Brexit: Negotiations
Lord Higgins Excerpts(6 years, 1 month ago)
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Lord Higgins (Con)
My Lords, all of those who took part in the debates which set up the 2016 referendum were absolutely clear that what we were legislating for was an advisory referendum, not a mandatory one. But the morning after the result was announced, the Government immediately took the view that we should treat it as if it were a mandatory referendum. That was despite the fact that the campaign itself was riddled with lies, fake information and deception. It is also the case that perhaps the worst lie of all was that leaving the European Union was going to be simple. No one in the Chamber this evening would take that view.
But it has presented the Prime Minister with an immensely difficult task, and we must give credit to the stamina and determination which she has shown in pursuing that objective. However, the last thing we need at this moment, I believe, is a change of Prime Minister. I have been appalled by the way in which various members of my own party have sought to undermine her position at such a difficult time.
We have been very clear that the alternatives are: this deal, no deal or no Brexit. The Prime Minister herself has put it in those terms. I am quite clear myself that, of those three alternatives, as far as the future of this country is concerned, the best thing we can do is have no Brexit. That is what we ought to aim to do, but we are stuck with the result of the referendum and therefore there is now enormous pressure for a second referendum.
On 25 October, and indeed on 19 January, I spoke at great length saying why we should not have another referendum or, indeed, any referendum. Every time we have one, we undermine the whole basis of our representative parliamentary democracy, because the referendum takes away our position as representatives and brings us here as delegates. I therefore do not believe it would be right to hold another referendum. Incidentally, what I am clear about, having spoken to many of those who joined that enormous march in favour of a people’s vote, is that 99.9% or probably even more of them were in favour of a referendum because they want us to remain. The demands for a referendum should be viewed in that light.
The question now is: if we are not to do it by referendum, what should happen? This is the time when Parliament has to look at the three alternatives and should say that, in the interests of our country, we must not go ahead with the proposal to withdraw. Here I agree with the noble Baroness who spoke from the Liberal Benches, and indeed I detect a growing feeling in the House that we ought to stand up and take that position so that we do what is right for the economy and the people of this country. It is a great regret that we did not have a vote on whether we accepted the referendum result. I think that it is high time we did.
Scotland Bill
Lord Higgins Excerpts(8 years, 9 months ago)
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Lord McCluskey
I shall conclude by saying that I acknowledge that that is exactly correct. It was an extremely worthwhile proposal and I am thankful that, one way or another, as the months and years pass by, we will be able to get the whole truth out about what has happened in relation to this settlement.
Lord Higgins (Con)
My Lords, the noble and learned Lord, Lord McCluskey, says that he has been involved in these matters for some 40 years. I have been involved, at one end of the building or the other, for 50—33 at the other end and 18 or so at this end—dealing to a large extent with financial and Treasury matters, but I have to say that I cannot recall any financial issue, in either House, that has been dealt with in such an inadequate way as the legislation that we have in front of us. The fiscal framework, which is at the heart of the Bill, has still not been debated at all in the House of Commons. We had a very truncated debate in Committee, with no debate on the fiscal framework, and very limited debate thereafter.
The Minister referred, in the debate on the previous group, to the promises made in the course of the referendum campaign. He described them as joint promises, but they were made, of course, with absolutely no consultation. The so-called vow was made during the referendum campaign and the statement by the Prime Minister was made the morning after the referendum took place. The deal that has been struck perpetuates a grossly unfair balance for those paying taxes and involved with financial matters in England, Wales and Northern Ireland and perpetuates the very substantial subsidy that is given to Scotland. Members of Parliament have not had any opportunity whatever to debate this. One must hope that their constituents will hold them to account when the details begin to sink in to the consciousness of the public at large in the parts of the United Kingdom other than Scotland.
The noble and learned Lord’s amendment is very much to be commended. We are stuck with the Barnett formula, which we all know the late Lord Barnett himself decided was obsolete long before his lamented departure. The reality is that we are now going to go on doing this with virtually no prospect of the matter being changed again in five years’ time or beyond. That is a dreadful situation as far as taxpayers in the rest of the United Kingdom are concerned. I certainly support the noble and learned Lord’s suggestion that we at least ought to know the details of what has been agreed.
Lord Cormack
My Lords, a constant theme in your Lordships’ House is that the other place has inadequate opportunity to scrutinise legislation thoroughly. When we say that, we always then go on to say that in your Lordships’ House things are different. In this case, they are not. It is nothing short of disgraceful that the other place has not had an opportunity to debate the fiscal framework. Twenty-nine of us put our views on that on the record when we had a Division a few weeks ago, but it was a vain gesture.
I speak as a Member of your Lordships’ House who feels proud of our reputation for scrutiny and our ability to look at Bills forensically and to get change by either passing more amendments or, more regularly, by getting the Government to recognise that points of substance have been made and that alterations of substance should follow. In this case, that has not been possible.
It is deeply regrettable that that is the case. I make no personal criticism of my noble friends on the Front Bench; they are men of great charm and ability. However, they have been working under orders and have not been able to respond to points of real weight and substance because the brief has not allowed them to do so. In so many ways, this is a one-off Bill. I trust, above all, that in the context of scrutiny it will remain a one-off Bill.
Scotland Bill
Lord Higgins Excerpts(8 years, 9 months ago)
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Lord Higgins (Con)
My Lords, along with Burke, I have always believed fundamentally in representative parliamentary democracy, and therefore I have always had severe doubts about referendums. Nothing in the debates that we have had this evening has convinced me otherwise. Indeed, that may turn out to be so in the context of the European Union as well.
The way in which this matter has been handled seems deeply disturbing. A deal is being put forward that is clearly grossly unfair, and I do not think that it would be right for any English Members of Parliament to go along with it. What is absolutely certain is that they ought to have a chance to debate the matter and vote on it, because then they could be held to account for the consequences of the deal which has now been done as a result of statements made during the referendum campaign and as a result of what I can only describe as the “morning after the night before” speech by the Prime Minister.
We have been pushed into a situation where things are being rushed through. There has been no discussion in the other place about the central feature of the deal. We are discussing it only now, on Report, with the dispensation that we can speak more than once and adopt a system of debate close to the Committee stage system, but without having the opportunity for a stand part debate, for example. The whole thing is being rushed through highly unsatisfactorily.
The House should be grateful to my noble friend Lord Forsyth, who has set out the arguments with extraordinary clarity. It ought to be obligatory reading for everyone in the House of Commons, and it is absolutely essential that they should have an opportunity to debate this matter, even at this late stage, so that they can be held accountable for the decision that is reached. I agree with every word that my noble friend said and with all the doubts expressed by every other speaker in this debate, and I very much hope that my noble friend will press his amendment to a Division. If need be, we may have to revert to other aspects of the matter at Third Reading.
We must take this opportunity to give the House of Commons a chance to debate something which is far more important than almost any other issue and of lasting importance, as my noble friend spelled out, in terms of the deal containing a veto relating to reconsideration of the issue in a few years’ time. We really must make sure that the House of Commons has a chance to debate this matter.
Lord Cormack (Con)
My Lords, following my noble friend Lord Higgins, I add my support for my noble friend Lord Forsyth. We are in danger of forgetting that this is, as the noble Lord, Lord Empey, said, a treaty between the sovereign Government of the United Kingdom and the Government of Scotland, who, we must recognise, are composed of a party whose sole raison d’être is the destruction of the United Kingdom. That is a perfectly legitimate view to hold, but that is the view it holds. We have here a document that, as my noble friend Lord Higgins has just said, is of enormous, far-reaching significance, and it has to be debated in Parliament in some detail.
In another context, a few weeks ago some of us remarked that Governments are accountable to Parliament and not Parliament to Governments. Here, the Government have come to an agreement and are expecting us to more or less put it through on the nod. It has very far-reaching implications. My noble friends Lord Lang and Lord MacGregor of Pulham Market have both made powerful, brief speeches indicating how vital it is that this matter be properly discussed.
It is the fault of no one in this Chamber that we have had to wait so late for this document. We have not had the chance properly to analyse it. It is full of extraordinarily vague statements and, at the end of the day, a review which will be entirely at the whim of the Government of Scotland, rather than the Government of the United Kingdom. I believe passionately in the United Kingdom, and equally passionately in parliamentary democracy. Neither is being served by debating this far-reaching document in such an unsatisfactory manner. I very much hope that, even at this late stage, my noble friend the Minister will acknowledge that each House of Parliament should have the opportunity to debate this document at some length. At the end of the day, it will probably be endorsed. But then, as my noble friend Lord MacGregor said, it will have been endorsed by Parliament and we will have a degree of responsibility for it.
This is a mess. It is a wholly unsatisfactory situation. We are deeply indebted to my noble friend Lord Forsyth for the calm and analytical way in which he spoke in moving his amendment, which deserves considerable sympathy and support.
Lord McCluskey (CB)
My Amendment 67A is in a different group but, with respect, because it deals with the Barnett formula it ought to be considered at this stage. It raises the general question of the formula, as did its predecessor, which contained a reference to the Government’s obligation to publish the Scottish fiscal framework.
The Barnett formula runs through the whole document—rather like dry rot in a south Edinburgh house I used to live in. It cost an awful lot to put that right, and I dare say it will cost an awful lot to get this right.
The noble Lord, Lord Forsyth, referred to getting the briefing. I saw the document on Friday, and I came to today’s very useful briefing with, like President Wilson, 14 points. However, I did not dare raise the 14 points because many people were anxious to speak and we had very limited time. I do not propose to raise them all now, and I am happy to note that many have been dealt with by others, but there remains one rather important one.
This Scottish fiscal framework is recognised by everyone as being fundamental to the whole Bill. The entire Bill rests upon the Smith agreement, which was reached in nine weeks. It took nine months to frame the fiscal framework. The Smith agreement was reached by 10 elected Scottish politicians—Members of the Scottish Parliament. They included representatives of the Labour Party, the Liberal party and the Greens, none of whom, as far as I can see, have been consulted at all about the Scottish fiscal framework, and certainly not in the formal consultations. It is a very odd situation. This document has been produced between the two Governments, after nine months, and it contains things that are simply not in the Smith agreement.
For example, we talk about “no detriment”. I never knew what it meant, and I am happy to say that I was not alone in my failure to understand. The committee of the House of Lords that looked at it could not understand the second detriment, and even the noble Lord, Lord Forsyth, for whom one has the highest regard, was not able to understand it. He asked in vain if anybody would explain it to him, and we are still waiting for an explanation. Now, the paper has come up with something that was not considered by the Labour Party, the Liberals or the Greens: division of detriment into direct detriment and behavioural detriment. Last week, we were told about not behavioural detriment, but indirect detriment. All those concepts have come up to fill out the notion of no detriment, which no one has yet been able to explain.
I want to pick up one or two of the points that have been made, just to show my support for the approach of the noble Lord, Lord Forsyth. Paragraph 7 of the document states that,
“the … block grant will continue to be determined via the operation of the Barnett Formula”.
That seems to fly in the face of what the noble Lord, Lord Lang, said, but that is what the document says. House of Lords paper No. 55, A Fracturing Union?, states:
“The Formula contains no mechanism to correct any unintended consequences being built permanently into the baseline”.
That surely means that Scotland continues to get the benefit of built-in unintended consequences for at least five years, and perhaps in perpetuity, given the remarks made by others about the arrangements at the end of the five years.
The document continues:
“For welfare … and … other spending”—
nothing to do with the Barnett formula, at the moment—
“the chosen method will be the Barnett formula”.
Does that mean that, in respect of the devolution of welfare payments, the block grant will be adjusted to give Scotland the benefit of the unintended consequences of the operation of the Barnett formula?
We talk about the unintended consequences, but it is entirely foreseeable—
Lord McCluskey
Forgive me—yes. The document that talks about the unintended consequences is the House of Lords document.
One thing is foreseeable: that the Scottish population will decline in relation to the UK population because, as the noble Lord, Lord McFall, pointed out, that has been the position for hundreds of years. In law, or certain branches of it, if you can foresee the consequences of your actions, you are deemed to intend them.
I do not want to go through all my 14 points, but I have the greatest difficulty in understanding paragraphs 15 to 19. I do not understand what is meant by “Income tax, 87.7%”—per cent of what? These things are rather difficult, and they are not explained. Not being an accountant, I am unable to follow entirely what is going on.
I repeat the point that was made a little earlier: if Scotland’s population declines in relation to that of the rest of the UK, the funding will not go down under this document. Funding per capita is bound to rise; that is just inevitable. So I do not see how we can have “no detriment” to Scotland without causing detriment to other taxpayers throughout the United Kingdom.
On a point of detail that I hope will be echoed by my noble and learned friend Lord Hope of Craighead, the courts and tribunals are dealt with in paragraph 28. There is no agreement, apparently, as to who is to pay for the Supreme Court. I am not sure whether it is regarded as a court in Scotland or a court in the United Kingdom. That is a small detail.
I have little more to say. However, I do not understand how the £200 million figure and others related to it can possibly be justified. They are certainly not justified within the document.
My other amendment relating to this issue concerned the independent scrutiny of these matters in Scotland. However, this is now going to be dealt with by a government amendment and I give notice that I will not seek to move Amendment 67.
Lord McFall of Alcluith
My Lords, the noble Lord tells us nothing new. I looked at that issue as well. I think I made the point in the last debate here that the two no-detriment principles are irreconcilable. We must try to work out the politics of that at a later date but there is absolutely no doubt of that. Professor David Bell in his submission and the work he did for the Economic Affairs Committee illustrated that very much. In fact, I sat for about three hours looking at that report from the IMF with David Bell and I thought I was back at university. After those three hours, I understood maybe 15% of the whole issue. It is hugely complex—we all agree on that.
I mentioned the issue of the safety net. This is a good deal from Her Majesty’s Treasury but after the five years there will be the review. What will the Treasury do at that time? That will depend on how the population looks then and what other political and economic factors are going on. I agree with individuals who say that this is a five-year or six-year proposal. At the end of the day, negotiations must start again. One thing I am interested in here is to see that we develop a narrative as a result of this fiscal framework which will ensure that the grievance mentality is abandoned. Some would say it will not be but there is a possibility of that happening. I will mention that later on in my speech.
For clarity’s sake, we see that the Scottish Parliament is supported by, as we said, shared UK resources from Barnett, its own tax revenues levied in Scotland, and a cash supplement from UK resources. That could possibly force all the parties in Scotland to go into what they are offering the Scottish electorate in terms of tax and spend. We have seen it already; today I read it in the Scotsman as I was coming down in the plane. For the first time, in many ways, we are getting on to the reality of devolution and have moved on from the process. Sadly, the Labour Party was very much involved there because it was mentioned that devolution was a process rather than an event. That got it wrong. As my old friend Tam Dalyell said, it was like a motorway without exits. Let us try to build the exits as a result of this fiscal framework.
We can go on indefinitely in asking who won the fiscal framework battle. Yes, the Treasury model is being used. We call it levels reduction. Yes, the UK is reimbursing Scotland for any money it would have received under the indexed per capita deduction in place. In effect, one side is happy saying, “The Treasury model is being used”. The other side is happy saying, “Yes, it is being used but we ain’t going to be disadvantaged because at the end of the day the per capita will be involved”. How far has that taken us? It has taken us five years down the road in terms of politics. We will have to come back and see how far it takes us down the road in terms of finance.
There is a big picture here as well, which nobody has mentioned. This will be the biggest ever transfer of powers to the Scottish Parliament. In fact, it will have as much autonomy as it had in 1707. It has demanded both good will and compromise to reach that position.
On that particular point, I commend the Government for their work in this area. However, in terms of the reporting of the fiscal framework, it could be helpful if the Government teased this issue out. The fiscal framework states that the Government will be required to produce reports on the implementation and operation of new powers in line with those produced under the Scotland Act 2010. Will this be done on an annual basis? If not, when will such reports be published? If we are to have an independent review, it should be set up very quickly and should not wait until the last minute, as we had to do with the fiscal framework now, where eight weeks of Smith translated itself into a secret cabal deciding it and then presenting it to us. We should have that transparency so that that independent commission can report to Parliament on an annual basis. By doing so, there will be transparency and individuals can look at it from the two no-detriment principles—particularly the second, of fairness to UK taxpayers.
This is a solution. Is it a neat solution? We can argue about that until the end of the day but there is a political momentum on this issue with the political parties in Scotland. The Government have responded to that. We wish them well in the negotiations.
Lord Higgins
I am most grateful to the noble Lord for giving way. We have had an extremely interesting debate on various aspects of the fiscal framework, but that is not actually what the amendment is crucially about: it is whether or not each House of Parliament should have an opportunity to approve it. That is what we are voting on. Despite all the technical discussion and so on which has been admirably set out and considered, the crucial issue is that the other place must have an opportunity to debate this. It would be absurd if the whole thing goes through without the House of Commons having debated it at all.
Lord McFall of Alcluith
My Lords, I take the noble Lord’s point on that but right at the beginning of my speech I made reference to all political parties in Scotland and to the leader of the Conservative Party in Scotland, whose idea this was, which was adopted by the Chancellor of the Exchequer, according to Professor Jim Gallagher. Some people are waiting to say that the unelected House of Lords is stopping a Bill which is in Scotland’s interests. So do we go with the intellectual case, which always appeals to me, or do we understand the politics in Scotland at this time? If we have a gap in this fiscal framework where this House can understand what is happening on a year-by-year basis, we should give the Government the benefit of the doubt on that issue because the political force is with all political parties in Scotland. I commend my speech on that point.
Lord Dunlop
I am not sure I will be able to satisfy the noble and learned Lord on that point because I have learned not to deal in hypotheticals or to speculate about what might happen in five years’ time. As I say, I think the conditions that pertain then will be favourable to reaching an agreement and I am confident that we will reach an agreement at that time.
On the amendments relating to the fiscal framework being approved by Parliament, the Government do not believe it would be appropriate to subject the framework as a whole to approval by both Houses. Many aspects of the fiscal framework are administrative, not legislative, and the need to update these aspects requires a degree of flexibility. There is also no precedent for these non-legislative aspects to require parliamentary approval; for example, the block grant adjustment mechanism arising from the power to devolve under the Scotland Act 2012 was not subject to separate parliamentary approval.
Lord Higgins
This is a matter of enormous importance. Would it not be absurd if the central part—the heart—of the Bill were to go forward with the House of Commons not having had any opportunity at all to debate it? It is inconceivable that that should be right. It is really important that the other place should have a chance to express a view.
Lord Dunlop
My noble friend is of course quite right that the fiscal framework should receive detailed scrutiny from this Parliament. I know that this House will play a full part and I anticipate that the House of Commons will do the same. What the House is being asked to do today is to scrutinise and approve one of the most significant aspects of the framework: the capital and resource borrowing powers. The noble Lord, Lord Empey, raised this issue and we will have an opportunity to debate it in detail in the next group of amendments. Dr Angus Armstrong of NIESR told the Lords Economic Affairs Committee that the question of borrowing is,
“the most important question in the whole debate”.
In due course, this Parliament will also be asked to approve changes to tax legislation as a result of the fiscal framework and the Smith commission. That legislation will be scrutinised by Parliament in the usual way. Likewise, the legislation required in Westminster to establish the Scottish Fiscal Commission on a permanent footing by means of an order under the Scotland Act will receive scrutiny in both Houses before it is approved. As I said to the noble Lord, Lord McFall, the Government have committed to report annually to Parliament on the operation of the framework. I know that these reports will receive full scrutiny.
At the end of the day, the fiscal framework has been agreed between the two Governments. To introduce a further process at this stage would not only delay the transfer of powers, it would mean that the UK Government—
Lord Forsyth of Drumlean
I am sorry, but my point to my noble friend is this. The Scottish Parliament will decide whether it is going to give legislative consent to this Bill, which will have the effect of making the Bill reach the statute book. It has the opportunity of discussing the fiscal framework because we now have one.
Lord Forsyth of Drumlean
Yes, it has the opportunity of approving it, whereas the House of Commons has not had the opportunity to do that. What possible justification can there be for not giving the elected Members of the House of Commons the opportunity to consider the fiscal framework, which has implications for the whole of the United Kingdom, when the Scottish Government have quite rightly insisted that they would not give legislative consent without the Members of the Scottish Parliament having an opportunity to consider it? I honestly think that my noble friend has to concede that there has to be an opportunity for the House of Commons to be treated in exactly the same way as the Scottish Parliament.
Lord Dunlop
That is a matter for the House of Commons; it is not a matter for the House of Lords. The House of Commons has decided to pass the Bill through its stages, in full knowledge of what the state of play was on the fiscal framework.
Lord Higgins
It had absolutely no knowledge of what the state of play was on the fiscal framework and it ought to have an opportunity to debate it.
Lord Dunlop
That really is a matter for the House of Commons, and not for this House of Lords. That House has to decide how it wants to deal with these matters and has done so.
Lord Forsyth of Drumlean
My Lords, we have had a lengthy debate in which we have covered a lot of ground. However, a number of questions remain unanswered, which makes the case for both Houses to have an opportunity to consider the fiscal framework. I am extremely grateful to the many eminent and distinguished Members of the House who took part in the debate. I will not list them all as we need to get on, but I find it difficult to resist making one point to the noble Lord, Lord McFall. He said that the Scottish Parliament will be in the same position in terms of its powers as it was in 1707, and I will leave the House to speculate on who is playing the role of Queen Anne in that respect. It is, I might gently suggest, a slightly ridiculous position, although the big difference with 1707 is that it was not then dominated by one political party.
When I used to go to European Council meetings, I would always take the advice of the noble Lord, Lord Kerr, when he was in charge of UKRep. I am tempted to take his advice and withdraw Amendment 56ZA, but give notice that I will divide the House on Amendment 68.
Lord Higgins
I entirely take the point which is made about the later amendment, but I merely suggest to my noble friend that the vote will become detached from the debate which we have had now. We could go over the whole process again on the other amendment but that does not seem a very sensible way of proceeding. I would have thought, given the debate, we are much better really taking a decision now.
Lord Forsyth of Drumlean
I always listen very carefully to my noble friend. I therefore beg leave to test the opinion of the House.
Lord Higgins
My Lords, I have added my name to my noble friend’s Amendment 56A. It would simply insert, at the end of page 16, line 14, the words:
“must be made by statutory instrument”.
That amendment and the other amendments which stand in my name all arise from the 15th report of the Delegated Powers and Regulatory Reform Committee. I will quote as briefly as possible from the report, but the committee said:
“The Scotland Office have provided a delegated powers memorandum. We were disappointed with the quality of this document. In a number of cases, the explanation given in the memorandum failed to deal adequately with important aspects of the power, and most of the matters to which we are drawing attention in this Report arise from the fact that the explanation of the power in the memorandum is inadequate”.
I will not go on quoting from the Select Committee, but that is the general tone of what it said. In particular, it made a number of detailed criticisms which I have sought to cover by the additional amendments that I have tabled. I would be grateful if my noble friend would be kind enough to say whether he supports the other amendments, all of which seek to implement what was said in the committee’s report.
The committee goes on to deal in a little more detail with the subject matter of Amendment 56A. It said:
“To our surprise, there is nothing on the face of the Bill requiring the regulations to be made by statutory instrument. Since it is the invariable practice … we assume this is a mistake”.
I therefore seek in these amendments to cover the various points that the Delegated Powers and Regulatory Reform Committee made in its extremely helpful analysis. It would be helpful to know if my noble friend will accept the other amendments as well as Amendment 56A, which appears in both his name and my own.
On Thursday, the committee produced a further report that included remarks it received from the Government, including an apology for the inadequate way in which the proposal was first presented. We could go through each of the amendments in detail but perhaps my noble friend will simply indicate whether he agrees that we need to make the changes that I have put down on the Marshalled List and which implement the committee’s report.
Lord Kerr of Kinlochard
I welcome Amendment 56K, which covers borrowing, on which I have tabled Amendment 57. I think that Amendment 56K is a great deal better than my amendment and I congratulate the Government on producing it. For me, it was important that we had on the statute book a clear indication that there would be additional borrowing powers—that seems to be a necessary concomitant of tax devolution—that all borrowing would be in accordance with Treasury rules and that it would be subject to ceilings. All three elements are well met in the Government’s amendment.
It seems clear that the UK will be standing behind borrowing in the markets by the Scottish Government—that is, borrowing in line with the statutory requirements of being within the limits and in accordance with the Treasury rules. That has to be clear, otherwise borrowing in the markets will be more expensive for the Scottish Government and therefore for all of us, since it will be part of the UK borrowing programme. I would be grateful if the noble Lord could confirm that my reading of that is correct.
The borrowing section of the fiscal framework document all seems to make sense and the increased limits seem appropriate, except possibly the biggest single increase. There are two elements that cause me a little bit of concern and I would be grateful for the Minister’s views. One is the annual limit of £600 million for borrowing in response to a Scotland-specific economic shock. Paragraph 66 of the framework document says:
“A Scotland-specific economic shock is triggered when onshore Scottish GDP”—
I think that it means GDP growth—
“is below 1% in absolute terms on a rolling 4 quarter basis, and 1 percentage point below UK GDP growth over the same period”.
I pause on the word “onshore”. I am not quite clear when the added value of the North Sea comes into GDP. Is it when it comes onshore? Can the noble Lord elucidate? Would an oil price shock, such as the one that we have just seen, be regarded as a Scotland-specific shock? If not, I see a possibility of debate and dissent down the line.
Secondly, the document tells us that when a Scotland-specific shock is triggered, it may be triggered from outturn data or from forecasts. It says:
“In the event that forecast data shows an economic shock but outturn data does not, no retrospective revisions will be applied to borrowing powers”.
I agree with that sentence.
I slightly worry about this. It is odd to define a Scotland-specific shock by its effect on GDP rather than by its own characteristics. If you do that, given that GDP is always subject to revision for a number of years—a point made by the noble Lord, Lord Darling, in our Committee stage debate on borrowing—it seems that, again, you have the possibility of some debate. That is dealt with in a way by using a rolling four-quarter basis for calculating whether Scottish GDP is growing at less than 1% in absolute terms and 1% below UK GDP. Even so, is the Minister quite sure that the best way of defining a Scotland-specific shock is by its subsequent observed effect on GDP rather than by some intrinsic characteristic?
Scotland’s Fiscal Framework
Lord Higgins Excerpts(8 years, 9 months ago)
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Lord Dunlop
Obviously discussions are going on between the UK Government and the Welsh Government about the fiscal arrangements for Wales. I am sure, as this deal has been successfully concluded, that they will be successfully concluded as well.
Lord Higgins (Con)
My Lords, the Statement concludes by saying that the fiscal framework should be subject to full scrutiny. How is that to be achieved in your Lordships’ House when the Scotland Bill has already reached Report stage and we will be operating under the restrictions that we always do on Report and at Third Reading? Should those restrictions not be removed, given the situation that we are now in? Secondly, the perpetuation of the Barnett formula means that the injustice between England and Scotland is going to be perpetuated as well. That cannot possibly be regarded as fair.
Scotland Bill
Lord Higgins Excerpts(8 years, 9 months ago)
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Lord Higgins (Con)
My Lords, whether or not any undertaking has been given up to now, it is painfully obvious that we ought not to proceed with Report given that we have had no debate at all on the financial framework in Committee under Committee conditions. It would be quite wrong for us to go all the way through the Bill when we are not able to have adequate discussion. Indeed, the Statement we heard this afternoon said there would be adequate discussion. My noble friend need not reply to this now, but I suggest to him that we really ought to have, in the course of this evening’s debate, a clear statement from the Front Bench that the proceedings on the latter part of Bill will be such that we can debate it fully.
Lord Foulkes of Cumnock
This is duplicity by the Government, and it really needs to be sorted out. I have been sitting quietly saying almost nothing—
Lord Taylor of Holbeach (Con)
Will the noble Lord give way? I had hoped to be able to discuss this in an orderly fashion, and I apologise if it has taken longer than the House would expect. I fully realise the pressure under which the House has been dealing with this Bill in general. Although we started the Bill an awfully long time ago—I think it was November when we had Second Reading—we have been in an expectant state for some days. Such is the situation that I recognise that noble Lords will want a little more time on Monday on those groups of amendments that deal with the fiscal framework. I understand that. I think it is the agreement of all in the usual channels that this would be a satisfactory way of dealing with it. It will be an informal agreement, with no resolution of the House, but I can announce it to those here today who I know are interested in this matter.
I thank my noble friend Lord Younger for holding the fort, but I happened to see the situation in which he was placed and I thought it would help matters if I made the position of the Government clear in this respect now. Many noble Lords involved in this debate are used to absorbing complex documents very quickly—that is why they are here—and I hope they will take the opportunity of the weekend to swot up, so that when we meet on Monday to discuss those aspects of the Bill, they will be in a position to add to our debate in a constructive way.
Lord Higgins
I do not think my noble friend was in the Chamber when this discussion began. The issue was not whether we would have more time next week, it was simply whether the rules which normally apply at Report—on speaking more than once, for example—should apply on the financial provisions, where we have had no discussion yet.
Scotland Bill: Fiscal Framework
Lord Higgins Excerpts(8 years, 9 months ago)
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Lord Dunlop
On the noble Lord’s first point, in any negotiation there is always a balance to be struck between keeping the public informed and providing the private space to get the deal done. Our priority has been to do all we can to reach an agreement, rather than to adopt public positions that in some way make it more difficult to reach agreement. With regard to independent scrutiny, I very much agree with the noble Lord, and I am sure that that will be part of any agreement we reach.
Lord Higgins (Con)
Will my noble friend guarantee that we will not proceed with further consideration of the Scotland Bill until we have a clear idea about the financial framework and can judge whether it is fair? It would be quite monstrous, given the history of this affair so far, if we were not to have adequate time to debate the matter.
Lord Dunlop
Obviously, this is a negotiation between two parties, and I cannot give a guarantee on an outcome to a specific timetable. What I can say is that both Governments understand the pressing parliamentary timetables, both here and in Holyrood, and our desire and commitment to see full scrutiny of this fiscal framework.
Scotland Bill
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Lord Dunlop
That the amendments for the Report stage be marshalled and considered in the following order:
Clauses 1 to 12, Clauses 34 to 41, Schedule 2, Clauses 42 to 64, Clauses 13 to 18, Schedule 1, Clauses 19 to 33, Clauses 65 to 70, Title.
Lord Higgins (Con)
My Lords, my noble friend the Minister has not given any explanation as to why the clauses of the Bill should be taken in that particular order. More particularly, in the earlier exchanges, he declined—I think that would be the right way to put it—to give a guarantee that, before we proceed to debate amendments on Report, the fiscal framework will be before the House in such a way that we can appraise the extent to which it is fair between the various parts of the United Kingdom.
The Minister will be well aware that the suggestion was made in the debate yesterday that, if we do go straight to Report, we should alter the way in which proceedings go ahead on that occasion so that we could at least speak more than once, and perhaps one should give further consideration to the situation. We will not, of course, have the opportunity to debate any clauses stand part on Report.
The way in which this matter has been proceeded with is quite intolerable. Parliament is being prevented from holding the Government to account in the proper way, and we are not being given the information on which we are bound to rely in deciding whether this is a sensible measure or not. It has gone through the House of Commons with no scrutiny at all of the fiscal framework, as I understand it, and we have had no discussion on the details of the framework in this House. It is really dreadful, given the magnitude of what is at stake here, in terms of the effect on individual constituencies and constituents, that we should not have a proper debate on this issue.
I hope that the Government can come forward with a clear assurance that we are not going ahead. I understand all the political implications with Scotland and so on, but the fact of the matter is that we are not being allowed to carry out our duty properly. I believe that this is an appalling state of affairs and has to be put right.
The Parliamentary Under-Secretary of State, Scotland Office (Lord Dunlop) (Con)
I thank my noble friend, and will make three points in response. First, the purpose of the Motion that I have just moved is to ensure that we take Report in the same order that we took Committee. Secondly, to address the central point that he makes, we have done that precisely to meet the intent of what he is seeking: to give more time to reach agreement on the fiscal framework and to ensure that, when we come to the second day of Report on 29 February, we have an opportunity to scrutinise that framework. Thirdly, it was suggested yesterday that the rules of Committee should apply to Report, and I know that is being discussed through the usual channels.