 Welcome everyone to the 21st meeting of the devolution for the powers committee. I commend all members present to switch off their phones. I welcome very much the panel witnesses and welcome to any other witnesses to today's proceedings. We have apologies from two of our members, Stuart Maxwell and Duncan McNeill. There are no substitutions on this occasion. Agenda item 1 is the decision on taking items of business in private. Do we agree to taking items 3 consideration of evidence heard for the summary note of our wayday in five, our citizens' grade in private? On that case, we now move to agenda item 2 on the Scotland bill. This is another one of our sessions in taking further evidence on the Scotland bill, prior to its consideration at the House of Commons at report stage. We have today a panel of academic witnesses, Aileen Macargue, who is Professor of Public Law and Department of Law at Strathclyde University, Ian McClenn, who is Professor of Politics at Nuffield College, Oxford University, Andrew Tickell, the lecturer of the Department of Law at Glasgow Caledonian University. Thank you very much for coming along. We are very grateful for you giving us some of your time as we continue to deliver the Scotland bill before the report stage. Can I start with a question to Professor McClenn, as I think that it starts the discussion up nicely? I see the other two of you sighing a sigh of relief. Sorry, Ian, but I was very interested in the views that you have expressed in your submission about the balance between the taxis being devolved in those reserved and the ability of a future Scottish Parliament to pay for a different set of economic and social policies in Scotland compared to other parts of the UK, if that is what we want to do, things like abolishing the tuition fees or, for instance, bedroom tax. My question is whether the balance in this bill is right between the risk and rewards for the risks that are being transferred, for example being responsible part of the provision of the Scottish welfare system. Are we getting the right rewards in terms of either extra financial powers, policy flexibility and, in that light, how important does the fiscal framework become? Thank you, convener. I think that neither the UK Parliament nor this Parliament seems to me to be an entirely free agent in this matter because what we are seeing is a bill to implement the recommendations of the Smith commission, and the Smith commission proposed a certain balance of tax powers and spending powers. That, more or less, is what this bill proposes. As members will have seen in my written evidence, there are some things that I think are good to the extent to which it reduces vertical fiscal imbalance, which I define in my notes, and I am happy to talk further about, but there are other aspects that I think are because of the political process of Smith, which are rather confused, so that a rather, in my opinion, random set of welfare powers are put into the bill and then powers to top up other welfare spending. You asked about the balance of risk and reward, and I think that the issue there is that this bill contains powers on the upside, but not on the downside. The risk in any further tax devolution is that tax receipts in Scotland go up by less than tax receipts in the rest of the UK. The bill contains powers to top up spending, but it does not contain powers to reduce spending, so that risk, in my view, transmits into the risk that the Scottish Parliament might face a funding crunch somewhere towards the end of the spending review period that is about to start. I would prefer if risk and reward were more balanced in the ways that I suggested in my notes, if you are devolving welfare powers, in my view, you should also devolve some welfare tax powers, and then the risk and the reward both sit with the Scottish Parliament. At present, some of the risk is in one place and some of the risk is in another. Can you let me widen that out so that others can take part in this discussion as well, and give you a specific example where, in the area of welfare, I hope that I will open it up into other welfare issues that Anulinda Fabiani wants to get into. We had a submission to the welfare reform committee from Professor David Bell, who pointed out a possible flaw in the risk-reward balance, and that is why I opened up with that question. If you do not get agreements between the two Governments right, when the powers for DLA, carers allowance, etc. transfer will receive about £2.5 billion to pay for those benefits, but unless we rate each year at the correct rate, the fact that our population is ageing quicker than the rest of the UK means that demand may outstrip the revenues that are being provided. Unless we get it right and have the more ability to boost tax revenues from elsewhere through a deeper basket of taxes devolved, or indeed make sure that we have a right balancing agreement in the fiscal framework, we could be potentially looking at a poison chalice for a better description. I just want to get your thoughts on that, and maybe I've described it a bit too strongly, but you can see where I'm going. Thank you, convener. Is poison chalice may I ask David Bell's language or your words? No, it's mine. David Bell knows what he's talking about, and although I haven't seen his evidence, it seems to me that's very likely to be right. I think that poison chalice is a perfectly appropriate phrase because of the general point that I made earlier. If Scottish tax receipts do not go up in proportion to spending liabilities, it is indeed a poison chalice. Can you also, before I come to Aileen and Andrew, reflect on how we might use the fiscal framework to allow a balancing process that could create the environment where that situation wouldn't develop? Is it possible? I'm sure that it's possible, convener. Ministers talk about using tax powers to grow the economy. I think that there may be a wee bit optimistic there. I do, however, think that the area where this Parliament has already shown some initiatives and where there is the most potential is in relation to land and property taxation, where this Parliament has already stepped away from the Westminster framework. In my view—and I've separately given evidence to the Tax Reform Commission, which I could refer members to—in my view, there is scope there. Aileen Andrew? I don't know a huge amount about tax, so I'm going to—I don't have a lot to add. I would say, I suppose, that the general view—and this seems to be borne out by experience—is that the income tax is a difficult tax to raise. Other taxes are easier to raise, and the wider basket of taxes you have, the greater flexibility you have. I think that there are other issues also about—and this is wider than welfare—we have to understand tax not merely as a revenue-raising instrument but also as a regulatory instrument designed to alter behaviour. The fewer tax powers you have, the less flexibility you have in other areas as well. The failure to devolve taxes can alter the balance of risk and reward on substantive policy areas. Ian has mentioned in his submission that he talked about onshore oil and gas taxation. There is an interesting issue there about the political incentives that that creates in relation to allowing fracking, for instance. If the Scottish Government is not going to get any of the rewards from allowing fracking, and if fracking, as we know, is highly controversial, then that sort of tips the balance a little bit in terms of the substantive policy decision as to whether you decide to allow fracking. We have to understand tax in that broader policy sense and not merely as a revenue-raising instrument. I am not a tax lawyer either, or particularly good with numbers in general, but it is one of the challenges that this committee faces. We have a dual process here. We have a process for framing the Scotland bill, which sets out what powers this Parliament will or will not have. As you described, there is a parallel set of negotiations between the Governments about the fiscal relationships, about how Smith's principle of no detriment might be realised, and in the sense that just looking at the bill does not tell us that. It does not tell us how that level of negotiation is going between the UK Government and the Scottish Government. It does hit the right balance in distributing resources across this country. That is one of the big challenges for us. It is hard to analyse the bill in isolation. Is it not also constrainous in terms of policy flexibility? You described some of that in your own paper, Andrew. Do you want to expand some of that? In terms of tax? In welfare in particular? I think that my criticisms of the bill were largely premised on how it is drafted in terms of the powers, as opposed to the interaction between taxation and welfare. My basic starting point, my basic principle here, is to ask, are the restrictions that are placed on powers intelligible? Are they sensible? Are they necessary? If they are not necessary, then they should not be there. In the context for me, we are talking about the Scottish Parliament. It is a constrained legislature. It is not like Westminster. We are not transferring welfare powers from Westminster to Holyrood, because Holyrood is subject to judicial review in ways that Westminster is not. Westminster is a sovereign Parliament in welfare. Policy made by Westminster, generally speaking, cannot be challenged in the way that acts of this Parliament can be. It is around those areas that I am particularly concerned about some of the definitions around welfare in the Scotland Bill, that they are very likely to give rise to litigation, they are likely to limit your ability to make policy on things like disability, on things like carers, and I think that that is unnecessary. That leads probably into the one that is in terms of some of the other things that are interesting. There are two issues here, Andrew, that are picked up from your paper, and relative to what Bruce has been saying. First of all, I consider that to be a lack of cohesion among all the different elements of what we have in the Scotland Bill. That is particularly stark when it comes to the welfare issues. I have a real concern that when we move from talking about the theory of how that happens and all the disagreements, at the end of the day we have people who may well find that their lives are even more messed up than they have been over the past while with welfare. I was interested, Andrew, in what you were talking about, the difference between the Smith report saying that Holyrood would have complete autonomy in determining the structure and value of benefits for certain things, and then what you mentioned to the convener about the restrictive way in that that has been applied. The definition is particularly about specifying who should be classed as disabled, who should be classed as a carer and the potential on-going long-term argument between institutions that ends up with people in the middle having a really hard time. Have you been able, as an academic, to work out the logic in why that is being applied and why it is so different from what was clearly the intent of the Smith commission? It is probably because my understanding is that the first draft of the Bill was written by the Treasury, and that begins to explain quite a lot about how it is drafted and the control freakery of it. Take the example of how we define a carer. What interest does the Westminster Government have in defining carer's benefits as belonging and being able to be paid only to people over the age of 16, not on work and not on education? Is it accepted universally, forever and for all time, that this Parliament, for example, would not want to give extra support to 14-year-olds who care for their relatives? I do not understand really what the prevailing interest is of the Westminster Parliament in specifying that, and what is to be gained really in terms of constraining the policy autonomy of this Parliament. As you see, if in future a Government comes along, a party comes along who wants to challenge that and say, for example, give payments to 14-year-old carers, we will have another section 30 under the Scotland Act and another set of reform. That is meant to be a stable settlement. I do not think that it realises that. That leads me on, Aileen, to one of the things that you were saying, in relation to the new welfare benefits and devolved areas. I was interested, Andrew, that you said that, in your opinion, it would quite clearly have been started by the treasury, that kind of discussion. We have the Smith commission recommendation about the power to create new benefits within areas of devolved responsibility. That was quite clear. We now have a Secretary of State for Scotland who is saying that that is just silly because you already have that. If we assume that that begins from the treasury, the treasury sat there all the way through the Smith committee negotiations without giving too much away, I think that we were rather constrained at times, Tavish, by some of the treasury opinions. I just find this whole area confusing. That is fine to talk about when we are all sitting here talking in committee and there are different panels everywhere. At the end of the day, there are people going to be very much affected by what eventually is legislated here. I do not know what I am going to try to ask you to do, but could you just tell us what to do? What is your view on that? What is your view on the potential now for simplifying this and making it more cohesive overall at the stage where we are at just now in the legislative process? In reality, I think probably not much. My strong sense from talking to officials in the UK government is that they are not going to change anything. Somebody did say to me that we are too far down the process to be tearing it up and starting again. I think that whilst amendments are possible, I think that where there is an issue about the entire approach that has been adopted, we are probably stuck with it, which is very, very unsatisfactory. I agree with you. As I said in my written evidence, I think that the way in which we are approaching this, the authority that has been given to the Smith Commission agreement, and there is no offence to the members here who are on the commission, but it is highly problematic given the nature of that process. It is very rushed, a political bargain, very, very little public involvement. Now that is being used as the measure of what can be done in the parliamentary stages, this far and no further, is really problematic, because this is the point at which we are supposed to be scrutinising this bill and supposed to be working out whether it works or not. We are allowing an earlier flawed process to now hamper a later part of the process. I mean, on the specific issue about devolved benefits, the top benefits of devolved areas, I mean, I am not a huge expert on this, but I did look into it in the last few days. I mean, my view on this was, there is scope for disagreement here, so why not make it clear? What is the objection to putting something beyond doubt? That should prevent disputes in the future. I do not understand why you would not do that if you had the opportunity to do it. I am fine with anything. I am really just to get on record that the Scotland offices, I presume, spending a lot of money just now with adverts saying the terms of the Smith agreement are being met, would that be your view? Some areas clearly yes, some areas clearly no, and in other areas, you know, your guess is as good as mine. As I have made at the point in my submission, the Smith commission is rather vague on those points, and an arguable case might be made to sound a bit lawyerly that a number of different areas are met. The critical question, I agree entirely with what Eileen just said, I think that we have to shift from a question simply of is it met or not to a question of does this make sense or not, particularly on welfare powers, for example. If we have a legal challenge emerging, which is quite probable, in the sense that this Parliament has seen a number of its acts challenged in courts, not only on ECHR grounds, EU law grounds but also in the sense that your legislation relates to reserved matters. If you have a convoluted scheme of welfare in schedule 5 with exceptions on exceptions, you can bet your bottom dollar that you will find your case in court brought by somebody. I think that it is back, convener, to spirit and intent. It does strike me occasionally that, I remember lots of academics saying that Kalman was too slow and now this is too rushed. Maybe we should just get you guys to write all this, and then we should just entirely give up altogether. Maybe I could ask two questions. The first is about Andrew Tickle's remark that welfare would give rise to the wealth of clauses and litigation. Do you want to quantify that? Governments do not go into court against each other, do they? No. In terms of what they could potentially, although that is not to be ruled out. My name is Tickle, by the way. My father would insist on me correcting that. It just makes you sound absurd, and I am absurd enough already. In terms of that, we have to think about standing in Scots law to bring actions in review of your acts has been expanded very significantly by the acts case, which you all know as the plural plaques case. We are not necessarily talking about one Government challenging another. Imagine, for example, that this Parliament passed an act about... Sorry, I just wanted to be very precise about the evidence that you gave earlier on in which you said that the welfare clauses in Scots law could lead to litigation. I am just suggesting to you that the intergovernmental machinery that this committee is also taking a lot of evidence on is designed to make sure that that does not happen. Governments do not go to court and will not go to court in a practical sense on this either, will they not? No, my point... Sorry, I perhaps did not make myself clear. My point is that an ordinary member of the public, a pressure group, a campaigning group, the Christian Institute acts at all of these organisations, they can review your acts in Scottish courts. For example, the disability clauses as they stand say that a disability benefit created by this Parliament has to be significant. Significant is a pretty vague phrase. If this Parliament introduces such a bill about disability and somebody out there disagrees with it, that can be reviewed in the court of session. I am not suggesting that it is the Government's, but any member of the public may well avail himself of that. Right. That is helpful. Thank you for that. I really wanted to ask Professor McLean about his paper, some of which I understood and some which I did not, if I may say so. It is a bit that got me was about horizontal fiscal equalisation. In point 11, power 11 of your paper, Professor McLean, you say this means, and you will need to take us through this, this means a transfer of resources from relatively rich people to relatively poor ones, and hence from relatively rich parts of a country to relatively poor ones. Can you say what you mean by that in the context of what we are discussing? Yes, I will do my best, colleagues. Suppose we considered the case, not of Scotland, but of Wales and Northern Ireland, because it is quite clear that these are both relatively poor regions of the UK. But we are considering Scotland with great respect. For the purposes of answering your… No, but forgive me, you are giving evidence to a Scottish Parliamentary Committee. We are not discussing Wales and Northern Ireland, we are discussing Scotland and the Smith commission, so I really would like the answer to relate to us, please. Okay, very well then. In relation to Scotland, Scottish GDP per head is about 96 per cent of UK average. Scottish public spending per head is about 115 per cent. Now, there are possibly some anomalies there, but if that… If we maintain a social union and Scotland remains part of the United Kingdom, then that 96 per cent suggests that, on average, there are somewhat more poor people or people in difficult circumstances per thousand of population in Scotland than there are in the rest of the UK. On average, also, there are fewer higher-rate taxpayers in Scotland than the rest of the UK. Therefore, within a social union, there will have to be some transfers. Therefore, it would… It can never be the case that the Scottish Parliament can be expected to raise all that it spends. It will raise less per head in tax and it will have more requirement to spend on welfare benefits. The only reason for proposing to bring Wales and Northern Ireland into the discussion is that the issues are much more clear-cut because they are of the order of 80 per cent per head, GDP. So the convenience question about the fiscal framework, you'd agreed that that's absolutely the nub of this issue? For me it is. That's not to disregard the legal points which other colleagues are here to address. Do you have a view about how that fiscal framework needs to work or how it can best be constructed? This is not in the bill, it's in the inter-governmental negotiations about which I know very well. Which actually stuff that really matters in all of this? There's a lot of stuff that really matters there. It's sort of clear what the no-detriment principles mean on day one of the transfer of a tax power. It's not at all clear to me that what they mean, if you will, in year two. In that respect, if I were answering Linda Fabiani's question about is Smith being implemented or not, I would have to say I don't know because I don't know how or even whether the no-detriment principles are to be implemented. That's very helpful. Do you think the no-detriment principle is a principle that applies over a parliamentary period, i.e. a Parliament, or is it over a spending review period? Do you think those definitions matter? Have you done any work on assessing how that might operate? They matter a great deal. If it were, for instance, if you will, locked into a spending review period, then the risks, the downside risks and the upside rewards are less than if it were done annually because where the GDP per head of one part of the country to grow less than the other, that might be protected for a whole spending review period, but if it were done annually, it presumably would not be. You would favour or you think that it would be more ffiscally responsible to take the longer view than the year-to-year short-term view in terms of how that was constructed? I'm not sure what I would favour because I'm not sure whose interests I would be expected to be looking at. In this context, the taxpayer, shall we say? Yes, but am I looking at the position of the Scottish taxpayer or the rest of the UK taxpayer? They might, in some unfortunate circumstances, be actually opposite, so I don't think that I can answer that question. I'm going to come back into deeper issues to do with the fiscal framework later, but I do need to get Annalisyn Johnson's particular time pressure, so I'm going to make sure that Annalisyn gets the opportunity to raise the issues that she wishes to do so. Thank you very much, convener. I'd like to ask Andrew Tickell about a couple of blogs that you've written recently. They've been very interesting regarding the UK Government's plans to repeal the Human Rights Act and the impact that that might have on ECHR requirements on the devolved nations. If I could just ask you two or three questions that might enable you to elaborate, is it your view that repeal of the Human Rights Act doesn't require consent? Is it your view that, while we should lament and campaign against this repeal, we might perhaps be better to push forward with our own version? I'd also be interested to learn your views on whether or not a British Bill of Rights would require consent from this Parliament. Plenty there, and I imagine that Aileen can speak to those points, too. I think that we may disagree on one or two of those things. Point 1, does the repeal of the Human Rights Act require sewer consent from this Parliament? There's an argument that it does, I think, quite a strong argument that it does, from a few different points. Ian Jameson, who's a former Scottish Government lawyer, has made the point that the Human Rights Act is the dictionary of the Scotland Act, and as you'll know, the ECHR provisions in the Scotland Act are different from the Human Rights Act. They will apply whether or not the Human Rights Act across the UK is repealed. So there's an argument, I think, a strong argument that, actually, the consent of this Parliament is necessary for repeal full stop, but it will alter the competencies of this Parliament, it will impact on what you can and cannot legislate for, and that engages sewer, as it has presently been understood. To do with a third point, I think that a British Bill of Rights clearly would require the consent of this Parliament. Human rights are not a reserved matter under Schedule 5 of the Scotland Act. I think that the UK Government has been profoundly confusing in its statements in public about whether or not it regards either repeal or replacement as requiring the consent of this Parliament. Michael Gove has seemed to suggest that it doesn't. I think that he's probably mistaken in that judgment. To be honest, I think that the UK Government shows very little evidence of having thought at all about the devolved aspect of this proposal. It dominated the Bill of Rights Commission, which was abortive—the Lib Dem Tory Bill of Rights Commission—but it's been really missing from the Government's analysis since. Your second point should be to replace it with the Scottish Bill of Rights. That might be an idea. It would be an interesting idea. We could replace it with different sets of rights, children's rights, for example, but it would have limits. It would have limits in the sense that it wouldn't apply to every single public authority in this country, as the Human Rights Act currently does—every school, every hospital, every local authority. I don't think that I disagree with Andrew MacDonald as much as he thinks I did. My initial view on your first question is to repeal the Human Rights Act requires. My initial view was that it doesn't, because the Human Rights Act is specifically a reserved statute under schedule 4 of the act, but I have been persuaded by what other people have said subsequently, particularly Ian Jamieson's views on this, that it is more intertwined in the Scotland Act and, therefore, I think that there is certainly an argument that Sule is required. I certainly agree with Andrew MacDonald for a British Bill of Rights. Sule would definitely be engaged. Is it better to push forward on our own version? I see no problem in principle with that. There is a view that human rights are part of the UK constitution. They should be the same throughout the UK, but the truth is that they are not, at the moment, the same. The level of protection for convention rights varies from country to country, and the way in which we protect rights more substantively, because rights are not just protected by the ECHR, they are protected in legislation, so the practical protection of rights varies quite substantially from jurisdiction to jurisdiction. I see no problem with that in principle. I have some concerns, as a little bit of a rights sceptic, I have some concerns about the idea that we should just, you know, this is a great opportunity, let's entrench everything, let's have lots of socio-economic rights, I'll be a little bit concerned about that. The point that Andrew made about what about reserved public authorities, would we be able to include them within a Scottish Bill of Rights? I think that there's a little bit of an argument that possibly we could. We might regard that as an alteration of Scotland's private law. Scotland's private law is defined in the Scotland Act 2020 rather problematically as including judicial review, which is not private law, but we could frame that as an alteration to the grounds of judicial review and it might be arguable that we could include reserved public authorities in that, but I wouldn't be confident about it. I think that there is a risk of a bespoke Scottish system that, yes, it might be much stronger and better in its content, but much narrower in its scope, and that would be a loss. If you think of where many of the human rights challenges come, for instance immigration cases, well, if that is outwith the competence of the Scottish Parliament, then that would be a huge narrowing of the scope for human rights challenge in this country. Thank you. Can I ask one more quick question, convener? It's not quite as tangential as that particular bit was. Well, I do think that it's a very important question. It just seems to me such a hugely important issue. I wonder if you have a view on the political implications of Westminster going ahead without the consent of this Parliament, because it will be massively contentious. Well, yes, of course it would be. It would be, I think, as many people would regard it as outrageous, frankly, in the sense that the Sewell Convention is a constitutional principle. It would be—some people would say—an unconstitutional act by the Westminster Government to do that, if I'm correct and if Eileen is correct on the points that are mentioned. Thank you. Thank you, convener. Do you agree with that, Eileen? I do. I think that it's Northern Ireland that you need to be really concerned about not here. Okay. I'll move into a slightly different area, though probably linked. I'm welcome. I did want to—and I will ask about Sewell more generally, but if you'll—this will allow me for a few minutes—you might regard it as tangential, but I'm really intrigued by another quote from an earlier blog of Andrew Tickell, where he said that if Westminster abolishes the Human Rights Act, Holyrood and the Scottish Government will remain bound over terms of convention rights, but Glasgow City Council and the police will be liberated from their obligations to respect freedom of religions and conscious and the privacy and home life of everybody they encounter. So I wasn't quite sure why that was the case, given that they're legislatively we're responsible for local government and the police. Yeah, as I'm being quoted of, but I hope my record's all as pure as that. The point is a distinction between the two human rights regimes that supply in Scotland. So this Parliament cannot legislate contrary to the European Convention under the Scotland Act. The Scottish Government must observe convention rights under the Scotland Act, but the Human Rights Act casts its net much more widely to incorporate those bodies that you've just described, hospitals, schools and the police officers. So if the Human Rights Act was abolished, and it's worth remembering that Westminster could do that, it would make your constitutional abomination, but it could do it, then it would mean that this Parliament would still be bound by the ECHR, but Glasgow City Council would not. Well, it was a very striking quote, so I think the convener's forgiven me for pursuing that line briefly, but I was interested really in the Sewell issues more generally, because obviously the intention of Smith is to give us more powers, but it appears from the way that Sewell's being dealt with that we're possibly getting less powers, and I was interested in the issues of, towards the end of Andrew Tickell's paper, he quotes from the Scottish Parliament Standing Orders, in fact, but the key phrase is being something that alters the legislative conference or the executive conference of the Scottish ministers, and I wasn't aware or particularly of the executive competence change, but could you just explain, I suppose, the more general point would be in which ways you think we're going to have less powers than we currently have if those aspects of Sewell are overlooked? Well, it's quite odd. Clause 2 of the bill, which sets out to recognise an inverted comma, is what's been called the Sewell convention, although I dare say with recent developments that we might want to call it something else now. That sets out the principle that Westminster will not normally legislate with respect to devolved matters. Devolved matters is not actually a term that we use in the Scotland bill in general. We talk about reserved matters, and all that is not reserved is devolved. Now, the Sewell convention has developed over time to extend not just to Westminster legislating about devolved powers, but also changing your powers. That's what we're here discussing. On my interpretation, if the Scotland bill was enforced today, we wouldn't be sitting around discussing this because the Scotland bill is not a devolved matter. It's a reserved matter. That seems, as I described it, chimerical. It's a much more limited understanding of what the constitution expects than I think the Scottish standing orders that you alluded to express. Could you say something about the executive competence, because you're suggesting some of that is actually going to change in relation to energy? I know that the example you mentioned was two different kinds of questions. There are the executive competence sections of the bill that will make the Scottish Government responsible for decision making in certain areas, so it will extend powers from UK Government to the Scottish Government. Generally speaking, with Sewell, we're talking about changes to the Scottish Government's powers. Say down the line an act of the Westminster Government proposed to strip the Scottish Government of certain executive powers. The question is would that require this Parliament's consent? Under your standing orders definition of Sewell it would, under the Scotland bill's definition it arguably wouldn't, but then again we don't know what this magic phrase devolved matters means because it's nowhere defined in the bill. Can we ask the alien to reflect on some of that as well? I agree with what Andrew Hamilton has said. If you want an example of where this Parliament's consent has been required to changing executive competence, an example would be what became the Energy Act 2013, which took away the Scottish Government's powers to set its renewable obligation in Scotland when that was being replaced with contracts for differences. That's an example of where that wider sense of what Sewell requires has been implemented. In terms of legislative powers, of course, the Scotland Act 2012 was subjected to legislative consent motions in this Parliament. If we understand conventions as constituted by practice rather than words, practice tells us that Sewell is wider than what is currently in the current Scotland bill. If clause 2 is merely a sort of declaratory clause, if it doesn't have any legal effect, and I would argue that as currently drafted it doesn't, that doesn't necessarily mean that the other bit of Sewell doesn't still apply. The problem is that the statutory statement is likely to become the more authoritative understanding of what it means, so there is a risk that the other bit of Sewell atrophies. I think that that would be the risk. In terms of the legislative competence, can you give examples of that where it has applied and where it wouldn't apply in the future necessarily? Well, as Anjou said, you wouldn't be being asked for consent to this bill, because changing the boundary between reserved and devolved matters is not a devolved matter. Can you think of any examples of where we have been asked? That's Scotland Act 2012. I know that you are interested in the area in this area, but have your questions been answered or do you want to probe a bit further? When I came in here this morning, I didn't think that we would be discussing a Bill of Rights, whether a UK or a Scottish, but it certainly got me to thinking, particularly after I heard from those given evidence this morning. With the proposals in the current Scotland Bill regarding the devolution of some of the welfare powers to come to here, and if there were to be that discussion regarding a Bill of Rights, how would that affect this place in terms of actually taking any decisions over some of the welfare powers, or how would it also affect an LCM if the UK Government, at some point in the future, wanted to change or amend or abolish the human rights act? It feels extremely hypothetical, hypothetical on hypotheticals. If you could narrow it down to possibly something more specific, I might be able to be more helpful. With the Bill that is in front of us, the Scotland Bill and with the devolution office, some of the welfare powers, we have had a bit of a discussion already this morning regarding some of the elements of them. The committee has widely discussed the issue of welfare powers in terms of some of the potential confusion or potential restrictions that will be placed on that place. If a UK Government in the future just wanted to make any major amendments to welfare powers through a different means, not a direct change to it, how would that place be affected? Would we still, if what is suggested with the Scotland Bill regarding the Sewell, make the proposal? How would that place be affected by that? Right. That would be a question of taking back devolved competencies, is that what you are talking about? Or extending devolved competencies or recasting them in some way? That is the sort of thing that is covered by the second bit of Sewell. The bit of Sewell that is in the Scotland Bill would cover a situation in which Westminster decided to go ahead anyway, notwithstanding the devolution of welfare powers to this Parliament, to go ahead anyway and legislate. For instance, as was threatened in relation to Northern Ireland just last week, but if the Northern Ireland Executive could not agree on a social security settlement, Westminster would step in and impose one. That is unproblematic. If you are talking about adjusting the boundaries, that comes under the second bit of Sewell, and that is the bit that is not clearly catered for under close two, as it currently stands. In the case of the Sewell stuff, just to get on the record, how important you feel it is that all three strands of the Sewell defined in DG note 10 are fully reflected in the bill? That only covers the situation in which Westminster would be exercising its right to legislate in an area that has been devolved to this Parliament. It only clearly does that. That is where the other bits are missing? I think so. Okay. Andrew, do you feel the same? Yes. Okay. That is on the record. We know where we are. Thank you, convener. I wanted to look at the fiscal frame work and perhaps some of the financial elements of the legislation as well. The secretary of state was before us on 25 June, and in his evidence to the committee in answer to a question that I posed about the flexibility that is allowed within the fiscal framework, he said that it is not the intention that the fiscal framework should constrain the powers that are being devolved in the bill. However, if I look at point 2.2.5 of the command paper, I find the sentence, in the context of Scottish devolution, the fiscal framework must ensure that Scotland contributes proportionally to the overall fiscal consolidation pursued by the UK Government. Do you feel that those two statements sit side by side? They seem contradictory? I agree that they seem contradictory, and I think that it really takes us back to the set of questions that the convener asked at the start of this session. You cannot square the circle. In the worst case from the point of view of Scotland, where Scottish GDP and therefore Scottish tax revenue grows more slowly than the rest of the UK GDP, and Smith no detriment operates both ways in both parliaments, UK Parliament has to, I think, while we remain in a United Kingdom, to be able to say Scotland cannot increase its deficit, for instance, by more than the UK does. My reading of that is that that is a consequence of our remaining United Kingdom, which the majority voted for last September. As to the contradictions between that and what the Secretary of State said, I cannot speak for the Secretary of State. Possibly a wise approach to take. I do not know if Professor Macargo or Dr Tickell have anything to say on that. I suppose that the technical point that you can have something in legislation will always trump as a matter of law something that is not in legislation, but we need to be aware that what the legislation says is not always what actually matters in practice. There are other ways of enforcing things that may be included in non-statutory frameworks. I guess that it does come down to the point that was made about the, and I think it was Andrew Tickell who said that while we have the legislation going forward, we also have the negotiations that are taking place around the fiscal framework. I was interested, looking more broadly, convener at the financial powers that will come to Scotland. It ties into the coherence point that my colleague Linda Fabiani mentioned. Professor McLean, you have expressed a view that perhaps the suite of taxation powers that are coming to Scotland do not seem to match the aspirations that could be achieved via some of the policy instruments. Essentially, if you take income tax, for example, there are limitations to how many things one can do with income tax in order to derive the revenues to make policy decisions compared to perhaps other taxation powers. I do not know if you would want to put some of that on record. That was not exactly my point. My point was that the tax powers in total are still less than the spending powers in total, and therefore there is still an imbalance. I was not expressing an opinion on which tax powers were best used for which policy purposes, except to a limited extent in my paper in paragraph 20 about sin taxes, fuel taxes and excise, which clearly can be used as policy instruments, but they give rise to the classic problem that the more successful you are at stopping the behaviour that you want to stop, the less you raise in the tax. In fairness, you do in your paper talk about taxes, which would be what you describe as candidates for further devolution. In particular, you have highlighted the full assignment of VAT, as opposed to the partial assignment of VAT, and the devolution of national insurance contributions, which I know has been discussed, because I am a member of the finance committee, has been discussed there about the completeness that that would provide in terms of the income tax provisions. I do not know if you want to comment on either or both of those. I mentioned those simply because they bring more into balance the tax and the spending, but VAT is an example of, as I say in my paper, that you could not devolve, you could assign the whole of that receipts in Scotland to the Scottish Government, but it would make not a blind bit of difference to the policy levers that this Parliament can pull because it is an assignment, not a devolution. In a sense, I think the same about the big ones, national insurance contributions, either employers or employees. The ones where I think devolution of tax gives you policy levers are excises and fuel duties, as I have already mentioned. Since it came up earlier in the discussion, I will also mention offshore and onshore mineral taxation, where you would be given policy levers if those taxes were devolved. In terms of the broader point about the coherence and the relationship between the levers available and the powers available, I do not know whether Professor MacArthur or Dr Tekel have anything that they want to contribute on that. No, I am seeing shakes of the head. Just in this year, do you want to pick up on any issues at this stage? A couple of things, but I am moping up operation. In the simplest form, I have always taken the view that devolution of powers to Scotland should be basically involved in the areas that you can do what you like, as long as you pay for it yourself. Are you telling us that, within the proposed Scotland Act, that the profiles do not match in order to achieve that outcome? That is a question for me. Correct. The profiles do not match, although they are closer to matching than either of the previous Scotland Acts 1998 and 2012. One of the things that we do regularly, as we assume that every stab we have at devolution is going to be the final chapter in the book. Of course, it never is, and each attempt produces hostages to fortune. Are we in a position where we need to take action now to avoid hostages to fortune when the next round of devolution in the next final chapter is being written? That is almost a political question. I will take refuge in the wise statement of the First Secretary of State for Wales, Ron Davies, that devolution is a process, not an event. Indeed, on that subject of a process, this is one of the areas that we actually touched quite heavily on earlier, and I wanted to have a final question on it. That is that the nature of the act and in relation to the fiscal framework in particular, which we have little or no control over, do you see what we achieve as being something that can be an on-going process, or will the effect, particularly in relation to no detriment, be that we have a snapshot on day one that may be clearly definable as functional, but that it will be inflexible going forward and therefore will only ever work on day one? That is really tricky, because none of us around this table knows what no detriment means, I refer you to the earlier discussion between myself and Tavish Scott. Over what time period are the no detriment principles to be set and reset? We do not know. With respect, I found that question impossible to answer, and I apologise for that. The final thing that I wanted to ask relates to a very specific comment that you made in your very opening remarks. When you were talking about the relationship between powers and taxation, you said that—and I am part of reason very heavily here—it was relatively simple to work out what a welfare power was, but you mentioned something that you described as a welfare tax. I want to explore what you meant by a welfare tax. Nominally, since 1911, national insurance contributions have been a welfare tax. They are nominally linked to a national insurance fund. You might say that this was a fraud from day one and that Lloyd George, who began this new very well fraud, has a famous book called Lloyd George's Ambulance Wagon, which shows that he knew exactly what he was doing. He was creating a pay-as-you-go system. If I gave the impression that I thought that the link was any more than nominal, I probably should not have done. Nominally, there is a link between national insurance contributions and welfare benefits. You were talking in a fairly general centre, rather than suggesting anything that would appear to be the hypothecation of taxation. Everybody around this room knows that the UK Treasury has a panic fear of hypothecation of taxation. I do not think that that really is coming up as much of an issue in this bill or in the fiscal framework discussions, to the best of my knowledge. It simply would appear that if we achieve all that we want to achieve in terms of the ability to create new benefits, for example, and to devolve the areas, you are concerned that the necessary tax powers in order to achieve that are not contained within the bill? My concern was expressed at a more general level. Apart from what is needed to redistribute within a social union, I would prefer if the power to tax amounted to the same proportion of public expenditure as the power to spend. That is just a neutral principle. It is not saying anything about any particular tax. To sweep the session up before I go to Rob Gibson, would you agree with the committee on the fiscal framework that, as it has developed, we should have more transparency around the process so that the parliaments can understand what the fiscal framework means when it gets there. We should have the chance to scrutinise draft elements of the fiscal framework before they are set in stone. Both parliaments should agree them before it is signed off, because from what we hear this morning, it is now the absolute central documentation and framework that is going to decide whether that is going to work or not. At the end of the process, the Parliament has to decide whether or not to give legislative consent to the bill. I find it difficult to see how the Parliament can decide either way, unless it knows something about the fiscal framework. I would agree with that. You cannot calculate what the bill will do until you know that. Good morning. The panel turned to the devolution of the crown estate, which both Eileen McHarg and Ian McLean have commented on. From both the point of view of process and the use of assets, Eileen McHarg has said that there is even greater complexity in the devolution arrangements in the bill as compared to the draft clauses. Indeed, it is not entirely clear how the Scottish Parliament's powers to alter the management of the transferred assets contained in clauses 31.2 and 31.6 will be affected by any restrictions in the transfer scheme itself, in particular regarding clause 31.10. I wonder if you would like to explore a bit for us how you think 31.10 constrains those previous bits, or how it might be altered. Clause 31.10 is the bit that says that the crown estate has to be maintained as an estate in land. My first reaction to that is what on earth is an estate in land. It is a term that currently appears in the Crown Estate Act 1961, but it is not a term of art in Scots law. That is a problem. I asked an Australian colleague a few weeks ago. She is a property lawyer and an Australian property lawyer is based on English law, so this is an English law term of art. I asked her what does this mean. She said, oh yes, that is a very good question. I was not really any the wiser, unfortunately. It seems to be some idea that there has to be something that is maintained in Crown ownership. It does not have to be what is currently in the Crown Estate, so assets can be sold or added, but there has to be something that is a Crown Estate. I find that that is a really odd idea. I do not understand the justification that is given for it. I do not think that it makes sense historically. The argument seems to be that the Crown is indivisible, therefore Crown property is indivisible. This is historic property of the sovereign and it must be maintained and trust for the sovereign. This seems to be to be a lot of nonsense. Crown estate property is government property. Things that are included or not included in the Crown Estate are, to some extent, random. We look at offshore energy rights, for instance. The rights to grant leases for offshore gas storage, offshore renewables have been added recently by statute to the Crown Estate. Oil and gas pipeline is also our Crown Estate added by statute. Oil and gas drilling offshore never had anything to the Crown Estate. It is still a Crown right, but it is not Crown Estate. It has nothing historically to do with the sovereign. It is just government property. This is a device by which we manage government property. There may be a case for maintaining government property, but there may be a case for doing something else with it. I just do not see any argument for imposing that restriction on the Scottish Parliament. If you want to give away Crown property, you should be free to do so. Indeed, the transfer of Stirling Castle grounds was one of the interesting recent examples of where the Crown Estate made an agreement with the Scottish Government and Parliament. Right. Some Crown property is already devolved. Not all Crown property in Scotland is Crown Estate. It is completely haphazard. What you are suggesting is probably that clause 31.10 should be scrapped. I would say so, yes. I wonder if we could bring in Ian McLean at this point, because you talk about the consequences not being specified in your paper about Scottish ministers deciding how to treat other Crown assets in different ways. It follows on from this. Do you think that those restrictions should be abolished in 31.10? Not being a lawyer, I would rather not attempt to second-guess what Ian McLean has just said about 31.10. I am simply taking the statement in the bill of explanatory notes, which I quote in my paragraph 7 at face value. I am making a different point to Aileen's, namely that if Scottish ministers use the freedom that it said that the bill grants them and whether it actually does grant them that freedom or not, I am not qualified to say. Let us assume that it does. Then that is a policy change. Therefore, under the Smith no detriment principles, the rest of the UK could play hardball and say that you have reduced the revenue that comes to you from the Crown estate. You must bear the risk of that. I am simply pointing out that that is a risk to this Parliament of using the powers in that way. That is not to say that it is not the wrong thing to do, it is just a risk. It is only an example of using a less commercial approach, for example, to increase the role of social enterprise, but it could be adding to the estate through various taxes and offshore renewables or oil and gas. It could be different, but the example that has been given suggests that the Scottish Government would take less from the Crown estate. Why does it not suggest that it could take more? I am just going with the example-giving. The consequences of the example-giving in that expoundary note is that the Scottish Government would take less. I am simply saying that this could give rise to a claim from the rest of the UK. It might be trivial, in proportion to the total of public expenditure, but it could. I should say that I speak in one of my hats as a trustee of a body in the British Academy, which is a tenant of the Crown estate. I am very well aware that the Crown estate is as hard-nosed as any landlord you will get. Speaking from my private citizen, I would be delighted by the Scottish Government to take the approach that is suggested that it could in that expoundary note. However, there would be fiscal consequences. I have a feeling that you want to contribute. There is an irony in the transfer scheme. One of the restrictions that is to be imposed is to ensure that we cannot fleece UK energy consumers by upping rents for offshore renewables or pipelines. However, there is no such restriction on the powers of the Crown estate in England. As Iain has just said, it acts in a wholly commercial manner. There is a real inconsistency there. I do not understand why the Scottish ministers in control of those assets are any less to be trusted than the Crown estate. If there is a problem, it is already a problem. The Crown estate assets include the revenues from offshore wind and things like that. In fact, the UK Government has changed the potential income from those assets by constraining the number of offshore wind developments there might be. The Crown estate is investing its income in further income-gathering projects. It is already detrimental to Scotland's ability to gain income from the offshore estate. Do you think that that is something that the no-detriment principles would have to take into account? Although it is no detriment as a result of the decision to devolve further power, that does not apply. However, the no-detriment as a result of the UK Government or Scottish Government policy decisions post-defolition. However, we are already talking about things that have been constrained before we get to that stage, Iain MacLean. I am not a lawyer, but you have two lawyers sitting to my left. However, if the Crown estate in and on the foreshore in Scotland controls facilities to do with offshore wind, then it seems to me that Scottish ministers have under this bill the power to direct the Crown estate to do with the opposite of what it says in this illustrative note and to act in a more commercial manner to allow more offshore wind to be developed off the Scottish coast. In that case, the no-detriment principle still works, but it means that the policy changes in Scotland and that if there are more tax receipts as a result of a directive to the Crown estate commissioners, then this Parliament gets to keep them. Indeed. Do you think that the restrictions in clause 31.10 should be scrapped? I must defer to the lawyers here. Okay. The lawyer has already said yes to that question. Yes, I know that. Okay, well thank you very much. I think that that has been a very useful session, very informative from the committee's perspective. I am very grateful for Iain MacLean and Andrew coming along and giving us evidence today. Thank you very much. Now close this and we will go into private session.