(10 years ago)
Lords ChamberMy Lords, I agree with almost all the points that the noble Lord, Lord McFall, has just made. A great deal of wisdom has been on offer in this debate so far, but I am a little uneasy that we are looking back too much, with a little too much retrospection and recrimination. The noble Lord, Lord Hennessy, got it right when he said that the fundamental thing that was wrong with the 7 am Downing Street statement was that that was a time for binding up the wounds. It was not a time for inflicting a new wound and making a link that had never been mentioned when the promise was made.
The first thing that we should do in this debate is send a message of congratulations to Ms Sturgeon in Edinburgh, the next First Minister of Scotland and the first woman to hold that position—clearly a doughty fighter and a worthy successor to Alex Salmond. I disagree with almost everything that she stands for, but I think that it is extremely important that we have a civilised debate. I would like us to send a message to her. I am very pleased to see the Leader in her place, and I hope that she will consider advising the Prime Minister to send this message: we in this House believe that our debates would be greatly improved if the voice of the 37%—only 37%, to correct the noble Earl, Lord Arran—who voted in Scotland for independence was heard in our debates. It seems to me that it is very easy for us always to be attacking the Scottish National Party. The Scottish National Party should be here. I have never understood the logic of the position that it is possible for them to take seats in the House of Commons but not in the House of Lords. It is in their interests, it is in our interests and a warm invitation should be extended straight away to Ms Sturgeon to change her party’s position and agree that the party should be represented here.
I want to make two points, risk two unfashionable paradoxes and make one proposal. My first point has been made already—the ATM point, as made by the noble Lord, Lord Empey. I think that “no representation without taxation” is a good rule. Any parliament that is responsible for expenditure but does not have to raise the money is always going to be irresponsible about expenditure. I am strongly in favour of the Strathclyde proposal on the devolution of taxing power.
Paradox one: why is the European Parliament always so determined to increase expenditure more than the member states are prepared to allow? For the same reason: it has no power to raise revenue. Most other Governments believe that the taxing power for the EU, raising the 1% of GDP that is the EU budget, would be better than a levy or a Barnett formula, which occasionally leads to a review and, if a review has been postponed and resisted for very long, can lead to a very large correction that can provoke tantrums and kerfuffles. The tax would seem to be more logical, but if one proposes that to the British Government, they draw back their skirts in horror. Yet the logic on Strasbourg and on Holyrood should be the same. Just as we are all to be content to see more taxing power even than in the 2012 Act given to Scotland, so we should think again about whether the Government are right to have decided to make no contribution whatever to the review of the revenue side of the EU budget that Prime Minister Mario Monti has been asked to undertake, and which we have decided we will not contribute to. That is a very unfashionable analogy, but I think I have just about got away with it.
My second point is of course about EVEL. The correct answer to the West Lothian question in today’s political circumstances is: “Get over it”. It is a problem that has existed for a very long time and it does not need a solution now. A quick off-the-cuff solution of the kind that could emerge from Mr Hague’s commission seems to be just the way to reopen the wounds of the Scots that we should now be trying to bind up.
The European analogy is perhaps relevant again, so I might try to get away with it a second time. For three years the French have argued for a two-tier Parliament in Strasbourg. With perfect Cartesian logic, they have pointed out that, since the British have decided not to join monetary union, the so-called fiscal union or the banking union, it is pretty odd that the British should be voting on eurozone laws in all three areas. The British Government have—completely correctly, in my view—resisted that, pointing to the folly of deliberately widening the Channel and to the importance of retaining the single market. So we have hotly opposed what the French have suggested, and it seems that we have won.
I had the privilege yesterday of being in Brussels with the noble Lord, Lord Boswell, in his capacity as chairman of the Select Committee, and it is a pleasure to see him in his place. We discovered that nowhere in the European Parliament is there any eurozone-only structure. We discovered, although of course we knew already, that Mr Juncker, the President of the Commission whom we decided to insult and oppose, has decided that all EU laws must reflect the interest of all EU members, and has given the noble Lord, Lord Hill of Oareford, responsibility for the laws of the banking union that we would not join. Now that is magnanimity and statesmanship, and in my view that is what was lacking the morning after the referendum.
That was my second paradox; I now come to my little proposal. Actually, this proposal has been made already. I am a very strong believer in the royal commission or the constitutional convention, but I think that there is a House of Lords angle to this, rather as the noble Lord, Lord Steel of Aikwood, was suggesting—some sort of solution whereby the devolved Parliaments indirectly elect representatives here. That would be a very good way of cementing the union for which the Scots have voted. Promises must be kept, of course, so let us press ahead with the commission of the noble Lord, Lord Smith—I wish him good luck—but one should go very slowly on EVEL and, as the noble Lord, Lord Maclennan, suggested, one should be thinking now of the correct form of convention or royal commission.
(10 years, 1 month ago)
Lords ChamberI agree with my noble friend that a battle line approach will not be productive. I accept that the time is tight for the noble Lord, Lord Smith of Kelvin. I rather fear, however, that if we were to suggest any slippage the cries of betrayal would be even louder so I think it is important that we do stick to that. However, it is important too that people entering into these talks do so with a view to trying to achieve a lasting outcome. Simply to make a concession, for example, on monetary union, that was going to be made anyway in the context of independence, I do not consider a concession.
I totally agree with the sentiment expressed by the noble Lord, Lord Steel of Aikwood, but I fear that the noble Lord, Lord Strathclyde, is more likely to be correct in his prediction of the outcome of the Smith commission. It would have been better—there is no point saying this—to have defined in advance what further devolution would make sense. Some of us in the House said that. I feel it was a great pity that in 2012 the Edinburgh agreement left only one question on the paper. My concern now is that the difficulties of reaching a consensus on this in the Smith commission will be greatly increased if extraneous issues are brought in. It was a great pity that the West Lothian question emerged at 7 am on the morning after the referendum. I thought that was a very great pity. I hope the noble and learned Lord will agree that in present political circumstances, whatever the mathematical logic of the West Lothian question, the correct answer is get over it.
My Lords, I do not think it was ever possible for three parties to come together in the heat of a referendum campaign and hammer out a single proposal. Many of our opponents would have loved us to have spent our time doing that rather than getting on with deploying the case for the United Kingdom. That is why we now have a Command Paper that sets out the proposals. I reassure the noble Lord, Lord Kerr, that while it is the case that the position on the West Lothian question is being looked at, it has been made clear by everyone that the extra powers for Scotland are not contingent or conditional on that. It is important to underline that.
(10 years, 5 months ago)
Lords ChamberMy Lords, I was struck by the litany quoted by the noble Lord, Lord Steel of Aikwood, of Scots who grew, and made good, through the union, living or working outside Scotland. As I rise, the pride of English footballing prowess is trotting on to the pitch to play the might of Costa Rica. It seems appropriate to recall Mr Archie Gemmill, who 36 years ago today scored the finest World Cup goal ever—at the time. Had he stayed in St Mirren, had he stayed in Paisley, had he not come under the influence of the genius Mr Clough, would he have attained the heights that he did? If Sir Alex Ferguson had stayed in St Mirren, who sacked him I believe, would he be the legendary figure that he is now? I really hope that we are not forced to choose between being Scottish and being British. If we are, both sides will lose.
This is an excellent report and I am grateful to the noble Lord, Lord Lang of Monkton, for introducing it. I want to speak only on the premise, which is the premise of the report, that Scotland opts for secession. I hope and believe that Scotland will not opt for secession. What I would have said on the assumption that Scotland chooses to remain in the union has been very well said by the noble Lords, Lord Strathclyde and Lord Richard, and I have little to add to that.
On the premise that Scotland opts for secession, I agree with almost everything in the report. I pause on paragraph 97, where the committee recommends that the necessary negotiation between Scotland and the rest of the UK before independence should be conducted, on the rest of the UK side, by a team from the Government alone. Speaking as a member of a disenfranchised diaspora of Scots, I see certain defects in the Edinburgh agreement: the franchise, the threshold, the question. There is something to be said for having an all-party team negotiating in that situation. I register that as my one doubt about the recommendations of the committee of the noble Lord, Lord Lang.
I hope that in response to the plea made by the noble Lord, Lord Lang, the Minister will assure us that the Government’s policy on international representation is not as described in the report at paragraphs 47 and 49. The committee recommends that in the period between a vote for secession but before the act of secession,
“an agreement be reached between the two governments immediately following a ‘yes’ vote to clarify the basis of such representation for Scotland in the period between that vote and independence day”.
That follows quotations from two Ministers who appear to be arguing that at the moment when the Scots vote for secession but before the moment of secession the United Kingdom Government will no longer be interested in representing their interests abroad.
That cannot be right, as the noble Lord, Lord Lang of Monkton, said. If a Scot is in trouble abroad, he will be entitled to UK consular protection. If a Scottish company needs support, it will be entitled to the support of the UK Government. While the Scots remain UK taxpayers, they are entitled to receive the support and assistance of the Government at home and abroad. If an issue arises in the EU of particular relevance to Scotland—for example, fisheries—in the period after the vote but before secession, the UK Government must devote all their efforts to ensuring the best possible deal for the Scots. I hope that the Minister will be able to reassure us that that would indeed be the position of the Government. The Minister knows his Burke:
“Magnanimity in politics is not seldom the truest wisdom”.
It would be mean, petty, vindictive and wrong to take the line attributed to the two Ministers in the report.
I will make one cognate point, which is the one that the noble Lord, Lord Empey, kindly mentioned that I have made before. Supposing we were in a situation in which Scotland has voted for secession, it is my view—and I know the Minister had doubts about it when I put it to him before—that a responsibility would fall on the UK Government in the period between the vote for secession and the act of secession. We all know that despite the bluster and bravado of the Scottish Government’s White Paper, Scotland could not just pull up another chair at the EU table and carry on as if nothing had happened. We know that we are in Article 49 territory. We know that there would have to be an accession negotiation. We also know that, legally speaking, Scotland cannot even apply until it is a sovereign state—in other words, after the act of secession. Scotland cannot sign a treaty until it is a sovereign state and that treaty would not come into force until it had been ratified by the Scots and all the other member states. I remind the House that Belgium has seven legislatures that would be required to approve the Scottish accession treaty.
It follows that there are two potential periods of hiatus: first, after secession but before a treaty has been signed; and, secondly, during the ratification period. We cannot say, “That is the Scots’ problem”. We cannot just shrug our shoulders and walk away from it. With every respect to the arguments of the noble Lord, Lord Empey, it would be mean, vindictive and narrow-minded—let us remember our Burke—and while Scotland is outside the European Union we, the rest of the UK, would be responsible for manning the customs frontier of the European Union, which would be in Belfast Harbour. Goods coming from Scotland would have to be examined and customs duties charged. We would be rebuilding Hadrian’s Wall. That would be the responsibility of the United Kingdom Government, not of the Scots, who would be outside asking to get in.
It might not be possible to do what I hinted before and am hinting again that we should try to do. The lawyers in Brussels might well say, “No, we stick to the letter of the law. We will not hear the Scottish case for accession until Scotland is a country”. That would be in line with past practice but of course we are in uncharted waters because no member state has ever split before. It is possible to think of a member state, or perhaps several, which would have an interest in ensuring that the Scottish accession was as prolonged, complicated and difficult a process as possible. It might not be an easy task but it is one that the United Kingdom Government would have to attempt.
Let us not exaggerate the difficulties. The accession negotiations themselves would be relatively simple, on three preconditions, because Scotland is in good standing under EU law now—all EU laws apply in Scotland. It is absurd when one gets a spokesman from No. 10 saying that Scotland would have to take its place in the queue behind Montenegro and Macedonia. That is clearly nonsense and we should avoid saying such things.
Three preconditions would have to be met. First, the divorce terms would have to be agreed. You would never persuade the Brussels machine to get in the middle of a debate between Holyrood and Westminster. The terms would have to be agreed and they would have to cover, for example, the currency question. With respect to the Minister, there is no question of the Scots being obliged to join the euro. Scotland is not qualified and will not be qualified. It would fail all four of the tests that you have to pass before you can join the euro. But the Scots would need to be able to tell us, through their advocates in Brussels—if we were taking on the task—what currency they were proposing to use because the Commission and the member states would ask. All that would have to be settled.
The second precondition is that the First Minister of Scotland would have to abandon the ludicrously ambitious aims he sets out in his White Paper. The Minister spoke to the issue of the budget rebate, in my view completely correctly. It is not possible if you are knocking on the door as an applicant to say, “I am afraid I do not want to pay the club subscription”. I do not think you can do that. If you are knocking on the door from outside—no rebate.
Thirdly, it would be necessary for all other member states to acquiesce in this entirely new process: an informal prenegotiation of the future terms of membership for a country that is not yet a country. There is absolutely no precedent for any such thing and, as I said, one can think of several countries, one in particular, which might choose to object. Trying to persuade them not to press these objections would be a task for UK diplomacy in the period between a vote for secession and the act of secession.
It may or may not be possible but I would like to hear the Minister—this time; he was very sceptical the previous time I mentioned it—address whether it is not actually what we should be trying to do. Not only does he know his Burke, he knows his Burns. If there were to have to be a parting of the ways—and I hope and believe there will not—it would be very important that auld acquaintance should not be forgot because we really do not want to have to rebuild Hadrian’s Wall as the EU’s frontier. I really hope that we do not get there but if we do, magnanimity will be extremely important and the Government should act in the spirit of Burke. Let us hope we do not get there. The union is so much more—so much greater, so much bigger and better—than the sum of its parts.
(10 years, 9 months ago)
Lords ChamberMy Lords, I first offer a warm welcome to the noble Baroness, Lady Goldie, of Bishopton, which is famous in Scotland for its Royal Ordnance factory. It is clear that we have a big, new gun in our armoury, here in this House.
I offer my congratulations to the noble Lord, Lord Lang, on his brilliant speech. I need not speak to what I was going to talk about, because two propositions are already absolutely agreed: first, that Scotland would be worse off without the union; and, secondly, that the rest of the union would be greatly worse off without the Scots. That has been absolutely agreed this afternoon. I think that every speaker before the noble Lord, Lord Crickhowell, was a Scotsman, which may have something to do with that, but both propositions are true. It is also true that the Scots are a notably modest race.
I will address a slightly different proposition. Supposing that one got the wrong answer and the Scots decide to go for secession, what would be the responsibility of the United Kingdom? The angle I will touch on—I am sorry, but it will not enhance my reputation in the House—is the task of ensuring that the Scots get into the European Union. That is a very difficult task, which would be the responsibility of all of us, including the United Kingdom Government.
Of course, the route in that was suggested by the First Minister in his White Paper and all his oratory does not work. However, I will not go into Article 48 versus Article 49 again; the verdict is clear, so I do not have to. The President of the European Council, the President of the Commission and all heads of government and Foreign Ministers who have addressed this question so far are clear that the route in would be via an application for membership once the country became independent. That poses a problem, for three reasons. First, the European Commission cannot negotiate with the applicant until an application is received, and only a sovereign state can be an applicant. Secondly, all member states have to agree the terms which have been negotiated. Thirdly, all member states have to get them ratified in their countries. If you cannot sign the treaty because you are not yet a sovereign state, you cannot pre-negotiate the terms of that treaty, at least formally.
What is the way around that? One needs to find a way around it because, as the noble Lord, Lord Lang, said, we all have an interest in a prosperous Scotland, and we all have a moral responsibility toward the Scottish farmers, fishermen and exporters, the enterprises and the individuals whose legitimate expectations would be dashed and whose rights would go if there was a hiatus between Scotland’s secession from this union and its accession to the European Union. On the face of it, there is quite a high probability that that might arise. My solution is that it would be the United Kingdom Government’s job to attempt to negotiate informally the terms of Scotland’s entry into the European Union and the transitional arrangements for the period before all three stages of that process were complete and the treaty was ratified.
Three conditions would have to be met. First, a great many of the Scottish Government’s negotiating positions would have to be abandoned straightaway. One could not negotiate the impossible. An example is the question of the rebate. It is impossible as an applicant to secure the agreement of all member states, many of whom are much poorer than you, that you should not have to pay the full subscription. Therefore, an applicant Scotland would not secure a rebate. The UK rebate would go down, because UK GNP and the VAT base would go down; UK receipts would go down; and the rebate, which rebates two-thirds of the difference between the two, would also go down. Therefore, there would be a reduction in the rebate here. It is absurd for Mr Salmond to tell us that in addition to having a reduction in the UK, Thatcher rebate, we must write a cheque and send some money to Edinburgh so that it gets a rebate too. That does not work; we could not possibly pay twice, so that position would have to go. There is no point in an applicant country going to Brussels and saying, “I would need a rebate”.
The second condition is that the divorce terms would have to be absolutely clear. I am sure that the Council would be unwilling to allow the Commission to negotiate with a country that has not yet defined what its independence is. What independence means in terms of frontiers and currency would have to be clear. The Scottish and United Kingdom Governments would have to agree a precise scenario before any negotiations could start. Even then, the lawyers might object to the start of the negotiation, saying, “They aren’t sovereign”, so the negotiations would have to be conducted by a UK team flying the union jack. You cannot stop members of the Council negotiating with the Commission. They would have to operate on agreed instructions from the London Government and the Edinburgh Government. Even so, they might have a very hard task, because some member states could wish, if the occasion arises, to make the Scottish path to membership of the European Union as difficult as possible in order to dissuade secession movements in their own countries. That is the best I can come up with, and it is not certain that the road I am describing would be open. However, it would be the UK’s responsibility to try.
Edinburgh needs to become much more realistic, and we could not wash our hands of the problem. If the Scots say that they want to be independent, we have an interest and a responsibility to try to get them into the European Union as quickly as can be arranged. It will be extremely difficult. We all now have a responsibility to make clear to the Scots, before they vote, that there is a real risk of a hiatus—of falling into a costly crack between secession from this union and accession to the European Union.
(10 years, 11 months ago)
Lords ChamberThis document is 650 pages long and I congratulate the noble Lord, Lord Forsyth, on reading them all. It is, however, rather longer on assertion than on argument. I will just touch on the EU angle.
The aim as set out is to achieve by March 2016 a seamless transition into membership. The SNP says that the treaty base appropriate to the exercise is Article 48 of the treaty. That is not the view of the EU institutions or that of any of the member states that have so far spoken. I doubt if it is the view of HMG, although I will be interested to hear what the Minister has to say. Most people seem to believe that Article 49 would be the treaty base for the negotiation. They are clearly “all out of step but oor Wullie”. However, wishing it so cannot make it so. There will be a genuine negotiation to be had under Article 49. That cannot formally start until Scotland is an independent sovereign state. It could possibly be pre-negotiated; that would be possible if all member states were to agree that there could be pre-negotiation both of the substance of the deal and of transitional arrangements, which would follow during the inevitable hiatus after Scotland, as a sovereign state, could sign the treaty—some date after March 2016—and during the process, which might be many months, possibly more than a year, of ratification by all the other member states, because it is their treaty, too. It is possible that you could pre-negotiate both the substance and the transition. However, that would not be easy, and would require every member state to agree that they were prepared to do it. Judging by some statements that have been made, some member states might not want to.
The negotiations on substance would be serious. The text says that Scotland does not wish to apply to join Schengen. However, the treaty says that all applicants must undertake that they will join Schengen. It is perfectly possible to envisage a derogation for Scotland; no one would want a real physical frontier on the Tweed. However, that derogation would have to be negotiated. You cannot just assert that “We will not apply, therefore it will not apply to us”. The same applies to the euro. I do not believe that if Scotland had opted—and the remainder of the United Kingdom had agreed—to continue to use sterling, Scotland would be obliged to join the euro. In any case, Scotland would not be eligible, such would be its inherited debt and deficit. However, the treaty says that you take a commitment to join when you are eligible, and getting a derogation on that would have to be negotiated.
Most delightfully of all, the big book says that the budget rebate would continue. It also says that Scotland would be one of the richest countries in the world. The continuation of the rebate would play extremely well in Lesmahagow or in Linlithgow, but not necessarily as well in less rich Latvia or Lithuania, and it would be up to the Latvians and the Lithuanians to decide. I am not clear about a lot of things in the big book but it seems certain that if and when an independent Scotland achieved membership of the European Union—and I believe that it would—all Scots would be paying more into the EU budget per capita than would all English, Welsh or Northern Irish. It also seems absolutely clear that you cannot achieve, by March 2016, the seamless transition which is so boldly asserted in this book.
(11 years, 5 months ago)
Lords ChamberWell, yes. That is exactly why we must be much clearer about the negotiations before the vote takes place. I have explained the UK Government’s position on this and we do not think that that is sufficient. That is why we made the recommendation for the red lines to be clearly established beforehand so that no one is in any doubt as to where both Governments, but particularly the UK Government, would stand firm on some key issues.
To conclude, since we took evidence and completed our report, the UK Government have produced very helpful and detailed analyses of some key issues and we look forward to more. But it is critical that they also address this issue of the red lines and they should undertake to do so well before the referendum. That is the upshot of our report. There is some very helpful analysis in it and it will continue to stand the test of time as we get towards the end of the negotiations. It is on the point of the red lines, which the Government in their response to our report have so far sidestepped, that I would particularly welcome the views of the noble and learned Lord on the Front Bench in the wind-up. I commend the report to the House.
Had I managed to ask the noble Lord before he sat down, I would have asked—
My Lords, it is a pleasure to follow the noble Lord, Lord MacGregor, in this debate. I am open to intervention if need be on that issue. I thank him for his chairmanship. Allied to the question asked by the noble Lord, Lord Steel, the committee deliberately visited both Edinburgh and Glasgow, and spoke to the leaders of every party, including the former Chancellor, to the leader of Glasgow City Council and to business people. The only person missing was the First Minister. He would not come along to engage in the debate. That was an omission from the Scottish Government on this very important issue.
The debate in Scotland will centre around two themes: identity and economics. On the issue of identity, there is an assumption that if one feels intensely Scottish one will vote for independence. The paradox is that the debate in Scotland will not be about how Scottish one feels but how British the people of Scotland still regard themselves. That is according to the Scottish Social Attitudes survey. So it is about the degree to which people in Scotland still share some sense of fellow-feeling with those living elsewhere in the United Kingdom. That will be central to the choice that is made. It is important that we highlight that in the debate in this Chamber today. It will come down to whether Scots feel that they can assert their Scottishness by parting with the unionist part of their soul.
Michael Ignatieff, the UK journalist and leader of the Liberal Party in Canada, has a number of cautionary words for us in that area, because he took part in a referendum in Quebec. He said:
“We learnt the strongest argument for leaving countries as they are turns out to be that most people don’t want to choose between different parts of their identity”.
He added that post-referendum in Canada,
“Canadians were able to joke that what Quebeckers really wanted was an independent Quebec inside a united Canada. I suspect a majority of Scots want something similar”.
I was interested to see the Early Day Motion put down in the House of Commons on Dundee’s bid to become the UK City of Culture in 2017. It stated:
“That this House welcomes the decision of Dundee City Council to bid to become UK City of Culture in 2017… and wishes the city of Dundee every success in its bid to become UK City of Culture in 2017”.
It was signed by two prominent SNP Members of the House of Commons. Maybe there was an element of identity confusion there, along with the rest of the Scots.
The conclusion on identity is that both sides need to engage. If this is about a sense of Britishness, we cannot stand back; there has to be full engagement. The letter to which the noble Lord referred was from the Chief Secretary to the Treasury on 10 June. I commend every noble Lord to read paragraph 9 of that letter, because more pressure needs to be put on the British Government. Otherwise they will seem to be complacent, since the evidence shows that we must demonstrate that sense of Britishness.
What has characterised the debate in Scotland and elsewhere to date is the lack of good information. That is why it was wise of the Economic Affairs Committee, under the chairmanship of the noble Lord, Lord MacGregor, to start this debate. At the beginning, there was a sparsity of information, indeed a reluctance to talk, on the part of business. Rupert Soames, the chief executive of Aggreko, which was based in my former constituency and started life as a very small company—a two-man business—and is now a FTSE 100 company, built his new headquarters in Dumbarton. It was the last thing he did before I stood down from the House of Commons. He told the committee that if business opens its mouth, “bile and ire” rains down on people, the language is intemperate and business people feel that there are better things to do than be hauled over the coals.
The situation is now changing, and one thing that we have to remember is that the tone of the debate will matter greatly. Michael Ignatieff said that the referendum in Quebec produced fracture and division. We want to minimise that, because we have to live with each other after this referendum. That tone is still very important, but the uncertainty remains and I am glad to see that the CBI, the Scottish Council for Development and Industry and universities have been participating in this debate in asking the question.
Along with lots of others, I have no doubt that if Scotland decides to become a politically independent nation, it can do that, but the crucial question is how much economic independence Scotland will achieve. Jim Sillars, a former leader of the SNP, says, “Not very much”. That is why he rejects the proposals by the present SNP Government. Professor Gavin McCrone, a most esteemed economist for the Scottish Government over the years, has said that currency choice is the most important economic decision that Scotland will make.
Over the past 25 years, the Scottish National Party has adopted the stance of supporting an independent Scottish pound, then the euro and now the pound sterling, but the First Minister is on record as saying that the pound is a millstone around the Scottish neck. That is a most inauspicious start to a monetary union between Scotland and the rest of the United Kingdom. If we go ahead with this, it will raise the most complex problems of cross-border monetary policy, taxpayer exposure and multiple financial regulators. We have only to remember the crisis in the financial services in Scotland in 2009, when both our major banks, RBS and the Bank of Scotland, were bailed out to the tune of 211% of the GDP of Scotland. That is the extent of the issue if problems arise as a result.
Any monetary union can come about only on terms agreed by the UK Government. The question then will be: who will provide the lender of last resort facilities to an independent country if there is little control over the tax and spending risk to which the larger entity is exposed? The committee put it in very straight language—language with which I agreed—when we said that,
“the proposal for the Scottish Government to exert some influence over the Bank of England, let alone the rest of the UK exchequer, is devoid of precedent and entirely fanciful”.
We have to go back to square one in how we approach monetary union. It is for the Scottish Government to come up with proposals, vague as they are at the moment.
Another area that affects us is the issue of the single market in both domestic and European terms. If the integrity of the domestic single market has to be maintained, a lot of thought must go into the relationship between manufacturing and the financial sector on both sides of the border. I mentioned Aggreko. The chairman of Aggreko said that for his FTSE 100 company, it would impose a permanent layer of additional complexity, with headquarters and manufacturing in Scotland and listing elsewhere. We received a lot of evidence from the financial services community, particularly in Edinburgh, on that point, because 96% of its financial products are sold elsewhere in the United Kingdom, with 4% being sold in Scotland.
The issue of the single market in Europe will also matter. I know that the noble Lord, Lord Kerr, has written extensively on the subject and made very wise comments on it. We have to assume that there will be a smooth entry, but there are big question marks over whether there will be. That smooth entry might provide some reassurance, but it will not provide much if the EU imposes tougher membership conditions relative to those of the rest of the United Kingdom in, say, financial regulation and employment law. The question that that sparks is: will that weaken Scottish competitiveness with the rest of the United Kingdom?
One could say that that being the case, the Scottish Government might soft-pedal the negotiations on EU entry to delay such problems, but that would be a mistake. It would also be a mistake for the British Government not to come out with further information, as we have required. Professor John Kay, in giving evidence, said that post the referendum, that will entail years of complex negotiations. We must face up to that. We should not minimise the complexity of the negotiations but start to understand what the issues and problems are.
Is there a climate of fear and uncertainty in Scotland today? Yes, there is an element of that. That was articulated by the leader of Glasgow City Council. It is for us to reduce that climate of fear and uncertainty and speak to one another in a civilised tone in this debate.
I thank the noble Lord warmly for his reference to me. On the EU angle, does he agree that if an independent Scotland applies for membership of the European Union, the one thing that it cannot possibly obtain as an applicant from outside is a rebate on its budget contribution? Does he agree that if/when an independent Scotland becomes a full member of the European Union, all Scots will pay more into the budget than all English people?
Absolutely. Mention has been made of the letter that President Barroso sent to the committee on 10 December 2012. I will quote two parts of that. First:
“If part of the territory of a Member State would cease to be part of that state because it were to become a new independent state, the Treaties would no longer apply to that territory”.
This means a renegotiation of all these treaties. The letter continued:
“In other words, a new independent state would, by the fact of its independence, become a third country with respect to the EU and the Treaties would no longer apply on its territory”.
The notion of a rebate, on that point, is really out the window.
Secondly, speaking of Article 49, President Barroso went on to say:
“If the application is accepted by the Council acting unanimously, an agreement is then negotiated between the applicant state”.
I ask noble Lords whether we will have unanimity on a rebate for an independent Scotland. That notion not only vanishes; it is non-existent. I agree with the noble Lord on that.
In my peroration I said that one of the chief executives said of the debate that nothing dispels a climate of fear and uncertainty better than the sunshine of information. I thank the noble Lord, Lord MacGregor, for providing that ray of sunshine in this debate on the economic implications of Scottish independence.
(11 years, 10 months ago)
Lords ChamberMy Lords, my view of the Edinburgh agreement is closer to the noble Lord’s than that of the noble Lord, Lord Stephen. I scored the Edinburgh agreement a three-to-one win to the First Minister of Scotland. He seemed to lose on the number of questions but he won on the franchise, which is not a very important point; he won on the date, a more important point; and he won on the big point, which is the question itself. It is to that issue that I want to come back. I shall follow what was said by the noble Lords, Lord Sutherland of Houndwood and Lord Browne of Ladyton, and ask the Minister for a view on the internal wording of the Edinburgh agreement and its significance. I am referring to paragraphs 8 and 12.
In paragraph 8 we are told:
“Consistent with provisions in PPERA”,
the Electoral Commission will review the wording for its intelligibility. I do not know why these words are there but they worry me. Paragraph 12 has a straightforward reference to the PPERA, which gives the Electoral Commission responsibility for,
“commenting on the wording of the referendum question”.
What is the remit given to the Electoral Commission? The Constitution Committee’s excellent report—I am grateful to the noble Lord, Lord Crickhowell, for reading from it—shows that that committee, too, is nervous on that point. It says:
“We trust and believe that the Electoral Commission will be rigorous in assessing the question and will give candid and fearless advice on the wording proposed by the Scottish Government”.
It says that,
“the Electoral Commission will consider whether the referendum question … presents the options clearly, simply and neutrally … we would expect any departure from the Electoral Commission’s recommendations on the wording of the question to be robustly scrutinised. We hope that there will be no such departure”.
I share all those sentiments, obviously.
Why is the word “intelligibility” there? Why is it necessary to have the narrower definition of the role of the Electoral Commission? It is easy to envisage a question that is completely intelligible but also leading or misleading. I am nervous about the role of the Electoral Commission in this respect. I do not want to exaggerate the point. It would be resolved if the challenge of the noble Lord, Lord Sutherland, were accepted. We need to know the view of the Edinburgh Parliament in principle on what it would do—not when it has seen the language but its view of the language produced by the Electoral Commission.
The noble Lord’s question is particularly apposite as to why this limited reference was made when one considers that the Electoral Commission in 2009 set out the referendum question assessment guidelines, which included:
“Is the question written in neutral language, avoiding words that suggest a judgement or opinion, either explicitly or implicitly?”.
That takes it much further than the question that has just been raised by the noble Lord.
That is precisely the point that I am trying to make. Is the reference to “intelligibility” in some way limited to it or could it be construed in a court of law as in some way limiting the normal role of the Electoral Commission and its role envisaged in 2009?
Is not the agreement made between the Prime Minister and the Scottish First Minister a gentleman’s agreement? It is not an international treaty, which can be made only between sovereign states. Although everything that the noble Lord says has every relevance in the moral context, in terms of legal consequence and strict constitutionality it must be the case that it is no more and no less than a gentleman’s agreement, binding, of course, as it is.
That is where I was going, although I would like to hear the Minister’s answer to my question on how one reads paragraphs 8 and 12 together.
I wonder whether it would be helpful to do so now, as it has been raised. The word “intelligibility” is used because Section 104(2) of the Political Parties, Elections and Referendums Act 2000, passed by this Parliament, states, in relation to a referendum question, that the Electoral Commission,
“shall consider the wording of the referendum question, and shall publish a statement of any views of the Commission as to the intelligibility of that question”.
That is why the word, “intelligibility” has been taken from the statute and put into the memorandum. As the noble Lord rightly points out, the Electoral Commission set out in its 2009 guidance and guidelines, which I quoted when moving the Motion, how it intends to go about determining intelligibility. I hope that that clarifies why the word was used. The other matters to which the noble Lord referred, such as ease of understanding, lack of ambiguity and avoiding misleading voters, are part of the criteria that the Electoral Commission has indicated that it applies when undertaking the word, “intelligibility” in statute.
I am grateful to the Minister and in some way reassured. It seems to me that we need to keep a close eye on this issue. I strongly agree with the challenge raised by the noble Lord, Lord Sutherland, but I think in his normal, consensual, non-polemical way, the noble Lord, Lord Reid of Cardowan, got it absolutely right. There may be a fox around, but the Scots are not chickens. They are not stupid. If there is an attempt to rig the question, and the advice from the Electoral Commission, speaking to its remit as described by the Minister, is dodged or not responded to positively, it would be a considerable down side with the electorate in Scotland. The question of the question is very important, but let us not exaggerate it. If it is not a straight question the Scots are even more likely to give it a very straight answer.
(11 years, 11 months ago)
Grand CommitteeMy Lords, not having a brief and not being a brief, I can be brief. I should just like to say three things. I thank the Minister for bringing forward this Bill, which is clearly necessary to remedy a loophole that came to light following the tragedy. I also thank him for the meticulous way in which he briefed the unbriefed; I am very grateful for that.
For me, the most important thing that the Minister said today is something that I had deduced: there is no expansion of criminality in the Bill. The criminal law is not extended by the Bill. What happens here is that a technical bar—I think that was the Minister’s word—is removed. That seems very important and reassuring.
I have not heard from the Law Society of Scotland, but my only concern was with the question raised by the Minister himself in relation to Clause 4(4)(c). Suppose that a new partner is admitted—or a series of new partners, cumulatively—and that Clause 4(4)(a) applies as well as Clause 4(4)(c). The partnership still exists but the people are completely different. Could we have an explanation of what the situation would be? This may be a daft question. The noble Baroness, Lady Liddell, said that she might ask daft questions but she did not insist that she be the only one to do so, so I demand the right as well.
Having heard the noble Lord, Lord Stephen, I also look forward to hearing why one needs the words in Clause 4(1)(b),
“continues to carry on business”.
I, too, should like to be reassured that there could not be some unintended consequence.
(12 years, 1 month ago)
Lords ChamberMy Lords, the House owes the noble Lord, Lord Maclennan, thanks for securing this debate and for the wisdom with which he introduced it. As the noble Lord, Lord McConnell, said, he speaks from a consistent position down the years. He also speaks from the experience of a convention of which he was a member and which I tried to help—I will not mention that again.
I make two preliminary points. First, I was in the House on Monday to hear the noble Lord, Lord Strathclyde, asked about the fate of the Steel Bill, saying that it would languish in the Commons as a Private Member’s Bill until picked up. Surely a Private Member’s Bill has achieved a certain status if it has been passed by the House of Lords. I hope that the Government will look closely at the Steel Bill. It is extremely modest—it is much smaller than most of us would have wanted—but it passed by a large majority through this House and those minor reforms really need to be made. I hope that the off-the-cuff answer by the noble Lord, Lord Strathclyde, who was not being asked about the Steel Bill, is not definitive of the Government’s position.
Secondly, I make a point that I have made once or twice in our debates, especially on what is now the Scotland Act. It is in my view a great pity that there is no one among our number who represents the Scottish National Party. I understand why that is the case: the Scottish National Party’s position is that it does not believe in this place and does not want to be represented here. I think that that is a serious mistake. We all—the Government and Parliament—should make it clear to the SNP that it is illogical to send Members to the House of Commons but not to the House of Lords. They would be warmly welcomed to the House of Lords. They would be seen as making a real contribution that is now missing from our debates. I can think of several people in Scotland. I can think, for example, of a Presiding Officer who followed the noble Lord, Lord Steel of Aikwood, who would make an admirable contribution in this House. I hope this is a point on which, in the discussions that are going on with St Andrew’s House behind the scenes, the Government are being extremely welcoming. It is a non-partisan point on which I think all sides of this House would agree.
On the major issues addressed in the speech of the noble Lord, Lord Maclennan, I have been unhappy since 1997 about the way Parliament tackles constitutional reform. In summer 1997, Jack Straw produced his White Paper calling for a national conversation on our constitutional settlement. I found it a very odd paper. I did not feel at ease with its lengthy discussion of values and the need to decide on and be clear about what it means to be British. I felt dismayed by the assertion that the primacy of the Commons would survive unscathed if the House of Lords were elected. That is ground that we have all been over and the noble Lord, Lord Strathclyde, was absolutely right on Monday in telling us that he thought the penny on that one had now dropped in the House of Commons—and hence the Bill was dropped. However, I was astonished that the Jack Straw White Paper of July 1997 said not a word about the biggest threat to the constitutional stability of the kingdom, which was, and is even more so now, the independence threat in Scotland. That was passed over in complete silence.
At least Labour tried. There was a White Paper and some discussion of a future constitutional settlement. What have we had from the coalition? First, we have had an EU Act replete with referenda requirements and curiously making decisions of both Houses of Parliament—for the first time ever, I think—subject to subsequent approval by referendum. That seems to be a major attack on the Edmund Burke doctrine of representative democracy. I look forward to hearing the noble Lord, Lord Cormack, on that subject, as I regard him as the foremost exponent of Burkean doctrine in this House. Secondly, we have seen the attempt, repeating the Straw assertion, to go for an elected Lords without considering the role of the Lords. The Bill was about the composition of the Lords, but composition should be a function of purpose and we never addressed the role of the Lords. Thirdly, we saw the attempt at replacing first past the post by AV. I will not talk about that.
Fourthly, we saw the attempt to reduce the size of the Commons by equalising the size of constituencies. That seems to rest on a good democratic principle, but I would have liked to have seen that principle modulated by a greater concern for peripherality and geography. It seemed to me that Members of the House of Commons representing constituencies such as the one that the noble Lord, Lord Maclennan, used to represent could perhaps be regarded as facing more difficulties than someone who represents a central London constituency that also had 75,000 people in it. Fifthly, we had the Scotland Act with its ragbag of further minor devolution—the choice not seeming to be based on any particular principle.
Yesterday we had the assertion from the noble and learned Lord, Lord Wallace of Tankerness, that a reduction in voting age in the Scottish referendum would not set a precedent. I understand exactly what he meant: it clearly would not follow ineluctably that the age of voting in parliamentary elections should be reduced. Yet we all know that it sets a precedent that will be followed. Actually, I support it. If we send kids off to fight and allow them to get married, we might as well let them vote. However, my point now is not that one but that we are approaching constitutional reform in an entirely piecemeal way. Here is something that may well make sense but has never been debated and is not part of any attempt to form a settlement.
I see six issues that it would be good to address in the sort of convention that the noble Lord, Lord Maclennan, has in mind. First, do we still believe in representative democracy or are we moving more and more to direct democracy, and should we not have some criteria on what issues should be referendable? Secondly, do we still believe in the primacy of the Commons? Thirdly, what is the correct size of the Commons? Fourthly, what criteria should govern further devolution? This is the area that the noble Lord, Lord McConnell, spoke of, and it should not just be to Scotland. Which issues should the union lead on, and on which issues should subsidiarity take us towards further devolution? We need a principle there. Fifthly, there is the West Lothian question, which cannot be for ever ducked. Lastly, do we envisage that Scotland, presumably with increased fiscal autonomy, even if independence is rejected, should be represented in this House in the way that the noble Lord, Lord McConnell, was suggesting?
Indirect democracy could well be the answer: the cement of the union. I can see the Edinburgh Parliament electing its delegation to come here, and I see that as a precedent for the regions of England if they go that way, and certainly for Wales and Northern Ireland. There is a great deal to be said for a senate so composed, but of course that takes us back to the questions about the role of the House of Lords. It would no longer be a revising Chamber; it would have a quite different role. You cannot separate the big issues about devolution in the kingdom and the issues about the role of this House. I suspect that I am now heading for criticism from the noble Lord, Lord Cormack, because I have gone further on the wider stage than he would, although I am on his side on a number of issues concerning this House. I always listen with great respect to him and am sometimes reminded of the 19th-century Prime Minister who, when persuaded that some change was necessary, rather plaintively said, “Change? Why must we change? Things are bad enough already as they are”.
However, proposals for change need to be rooted in principle. I am not against the Graham Allen convention. Constitutional change should be considered, organic and consensual, and based on principles designed to create a stronger national settlement. I very much hope that the next two years will not just be devoted to partisan political debate about yes or no in a referendum. We should use this time, down here and throughout the nation, to have the kind of discussion that the noble Lord, Lord Maclennan, is calling for. This House would and should play a major role in that discussion and is rather well suited to that kind of debate, if only the SNP could be persuaded to be represented, and if only the Government could be persuaded to permit the modest reforms recommended by the noble Lord, Lord Steel, in his admirable Bill.
My noble friend and I are going to have to agree to disagree. I do not accept that that would be an automatic consequence. Before any change to the franchise for the House of Commons, or indeed for the Scottish Parliament or the Welsh Assembly, there would have to be full, proper debate and consideration, and it would require legislation in this Chamber. I do not think for one moment that my noble friend suggests that the House of Commons will suddenly roll over and vote for votes at 16. Apart from anything else, it will certainly not be at the hand of the Government, although they will have no opportunity to do so in the lifetime of this Parliament.
As I have indicated, the Government believe in the United Kingdom. We believe that the United Kingdom is greater than the sum of its parts, as was said by more than contributor to this debate. Our shared history during the past 300 years has been as a stable, successful, political, economic and cultural union. That has benefited our citizens, our economy and our place in the world. It is a unique constitutional achievement and one of the great success stories. It was striking that, in their contributions to the debate, my noble friend Lord Cormack and the noble Lord, Lord Judd, reflected on their own Scottish ancestry. The noble Lord, Lord Browne, indicated that, within his own family, the benefits of being part of a United Kingdom are manifest. Having looked up the origin in Scotland of the name Wallace, I found that it undoubtedly came from Shropshire or Wales in the 12th or 13th century, so it is clear that there has been movement of peoples in these islands for centuries. Geography is probably one thing that binds us more than anything else. Common sense says that we should not split up what has been successfully brought together.
Perhaps I may paraphrase the excellent case made for our United Kingdom in the report by my noble friend Lord Steel of Aikwood—the so-called Steel Commission report. That talked about nations which had been in conflict for hundreds of years, which were brought together and which together were able to exert a global influence. Our concepts of liberty, democracy and the rule of law, our philosophy and our ideas, have done much to shape the modern world.
Within our United Kingdom, Scots have made an important contribution—in science and engineering, medicine, administration, economics, finance and philosophy— and we have done so as an integral part of the United Kingdom’s success. In unity and co-operation with the other parts of the United Kingdom, Scotland has been able to punch above its weight as a small country and, in doing so, we have helped to build a United Kingdom which is more effective together than its combined resources would merit.
We benefit from being part of a strong United Kingdom and I believe that the United Kingdom benefits from having Scotland as a constituent member. Our experience together in the past 300 years has created a number of key British institutions which are part of a shared national identity: the BBC, the British Army, the Navy, the Royal Air Force, the Crown, the National Health Service and, indeed, this very Parliament. It is the strength of these institutions which will help influence people in Scotland when they cast their votes in the forthcoming referendum.
The Secretary of State for Scotland announced to the House of Commons on 20 June the work that the UK Government will do to highlight the benefits of the United Kingdom. I have detected—and it has been mentioned in some of our debates previously—an appetite for some objective and reliable information on the issues. It is right that the Government should provide facts ahead of the referendum and I welcome the fact that many other bodies now want to contribute objective information. That analysis can inform and support a debate on Scotland’s future within the United Kingdom.
Part of that future, and part of our immediate past, has been devolution. We have demonstrated a strong commitment to devolution, as it gives people choice and a real say over their own affairs. It is consistent with the decentralisation of power which is a core aim of this Government in line with our belief that there are benefits in making decisions at local level. We have an active devolution agenda. There is no status quo to defend because the devolution settlement, as the noble Lord, Lord McConnell of Glenscorrodale, pointed out, has continually evolved from day one. He will remember, when he and I were in government together in Scotland, the devolution of the railways under a Section 30 order and the fact that we were able then to take forward some important new railway building and construction in Scotland. That settlement continues to evolve.
Most recently, the Scotland Act 2012 was passed, representing the most significant development in devolution since 1998. Like the noble Lord, Lord Browne of Ladyton, and contrary to the view of the noble Lord, Lord Kerr of Kinlochard, I cannot accept that it is a ragbag of measures. First and foremost the measures that changed the devolution settlement in terms of powers were the product of a very detailed consideration by the Calman commission. The fact that it did not amount to a great number of powers is a testament to the settlement of the 1998 Act and the work that was done then. But it also included, very significantly, a substantial transfer of financial powers. That addressed a very important principle of the accountability of the Scottish Parliament, which hitherto has had total discretion on how it spends money but precious little responsibility or accountability in how it raises money.
Churchill said of some pudding—I do not know what pudding it was—that “this pudding lacks a theme”. That was what was wrong with the Bill. Individually, there was a rationale for particular measures and many of them came out of Calman, I entirely understand that. But nowhere was there anything architectural or anything explaining the principles of the settlement with Scotland. That is what we still need and that is why I am very strongly in favour of the proposal of the noble Lord, Lord Maclennan.
My Lords, there is a theme. I hate the word “subsidiarity”, but the overall theme is about where decision-making can best be achieved and delivered consistent with good governance. I think the issues and headings that we identified in the Calman commission, which were taken forward in legislation, did subscribe to that theme. Also, as I have said, a very important theme was the accountability that came to the Scottish Parliament with the devolution of financial powers. It must now answer to the people of Scotland as to how it raises money and not solely as to how it spends money.
There is more than just what we have achieved in the Scotland Act 2012, which of course is still ongoing in terms of its delivery. We have established the McKay commission to explore how the House of Commons might deal with legislation that affects only part of the United Kingdom following the devolution of certain legislative powers to the Scottish Parliament, the Northern Ireland Assembly and the National Assembly for Wales. The Silk commission, set up in October last year to review the present financial and constitutional arrangements for Wales, is due to publish its first report on financial accountability within the next few weeks. These are significant processes, and we must allow them to reach fruition and not impede their development. They have a common aim, which is to deliver improvement in the lives of the people in Scotland, Wales and Northern Ireland. Each evolved in different historic ways, and we believe that recognising the different features and factors that make up the constituent parts of the United Kingdom has been an important part of the process.
My noble friend suggested that we should be looking at alternative constitutional settlements. The noble Lord, Lord Soley, suggested there should be a royal commission, while my noble friend Lord Maclennan said this is something that might go on for years and not something that was going to be done in just months. My noble friend—as he was, and still is personally—Lord McConnell talked about the Scottish Constitutional Convention, one of whose features was that it had a very clear end in sight. It is important that we remember that.
I was interested by the number of noble Lords, including the noble Lords, Lord Soley—whose article I have had the privilege to read—Lord Foulkes and, I think, Lord Judd, who mentioned federalism. I can assure the noble Lord, Lord Foulkes, that it remains the policy of the Liberal Democrats and I am sure that when he reads the report of the Campbell committee, which was set up by the Scottish Liberal Democrats, in the next weeks, he will be pleasantly reassured, not necessarily surprised, by what he reads in that.
Numerous ideas have been put forward by your Lordships in debate. My noble friend Lord Steel of Aikwood referred to the 1979 manifesto when he talked about the second Chamber having a role to play in the representation of the nations and regions of the United Kingdom. If I am not mistaken, I rather suspect that was in the evidence that he wrote for the Scottish Liberal Party to the Kilbrandon commission in about 1967. We can check back, but it has been a consistent theme for some time. Clearly there are issues there that merit further examination and discussion.