the seabed and the seabed goes out to 200 miles second point is about local authority access and that is essentially defined by paragraph 33 and that the issue related to the foreshore activity around local authority areas and obviously there are three local authority areas that are mentioned there that have specifically advanced this argument but part of what the Smith Commission also wanted to do was to make sure that there was the opportunity for areas in addition to the three island authorities who've done a fantastic job of pursuing this argument were able to participate in this into the bargain thank you thank you very much can I just continue that line of questioning that Rob Gibson has helpedfully opened up I think Deputy First Minister you said at the end right at the end of your remarks there that local authority is the three that you mentioned could participate you will know paragraph 33 of the Smith Agreement where it says responsibility for the management of those assets will be further devolved could you give the committee some indication of what is being done would you say that has been taken forward in dialogue and discussion with the relevant authorities the three island authorities are named here and and obviously we would want to work very closely with those authorities as we have done to date Mr Mackay was in Orkney on Tuesday discussing some of these issues with leadership of Orkney islands council the islands prospectus that the government put forward committed to the government to the principle that island authorities should receive 100% of net revenues from adjacent waters to 12 nautical miles and a guaranteed more significant role in the management of crown estate marine resources and that would be the policy thinking that we would bring to bear on taking forward this issue with local authorities. I should also stress that the this point and a wider point that Lord Smith made if I recall correctly in his introduction about the desire to ensure that we devolve further responsibility from the Scottish Parliament to local authorities and local communities is a direction of travel which the government fully supports. That's helpful up to a point but the policy direction you just indicated isn't the aspiration of the communities a lot more than that because the submission for example from Shetland's council was to the Smith commission was to transfer all to local authorities all crown estate power and responsibilities they didn't see a middleman here and what you've just suggested is that you'd be the tax collector and then you'd give them a net and I think I quote you correctly a net amount so I think the communities are looking for how would one put it just being consulted on management they want to have the management powers for themselves don't you agree with that? Consulted was Mr Scott's word it wasn't one that I used where I said in my in my earlier answer is that it was to reinforce the points at clause 33 of the Smith agreement that responsibility for the management of those assets will be further devolved to local authority areas such as the free island authorities and that's what the government will discuss in the reconstituted islands working group there is in which our interests are taken forward by Mr Mackay I welcome that very strongly welcome that but that's not consistent if I may say so Deputy First Minister was saying we will be able to ensure that the island coastal communities receive 100% of the net income from seabed leasing revenues that suggests you've already decided your policy whereas I'm suggesting actually that the aspirations of those communities are much greater than just being on the end of a check we'll be very happy as I've said to discuss all of these issues with the island authorities the government has gone to great lengths to ensure we have a good strong and I think positively welcome dialogue with the island authorities on these questions and we will continue in that vein but does your mind open to much more of what 33 actually says which is the responsibility for the management of those assets being devolved rather than just being on the end of a check well I said that I endorsed the contents of 33 years I can check with Alison Johnson was used to do with the Crown Estate as well Alison well is to do with local autonomy well just before we go there I think we should agree that we need to I think right to both governments on this issue of 12 miles 200 miles there's been a different perspective given by both governments in this regard and I think to be fair to the Secretary of State and Mr Swinney we should right to seek clarity to make sure we can see we can come to get some agreement in this I think that would be a useful thing for us to agree now just obviously I have an advantageous position to the Secretary of State that I was a participant in the room which perhaps gives me more influence on this point or more perspective but the one thing and please stop me if I'm going too far on that position convener but at Clause 34 Clause 34 was specifically written to deal with issues that arise out with the 12 mile boundary and within the 200 mile limit so Clause 34 was believe you me poured over significantly because it dealt with issues beyond 12 miles which is why I was so firm and I'm absolutely firm I accept entirely your point about the Secretary of State in terms of where he was so I'm trying to be fair to him to give him a chance to reflect on his evidence by writing to him on the local communities issue because it's tied into the question on county and states I'll bring in Alison Johnson and then I'll go straight to Mark Macdonald Thank you Deputy First Minister you spoke about a direction of travel on local communities and I think it's fair to say that there are many who believe that local democracy remains the unfinished business of devolution even after the Smith commission I do think it's an area that deserves far greater attention if you are serious about empowering local communities do you think the fact that national government can you know usurp local government when it comes to imposing a council tax freeze is something that needs to be looked at? Well there's been no imposition of a council tax freeze every single local authority in Scotland has chosen since 2008 and some of them before that to apply a council tax freeze for which the government has been prepared to put up the resources to enable that to happen so the I can't impose a council tax freeze I can provide resources to local authorities to compensate them if they opt to do so but the only people that can vote for a council tax freeze are the elected members of local authorities You will maintain that that council tax freeze is a negotiations position but it's obviously very difficult in light of the freeze to it makes it very difficult for local authorities to be truly empowered Do you think the commission that's been set up on a cross party basis to look at alternatives to a council tax might look at that as an issue because certainly in many parts of Europe it's agreed that municipalities have that power and that national government should not intervene in that way Well I'm certainly very happy to see the establishment of the commission to look at these issues around local taxation the government has taken forward that proposal to build on recommendations made to us local government regeneration committee of parliament and I think it's a welcome opportunity for all interested parties including all political parties to be involved in a process of considering these questions so I think that's a welcome opportunity In terms of the ability of local authorities to determine their own priorities I simply remind Alison Johnson that when this government came to office in 2007 about £2 billion worth of local authority expenditure was ring fenced and controlled by St Andrew's House that now amounts to virtually nothing and the only areas where we exercise any ring fenses are by agreement with local authorities because we consider it to be a sensible thing to do where it's time limited funds with which we are dealing so the Scottish Government has significantly relaxed controls that were exercised by our predecessors over local authority actions to enable local authorities to determine more of their priorities according to local needs and we'll continue that process Straight away a bit from the purpose of today so I'm going to go to Mark McDonald and then Stuart McMillan last two questions in tax because I must move on to the welfare area Just around the assignment on the VAT the Secretary of State earlier when he was in I raised the issue with him that obviously the rate of VAT and how it is applied to various sectors will obviously remain the control of the UK Government what indication have you had if any that Scottish Government will be actively involved in discussions around that for example there are a number of sectors who've called for significant reduction in VAT on their particular sector have you had any early indications that Scottish Government would be actively involved in those discussions given that a drop below 10p for example a 10% would obviously impact on the assignment of revenues that would come to Scotland Bluntly Cymru I think it's unimaginable that the Scottish Government will have any influence over the setting of VAT rates in the United Kingdom Stuart Good morning Deputy First Minister I posed the question to the Secretary of State regarding the issue of corporation tax and paragraph 82 in the Smith Commission report indicates that all aspects of corporation tax will remain reserved and also we heard yesterday regarding the issue of corporation tax being devolved to Northern Ireland What are your thoughts on the issue of corporation tax being devolved there and also not coming to Scotland? Clearly the issue in relation to devolution of corporation tax to Northern Ireland has been one that's been advanced by our counterparts in Northern Ireland and they are absolutely free and welcome to take forward that argument and I'm certainly very satisfied they've put forward a set of arguments that have supported their proposition I do rather vest my arguments in this question on the conclusions of the Scotland Bill Committee in this Parliament prior to the 2011 election where the view was taken within that committee that if there was to be devolution of corporation tax to one part of the United Kingdom it should also be available to other parts and that would be a fair way to proceed given that would be one of the economic levers that we could utilise to strengthen the performance of the Scottish economy Do you see the issue of corporation tax and if it were to be devolved to Scotland do you see it as a means of actually creating jobs? Well it's one of the economic levers to which I referred earlier on in my answer to the convener and I think it's one of a number of different economic instruments that would be beneficial for us to utilise to what to strengthen the Scottish economy Thank you, Drew Smith Thanks very much convener, just to still on the issue of corporation tax of course if you go back and read the whole report of the Scotland Bill Committee it certainly doesn't make an argument for the evolution of corporation tax and I suppose the important principle that Lord Smith himself gave on Tuesday was that the agreement that was reached across all the parties was that it should proceed on the basis of what was in the best interest of Scotland and was not remotely contingent upon changes elsewhere in the United Kingdom and Lord Smith was very clear about that but I think he brought it up without even being asked the question about Northern Ireland so he was certainly extremely clear and presumably you would, except from the Smith Commission process that your view now on corporation tax is a fairly isolated one was clear that business doesn't support this that the unions don't support this that the submissions to the commission didn't support it and clearly it was just unfortunately for those people who believe in it an area where there is no consensus that this would be in Scotland's interest to Deputy First Minister Well it's not the only one where there's no consensus because if we flip the whole question on its head and say let's look at the evidence on some other questions other questions said that we should almost to exception civic scotland said we should have complete control over the welfare system almost without exception civic scotland said we should have control over the minimum wage almost without exception civic scotland said we should have the devolution of equalities legislation we've got none of those now out there, civic scotland wanted all these things and if we apply the same test that Mr Smith is applying to this that we should be listening to what all the external bodies of opinion allow me to finish my answer if we're going to listen to what all the external bodies are saying so the external bodies say we don't want devolution of the corporation tax so we don't get corporation tax so all the external bodies say we should have control of the minimum wage we should have control of our equalities we should have control of the welfare system and the Smith commission said to them no we're not agreeing to that so I think there's a fundamental illogicality in the argument that Drew Smith has advanced it would equally apply when those people make the same argument on the other side so we can perhaps agree to differ on whether consensus from submissions is the issue at hand and I want to go back I suppose to the point I was perhaps didn't get across which is the principle of what Lord Smith said out and as I say brought up himself to the committee on Tuesday which we should proceed on the basis of what is in the best interest of Scotland and Lord Smith was very clear on the principle in which the commission had come to agreement and that was not remotely contingent upon the position in Northern Ireland or elsewhere I proceed every day of my life I proceed on the basis of what I think is in the best interest of Scotland but I do accept that I'll have a different view of what's in the best interest of Scotland than what Mr Smith or this Mr Smith I suppose to Lord Smith only a matter of time I suspect but they it takes on any of these questions and because it's a we all come to judgement of what we think to be in the best interest of Scotland I think it would be in the best interest of Scotland for us to have a range of economic levers to enable us to strengthen the performance of the Scottish economy I've made no secret of that view and in some respects those priorities are supported by external organisations in some respects they're not supported by external organisations my views about how I think Scotland should proceed and how we should use all of the economic opportunities at our disposal just very finally you mentioned earlier in the initial discussion on this also the issue of national insurance and clearly the Scottish Government's position in seeking the power of corporation taxes to make a cut to that tax what would be your objective the other lever you identified in terms of national insurance would you also be seeking to cut tax there well employers national insurance contributions are a key factor in the cost of employment and if we are intent on trying to encourage and to support the growth of high quality employment in Scotland one of the levers we could use is to make it more affordable for companies to take on staff now clearly if there is a financial implication of all of that Scotland has to address that within its cost to programme but what it would strike me as has been a beneficial lever to have at our disposal to assist companies to take on more staff to have more tax payers to boost the public purse as a consequence of having more employees in employment generating thereafter stronger public finances and the ability to invest in our economy it was for the purpose of tax cutting it was for the purpose of economic growth all right last question in this area I will then move them into welfare issues a comment from me convener thank you it is that it would be worth reminding everyone that the kalman commission which is the parties here on it said quite clearly that the reserves of position on corporation tax should Northern Ireland be getting devolution in that regard can we move on to the welfare area now Deputy First Minister and I just want to come back to you yn dda'i gyd o'r reg premodol ar gyfer o gyfnodddol wedi'i gwrs oedais yn dweithio'r reg ergod. Byddai d medically i ddyn nhw'n ddyn nhw, oedd nieis o'r reg elfennydd o'r etydd gwrslau combineir ac ni'n ddedgynnu. Dw i'n fydig iddyn nhw'n ei gyd o'i ddyn nhw, ac rwy'n meddwl i gyd y rheoli, yn rydyn nhw'n ddyn nhw'n rydyn nhw'n ddyn nhw, oedd sylfaen ar beth byddai'r reg corroledig yn ddyn nhw'n ddyn nhw. Yn y cyhoedd y ffordd achos mae'r Ysgrifion Ardwyg Cynwylliannau Felly Cynwyllus, cerddw i'n ddangos cyffredinol, mewn dweud pethau yng Nghymru yn eithaf, gyda'r ddweud bod y prifeddwn cyffredinol Ceddaedd yma wneud hynny rhyw unigol o'r Ffyrdd Creddaeddol, cydwy'r cyhoeddion ar y ffund Ardwyng Ceddaedd yma, Mae gennym gweithredu yno gan yna'r prif ffordd a wedi unigol i gael y paragraf 55 rhwng yn cymysgol? Rydyn ni'n mynd i gael ei fod yn rydyn ni'n cael ei bod yn ymddangos i gael, gyda'r pethau addysgol, yn credu i gael i gael, yw'r ffordd ac yn rhaid i bod yw'r amser yn cymdeithasol i'r amser o'r Fysgol. Rydyn ni'n ffrifio gael i gael eich awr, oedd yn fwy o'r gael i gael eu cymdeithasol? Mae'n fwyaf o'r ddweud o'r cyfein. Felly mae'n mynd i'r cymdeithasol, yn y cas, wrth gwrs, mae'n cwestiynau 55, mae'n cwestiynau 55 mae'n cwestiynau cymdeithasol i'r cymdeithasol, mae'n cael ei ffordd o'r parlau yng Nghymru o'r ffordd o'r cyfein o'r cyfnod o'r cyfnod, Fe oedd y peth yn ymwneud o'r bwysigol oedd y ffordd yma os yw'r bwysigol oherwydd y rhai yn y ffordd. A oedd yn y sefydlu 55 oedd yn y gallu'r ysgrifennidol sy'n ni'n cael ei wneud o'r dreflygu o'r rhaid, mae'n rhai yn y ffordd yn y cwmddiwr o'r rhaid o'r rhaid o'r rhaid o'r rhaid o'r ffordd yn y rhaid o'r bwysigol o'r bwysigol. Ac yna'n mynd i'ch iddo, mae'n cael ei ddweud ei wneud y gweithio'r parlynedd ymlaen yw'r rhan o'r gweithio'r Llywodraeth ac yn ymwyfnod o'r cyflosol sydd ymlaen ymlaen yma. Bwyddiwch ar y gymryd i'r ysgol, yna dweud bod mae'n dweud o'r hynny'r fawr o'r ddweud. Rydyn ni'n dweud o'r hyn o'r ddweud i'r hyn, a dyna'n ei ddweud o'r cyflosol. I accept that Comedian, but certainly from... again, without wishing to tread over the line of my participation in the Smith Commission. That was certainly my view of the purpose of paragraph 55. Waft, to a fairly second state. He said he would come back to us and write it in a new media position. Absolutely clear on that regard. Has anybody else got any other questions on welfare lists? Thank you very much. Can I ask a couple of things on Scottish Government policy or preparedness for policy? One of the provisions in paragraph 45 is the power for the Scottish Parliament to vary the housing element of universal credit. It's the one exception in relation to the reservation of universal credit. There are a number of different aspects of this which would apply. I wonder if the Scottish Government has given thought as to how this might be constructively done in the context of the proposed split between reserved and devolved powers around welfare benefits. I think to go back to the ground I covered earlier, our initial assessment is that primary legislation would be required to amend at least the Scotland Act 1998. Perhaps it could be undertaken through a section 30 order, but there may also be, and this would perhaps be why primary legislation would be required, there may also be wider changes required to social security legislation into the bargain. I think there's quite a lot of ground to cover there to determine what would actually be the mechanism, the legislative mechanism for enabling clause 45 to be enacted. So clearly an area where more work is done. In policy terms has there been an opportunity yet to think as to how such a power might most usefully be deployed by the Scottish Government in the event that those technical issues are dealt with? There are two points I would raise there. First is that obviously we have a long standing opposition to the bedroom tax which is the under occupancy charges referred to in paragraph 45 and it would be an early priority of the Scottish Government to wish to remove that from the statute book. The second is how this power and responsibility could be deployed in a complementary fashion to our wider housing policy and of course we do have particular approaches within our housing policy that are designed to support and to enhance the circumstances of individuals who require support through the benefit system and the opportunity to integrate many of these interventions would be welcome. Thank you very much. On a different tax area, a welfare area, but a similar question. When the Secretary of State was asked this morning about work programme and also by DLA and PIPs his responses were in terms that he wanted to know what the Scottish Government proposed with these policies in order for discussions to be held for example between the DWP and Scottish Government around the transfer of responsibilities and so on. Are these conversations that have begun at any level between Governments, are the conversations that have begun within the Scottish Government as to how the devolved work programme powers for example would be deployed and how that transition could best be managed? What we've certainly been focusing on on the work programme is how we could timidly and effectively have the responsibility devolved at the end of the contract in March 2016 and obviously that's a very live issue just now because there's certainly been contact between the Scottish and United Kingdom Governments on this question as Mr Scott and I discussed earlier on this morning. I answered a question in Parliament on Tuesday about the fact that I would like to see the work programme more effectively aligned with the interventions that we make through third sector organisations and local authority programmes to ensure that we could best meet the needs in very specific local labour markets to the best of our ability. So that would be the approach that we would take on the work programme. On the question of disability living allowance and the roll-out of personal independence payments the Scottish Government has indicated that we would, when I made this clear to Parliament on Tuesday, that we would like to see the roll-out of personal independence payments brought to a halt in Scotland and we'd like to see the power transferred before the 20% cut to PIP which is a proposition of the United Kingdom Government. Thank you very much. Thank you. Certainly much of the area has been covered in that but I think there's a comment that I think would be very useful just to put to the Cabinet Secretary on Deputy First Minister and that's from Jackie Brock, the Children and Scotland Chief Executive on the issue of welfare. She is quoted as saying, I'm concerned that vulnerable families in Scotland may face even more complexity around welfare payments as a result of these transfers and with what you just had to say there a moment ago regarding the issue of PIP and DLA and also the issue of the extension to the work programme, do you agree with the comments from Jackie Brock on this particular issue? In a sense, my response goes back to my answer to Mr McDonald some time ago where he and I parted company on the word coherence. I think the danger of the changes that are recommended by the Smith Commission is that we don't have the ability to put in place all the coherence, all the simplification, all of the streamlining of the welfare system to make it much worse. If it is not accessible for vulnerable individuals then could and should be the case and that lack of coherence I think is something about which we have to be mindful and we obviously have a duty in implementation to ensure that as this whole programme is taken forward we do so in a fashion that has the citizen absolutely centre stage in our thinking about how this should be implemented to meet their needs. OK, again, I'm stressed. Let me do this quickly. Mark McDonald, Alex Johnson. Yeah, it goes more generally than perhaps touching on a specific benefit but there appears to have been a line in terms of the discussion from some around the way that intergovernmental relations work that would appear to suggest that the Scottish Government bears the sole responsibility on that. Given that the Secretary of State for Scotland in his answers earlier appeared to indicate that there was no appetite from the UK Government to take the approach on DLA and PIP that the Cabinet Secretary outlines, does he think that that is unhelpful from an improvement of intergovernmental relations approach? There is a lot of work goes on between Scottish and United Kingdom Governments which is good joint working. It works in orderly fashion. There are other areas where there's room for significant improvement and generally the areas where there's room for significant improvement is where we've got a disagreement about how we should proceed on many of these areas of policy which is why I get very frustrated by having decisions taken in London of which I completely disapprove. It's at the heart of my frustration about many of the choices that we have to make. In trying to resolve these issues we have to have better intergovernmental machinery but we shouldn't try to persuade ourselves that all of the disagreements that we'll have will disappear with lovely intergovernmental machinery. We'll still disagree about certain things because we have different views about things and that's a hard difficulty of politics. Minister, there is already a significant divergence between the cost of welfare in Scotland as a result of decisions already made to divergent policy and I think there's £100 million plus in your current budget that accounts for that. Do we have a proper understanding of what the nature of that divergence in cost will be as policy diverges and are we properly taking into account the potential impact of the Barnett formula on the cost of the Scottish Government in future? For example, you suggested a moment ago that you would like to see personal independence payments or their equivalent devolved before their subject to a 20% cut but surely even if they were devolved before that 20% cut, that 20% cut would be delivered via the Barnett formula? I wouldn't see how that would be deployed as part of the Barnett formula because the Barnett formula relates to specific programmes in existence in England and Wales and essentially comparators are based as a calculation on those different programmes. There's two points to look at what Mr Johnson has said there. The first is about the provisions that we make for welfare payments. We as a government make a choice and obviously there's widespread parliamentary support for what we're doing to make provision for additional welfare support through the Scottish welfare fund or through the mitigation of the bedroom tax. We have to find that resource from within our existing budget and it has to be done on a sustainable basis and that was essentially the turning point of the budget in February of this year. So those choices are there and they're done in a transparent way. The second point is in relation to, and it's a similar point, as these powers are devolved to us, there will be further calls on the Scottish Government to do certain things. But the test that we'll have to apply is whether we can find the resources to support them. And that's where I would have liked to have seen the Smith Commission giving us greater ability to improve economic performance which would then have enabled us to better afford some of these opportunities. You would concede that given the cost of the limited divergence we've already seen in welfare programmes that the kind of powers that are being proposed to be passed have the potential for quite substantial divergence in terms of budget. There is certainly the opportunity for divergence of programme but my core point to Mr Johnson is that these provisions have got to be supported financially and a Scottish Government would have to have the adequate resources to do so. Final question, a very quick question, because I must finish this for half past 11. One issue that was raised in some sense, there might be an agreement or disagreement with this, outstanding from the port is the issue of abortion. I would like to pursue the issue of the purpose of any devolution of abortion with the Scottish Government if it was the intention to continue to seek its devolution. But the convener indicates we don't have time to deal with that today so it's just a simple question which is, is the Scottish Government continuing to seek the devolution of powers in that area? The Scottish Government believes that all areas of legislative competence should be in the possession of the Scottish Parliament. So in a sense that's my answer to Drew Smith. Yes, we seek these powers because they're part of the remaining powers of Westminster that we would like to see exercised by the Scottish Parliament. On the very specific issue of abortion there were discussions within the Smith Commission on this question and the view was formed that the commission was minded to devolve, to recommend the devolution of abortion to the Scottish Parliament but that issue should be considered further with a variety of remaining health reservations that exist within the Scotland Act of 1998. Thank you very much colleagues, thank you very much. First Minister, I think I've had a good session this morning. It's very graceful for you to give me some of your time. I'll move straight on to agenda item 3, delegation of authority for witness expenses and I invite the committee to agree to delegate to me the authority to reimburse suitable witness expenses if required to any future witnesses. Some people are looking a bit of scant at that idea but we're agreed in general terms. That's it and at the end of the meeting I'll just remind colleagues that we'll meet again next Thursday all of a range of evidence from academic experts on the report of the Smith Commission. Thank you very much and we've made it with 25 seconds to go. Thank you.