UNCORRECTED TRANSCRIPT OF ORAL EVIDENCE To be published as HC 781
HOUSE OF COMMONS
ORAL EVIDENCE
TAKEN BEFORE THE
SCOTTISH AFFAIRS COMMITTEE
SCOTLAND OFFICE ANNUAL REPORT AND ACCOUNTS
WEDNESDAY 20 NOVEMBER 2013
RT HON ALISTAIR CARMICHAEL MP, RT HON DAVID MUNDELL MP and ALUN EVANS
Evidence heard in Public Questions 1 - 91
USE OF THE TRANSCRIPT
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Oral Evidence
Taken before the Scottish Affairs Committee
on Wednesday 20 November 2013
Members present:
Mr Ian Davidson (Chair) Mike Crockart Jim McGovern Graeme Morrice Pamela Nash Sir James Paice Mr Alan Reid Lindsay Roy
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Examination of Witnesses
Witnesses: Rt Hon Alistair Carmichael MP, Secretary of State for Scotland, Rt Hon David Mundell MP, Under-Secretary of State for Scotland, and Alun Evans, Director, Scotland Office, gave evidence.
Q1 Chair: Gentlemen, could I welcome you to this meeting of the Scottish Affairs Committee? It does not seem all that long ago since we met you, but another visit is always welcome. Today we are looking at the annual report and accounts of the Scotland Office. Secretary of State, could we start off by asking you how the Scotland Office sees its role in the coming year? Mr Carmichael: The role of the Scotland Office is as described in the report, but, if I may use the term politically, I see a very key and central role in government for the Scotland Office between now and the independence referendum in September of next year. It is clear that the resources of the Scottish Government are devoted to the promotion of a yes vote in that referendum, and I should wish to use the resources of the Scotland Office, within—well within—the limits of propriety, to ensure that the benefits of the United Kingdom, and the benefits to Scotland of being part of the United Kingdom, are fully understood by the population of Scotland when they come to vote next September.
Q2 Chair: How are you monitoring the implementation of the Scotland Act passed recently? What steps are you taking to make sure that people in Scotland are aware not only of the significance of that Act but of how it will impact upon day-to-day life in Scotland in the future? Mr Carmichael: If I can pick up the implication, or draw the inference from your question, there is more that we can be doing to highlight to the people of Scotland the significance of the Scotland Act, in particular the variable rate of Scottish income tax. There is a lot of contact on a regular basis between officials at the Scotland Office and the Treasury in Whitehall and the Scottish Government in Edinburgh, so that is an ongoing process. I think there is more we can be doing to remind people of exactly what is coming already, because within the context of the referendum debate it is in the interests of some to frame it as being a choice between independence on the one hand and the status quo on the other, when the status
2 quo is already undergoing a fairly radical programme of change, regardless of anything else that might come in the future.
Q3 Lindsay Roy: It will be a challenge to achieve a variable rate of tax. Are you working very closely with Scottish Ministers? Mr Carmichael: It is going to be a challenge to achieve, because, quite apart from anything else, there is the complete novelty in the United Kingdom of a tax power of this sort. It is not going to be easy, but we are committed because we initiated this work. I was one of the authors of the process that led up to the creation of the Calman Commission, which eventually produced the proposal that led to the Scotland Act. We are committed to making this work, and we will ensure that every assistance necessary for the Scottish Government to implement it will be made available to them.
Q4 Lindsay Roy: Are you achieving the same commitment from Scottish Ministers? Do you face any particular barriers? Mr Carmichael: There are always points of detail and process under discussion. Inevitably, the Scottish Government always pull in a certain direction, but these are essentially issues relating to implementation in the short term, and the medium to long term is one where there is very little disagreement between the two Governments. In the past, I am on record as saying that John Swinney as Finance Minister is somebody you can have a grown- up working relationship with, and that has been proven by the conduct of that operation so far.
Q5 Lindsay Roy: So there is no under-emphasis on that compared with the full tax- raising powers there would be under separation. Mr Carmichael: That is an entirely separate debate. Whether the model of what they refer to as independence would offer full tax-raising powers is another matter altogether. It is not impossible that we will know more detail about that when the Scottish Government publish their White Paper next Tuesday. We all know the questions that that White Paper has to answer; it remains to be seen whether it will do so. Lindsay Roy: You will not be surprised that we are asking about that later. Mr Carmichael: I will do my best to hide any surprise that I feel.
Q6 Chair: Before we move on, I have been told that you would like to have your accounting officer at the table with you, because this is about the accounts. Mr Carmichael: We understood that Mr Evans was to be at the table with us. Now we have started, perhaps we should proceed as previously indicated, but, if at any juncture it is necessary to call on his advice, he remains primed and ready to assist the Committee. Chair: Primed and ready to leap forward. We will see if we can find a difficult question about the accounts. I am told it is easier if he does sit at the table. There are only two seats there, but I am sure something can be done. Mr Carmichael: At a table of this length, even Mr Mundell and I can accommodate a third person. Chair: What can I say? I am simply the prisoner of my staff. Mr Carmichael: That is duly noted, Mr Chairman. Chair: Thank you. Some people will believe it. Can I welcome you to the top table, Mr Evans? I am afraid you do not have a name tag. Alun Evans: I will survive without one. Don’t worry.
Q7 Chair: Your name has been noted in the file. We will not forget who you are, and how long your reputation lingers will depend upon the merit of your answers. Secretary of
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State, what action will you be taking to make sure that the activities of the Scotland Office do not simply become overwhelmed by focusing on the referendum? Mr Carmichael: The day-to-day work of the Scotland Office in representing Scotland’s voice and ensuring that there is effective communication between Government in Whitehall and Government in Edinburgh continues regardless. That is the job we are charged to do. In relation to various different issues that have arisen in recent weeks since I took over, you will be aware of the threat of closure at the petrochemical plant at Grangemouth, and there has been public interest in the future of the BAE contracts on the Clyde. On both occasions the Scotland Office has acted as liaison within Government and as a Scottish voice within Government, as you would expect. Ultimately, it will be for others to judge, but I venture to suggest that in both instances we have been effective in carrying out the job we are charged with. David Mundell: Immediately before this meeting, I facilitated a meeting between East Ayrshire council, East Ayrshire MPs and the Energy Minister to discuss the collapse of the Scottish Resources Group and the impact that has had on East Ayrshire council in respect of opencast mining in that community—a very significant issue for that community in Scotland. We within the Scotland Office have played a very significant part in the ongoing discussions around the collapse of that company.
Q8 Chair: You can understand our concern. Work in the Scottish Parliament and Scottish Government seems to have almost entirely ceased, apart from a vigorous pursuit of the referendum issues. I do not think we would want the same to happen in the Scotland Office here. Mr Carmichael: Since this is the first occasion when I have had an opportunity to speak to the Committee on the generality of the work of the Scotland Office, as opposed to the specific issues we have dealt with previously, may I say that it is very much my intention that the focus of government in delivering what Scotland needs from Westminster should be the primary objective of this Department? To come back to Grangemouth for a second, I was completely immersed in the Government planning in relation to the handling of Grangemouth. I was in constant contact with a previous Secretary of State for Energy and Climate Change, and latterly I was able to take particular remaining issues to the Treasury— for example, the letter of comfort in relation to the infrastructure guarantee. That was a good example of how we were able to use the Scotland Office within the Government to elicit from the Treasury a very speedy response, which allowed early conclusions to what was otherwise a very difficult and destabilising time for the people of Falkirk.
Q9 Graeme Morrice: One accepts that the Scotland Office has engaged in a whole range of issues, as you have just described. Nevertheless, as you said in your introductory remarks, the Scotland Office is involved in the Scottish referendum. I think you said that, albeit with limited resources, you are acting in an appropriate manner in the utilisation of those resources. I think that is accepted by all of us here. However, do you take the view that your Scottish Government colleagues at St Andrew’s House are also using Scottish Government resources appropriately when it comes to the referendum? Mr Carmichael: They have to be accountable for their own decisions, and they are subject to the same governance provisions as Government Ministers anywhere else. It is for the mechanisms within the audit structures and the civil service in Scotland to ensure that the business of government does not stray into the realms of politics. In relation to the White Paper that is coming next week, I would raise a note of mild concern—I genuinely put it no higher than that at the moment—about the possibility of a mailshot being sent to every house in Scotland to publicise the content of the White Paper. The White Paper is a Scottish
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Government document, but it is aimed at a specific purpose: explaining the case for Scottish independence. It does look a little as if that might be using the resources of Government for pursuing a political campaign. I put it out there as a note of caution. I would wait to see, first, the terms of the White Paper and, secondly, any mailshot that was to be produced from it, but as a taxpayer in Scotland I am concerned to see that, and I will be keeping a very close eye on it.
Q10 Graeme Morrice: That is a very interesting point, and many of us here would share those concerns. Would it be the intention of the Scotland Office to do something similar if, as you suggested, the Scottish Government go ahead with that, accepting of course that you do not have the same kind of resources at all? Mr Carmichael: We have behind us the resource of the United Kingdom Government. I would require to be persuaded that it was an appropriate use of taxpayers’ money. As things stand, I think it would take some persuading. There is a quite legitimate case for Government explaining what they are doing. That sort of spending is often open to misrepresentation, but it is nevertheless legitimate. But you would need to persuade me that for a mailshot of that sort there was, first, a locus for the United Kingdom Government in doing it; and, secondly, that it was an appropriate use of taxpayers’ money. I am not going to give you a categoric no—I would not do that—but I am giving an indication that there is a high threshold to be cleared before I would sanction any expenditure of that sort. Alun Evans: The Secretary of State would have the right and responsibility to consult me as accounting officer, or the Cabinet Secretary, if he had doubts about the propriety of the use of Government money in this way. In the Scotland Office, we try to draw a distinction between the work of the civil service in support of the Government Minister and the work co-ordinated separately by the Better Together campaign.
Q11 Graeme Morrice: Many of us would share those concerns and understand your reticence to do something similar, on the basis that this is about spending public resources to do that. Mr Carmichael: To put it in a nutshell, two wrongs do not make a right. Graeme Morrice: Absolutely. Bearing in mind that there are two campaign groups out there putting out a lot of literature and publicity at this moment in time—the yes campaign and the no campaign—people are certainly getting the message on both sides of the coin on this.
Q12 Jim McGovern: Alistair, what information do you have about the mailshot? Mr Carmichael: I am only relying on what has been reported in the papers and heard on the broadcast media. I have not seen any hard and fast worked-up proposal, nor would I expect to. I am not normally consulted by the Scottish Government on these matters.
Q13 Jim McGovern: So at the moment it is guesswork or speculation. Mr Carmichael: If it is guesswork, it is remarkably well-informed guesswork, but we have not seen it and I would reserve judgment until we finally do.
Q14 Sir James Paice: If that speculation proves to be correct, do you have any powers, or are you in a position, to seek judicial review to address the problem, if you think the Scottish Government are using taxpayers’ money incorrectly? Mr Carmichael: The Scotland Office and the Secretary of State for Scotland do not have any powers beyond those of an ordinary citizen, but, if it were to be a question of judicial review, that would be open to anybody who could establish locus in front of a court.
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The difficulty is that we do not know exactly what is proposed yet, and I would require some persuasion that it was appropriate for me as a Government Minister to initiate any action.
Q15 Lindsay Roy: Would it be your plan formally to ask? Mr Carmichael: It is not my practice normally to ask the Scottish Government what their intentions are in these things, because they are the people who have an elected mandate for the job they are given by the Scotland Act to do. I am not going to get into the practice of asking them what they are going to do, but they have the same constraints on them as everybody else. Their expenditure must be legal and it must be appropriate, so they will have the constraints of good governance on them like everybody else. If it is felt by anybody else out there that those constraints have not been appropriately observed, it is up to them to act as they see fit.
Q16 Lindsay Roy: Even though you have gone beyond what you think is speculation to an educated position that this is likely to happen. Mr Carmichael: As I said, I am relying on what I read in the press and hear on the television, but, to go back to my former professional life, I would not initiate a court action just on the basis of what I read in the press.
Q17 Lindsay Roy: I am not talking about court action but a straight question. Mr Carmichael: An intervention? No, I wouldn’t—not through the formal channels of Government in any event. I might feel it was legitimate to ask it in any other public forum, but I would not use formal channels of Government to do that.
Q18 Lindsay Roy: But it would be perfectly in order for anybody else to ask that kind of question. Mr Carmichael: We are a free country. Lindsay Roy: Still. Mr Carmichael: Still. And as long as I am in the Cabinet, Mr Roy, you can have my assurance that I will be doing everything to ensure we stay that way. Lindsay Roy: I am sure you will.
Q19 Graeme Morrice: If this information has been trailed in The Scotsman and The Herald, it must be true. We know that the White Paper is to be published by the Scottish Government next week. I believe it is to be launched in Glasgow before it is reported to the Scottish Parliament in the first instance, but, hey-ho, that is up to them. Do you think that, when the White Paper is published, the content should be absolutely above reproach? Mr Carmichael: The First Minister—I think—said this was a document that would resonate down the years, or something of that sort, so he has set the bar fairly high for himself. Just about every Scottish Government Minister who is ever asked a detailed question has always said that the answer will come in the White Paper. Bear in mind this is not the first White Paper we have had. I think we had a couple in the last Scottish Parliament. I would still assume they mean the paper that is going to be published next Tuesday. There are enormous numbers of questions that the people I meet going round Scotland want to have answered before they make up their minds. If the Scottish Government want the answers that they provide to be taken seriously, they have to be prepared to substantiate them. If I go back to my school days, the maths teacher always used to tell me, “You have to show your working.” I will expect the Scottish Government to be showing their working, in particular on pensions. That is one of the crucial questions that people tell me they want to see answered. They did not show their working the first time they came forward with proposals
6 on pensions. As a consequence, we found out that the statements that had been made about the demographics in Scotland for future pension provision were wrong. It was only yesterday, when they published their further paper, that we got the correct figures for the demographics. I do not think that the credibility of the case for independence will sustain many more blunders of that sort.
Q20 Graeme Morrice: Personally, do you think that the content of the White Paper will be above reproach? Mr Carmichael: I would like to think it would be, for any number of reasons. This is a debate that has to improve. The Scotland Office and the Treasury have done everything we can to put a substantial case out there through the Scotland Analysis papers—a very well- resourced and researched series of papers, which are still being published; we have examined a number of them in this Committee. The quality of the debate demands that we have a better- resourced and substantiated case for independence than we have seen. The process of assertion, time and again, has got to finish. That is the opportunity. It is their White Paper; it is for them to make their case. This is not a case of which I have ever been persuaded, or that I have found even remotely attractive, but I cannot do the work for them; they have to come forward with that themselves. They can be certain that, even outwith the politicians and journalists, this White Paper is going to be given very close scrutiny. The people are demanding answers and they are expecting to find them next Tuesday.
Q21 Graeme Morrice: Do I take it from what you are saying that you suspect, therefore, the White Paper may not contain all the answers? Mr Carmichael: I think it would be generally regarded as well-informed speculation at this stage.
Q22 Chair: That would certainly be a surprise, wouldn’t it? We have been promised that all questions would be answered when the White Paper was produced. That has been the mantra for a considerable time in relation to defence and a whole number of other things. Surely it would be a dereliction of duty were it not to provide those sorts of solutions. Mr Carmichael: It might be a dereliction of duty or it might not, but politically it would be a spectacular own goal for people not to provide answers to the questions being asked of them, because eventually the people of Scotland will conclude that, if the questions are not being answered, the answers simply do not exist. Interestingly—perhaps I am reading too much into it—I saw the First Minister on the news last night and he said the people of Scotland would be offered “options” in the White Paper. I do not know if an option is the same as an answer. We will find out next week. It sounds like a slightly nuanced version of what had previously been said.
Q23 Chair: Presumably, it is on the basis, “We have principles, but if you don’t like these we have others.” Is there going to be a mechanism by which people can choose between the options? I could understand it if it was a case of, “If we do not get an agreement on joining the EU, or keeping the currency or joining NATO, our fallback position would be such and such.” That would be not unreasonable. It would be quite constructive if that was the case. We have discussed conspiracy optimism—the assumption that everything goes according to plan. Surely it is only reasonable that the Scottish Government would have something there indicating what they would do if, for example, they were not allowed to join NATO.
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Mr Carmichael: What is reasonable is that, however you slice it and dice it, the people of Scotland are given to understand that at the end of the day there are only two options on the table: to be part of the United Kingdom or not.
Q24 Lindsay Roy: There have been allegations that so far the Scottish Government has fallen short in the referendum debate of attaining high standards of accuracy and clarity. Can you tell us about some of these? Mr Carmichael: I have referred already to the question of pensions. In the past, I have referred to the position put out by the Scottish Government in relation to the establishment of an oil fund, which was later contradicted as the result of a freedom of information request. We have the paper that was leaked within the Scottish Government from Mr Swinney, the Finance Minister, to his Cabinet colleagues, which referred to the demographic challenges and dealt very candidly, and with some intellectual rigour, with the real challenges that an independent Scotland would face. Lindsay Roy: We have seen that. Mr Carmichael: But that has not always been reflected in the public pronouncements of Nationalists. It does concern me, as I know it concerns many people, that there is an emerging pattern of saying one thing in public while acknowledging something quite different privately. David Mundell: There was also the claim that there was legal advice on membership of the EU, and that membership would be automatic. It is very telling that now even the Scottish Government do not in any way pretend that membership of the EU would be automatic.
Q25 Lindsay Roy: What benchmarks are you going to use to subject this paper to scrutiny? Mr Carmichael: I am not quite sure what you mean by “benchmarks,” Mr Roy. Lindsay Roy: What is the threshold in terms of your acceptance of the arguments put forward? Mr Carmichael: One of the benchmarks I will employ is the views put to me when I am out meeting people in the communities across Scotland that I now visit frequently. People may say to me, “I was worried about my pension, but I have had my questions answered,” or, “I was worried about how business would operate.” I have spent a lot of time recently talking to the Scottish financial services sector. If they told me next week, “We were worried about the impact on our business of having two systems of regulation to deal with, one in Scotland and one in the rest of the United Kingdom, and these concerns have now been met,” I would probably take that as the most important benchmark. But it is difficult to see how you are going to square these circles; for example, trying to think how the concerns of the financial services sector would be met. There is an emerging pattern. The SNP say, “Of course, we want to walk away from the UK, but we will keep the pound, or we’ll keep the Bank of England as the lender of last resort. We will keep buying into the things that we like and cannot do without.” If you think of the Scottish financial services sector and the regulatory bodies concerning them, it is not impossible to think that they might come up with some sort of cobbled-together deal that says, “Of course, we will have an independent regulator because we are an independent country, but we will just do what the rest of the country does anyway.” I do not think that would be a solution that would command much support or credibility within the financial services sector and the people I have spoken to in recent weeks.
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Q26 Lindsay Roy: If it is assertion without any evidence base or back-up, you would be very concerned. Mr Carmichael: Yes.
Q27 Lindsay Roy: The one area that seems to come up again and again is what some people have called the promise of the land of milk and honey without the prices being detailed and what it is going to cost. Mr Carmichael: I made a speech in Inverness last week and made it clear that, given the dozens, possibly hundreds, of questions you could ask, the three most important are what will happen with the currency and the pound in your pocket; what will happen to your pensions; and what will be the costs of set-up and the ongoing costs. We had an early answer to the question of costs from the Institute for Fiscal Studies this week. On Monday, they published a report which indicated that, even on the most favourable analysis they could countenance, there would be a substantial deficit for an independent Scotland, as opposed to where we are in the United Kingdom. It is not just saying they would have a deficit, because, as we know in this House, countries run deficits, but to get to the same position the United Kingdom Government are currently in they would either have to cut public spending further than we have here or they would have to raise taxes. It did not stop the First Minister and Finance Minister going out yesterday, 24 hours later, talking about what could be achieved by radical reductions in corporation tax. That is a perfectly respectable view, but it comes with a cost attached. The difficulty I have with that sort of approach is that all you ever seem to hear is the wish list; you never get the price list. What we need to start hearing next Tuesday, if the wish list is to have any credibility, is what is on the price list.
Q28 Lindsay Roy: A wish list without consequences is a danger. Mr Carmichael: It is beguiling, but it is no way to run a country. Lindsay Roy: That is very helpful.
Q29 Mike Crockart: I share your concern about the change in terminology to policy options from what was being said previously. Do you share my worry that that will mean, “This is what we would like to do as the preferred option,” and it will not then go on to answer how it would or could be achieved? Mr Carmichael: Absolutely. In a debate where people in Scotland want answers and certainty, they deserve to get more than options. The figures that seem to be coming out from the IFS report, for example, are that there would probably be substantial increases in income tax. That is the sort of information they would have to produce a counter to.
Q30 Mike Crockart: We are in danger that the entire time we have with you is being hijacked by the White Paper. My question is about making sure that the priorities of your office do not go the same way in the next year. One of your major objectives is ensuring that the UK Government serve the interests of all people in Scotland on reserved policy issues, one of the major areas of which is welfare reform. What work has the Scotland Office done to understand how welfare reform is impacting on the people of Scotland? Mr Carmichael: I will turn to Mr Mundell, because he heads up a great deal of that; but you will be aware that substantial sums of money were made available to councils in Scotland earlier this year. That was a process in which the Scotland Office under my predecessor was intimately involved and has pursued vigorously. David meets regularly with councils in Scotland and discusses with them the impact of welfare reform. David Mundell: During the course of this year, I have met all 32 local authorities in Scotland. We are in close contact with and have met the Scottish Federation of Housing
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Associations and a number of individual housing associations. After our initial discussions we were able to feed back very specific concerns—for example, about how rurality was impacted in relation to welfare reform. That led to the UK Government making a provision for rurality in terms of the single room subsidy—a payment of about £3.5 million to local authorities in Scotland. We also saw the establishment of a national fund of £20 million into which local authorities in Scotland could bid. We in the Scotland Office are looking to work with local authorities like West Dunbartonshire, who have taken forward an application, South Lanarkshire and others to support the specific issues they are facing. We listened to the concerns local authorities raised in relation to online applications, direct payments and vulnerable people, and changes were made. I am now in a second round of dialogue with each local authority. I met Argyll and Bute council last week; this morning I participated in a video conference with Western Isles council; and tomorrow I am due to meet North Ayrshire and West Dunbartonshire councils. We are in constant dialogue. I am not suggesting that we are in agreement on all aspects of policy, but we are seeking to ensure that there is a direct dialogue between the UK Government in relation to reserved areas with local government and other stakeholders in Scotland. We have expanded that to the third sector; for example, a couple of weeks ago in Edinburgh I met EVOC, which is the umbrella body for third sector organisations. I had a very useful dialogue, not just on specific issues but also on the impact of independence on that sector and, reflective of a number of the other discussions, they are looking for answers. They feel as a sector that they have not had answers and, like everyone, they are very much looking to the White Paper next week to provide some of those answers.
Q31 Mike Crockart: About a month ago, the Deputy Prime Minister announced an independent review to look at spare room subsidy. Will there be an opportunity for the Scotland Office to feed into that and take a particular Scottish perspective? David Mundell: We are constantly feeding in information that we have from Scotland. The local authorities are very keen to provide us with detailed information. One of the aspects I learned in my discussions with them is that local government in Scotland is very much to the fore, and each of them has different issues and a different approach. We feed all the information we have into the DWP. I also know that the Deputy Prime Minister has taken a direct interest, so all of that forms part of the feedback. I am pleased to say that, despite some political differences, all the local authorities I have been in contact with have very much welcomed the additional funding they have received as a result of the previous dialogue. Alun Evans: The Secretary of State referred earlier to the Scotland Analysis programme. We are currently working on a paper in the Scotland Office, with the Treasury and DWP, on the economic and other implications of welfare reform for an independent Scotland. That will be published probably in January or February, and the points Mr Mundell referred to are fed into that process.
Q32 Mike Crockart: You will be aware that we are conducting an inquiry into this at the moment, so I am sure we will talk more about it. David Mundell: We always pay very close attention to the inquiries that this Committee conducts; it informs our work. We are also looking to ensure that we have a direct dialogue with local government, housing associations in Scotland and other interested parties.
Q33 Chair: As you are probably aware, many of us here are in favour of abolition of the bedroom tax, but it would be helpful to have clarification sooner rather than later of the question of whether the financial support being offered to local authorities at the moment is intended to continue year on year, or whether it is simply an initial payment, and also about
10 the timing of the review. As Mike said, when we are looking at the operation of the bedroom tax in Scotland, leaving aside for the moment the question of abolition, we would probably want to come back with some recommendations about what both the UK Government and the Scottish Government should do. In that context, tomorrow we are visiting the Welsh Assembly Government and taking evidence from them. What is the time scale for this sort of review, and what would be the mechanism by which our changes or amendments could best be pursued? Mr Carmichael: On the first point about future intentions in relation to the rolling- over of any money, that is within the ambit of the Treasury. You will know that the autumn statement is coming up fairly soon, so beyond these two bald statements of fact I really cannot offer you any assistance. In terms of feeding into the review, I do not know what the review date would be, but I can make an early effort to find out and give you the information. The fullest possible information in that review would be helpful. Like Mr Mundell, I have met a number of local government leaders in recent times. I have twice met the leader of Glasgow city council since I became Secretary of State and I have conveyed the same message to him.
Q34 Chair: Can I just be clear? It is realistic for us, and for local authorities and housing providers in Scotland, to anticipate or expect that in the autumn statement it will be made clear, rolling forward for quite a period, how much financial support is intended to be provided to ameliorate the worst effects of the bedroom tax. Mr Carmichael: It is fair to say, Mr Davidson, that you and I have been around this place long enough to know that the only people who know what is coming out in the autumn statement or the Budget would be the Chancellor and the Chief Secretary, and I cannot imagine either of them giving the game away before the date. You will just have to wait and see like everybody else.
Q35 Chair: So it is reasonable for us to expect that they will provide an answer. We do not want them to be in the same position as the Scottish Government and not provide answers. Mr Carmichael: We will provide the answers on the day of the autumn statement, but I cannot imagine you ever having an unreasonable expectation, Mr Chairman.
Q36 Chair: I am very glad to hear that. We will get on much better in those circumstances. In terms of feeding in evidence, we are pretty close to producing an initial report. Do I take it that before Christmas would be a suitable period? Mr Carmichael: I would say sooner rather than later. This information emerges real time. The sooner it is fed into the machinery of government, the sooner changes, if they are necessary as a result of that information, can be implemented. Chair: I am sure the staff have noted that, and they will be starting to write up our report as soon as.
Q37 Pamela Nash: Before we move on from the bedroom tax, Minister, you detailed quite extensive consultation and what you had done to look at the impact in Scotland. Is anybody telling you that this is a successful policy? David Mundell: What we have discussed is the implementation of the policy. We have moved forward on the basis that there are political differences in relation to the policy. We have not, in my view, wasted time in discussions on the politics of it, because that is to be debated here. Your own party secured a debate here recently; and it is certainly subject to a lot of debate within the Scottish Parliament as well. We have discussed the practical issues around implementation—the specific issues councils are facing and, within the context of the
11 policy, what we can do to support and assist them. Specific issues were raised by West Dunbartonshire council; for example, difficult-to-let properties. There may be vacant properties, but they are still difficult to let. That is one of the categories of issue dealt with by the national fund, and that is why we work with them to be able to bid into that fund.
Q38 Pamela Nash: I understand, but I presume you are not just asking people about the problems but that you have asked for full feedback on how implementation of the policy is going. Has anyone come back and said it has been successful, or that it is working well? David Mundell: What they have come back and said is, “We accept that this is the policy and we are working with the policy as best we can in the circumstances.” A lot of councils in Scotland have taken forward very innovative measures. One of the things I was discussing today with Western Isles council was that the fact that councils are now administering the Scottish welfare fund has allowed them much better to connect their services across the council, with social work and other departments. A lot of positive things are going on. I do not expect, in terms of the political debate about the policy, that it will continue, but rather than taking time in those discussions rehearsing arguments properly made in this Parliament, and to a certain extent in the Scottish Parliament, we focus on implementation, support and the practical issues that councils are facing.
Q39 Chair: Would it be fair to say that Scottish local authorities and social housing providers have been very ingenious in making the best of a bad job, and that the answer to the original question that Ms Nash asked is that, no, you have not found anybody who is in support of the bedroom tax? David Mundell: I have not explicitly pursued that route, Mr Davidson. Chair: But normally if something really good is happening— David Mundell: I have made it clear in all my discussions that it is not a policy discussion; these policies are debated here in Parliament. It is about supporting and working with councils and housing associations in relation to implementation. It is about listening to the points they have raised, such as the impact of rurality, the suitability of certain individuals to go into the direct payment regime and issues about online access. We have taken these practical issues back and we have sought to do something about them.
Q40 Chair: None the less, nobody has come up to you and said, “By the way, David, this is a really good policy and we support this.” When we had a Labour Government, I would travel around and discuss practical implementations and so on. Sometimes people would say, “We support this, but it could do with a bit of tweaking.” Have you been swamped by a flood of people saying, “This is a really good policy, but there are a few amendments that could improve it,” or is it simply the case that they are having to make the best of a bad job? David Mundell: I think what councils in Scotland do is see what the policy is and— Chair: That’s a yes then. David Mundell: They see what the policy that the UK Government, or indeed the Scottish Government, have adopted is, and they take forward the implementation of that policy. What we have been seeking to do is to work with them in the implementation, and to take their feedback. It is clear, and they recognise, that we have responded to a great deal of that feedback.
Q41 Pamela Nash: The reason I asked that question is that we want to take balanced evidence as part of our inquiry into the impact of the bedroom tax on Scotland. As far as I am aware, we have not received any evidence in support of the bedroom tax.
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Mr Carmichael: We are in a position we do not want to be in, and we are in that position because of the economic situation we inherited in 2010. Nobody would want to cut the budgets in the way we have had to do, but that is the reality of the situation that faced us. You can make all the clever points in the world that you want, but ultimately it comes down to: are we as Government Ministers going to go out and engage with local authorities to ask them, “What difficulties are the difficult decisions we have had to take causing you?” and do our best to fix them? Yes, we will do that. I make no apologies for it, and I do not think we should. I am quite happy to work with this Committee on exactly the same basis.
Q42 Pamela Nash: I thank the Secretary of State for that answer, but I do not think it is even clear yet that this is going to save money. If you are saying that in your view the bedroom tax is about saving money for the Exchequer— Mr Carmichael: It is part of an overall package of welfare reform, which is a very necessary part of reducing public spending to meet our deficit reduction programme. Pamela Nash: I appreciate that but— Mr Carmichael: If there are issues that emerge and, as occasionally happens with Governments of all colours, you implement a policy with a particular intention and it turns out that it does not achieve the savings you wish, of course you will not carry on regardless. That is the whole point of having a review. The question for you and for the Committee is: do you want to take a responsible part in that review, feeding in the difficulties to get the answers, or do you want to just make a point?
Q43 Pamela Nash: It is not about feeding into it. As I just said, we want to take balanced evidence, and we have yet to have positive evidence on this policy. You guessed what my next question would be: would you support us scrapping this policy if it turns out that it is not saving money for the Government? Mr Carmichael: That is the whole point of having the review, and we judge the review at the conclusion of it. Pamela Nash: Excellent.
Q44 Graeme Morrice: It seems to me that a disproportionate amount of time and the resources of the Scotland Office—after all, we are discussing the annual report—are going into the issue of implementation of this piece of legislation. Clearly, it is not popular in Scotland, and we have discussed the policy aspects of it. Do you not think life would be much simpler for you and the Scotland Office if we did not have this piece of legislation? You could be using your time and resources on something that people in Scotland support, Secretary of State. Mr Carmichael: Of course, life would be simpler. We could ignore the deficit and just let borrowing go on unabated. That would be the simplest thing in the world, except that we tried it and it did not work, and that was why we inherited the mess we did in 2010. It is a bit rich to criticise the Scottish Government for not facing up to the realities of difficult economic decisions if we are not prepared to do it here. I am prepared to be consistent here and in Scotland. David Mundell: You and others have identified this as a very important issue. We have responded by entering into a dialogue. It also allows us to have a direct dialogue with local authorities on other issues that they want to raise. It is hugely important for the UK Government, as came out in Mr Crockart’s original question, to have a direct dialogue not just with local authorities but with all the other important stakeholders in Scotland. Graeme Morrice: I think my point is well made.
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Q45 Jim McGovern: The Committee has taken evidence all over Scotland on this subject. I have to agree with Pamela that there has never been any positive feedback about the bedroom tax. Mr Carmichael: Can I ask what evidence you have taken from the private sector? Jim McGovern: Can I speak through you, Chair? Chair: Yes.
Q46 Jim McGovern: When people come to my surgery in Dundee and say, “I am quite happy to move to a smaller house but there aren’t any?” do you think they should be hit by this? Mr Carmichael: No. That is one of the obvious difficulties that implementation of the policy provides. We need to know the scale of that difficulty and who is being impacted in that way. That is the whole purpose of having the review. If there are difficulties that are going to be insurmountable, it will become apparent in the course of the review. You are asking me to second-guess the outcome of that review, and I am not going to do it. This was introduced in the private sector by the last Government. Private sector landlords have clearly managed to cope with it. I hope that as a Committee you will be taking evidence from that sector as well. Presumably, you supported the introduction of it in the private sector. Jim McGovern: No. Mr Carmichael: You voted against it, did you? Jim McGovern: Yes. Mr Carmichael: You would be one of a minority of your colleagues, I suspect. Jim McGovern: I would do so again.
Q47 Pamela Nash: Secretary of State, apologies if I have misunderstood the report, but, looking at the figures, there was quite a significant underspend by the Scottish Government. Is that correct? Mr Carmichael: Whereabouts in the report are you? Pamela Nash: I am in the third chapter. It says there was a £1.152 billion underspend in the Consolidated Fund, and there is a sentence that says it was because of “reduced funding requirements within the Scottish Government”. Mr Carmichael: I would need to pass that to Mr Evans as the accounting officer. Alun Evans: We make a block grant transfer to the Scottish Government of about £26 billion or £27 billion a year, and they account for that. I remember the specific point you raise. There was a £1 billion accounting transfer; it was not so much an underspend. I do not remember the precise reason for it. The Scottish Government have to account separately for it, but I will happily follow up that specific point.
Q48 Pamela Nash: The word “underspend” is used in the report and that is why I use it. I would like to get some clarity on that. I also want to move to the budget of the Scotland Office. According to the report, the budget is going to be 25% less in 2014-15 than it was in 2010-11. Is this the Scotland Office’s fair share of the cuts compared with other Departments? Mr Carmichael: That settlement was negotiated by my predecessor. We have a budget that I am satisfied equips us to do the task we are required to do for the remainder of the comprehensive spending period. I am not somebody who has ever been attracted by a budgeting process that has money spent just for the sake of it. It is going to be tight, and we have to keep one eye on cost all the time. I am very concerned that the Department should not be incurring unnecessary expenditure, but at the same time, if it is necessary to find money to do the work of the Department, we will do it.
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Q49 Pamela Nash: Do you think that will have any impact on the work of the Scotland Office? Mr Carmichael: No. At the moment, there is nothing that I want the Department to be doing that is not going to be covered by the budget I have.
Q50 Pamela Nash: It says in the report that the bulk of the cuts have been made in relation to “staffing and associated expenditure linked to advisory and support functions for Ministers and other…Departments.” Could you expand on that, and where those efficiencies are going to be made? Mr Carmichael: The staffing position of the Scotland Office is, if not unique, highly distinctive within Whitehall, because we do not employ any staff directly. We take all our staff on secondment either from the Scottish Government or other Whitehall Departments. In terms of where the changes will come, Alun, are you in a position to assist? Alun Evans: The budget of the Scotland Office is effectively three things: staff costs, accommodation costs, and other costs. As the Secretary of State says, staffing numbers will be kept at the same level over the spending period. In terms of efficiency savings made in the current year, they are overtime, 38%; travel, 7%; heat and light, 26%; Government car service, 10%; and repairs and maintenance, 11%.
Q51 Pamela Nash: Is that for the past year or the current year? Alun Evans: The past year. One thing the Scotland Office does, which got some coverage, is to let out some of our accommodation, which reduced our accommodation costs. Indeed, we have welcomed the Deputy Prime Minister into Dover House temporarily, but the cuts have not been made in staff numbers at all.
Q52 Pamela Nash: But going forward to the next financial year, will there be cuts in staff? Alun Evans: For the next financial year we have an allowance. Whether or not it proves enough I do not know. At the moment, we have not had to go to the Treasury for any extra money this year, and we do not intend to. As the Secretary of State said, if we find in 2014-15 that we are going to need more money, we will have to discuss it with the Chief Secretary.
Q53 Pamela Nash: It is more likely that you would ask for more money to maintain staffing levels than cut staff. Is that correct? Alun Evans: As I said, we have made no cuts to staffing at all, apart from marginal numbers up and down, and at the moment we envisage the same level of staffing. If we came to a situation, which we are not in at the moment, where our budget implied we would have to make cuts and the Secretary of State thought they were not feasible, we would have to negotiate with the Treasury, but we are not at that stage at the moment.
Q54 Chair: We note the point about Nick Clegg seeking refuge in the Scotland Office. Images of Julian Assange in the Ecuadorian embassy spring to mind. Could I ask about Barnett consequentials, which presumably flow through the books? Can you give us a note of the separate Barnett consequentials that went to the Scottish Government last year, and whether or not any of them were unencumbered by obligations? I want to clarify the scale of free money, so to speak—money that was not predestined for a particular purpose as a result of the UK Government’s decision making, compared with money that resulted from an obligation being passed to them. In addition, what has been the
15 progress this year, and what do you anticipate for the remainder of this financial year, if that is possible? Mr Carmichael indicated assent. Chair: Thank you very much.
Q55 Sir James Paice: I have a very small question for the accounting officer. We note that in the report you referred to the fact that one of your deputy directors received £22,000 in benefits in kind. Can you elaborate on what that was, and why it was authorised? Alun Evans: The benefit in kind, and why it was authorised, is an ongoing agreement that the Advocate General has to have access to qualified Scots lawyers based in London to provide him with advice. Therefore, one of the deputy directors currently gets her accommodation costs paid in London, which is marked in the book, but it is given on the basis that the current incumbent does not let out their house back in Edinburgh. It is in lieu of subsistence expenses overnight here, so they do not make any money out of it. It is the cost of accommodation for a Scots-based lawyer for the office of the Advocate General in London.
Q56 Mr Reid: Alistair, you are aware of the concerns we raised at a previous session about the registration to vote of Scottish service personnel. Are you able today to add anything to the evidence that you and Dr Murrison gave at that evidence session? Mr Carmichael: Yes, indeed. Dr Murrison gave a very comprehensive explanation of the efforts that the Ministry of Defence is taking to encourage registration among service personnel. Perhaps the other detail that might have been usefully included, and which I think would assist the Committee, is that within the provisions of electoral law there is a thing called the military declaration, which allows serving personnel effectively to make a statutory declaration that they are connected to whatever particular area it might be. If I had a family member who joined up and went to serve elsewhere, he could assert that he was to be registered in Orkney and would be able to cast a vote in Orkney as a result. This is fairly well known within the armed forces, but the Ministry of Defence is looking at ways in which it might reinforce the messages so that everybody is aware of their entitlements in that regard.
Q57 Mr Reid: But are the implications being made clear to service personnel that if they register at their base in England they would not have a vote in the referendum, but if they have a connection with Scotland and they register in Scotland they will have a vote in the referendum? Are they being made aware of the importance of where they might do that? Mr Carmichael: I do not know the exact terms of any advice that has been given by the Ministry of Defence to serving personnel. If it is helpful to the Committee, I will obtain as much of that as I can and pass it on to you, but I think it is fairly well known. A few weeks ago, I attended Sunday morning service at St Columba’s, Pont Street—the Church of Scotland in London—and a fairly steady stream of the congregation came up to me remarking that Scots living in London, or elsewhere in the south-east, would not have a vote, so I think that message has got across. I am fairly confident that, once they know of the availability of the military declaration, armed forces personnel will be able to join the dots for themselves.
Q58 Chair: Rather than passing it on to us, though that would be helpful, passing it on to Dr Murrison and the MOD would be even more helpful. The purpose of us originally inviting him along was to cover this, and possibly he was slightly badly briefed. The issue is not necessarily simply one of the military declaration. My understanding was that the military declaration was designed for those who were abroad—outwith the whole of the UK—and in normal circumstances the assumption would be that someone based in England, Wales or Northern Ireland would register where they were. However, because eligibility to vote in the
16 referendum applies only to those who are registered in Scotland, it does need to be explained to people in England, Wales and Northern Ireland in the services that there would be an opportunity for them to vote in the referendum by back-registering to where they had been. We are not saying that people should necessarily do that, but we want to make sure that they all have the knowledge to make that choice, if they so wish. Maybe we can leave that with you, and you can come back to us and Dr Murrison about it. David Mundell: The Electoral Commission intends to carry out activity specifically to advertise in forces media the need to register, and the fact that registration will be required to vote. It would be worth taking forward to the Electoral Commission the point being made about the need for people to understand that being registered in England will not get them the vote, and therefore they need to follow the service declaration procedure if they want to have the vote. Chair: I think that would be very helpful. David Mundell: I will write specifically to the Electoral Commission on that point.
Q59 Chair: Everything we are saying here in relation to service personnel we would want to extend to spouses and children. Mr Carmichael: Sixteen and 17-year-old children. Chair: It would be all children they have with them, but in particular 16 and 17-year- olds. If you are able to undertake that, it would be very helpful.
Q60 Jim McGovern: Secretary of State, is the irony lost on you that Terry Butcher, the former captain of England, will get to vote in the referendum but Sir Alex Ferguson will not? Mr Carmichael: I have never been a great man for irony. It is right and proper that anybody who chooses to live in Scotland and make their home there should have an entitlement to have a say in this decision. I understand the frustrations that I hear from Scots living in other parts of the country, but the concern of the Government in relation to this referendum was that it should be fair, legal and decisive. When you are drawing up a franchise, you can do it only on that basis. While I share some of what I understand are Sir Alex Ferguson’s frustrations on this, I do not see any basis on which the franchise could have been changed. It is an inevitable consequence of a process that is, and always was going to be, a divisive one.
Q61 Chair: Has the Scotland Office looked at membership of the Scotland football team, for example, who are prepared to spill their blood for Scotland, but many will not have a vote, or the Scotland rugby team, who are prepared to spill other people’s blood for Scotland, but many of them will not have a vote? Surely, this ought to be addressed. Mr Carmichael: It is essentially the same question. As ever, I appreciate and applaud your ingenuity, but the answer does not change. David Mundell: As you know, that issue was very extensively debated; indeed, it was discussed in this Committee at the time when the section 30 order was proceeding through the House of Commons.
Q62 Jim McGovern: Could I say to the Secretary of State that as soon as I leave this meeting I am going to check my voting record with my researcher? If I have inadvertently misled the Committee, I apologise in advance. Secretary of State, your predecessor took part in a televised debate on separation. Would you be open to such a debate?
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Mr Carmichael: Not only am I open to it, Mr McGovern; I am doing one on Wednesday night next week, which is being broadcast on Scottish television. I think the broadcast starts at about 11 o’clock, so you can all tune in.
Q63 Jim McGovern: Who else is taking part? Mr Carmichael: I believe the Deputy First Minister is also taking part, in the same format as two previous debates.
Q64 Jim McGovern: Do you regard this as an effective way to give information to the electorate? Mr Carmichael: Any opportunity that allows the issues to be debated in a serious and reasoned manner has to be a welcome one. I anticipate that there will be a great deal more of this. I have always been clear in my view about the desirability of Scotland remaining part of the United Kingdom. I am quite prepared to discuss that view with anybody anywhere at any time. Jim McGovern: Thank you. That is helpful.
Q65 Chair: On the question of television, maybe I can make clear to you that the long-standing view of this Committee is that there is no role for the Prime Minister, David Cameron, in any televised debates. These are debates of Scots about what should happen to Scotland. As to bringing in people from outside, while I understand the attraction of wheeling out Tory toffs in order to have characterisations and so on, that is not, in my view, how this should be conducted. Mr Carmichael: As the Prime Minister of the United Kingdom, he has a very important role in Scottish public life, and I have no doubt that he will participate in the wider conversations that we are having. When it comes to actual debates of the sort envisaged, that is a quite different matter. The people who are going to make the decision—that is to say those registered to vote in Scottish constituencies—are the people who should be taking part in these debates. I completely understand the attraction for those who want to take Scotland out of the United Kingdom of setting this up as somehow a contest between Edinburgh and London, but it is not. This is a decision that Scots have to make for themselves, and the participants in that debate should be Scots.
Q66 Jim McGovern: Do you have a view on why there are still so many don’t knows? I go out canvassing every weekend. The majority of people say they do not want Scotland separated, but a large number say they are undecided and don’t know. Mr Carmichael: There is a variety of different reasons for that. You will be as acquainted as I am with the phenomenon of the voter who says, “I don’t know” when they see you on the doorstep. They know perfectly well; they just do not want to tell you. There may be an element of that in it.
Q67 Chair: Do you find that? It is not my experience. Mr Carmichael: It depends on how much self-awareness you take on to the doorstep with you. Jim McGovern: Some of them are hiding behind the couch—they just don’t open the door. Mr Carmichael: It also has to be recognised that there is still a 10-month period, more or less, to run in this debate. There are always people in life who will want to hear all the available information before they make up their mind, and that is a perfectly proper and legitimate way of approaching the issue.
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This will be a referendum unlike any other. This is the first time that Scotland has been offered an option which has a point of no return. In previous referendums, we have been looking at devolution or going into the European Union, all issues which legally and theoretically are possible to reverse, albeit politically next to impossible; it would be unthinkable that you would reverse the devolution settlement, for example. Beyond that, this is a decision from which there will be no return. For that reason, it is absolutely essential that the broadest possible range of people take part in this debate, think about the issues, have a voice in it for themselves—it is too important to be left to the politicians—and ultimately cast their vote. This is not an occasion where the don’t knows will make a difference; there is no 40% rule here, and rightly so.
Q68 Pamela Nash: I want to ask about the other inquiries we are conducting at the moment, the first being about zero-hours contracts. BIS has announced a review into zero- hours contracts. Could you update us on the progress of that? Mr Carmichael: No, because I do not know exactly where they are with it at the moment. I do know Vince Cable well enough, however, to understand that it will be prosecuted to a fairly vigorous timetable, and I would expect an early answer. If you want, I will get the timetable and give an indication of when you can expect a report. There is a balance to be struck in all these inquiries and reviews, in getting the fullest range of information but not taking for ever in coming to a conclusion.
Q69 Pamela Nash: I also want to ask about blacklisting, which is another major inquiry. We would like to hear your views on it, and also what the role of the Secretary of State is in feeding into these inquiries? Are you a voice for the specific problems with blacklisting that we face in Scotland? Mr Carmichael: On blacklisting, as a constituency Member of Parliament, I have had constituents coming to me expressing concerns that they feel they have been blacklisted. I think I saw in the news the other day that there had been a settlement, from a company that had previously been managing blacklists, to people who had been blacklisted. I think that the process of blacklisting is morally and legally reprehensible. The fact that somebody’s life can be blighted in that way is truly disgraceful. However, knowing or believing that it is going on and proving that it is going on, and thus doing something about it, is always going to be the challenge. You have to be realistic about the extent to which there is a Government solution, but I guess that will be the outcome of any review. David Mundell: In response to a question from Mr McGovern, once your report is published I have undertaken to discuss it with the Scottish Government, so that dialogue takes place. I assure you that I will most certainly do that.
Q70 Pamela Nash: I appreciate that. We are the Scottish Affairs Committee, so clearly there are specific Scottish issues around both blacklisting and zero-hours contracts; otherwise, we would not have taken them on. We want to ensure that you are a voice for Scotland in this. Mr Carmichael: Absolutely. The right of Scottish workers, or workers in any part of the United Kingdom, to proper protections from that sort of industrial practice is something that I would take seriously.
Q71 Pamela Nash: Are you given an opportunity to feed into the review of zero- hours contracts? Mr Carmichael: There will be a write-around process within Whitehall, and I would expect us to take part, but as a conduit for a particularly Scottish problem, if an industry is
19 seen as having a predominance in Scotland that gives us a particular locus, I would certainly want to know about that. Chair: Perhaps it would be helpful if I clarified the mention that has been made in the press about a compensation fund. A compensation fund is being set up. Various proposals have been made, but it has not been negotiated as yet. It is worth mentioning that the Committee has agreed, having recognised that only eight firms have joined together in this potential compensation fund, that we will write to the others that were guilty of blacklisting through the Consulting Association to ask them whether or not they are participating in any such proposed fund. Depending on the answers, we will then consider how many of them we bring in to justify their positions. It is worth mentioning that the Welsh Government seem to have done much more than the Scottish Government on this question, and we intend to meet them tomorrow to discuss this. After we have done that, we will have a fair amount of evidence and we will probably come back with another interim report for you to pick up. Thank you for being so responsive.
Q72 Jim McGovern: About three months ago I put a question in the Chamber to you, David, about how many people might be employed by Government Departments on zero-hours contracts. Your answer was along the lines, “We don’t directly employ people.” Putting that aside, how many people are employed in Whitehall or here on zero-hours contracts? David Mundell: I cannot give you an answer to that at this moment. When it was raised in the context of Scottish questions, it was within the Scotland Office. While I would not want to hide behind process, it is a fact that the Scotland Office does not employ anyone directly, but I will ensure that we write to you to respond more broadly. Mr Carmichael: Rarely a week goes by that I do not find a written parliamentary question in my box for clearance on questions on this. It always gives the formula you have heard that we do not employ people directly, but attached to it is a note saying that this is a round robin question that has been submitted to all Government Departments. I suspect that the full picture is out there, if anyone cares to look for it.
Q73 Chair: You are in front of us now, so maybe it would be helpful if you undertook to come back to us to tell us how many people work in the Scotland Office, which I presume is all of them, and are on zero-hours contracts. That may be the easiest way of doing it. Mr Carmichael: I am told there’s none.
Q74 Chair: You are told there’s none, so that is absolutely correct; we can take it as gospel. Fine. It would have been much easier if you had said that at the beginning. Mr Carmichael: The only caveat, to be slightly legalistic for a second—forgive me— is that occasionally there are people in and out of the Scotland Office who are contract workers, and whatever else. I cannot vouch for the terms of their employment.
Q75 Chair: Yes, you can. Contract workers are either employed on temporary contracts or some other form of contract. Mr Carmichael: But not by us. Chair: You would then be able to tell us whether or not it is a zero-hours contract. Alun Evans: Can I give you an example? We employ people on secondment—I was on secondment—from the Scottish Government, Ministry of Justice and some other Departments, and I can give you a guarantee that none of those was on zero-hours contracts. However, we have within our building contract workers from employees under contract to the
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Cabinet Office, to do accommodation refurbishment, for example. I have no idea what their contractual terms are because they would be employed by the Cabinet Office to do refurbishment in our building. Mr Carmichael: That is what I mean. The information is out there, because these questions get asked of every Department.
Q76 Chair: Somebody working for the Cabinet Office is a question for the Cabinet Office; I accept that. We are not simply accepting that they happen to be in your building with the Deputy Prime Minister as part of his asylum process. We want to be clear about whether or not there are any subcontractors working for the Scotland Office, whether it is cleaning, catering or anything else like that, who are on zero-hours contracts. I appreciate that you might not have that information at the moment, but you can understand why we are raising it. We are going to be pursuing this with other people, and we can hardly be in the position that we had not pursued it with you. Mr Carmichael: I completely understand. That is why I am not wanting to go beyond the realms of those employees for whom I am properly accountable. Once you go beyond that, into contractors and the rest of it, it becomes much more difficult. I give you the undertaking of best endeavours, but I can only be accountable ultimately for the people I employ, or who are employed by Government.
Q77 Chair: It is reasonable for us to expect you to clarify for us whether or not there are people in the Scotland Office who are cleaners, or assist with the catering, on zero-hours contracts, since you, or someone within your ambit, presumably has agreed to those contracts. We anticipate that when we pursue this we will find a lot of other people trying to wriggle out of it and saying they have no responsibility. We cannot, therefore, accept it from you. Mr Carmichael: No, I do not expect you to. I will make every effort to find out what the contractual arrangements are for those who are regularly engaged in working within the Scotland Office, if you want to take the example of cleaners.
Q78 Chair: Or anything. You know the operation and who comes in and who does not. Mr Carmichael: We do not have caterers. Chair: You do have caterers; I have seen them. They do exist. Mr Carmichael: People who hold functions in the Scotland Office will bring in caterers, but we do not have our own caterers.
Q79 Chair: The Scotland Office holds events in there. We would not expect you to be condoning or allowing anybody who is holding events in there to be using caterers on zero- hours contracts. You are responsible for the let of your premises. Mr Carmichael: You are taking it one step beyond what is reasonable. Chair: Absolutely. Mr Carmichael: The fact that these workers are coming into the Scotland Office is evidence that, whether or not they are on a zero-hours contract, they are still getting employment. Zero-hours contracts per se create particular difficulties, but I do not know that anybody is suggesting that they should somehow be abolished.
Q80 Chair: Perhaps we could make it clear. If there are events or functions taking place in the Scotland Office, it is obviously with the permission of the Scotland Office, and we can see no reason why you should not make it a stipulation that if anyone holds an event in the Scotland Office they do not use—or make it clear if they are using—people on zero
21 hours. We can then clarify whether or not in those circumstances it is reasonable. We have it put to us that there are firms like wedding caterers that might or might not have jobs at the weekend and for which zero hours are appropriate, and we accept that. But we want to avoid a situation where there is abuse, and the best way of identifying whether or not there is abuse is to clarify the circumstances when they are used. Mr Carmichael: I will give you my undertaking of best endeavours on abuse. I am not going to give you an undertaking that there will not be anybody working in the Scotland Office on zero hours, especially in relation to that sort of contract. Zero-hours contracts, for all the problems associated with them, are still legal contracts and they are important in many walks of life. The whole point of having a review of them is to establish the extent to which they may be open to abuse. Chair: We will establish the extent first, and then take views on whether or not we want to explore to identify abuses. That is the easiest way.
Q81 Mr Reid: In our inquiry into the Crown Estate we recommended that power be decentralised away from the Crown Estate down to local bodies. The Government’s response was to promise concrete steps to address our concerns. Perhaps you could update the Committee on what those steps have been. Mr Carmichael: Yes indeed. I met the chairman of the Crown Estate Commissioners in the second or third week that I was in post—early days in any event—in particular in relation to the management of the marine estate, which you know has long been a concern of mine. It is important to put out there that the establishment of the coastal communities fund, which brings back to the coastal communities a lot of the money that flows through the marine estate, has been a significant piece of progress and is long overdue. In terms of decentralising and getting control down into the local communities concerned, I think more can be done. I am speaking to the Crown Estate in relation to that. They themselves are talking to a number of local authorities. Your own is one of them; Highland, Orkney and Shetland councils have been others. We will need to see what emerges from those discussions. Something along the lines of a management agreement, if I can put it in those terms—we will see what shape it takes and what eventually emerges—would bring with it a degree of accountability for the use of the resource, the absence of which has been one of the major defects in the past. I have pursued this issue at least since I was elected—you may recall that my maiden speech was on the subject of the Crown Estate—and for some years before that. The response I have seen from the Crown Estate Commissioners in recent months and years is transformed compared with what I have seen in years gone by. I see a willingness now to engage with local communities, especially those dealing with the marine estate—the island and coastal communities—which would have been unthinkable even four or five years ago. There is willingness on both sides to move things on. I said in public recently that I regard reform of the Crown Estate as unfinished business. That is very much my view, and I am hopeful that, with co-operation from Government, communities and the Crown Estate themselves, we will see progress. The only coda to that is that the three island authorities—Shetland, Orkney and Western Isles—are also coming up with proposals on what they want out of a reformed Crown Estate through the Our Islands, Our Future campaign. If this exercise is to be worth anything at all, it has to involve the communities first saying what they want, rather than people like myself, or anybody else sitting in London or Edinburgh, telling them what they should get.
Q82 Mr Reid: You are obviously aware of the campaign by the three island authorities. Are you also aware that other islands, which are part of mainland authorities, such
22 as the Inner Hebrides or the Clyde islands, are concerned that they may be left out of this process? Can you give an assurance that, as far as the UK Government are concerned, any powers devolved to the island authorities will also be devolved to other islands as well? Mr Carmichael: I am reminded of the concerns of people living in other island communities linked to mainland authorities every Sunday afternoon. This opportunity has to be made available to coastal and island communities, and not just those actually in Scotland; there are similar issues for coastal and island communities in other parts of the United Kingdom as well. It is particularly acute in Scotland because we have the number of island communities and length of coastline that we do, but whatever emerges should be made available to all. I would say to you, and to Argyll and Bute council and Highland council as well, that the Our Islands, Our Future initiative is one that has been taken by the three uniquely island communities, for reasons that are pretty obvious and easy to work out, but that is not the end of the debate. They and their island communities must have a view on how the marine estate could be managed and what they would want to get out of a reformed marine estate, and they should be undertaking the same process. I would hope that they go out and get the communities to do the thinking for themselves, because a process that is driven from Inverness or Kilmory will be no better for islands than one driven from Edinburgh or London.
Q83 Mr Reid: I certainly agree with that. The coastal communities fund has been very welcome. For the first time, the profits of the Crown Estate are going to the coastal communities whose assets are being used to generate the Crown Estate’s profits. During our inquiry, concern was expressed to us that the lottery was not necessarily the best vehicle for deciding where the grants went. Have the Government had a chance to review the operation of the coastal communities fund, particularly the way the lottery is choosing to make the awards? Mr Carmichael: We must have had the opportunity, because the coastal communities fund has been running for a couple of years. I am not aware that we have conducted any such review. If there is a better way of doing this, I am certainly in the market for hearing it. What we came up with initially in relation to the coastal communities fund was effectively a quick and dirty solution—if you know what I mean—and anything that was getting the money going back into the communities was good. This was one of those occasions when I thought it was more important to get it quick than it was to get it right. If we can improve on that now, I am more than happy to listen to a case for it.
Q84 Lindsay Roy: Do you think that the work of this Committee has been a catalyst in the change in attitude and outlook by the Crown Estate? Mr Carmichael: I think it has been a significant part of it. You have brought a degree of attention to the Crown Estate and its workings, which puts a song in my heart. Perhaps there were other factors at play as well. I have said before that we now have a Cabinet which has a boy from Colonsay representing Inverness sitting across the table from a boy from Islay representing Orkney and Shetland. The political interests of the highlands and islands have never been better represented or served than they are currently within the Government. I think that message will have been heard by the Crown Estate Commissioners as well as by others. I should be completely open and say that the arrival of Alison Nimmo as chief executive of the Crown Estate has brought about a very different approach. I give complete credit to the Crown Estate for the willingness they have demonstrated in recent times to engage and to take on the arguments for reform in a way that was absent in years gone by. Now that we have the wind at our back, I am pleased to see this. When I was talking to the Crown Estate Commissioners, it helped me to be able to point to the work of the Scottish
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Affairs Committee, and to say that in the past this might have been something that was only of concern to a minority of MPs like myself, but that it is now a direction of travel which is on a one-way ratchet. You are not going to unpick this. You have commitment to drive this forward from the two parties in government at the moment and you have a commitment, through yourselves, from the Labour party, so they know that whoever is in government, this agenda will continue, and obviously it is in their interests to co-operate with the agenda.
Q85 Lindsay Roy: The clear message is that by working collaboratively we are making a difference. Mr Carmichael: My fondness for collaborative working has, I hope, never been in doubt.
Q86 Chair: We are glad you recognise that we are here to help in this as in so many other contexts. We are perhaps less optimistic than you are. We very much date the transformation of the attitude of the Crown Estate from the day we started to have hearings, and it is worth while flagging up that we intend to go back and see the Crown Estate at the beginning of next month and take evidence. Our view is that it is moving only when it is obliged to do so, and the radical proposals that we had in our report have not yet been fully implemented. We would want to go far beyond the basic baby steps that have been taken so far, subject to the evidence we take. We will come back to you on that. You will know that we are also going to do reports on land reform across the highlands and islands and other parts of Scotland, so we will come back to that. Unless there are any other questions, the final point I want to raise with you is your recent reaction to being called unpatriotic, or not a true Scot. Mr Carmichael: I was a supposed Scot.
Q87 Chair: You made quite a fuss about that. Are you not just overreacting a bit? Is it not just part of the rough and tumble? Mr Carmichael: Individually and collectively, all of you have known me long enough to know that I am not averse to a bit of political rough and tumble, like anybody else. I have been around long enough. That is stock in trade and it is part of what we all sign up for. I responded for a number of reasons. It is easy to say it was a throwaway remark from a councillor I have never heard of on a social media site, so you can just pass on. But when he was challenged on it and asked to withdraw it, he saw nothing wrong with it. I can see plenty wrong with it. Nobody has the right to challenge my Scottishness, or anybody else’s Scottishness, including people who are Scots because they have chosen to live in Scotland and to make their home and create their living there, rather than people like myself who were born and brought up there. I also thought it was worth highlighting because it is not an isolated instance. I am not just talking about the Twitter trolls and all the rest of it, because they are more to be the subject of pity than anger. You made reference to the call for debates between the First Minister and the Prime Minister made by the First Minister himself. When he made that call, he said he wanted David Cameron to come and argue against Scotland—not against Scottish independence, but against Scotland. It seems to me that there is a danger of an emerging mindset, and if it is not challenged, people will lose the capacity to tell the difference. The weekend before that, the Deputy First Minister referred to me as the Secretary of State against Scotland, i.e. if you do not agree with them you are against Scotland. I challenge that. We have had fairly robust exchanges today already on where we see Scotland’s best interests lying and being served; that is why we all join different political parties. But surely
24 we can all accept that, however we see it, we all want to get the best for Scotland, our constituents and our communities. There is a real danger that, if you do not point out these things, this debate could take a turn for the poisonous. At the end of it, whenever we resolve this and whatever the outcome, we have to learn to live and work together. We cannot allow that sort of division to enter into our political debate. Referendums are by their nature divisive. They are intended to be divisive, because they force people to take a yes or no position, but there is no excuse for taking the debate to a level that begins to question people’s patriotism or commitment to their country.
Q88 Chair: You mentioned your anxieties that this should not take a turn to the poisonous. Surely, to some extent, it has already happened, so it is a question of how we deal with it. Before I came here, I asked my staff to fish out some of the recent comments I had had: “I wish someone would hold a gun to Davidson’s head. The sooner we are shot of him, the better”; “When we get our independence, this man should be tried for treason”; “Whatever next from this mentally challenged wee man? Bomb Glasgow airport?”; “What a traitor to his constituents”; “All he would understand is a good smack in the puss”; “This thug seems to be mutating into a resurrected version of Ernst Röhm—the assassinated leader of the Sturmabteilung”, or words to that effect; “Scumbag”; “Idiot”; “Lower than a snake’s belly”; “Turd”; “Odious”; “Cretin”; a suggestion that I should go to Zimbabwe. Not all of these, I have to add, are from members of the Committee. “Baldy Unionist prat”. Graeme Morrice: That’s true. Chair: There was a comment from a Stirling university politics student, which I quite like, “You’re a disgrace to the left movement, and your family are a joke to.” The “too” is spelt with one “o” rather than two. I do not know what education they are giving at Stirling university these days. “Ignoramus”; “Turncoat”; and, “Despicable excuse for a Scotsman”. One I quite liked was, “Crawl back under the stone which excreted you.” Then I had: “Buffoon”; “Turd needs a good punch in the puss”; “Davidson is to serious debate what Josef Mengele was to anaesthetic surgery.” That is 10 minutes’ worth of reviews. How is it possible to have reasonable debate while the leadership of the SNP quite clearly condone this, because they could stop it if they wished? Mr Carmichael: I do not know, candidly, if they could stop it, because those are examples of people who are more to be the subject of pity than anger, but when you are engaged in political debate in a public role—and we all hold elected office—you have a responsibility to conduct the debate in measured and responsible, if passionate, terms, and when you see that sort of thing happening, to condemn it and make it clear that you are not going to be associated with it. That is why I thought it was worth raising it in a public forum. If any Liberal Democrat councillor ever spoke about a Nationalist in the way that the Nationalist councillor was allowed to speak about me, I would want to wade in and make sure that he or she was pulled up short about it, and the same should be true of every other party.
Q89 Chair: Are you aware of any effort having been made by the leadership of the SNP to curb this sort of behaviour? Mr Carmichael: No. That is not to say they have not been doing it, but I am not aware of it.
Q90 Chair: I am not aware of it either. I just wondered whether or not they had said it to you in some other forum that we were not privy to. David, have you ever come across the Nationalists saying that?
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David Mundell: No, I have not, Ian. You would not be surprised that I receive a considerable amount of similar abuse. Chair: But to be fair you deserve it. Mr Carmichael: He’s got much more hair. David Mundell: The word “baldy” never appears. Mr Carmichael: I received an e-mail in my parliamentary account just a few days ago bringing to my attention a site that features the First Minister, which to my mind was offensive. I cannot now remember exactly what was said on it, but I have given an undertaking that I will raise that site with the managers of Facebook, and say that in my view this is inappropriate and ought to be closed down. What they do with it is ultimately their decision, but I do not think that sort of debate has any place in our public life. Sir James Paice: Chair, there is a distinction here. Frankly, many of the things that you read out I get from my constituents—we all do—but a few of yours, and certainly the points the Secretary of State was referring to, actually cast doubt on your patriotism. It is suggested that unless you support independence you cannot be a true Scot. To me, that is the distinction from the normal abuse that we all have to accept from a certain part of our constituencies. That is the key point that distinguishes them. I would agree entirely with the Secretary of State’s view that it is reprehensible to suggest that you cannot have a debate about the future of Scotland from the perspective of being a Scot unless you support independence. It is palpably absurd. There are analogies in England and the whole of the UK, but to suggest that, being born and bred there, you cannot be a Scot simply because you do not support an independent Scotland is reprehensible.
Q91 Chair: Are there any final points that you want to raise with us, or any answers that you had prepared to questions we have not raised? Mr Carmichael: I think we have been fairly comprehensive in our reach today. If I may say so, Mr Chairman, I was very impressed that you even managed to touch on the annual report, albeit pretty quickly. Chair: Similarly, I am very impressed that you managed to raise the question of your maiden speech, which nobody else on the Committee had ever heard of. Mr Carmichael: I still have the video. If you want, I will have a copy sent along to you. Chair: I am sure you do. Let’s end on that happy note.