Scotland Bill

Lord Foulkes of Cumnock Excerpts

Tuesday 24th November 2015 Lords Chamber

[Lord Dunlop]

I shall come on to speak about the fiscal framework. The Government of Scotland and the UK Government are negotiating the fiscal framework and exactly how we put those principles, including the no-detriment principles, into practice. I will come back to that.

The Bill also enables the devolution of many other responsibilities, from the management of the Crown Estate’s economic assets in Scotland to the management and operation of reserved tribunals. The Commons also agreed the devolution of abortion policy, which the Smith agreement concluded was an anomalous reservation. There are also significant measures relating to transport and energy.

I want to say something about the fiscal framework, to which my noble friend has alluded, the importance of which is rightly recognised by many of your Lordships. I am particularly grateful for the work done on this by the Economic Affairs Committee. The Government agree with the committee that the relationship between the fiscal framework and the legislative powers in the Bill is critical. It underpins the transfer of tax and welfare powers to Holyrood. The issues raised by the committee’s report are exactly those being addressed in the detailed negotiations between the UK and Scottish Governments. Both Governments have agreed not to provide a running commentary—negotiating in public is not conducive to reaching an agreement.

We are committed to reaching an agreement as soon as we can after tomorrow’s spending review and the draft Scottish budget on 16 December. We cannot guarantee when the negotiations will end—that is not in our gift—and to try unilaterally to set a specific date risks weakening our negotiating position. I hope the House will understand both Governments need time and space to reach an agreement that is right for Scotland and the UK as a whole and is built to last.

[Lord Foulkes of Cumnock (Lab)]

I am sure the House will recognise that, but can the Minister help us? If, during the discussions on the fiscal framework, the Scottish Government’s representatives conclude, as they may well do, that they are better off with a block grant based on the current arrangement of the Barnett formula than raising money through the tax powers on a low tax base, and if they do not accept the proposal from the UK Government on the fiscal framework and the Scottish Parliament fails to give legislative consent to this Bill, what is the Government’s plan B?

[Lord Dunlop]

I seem to have heard “plan B” somewhere before. I say to the noble Lord that we are planning for success here. We working for success and the UK and Scottish Governments are saying the same thing. We are working constructively together to reach an agreement as soon as we can and good progress is being made.

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[Lord Smith of Kelvin (CB)]

My Lords, in the run-up to the Scottish independence referendum, the leaders of the UK’s main parties made a series of commitments about further powers for the Scottish Parliament. I was asked to chair political talks to agree the detail of what those powers should be. These talks led to an unprecedented agreement among Scotland’s five main parties. That agreement has now been translated into the Bill before us. I will address three main issues in my brief remarks today: first, to talk about the process through which the agreement was reached; secondly, to reflect on how the agreement has been translated into the Bill; and, thirdly, to address the issues that remain outstanding.

Before I do so, I will explain my role in the process. I stand here today as a Cross-Bench Peer, and throughout my career I have sought to avoid any political affiliation. Although the agreement has come to bear my name, its conclusions have not been influenced by me. I never discussed my views on Scotland’s constitutional settlement or how the powers should be used—and I intend that to remain the case.

I begin with some reflections on the process that led to the agreement. The process was the first time that Scotland’s main parties came together and reached an agreement like this. It was an unprecedented outcome of an unprecedented time in Scottish politics, so it was no surprise that the agreement was hard fought. All parties had to make compromises. Some felt that the agreement had in some areas gone further than they would have liked and others felt it had not gone far enough, yet they all put their personal positions to one side to reach a deal. I pay tribute to the parties for doing this, especially the representatives that I had the pleasure to work with directly. I think we have one solitary member of the commission with us today—the noble Baroness, Lady Goldie.

[Lord Foulkes of Cumnock]

In relation to good faith, the noble Lord says that all the parties agreed to the agreement. I saw his press conference, when he announced the agreement, and I also saw John Swinney immediately afterwards say that he did not agree with what had been agreed. Is that good faith?

[Lord Smith of Kelvin]

What actually happened was that he signed up to every single word in that agreement. Immediately afterwards, as a lifelong nationalist, he said that he would always want much greater powers—and, indeed, independence. That was probably what he was going to say when he entered in—but they did not leave the table, and they signed up to every word in the agreement.

The agreement was published on 27 November and it was and is a political agreement. Then it had to be turned into law and, very importantly, in the months that followed, a commitment to implement the agreement was set out in the 2015 general election manifestos of the Conservative, Labour, Liberal Democrat and Scottish National parties. At the same time, teams of civil servants were busy translating the agreement into a Bill.

That leads me to my second point: does the Bill match the agreement? I believe that the Bill that we have before us honours the agreement among the five parties. Both the House of Commons and the House of Lords will have an important role to play in making sure that the Bill makes for good law, but I am also sure that this House will reflect very carefully before making any substantial changes to the Bill that would result in it differing significantly from the agreement.

I turn to my last substantive point: the issues that remain outstanding. Not all the agreement requires legislation. One crucially important part remains outstanding, as we have been hearing time and again: a new fiscal framework for Scotland. This is fundamentally important to making Scotland’s new powers work. It is the final piece of the interlocking jigsaw. As we have heard, it is not yet agreed and is being discussed between Governments. I am told by Ministers on both sides—I am taking a healthy interest in this—that conversations have been constructive and carried out in good spirit. I expect that to continue and to deliver an outcome in line with the principles set out in the agreement. It is vital that they do. I know that noble Lords and the Scottish Parliament will have views on how the Bill and fiscal framework should proceed. In my view, it is an issue to be discussed and agreed between both Governments, so I shall defer any questions on the parliamentary handling of this issue, at any rate, to the Government Front Bench.

That leads me to the final issue that I want to raise under the heading of unfinished business: the working relationship between a Scottish and UK Government.

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[Lord Foulkes of Cumnock]

My Lords, I also congratulate the noble Lord, Lord Campbell of Pittenweem, for his very statesman-like maiden speech—I was going to refer to it as “Ming’s maiden speech” but that might not be appropriate in this setting. It was a tremendous tour de force. I am also very much looking forward to the maiden speech of the noble Baroness, Lady McIntosh of Pickering, who I know well from the other place.

As a number of Members will know, not least my noble friend Lord McAvoy on the Front Bench, I have been an enthusiast for devolution for a very long time. I argued for it in the 1970s and was very disappointed at the result of the 1979 referendum, when, although we had a majority, we did not get over 40% of the vote. We were all disappointed but we pulled up our skirts—or our kilts—and fought again and we managed to get it in 1997 in the general election and in 1999 in the referendum. We were very pleased about that. The constitutional convention in Scotland—with, let us be honest, the SNP and the Tories on the sidelines—came up with a great scheme. At least we thought it was a great scheme. The noble and learned Lord, Lord Wallace, and I served on that constitutional convention and many compromises were made, as he knows.

I must confess—and I know the noble Lord, Lord Forsyth, will say, “I told you so”—that, on reflection, the Scottish Parliament and particularly the electoral system have not functioned as we had hoped and expected. We were told that that electoral system would not result in an overall majority. Yet in 2011 we saw the SNP, with only 45% of the vote, get an overall majority: 69 out of 129 seats. Let us be honest about it. This is something we all have to face up to, particularly the noble Lord, Lord Smith, but everyone here. It may not be known by some of the people south of the border that the result has been an SNP hegemony—control by one party—in Scotland.

The SNP does not just have a majority in the Parliament, but there is an SNP Presiding Officer—it did not see fit to let another party have that job. There are SNP majorities on every committee—which never criticise, unlike our committees in both Houses of this Parliament. Civil society, through a succession of carrots and sticks, is becoming increasingly subservient to SNP dominance, as are the media. We saw that one of the committees of the Law Society seemed to have been taken over. There are the voluntary organisations: we saw a £150,000 grant, without any submission, being given to T in the Park because there was a little bit of elbowing by someone very close to the SNP.

Of course, there are no checks on the power. There is no “House of Lairds”—or, even better, a Senate—that might hold the SNP to account. It has total control. Let us not pretend. My noble friend Lady Liddell—I call her the Secretary of State Emeritus—and my noble friend Lord Maxton said this. Everything the SNP does is subservient to its goal of independence. We must never forget that. That is what it is doing. If it agrees, it is a tentative agreement. It is done just because it is expedient to do so at the time.

As the noble Lord, Lord Lang, said, we have had three Scotland Bills. The tax-varying powers in the 1998 Bill were never used. The second Bill in 2012 led to the Calman commission and all those powers—tax-raising powers, borrowing powers, the revenue Scotland created—but very little recognition or credit was given to this Parliament for giving that kind of devolution. The SNP keeps asking for more—this Oliver Twist syndrome, which is part of the slippery slope towards independence. That is how the SNP sees it.

As the noble Baroness, Lady Goldie, said, the 2011 election provided the SNP with the 2014 referendum. With no disrespect to the Prime Minister, he was conned by Alex Salmond into deciding that it should be yes/no—and the Electoral Commission went along with that. It is not doing that for the European referendum, which is not going to be yes/no; it is going to be “withdraw or stay in”. Of course the SNP made its proposal the yes proposal because it is good to be positive. It chose the date. It used all the resources of the Scottish Civil Service to argue its case.

Then, just as we were getting near, there was that flawed YouGov poll—and it was flawed. It was out of kilter with every other poll. That led, as my noble friend Lord Maxton said, to the unnecessary vow. It led to panic. It led to the Smith commission. With no disrespect to the noble Lord, Lord Smith, that was rushed and we have ended up with an unworkable proposal. That created the momentum for the 2015 victory; it led to the SNP being elected with—well, it was 56 seats, then it was 55, now it is 54; they are toppling one by one through various means.

What have we got in Scotland? We have an Education Minister who cannot string two sentences together, a Justice Minister who does not seem to see the need to meet with the chief constable regularly and a Health Minister who is totally oblivious to the failings of the Scottish health system. They are not exercising their powers. The noble and learned Lord, Lord Wallace, made a very eloquent plea for the SNP to improve services in Scotland, to improve education, to have innovation and new ideas in the health service, and to improve the justice system to get fewer people in prison—all those kinds of things which it promised it was going to do but has not been doing. It has let the services take over while the First Minister and her Cabinet Ministers go around the country for photo opportunities, campaigning for independence. That is exactly what they are doing—let no one be in doubt about that.

In an intervention that I made on the Minister, I asked about the now increasingly likely event that the SNP will see that it is going to get these proposals but will be worse off in financial terms than it is currently under the block grant and will decline legislative approval for the Bill. It might well do that. We are in a very difficult position because the Government have no plan B. The Conservatives are doing this and everything else on an ad hoc basis. As for the truth of what went on between the First Minister and French ambassador, I still believe that she did say to her that she would prefer Cameron as Prime Minister to Miliband, because it serves the SNP’s purpose to have a right-wing Tory Government making cuts, doing the kind of things that the people of Scotland do not want.

What is the alternative? The Minister could well ask me what my plan B is, but I have said it again and again. It was great to hear the noble Lord, Lord Campbell of Pittenweem, come in and say it and to hear the noble and learned Lord, Lord Wallace, say it again. We have the Bill from the noble Lord, Lord Purvis of Pittenweem, and we have heard this now from the Constitution Committee of this House on a number of occasions. What we need is a UK constitutional commission to work towards a federal or a quasi-federal system to deal with the English democratic deficit, to include Scotland, Wales and Northern Ireland, and to provide an opportunity to consider proper Lords reform at the same time. There is a growing consensus for that, and the only people who do not see it are the Government. If the Government continue to fail to understand this and what is happening in Scotland, I warn them now that independence is inevitable sooner rather than later. It is about time that the Conservative Government woke up and did something positive to protect the union.

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[The Marquess of Lothian (Con)]

My Lords, it is a pleasure to follow the interesting speech of the noble Lord, Lord Turnbull. It will certainly deserve re-reading tomorrow to get its full impact and I shall certainly be doing so.

My family’s Latin motto is “Sero sed serio” which, translated into English, means “Late but in earnest”. That is fairly appropriate for my position in this debate. This does, however, have its disadvantages because I had written a speech for this occasion before I knew the running order. During the course of the debate, every line of my speech has been delivered in one part or other of the House, so I am going to restrict myself to a number of observations. Before I do, I should like to congratulate the two maiden speakers. The noble Lord, Lord Campbell of Pittenweem, is an old colleague of mine at the Bar in Scotland and served with me for a long time in the other place. My noble friend Lady McIntosh of Pickering made another very fine maiden speech. She was also at the Bar in Scotland, as I was, and also served with me in another place. We had two excellent maiden speeches. I look forward to hearing much more from them.

It has been 17 years since I last spoke on devolution at all, let alone in a devolution debate—I will explain why a little later—so coming to this debate has been rather nostalgic. There are the same faces and quite a lot of the same points are being made all over again. One of the things I enjoyed most, which was fairly novel in these debates, was listening to my old friend the noble Lord, Lord Foulkes, fulminating against the success of the nationalists over the years since devolution was introduced. I wonder whether at some stage he might apologise for the enthusiasm with which he embraced the concept that devolution would kill nationalism stone dead, but—Oh! Perhaps I will get that apology.

[Lord Foulkes of Cumnock]

It was another George, my noble friend Lord Robertson, who used that particular phrase. I am sure he will explain that away himself. I have gone as near as I can—the noble Lord, Lord Forsyth, recognised this earlier on—in recanting some of the things I said when I was a bit younger.

[The Marquess of Lothian]

I think I will have to take that as being as near to an apology as I will get from the noble Lord, Lord Foulkes.

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[Lord Dunlop]

That all depends on what is agreed in the fiscal framework. For example, if you look at the last Scotland Bill, there were issues to do with borrowing that needed to be put in primary legislation. The outcome of the fiscal framework will determine what legislation we need to underpin that.

The third point I wanted to make was on the legitimacy of the process. Given the degree of cross-party consensus on the devolution of further powers to Scotland, whatever the result of the general election in May there would have been a UK government Minister standing here arguing for the Smith agreement to be implemented in full. That is the nature of the cross-party agreement. The Scotland Bill and delivering the Smith commission agreement in full was, as I said, a manifesto commitment of all three UK parties. Against that background, I ask the House to consider how it would play with voters of Scotland, six months out from important Holyrood elections, if your Lordships were seen to hold up the passage of this Bill.

[Lord Foulkes of Cumnock]

I wonder if the Minister could answer the question I asked right at the start. I have waited patiently for the last seven hours for him to do so. If there is no agreement on the fiscal framework —that is entirely possible—and, as a result of that, the Scottish Parliament refuses to give consent to this Bill, what is his alternative?

[Lord Dunlop]

I am afraid that I am going to give to the noble Lord the same response that I gave earlier. We are working very hard to get a success and an agreement on this fiscal framework.

I think that the noble Lord, Lord Foulkes, was one of those who suggested that the Scottish Government do not want a fiscal framework agreed or to take on the new powers in this Bill. I do not accept that—and I have to say that I think there has been a tension in this debate. On the one hand, the noble Lord, Lord Lang, and others, have called for improving intergovernmental relations and, on the other hand, we have heard it said that actually we should not trust the Scottish Government. We have to operate on the basis that the Scottish Government are negotiating in good faith.

[Lord Foulkes of Cumnock]

Could the Minister answer the question that I put to the noble Lord, Lord Smith? John Swinney signed the Smith agreement, which was meant to be agreed by all parties. Then he came out immediately and denounced it. How can you describe that as good faith?

[Lord Dunlop]

I thought that the noble Lord, Lord Smith, answered that question very well. He put it in the context of an agreement, every aspect of which they signed up to—but, clearly, the SNP is a party that believes in independence, and therefore the whole context should be seen in that light.

The Deputy First Minister has agreed that finalising the fiscal framework is essential to delivering the Smith commission proposals. To touch on what the noble Lord, Lord Smith, said earlier, in the debate, he has spoken to both Governments and is confident that talks will deliver a fiscal framework in line with the principles set out in the agreement. As I said in my opening speech, talks have been constructive. We have agreed every step jointly with the Scottish Government and are working hard to agree a fiscal framework that is built to last, and is fair for Scotland and for the UK as a whole.