WEDNESDAY 25 FEBRUARY 1998

PROFESSOR PAUL HEYWOOD, DR CHARLES JEFFERY and MR UWE LEONARDY

  160.  It is both?

  (Mr Leonardy)  In Germany it certainly works the other way round. The Land legislatures are by no means homes for old-aged federal politicians. They are much more places where politicians serve their apprenticeship before they go up to the federal level and in many case the careers of federal politicians started in local government and they went on to be a member of the Land legislature and later on became politicians on the federal level. We consider this to be one of the advantages of the federal system that you have this kind of step-by-step education and political experience.

  161.  So do we but there are other people popping out the top. Is dual mandate permitted and does it occur?

  (Professor Heywood)  Straight forwardly, no.

  162.  It is not permitted?

  (Professor Heywood)  No.

  163.  Because of the strong constituency links in the UK, the public tends to bring their problems to Westminster MPs, often bypassing councillors and Euro MPs. Do you see an additional layer doing the same? Sometimes it causes friction and often it enables us to blame each other when we have to take hard decisions. To that extent do you see the Scottish Parliament Members and Welsh Assembly Members having, in fact, a full-time occupation?

  (Professor Heywood)  The parallel with the Spanish case is a slightly difficult one because the relationship between the Spanish public and their Members of Parliament is very different to the relationship between the UK public and their Members of Parliament. In Spain you have an Ombudsman who does work fairly effectively as a channel for expressing concern to complaints. Certainly in the devolved Spanish regional parliaments there has developed full-time professional, political roles. The regional parliaments are staffed by professional politicians. I am not sure that I feel there is a particularly relevant example there because it is a very different kind of political tradition to the one that exists in the United Kingdom.

  164.  The Länder?

  (Mr Leonardy)  Regarding Germany the question as to whether or not membership of a sub-national parliament would be a full-time job depends, of course, on the size of the Land, also on the question of whether it is a city state, you know we have the three city states, which normally would not be a full-time job. If you are a member of the legislature of North Rhine- Westphalia or Bavaria or Lower Saxony this is practically a full-time job. With the geographical dimensions in Scotland I would guess that this would also be the case. Your other question was about taking the problems of the local area to Westminster. That is attempted by many citizens when they approach their Members. It depends on the personality of the Member whether he or she is able to delegate that to another level or whether he or she allows him or herself to be eaten up by business which is not within his own field of parliamentary competence.

  165.  It is expected that the procedures of the Scottish Parliament will differ widely from those of Westminster. Are there any examples within your knowledge where national and sub-national parliaments, for want of a better word, use markedly different procedures and is it likely to have wider implications?

  (Professor Heywood)  In the Spanish case absolutely not. The Spanish devolved regions, apart from the fact they are single chamber rather than dual chamber, mirror the national state procedure in operation.

  (Mr Leonardy)  No significant differences in legislative procedure among the Land legislatures and also in comparison to the Bundestag, apart from the fact that in most Land legislatures you need only two readings of a Bill while in the Bundestag you need three. That is not really a substantial difference. There are differences in the way in which the Land legislatures elect their own governments. For instance, you may have one Land, in which you elect the Minister President and the Minister President has power to appoint his or her Ministers. You have other Länder in which the appointment of Ministers by the Minister President needs the approval of the legislature. You have others, particularly in the city states, in which the entire collegiate body of government needs to be elected by the legislature. That varies from Land to Land and it is, as the Constitutional Court once said, "the most noble exclusive power of any land to organise its own constitution". So they are completely free to do whatever they think fit under the only condition that they meet the requisites of the federal constitution, article 28, which says that a constitution of a Land must be democratic and republican.

  166.  Even if it uses its full tax varying powers the Scottish Parliament will only be able to raise, effectively, about three per cent of its total resources and will be dependent for 97 per cent on the Westminster Parliament. How does that compare with the Länder?

  (Dr Jeffery)  Very differently indeed. There is constitutional assignation of revenue from certain taxes to either the Federation of Länder separately or sharing the proceeds jointly, so there is no sense of the central government giving tax revenues to the Länder.

  167.  Does the Länder have tax-raising powers?

  (Dr Jeffery)  There are tax-varying powers but they are not especially significant taxes with great proceeds coming from them. The main taxes, income, corporation and VAT, are taxes whose revenues are shared between the two levels of government and the constitution says that.

  168.  There is no sense of resentment for lack of financial accountability, the Länder spending money they do not raise? There is no sense of that?

  (Mr Leonardy)  I do not think so. Again one must mention the Bundesrat because the Bundesrat is in the process so that an Act of Parliament would need the consent of the Bundesrat to take the Länder into the business and they are participating in the whole political procedure. One should add, though, that there is presently a lot of debate about strengthening the financial autonomy of the Länder by giving them more rights to raise taxes of their own but we have only just the beginning of the debate and there are many pros and cons which I can hardly touch upon here.

  169.  Is there not an argument between the richer parts and poorer parts?

  (Mr Leonardy)  First of all, you will always get that in any regionalised system. Secondly, there is a highly intricate mechanism of fiscal equalisation in the German system on two levels: horizontal equalisation by which the stronger Länder subsidise the weaker ones and also what we call vertical equalisation by which the Federation gives special grants to economically and financially weak Länder. Again this is a field, Mr Clarke, in which there is a debate now because there are some who say that equalisation is overdone because it is done up to a level of 99.5 per cent and that of course might take away incentives for the weaker to do their business in a better way and the richer ones are, of course, protesting against financing much of their additional gains into the pockets of the weaker ones. This will always be an eternal debate in every federal system.

  170.  Spain, is there a difference?

  (Professor Heywood)  There is a difference in what they are technically allowed to do. 15 of the 17 regions technically have the right to surcharge ceded taxes from central government. None has ever used that right. The two regions of the Basque country and Navarra have different regimes which is a recognition of the historic, the so-called foral right recognising a historic tradition which allows them to levy their own taxes but within a general fiscal regime decided on by the central state. There are technical differences in the manner in which finances are raised but the overall fiscal burden tends to follow the decisions of the central state and fiscal policy is a reserved area of that central state.

  171.  Is there a sense of regional governments lacking accountability for the money they spend because they do not raise it?

  (Professor Heywood)  They have means of raising money separately. They can raise money through borrowing, through selling debt, they get money directly from structural funds, etcetera.

  172.  In general what proportion of their funds will come from central government?   (Professor Heywood)  In Spain it is about 65 per cent at the moment.

  173.  It is the role of civil servants we really want to talk about. By whom are the civil servants in sub-national units employed? Are they employed by the central government or employed by the separate entity like they are in here?

  (Professor Heywood)  In Spain they are employed by the devolved government. They are civil servants in the employ of the regions. I think there were about 250,000 civil servants transferred from central to regional government as part of the establishment of the system of devolved government and the conditions of the transfer entailed that they must enjoy the same services and conditions of employment in the regional government as they had done under the central government but subsequently regional governments employ new civil servants themselves. You touch on an area of real difficulty which is that undoubtedly there has been significant duplication of civil service roles with central government not giving up sufficient civil service posts to the regions and regions employing more civil servants than they really need.

Chairman:   Gentlemen, we have had a very lengthy and most interesting and indeed fascinating session. Are there any final remarks or submissions you would like to put to the Committee? I think we have actually covered everything. Could I, Professor Heywood, Dr Jeffery and Mr Leonardy, on behalf of the Committee, thank you very much indeed. This has been an excellent session. The Committee now are much better informed than they were and the evidence you have given this morning will be most helpful to us as we proceed through our inquiry. Thank you very much indeed for your attention.