Scotland Bill

Lord Elder Excerpts

Tuesday 6th September 2011 Lords Chamber

[Lord Elder]

My Lords, I start by declaring a minor interest as a member of the Calman commission which led to this Bill. It will come as no surprise when I say that, as a result of that, I enthusiastically support this Bill. That does not mean to say I will not participate in Committee, nor that I shall not seek amendments, but it does mean that I fundamentally and enthusiastically support what this Bill is trying to do. A huge number of points have already been made and, judging from the length of the speakers list, a huge number of points are going to be made this evening so I will limit myself to three brief points: about the economic commission; about the financial recommendations in which I was heavily involved; and, finally, about a referendum.

The Calman commission made a very comprehensive study of the legislative powers which had been devolved in the 1998 Act and it reviewed very carefully whether there should be further changes. Further changes have been proposed but it is a measure of the strength of the original legislation that very few were suggested. The settlement, in most important matters, has stood the test of time.

The Calman commission was a good process and I regret that the SNP chose to stand aloof from it and to make passing remarks from the sidelines. The SNP should have made the effort to participate. We wanted the parties who were involved in it to look after the best interests of the good governance of Scotland for the people of Scotland. The SNP, I fear, wanted to reserve its position for independence irrespective of the consequences of that for the people of Scotland. I regret that.

The point about the financial settlement proposal is that the Scottish Government will have to set a rate for tax and will then either benefit from the additional taxes if the economy prospers or face a reduced income if the economy does less well. The budget will, to an extent, be tied into the success of the economy, and that is an important change. Some of the ease with which London is blamed when things go wrong will be passed back to Scotland properly. Had we known back in 1997, 1998 or 1999, when devising the original scheme, that the tax-varying power was not going to be used, then we would either not have put it in or, I believe, sought just the kind of arrangement that the Bill proposes. But it was intended to be used, and that is why it was a separate question in the referendum.

Some of the additional taxes proposed to be devolved on the financial side in Calman were, to be honest, put in at the last minute to get the total tax take up to a higher percentage. They were never central to the scheme. I hope that the Minister will not mind me pointing out that, as he was responsible for putting them in at the last minute by and large to get the total tax take up to a certain percentage, it is not without irony that the Government have taken some of them out since. They were never central to the scheme, because the central part of the financial settlement was always what was happening on income tax. That is a very important step, which is still absolutely at the heart of the Bill.

I would like to say a few words about a referendum. For whatever reason, back in the 1970s and in 1997, we held a referendum on the main question of setting up the Parliament, and in 1997 on a separate question on giving it financial powers. Had we known that those powers would never be used, I am not sure that we would have felt the need to have a referendum. However, having created that precedent, I think it is impossible not to have a referendum on proposals which contain new powers on tax which will have to be used in setting a tax rate. Therefore, there should be a referendum, and the only question to be resolved is whether it should a question on the SNP proposals as well. I think that it should be. I note that the noble and learned Lord the Advocate-General referred to Pujol a few days ago. I would not like Scotland to get caught in the trap of a supposedly nationalist Government always asking for more from the centre but never being prepared to ask the fundamental question themselves. I regret that, for whatever reason, the other place did not seek to introduce such a question. It might, however, be appropriate for this House, at least in the first instance, to give it the chance to reconsider the matter in due course.

Too often these days, discussion about devolution as against independence is caught in the past. No one is suggesting a return to the pre-Scottish Parliament days. One of the changes of the last five years, which I at least am grateful for, is that we have heard precious little of late from the First Minister about the arc of prosperity that he was so keen to join—Iceland and Ireland being his role models only five years ago. In a referendum, what the present Scottish Government want would have to be defined. To take just one matter of some importance, in the current financial climate, the central banking function would not surely be taken on by a new independent Scottish central bank, so it would have to be decided whether it was going to be the Bank of England or the European Central Bank in Frankfurt. I have to say that, if nothing else, that would smoke out what I fear many nationalists actually are, which is not so much pro-Scottish as anti-English—and that I deplore.

There are many things still to discuss in the Bill, although as I say I fundamentally support it, and I look forward to the further stages.