Scotland: Devolution

Lord Purvis of Tweed Excerpts

Wednesday 29th October 2014 Lords Chamber

[Lord Turnbull]

Not necessarily. Scotland would have to bring its spending into line with England and it would be getting the same grant from the centre as England. My recommendation corrects a favourable anomaly; it is not impoverishing Scotland compared with England.

[Lord Purvis of Tweed (LD)]

I am grateful to the noble Lord, and I do not intend to take up too much of his time. When he refers to England, is he including a calculation for London, and is he also including what is currently statistically considered as non-identifiable expenditure for defence and how that is distributed across the different nations?

[Lord Turnbull]

I was referring to identifiable expenditure, not defence expenditure. The latter, of course, runs at a very high level in Scotland, with our major bases there. I have not addressed the issue that the noble Lord, Lord Prescott, raised, which is how you deal with separate regions within England. That is a further thing that we have to address.

The other change is that the population ratios must be kept much more up to date than they have been at present. My plea, therefore, is that we start a new relationship which gives proper weight to the principle in the vow of “sharing our resources equitably” across the whole of the United Kingdom.

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[Lord Purvis of Tweed]

It is a genuine pleasure to follow the noble Lord’s forward-looking and very practical contribution to the debate today. It was very interesting to hear of the broad areas of common ground between him and my noble friend Lord Shipley, pointing out some practical ways forward to noble Lords.

Over the last month since the vote in the referendum I have reflected on two main areas and they have stuck with me. The first is that for many people who voted in the referendum the issue was less what country they wanted to be a citizen of and more about what kind of country they wanted to live in and bring up their children in. It has been something that all parties that believe in the United Kingdom need to continue to reflect on. The noble Lord, Lord Kerr, and others accurately pointed out that of those eligible to vote, 37% voted yes. We can use exactly the same definition when we come to the rather stark figure that 47% voted no. That, for me, is one of the areas where it is quite telling.

The second area, which is a much more optimistic reflection and one that shapes the rest of my contribution to today’s debate, was the discussions, interaction, listening and taking part in debates with 16 and 17 year-olds in the referendum. It was politically reaffirming but it also struck me that as a group a majority of them voted no. Many of them had their own definition of what a country and a state should look like. They frame what they want the country to be like to give them the best opportunity for the future in this fast-changing and complex world. They defined what a state would be and in many respects they rejected what was on offer by the Scottish Government in the White Paper, which they considered remarkably old-fashioned and in many areas incoherent. We need to challenge the threats ahead of us as a country, which take up much of our time in Parliament both here and in the one where I was proud to serve when I was in the Scottish Parliament. That is why for the year I have been in this place I have tried to take as many opportunities as I can to shape the debate about what happens next.

In June this year I was fortunate enough to have a Question for Short Debate:

“To ask Her Majesty’s Government what plans they have for further reform and decentralisation of the United Kingdom in the event of Scotland voting “no” in the independence referendum in September”.

I have been in this House just a year, as I said, but I served two terms in the Scottish Parliament and five years on the Scottish Parliament’s finance committee. My views have been framed over that period. I was well aware very early on that in 1998 we created a devolved legislative but we did not create a Government in Edinburgh that had fiscal responsibility commensurate with legislative competence. Indeed, in many respects it is that key aspect that we are debating today. It is a coincidence perhaps, but a good one nevertheless, that it was the plenary of the Smith commission—a different Lord Smith—meeting in Edinburgh today discussing taxation: what tax basket would be the responsibility of the Scottish Parliament—addressing the very issues on which the noble Lord, Lord Lang of Monkton, and others have been challenging us. A lot of thinking has been done in this area and there are lessons we can learn. There are strong, long-held principles on fiscal federalism from other countries in the world that are more comparable to the United Kingdom—as my noble friend Lord Tyler indicated with Canada and Australia—than perhaps other European federal nations. There are long-held principles of fiscal federalism that we can learn from in the United Kingdom. We do not always need to listen to the Treasury briefings that say that everything is really difficult and the default answer is no. We need to set political leadership and then the Treasury and others will follow.

Between being in the Scottish Parliament and in this place I wrote a series of proposals looking at these areas in detail. It was a regret to me at the time that when I met the Conservative Party it was holding to a line in the sand for no further powers and when I met the Labour Party a senior member of the party said to me, “We just do not like the choreography of being on the same stage as the Conservatives and you Liberals”. When I tried to propose two years ago a Glasgow agreement of common ground, common language and a common platform to go into the referendum campaign with a progressive narrative of what the United Kingdom is and can be, there was rebuff. It is an absolute delight that we are now in a position where all five parties in Scotland are around the table and this Parliament is seized of the positive opportunities ahead of us. We may yet still have a form of Glasgow agreement coming out of the Smith report and I declare an interest as chair of an all-party parliamentary group in this place set up on a cross-party basis trying as parliamentarians to forge that way forward.

Finally, I agree with other Members that one of the ways forward is what I have proposed as a conference of the new union meeting straight after the general election. My final appeal is that this should not be an opportunity to long-grass many of the issues or to rediscover many of the questions. We know what we need to resolve. The difficult part is political parties with vested interests often having to make uncomfortable compromises for their own sake. We have to do it because the figures of 37% and 47% should always stay in our mind. If that is the case, we have that on our shoulder but let us be optimistic and seize the opportunity that has been presented to us.

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[Lord Wallace of Tankerness]

The noble Lord, Lord Turnbull, quoted very accurately the words used in the statement in the Daily Record. As I indicated to my noble friend Lord Forsyth, with all his success in getting more money, it is the base line that is applied. With regard to Wales, it is understood and recognised—

[Lord Purvis of Tweed]

If the Minister will give way I will, for the information of the House, quote from the public expenditure statistical analysis by the Treasury in 2013 which shows that in 2008-09 the DEL resource grant, which may well be considered the transfer, was 7.7% of all of the grants for that year. The plans for 2015-16 are 7.96%, which is below the population share for Scotland. The point has been made about how you would balance that grant with the further tax powers. This is the work of the fiscal federalism principles of looking over a 10-year profile over economic cycles to make sure it is a balanced and fair proposal. The Strathclyde commission did it; the Liberal Democrat commission did it. There is work being done to inform this quite considerably.

[Lord Wallace of Tankerness]

My Lords, with respect to my noble friend who I know has studied it in great detail, I hesitate before going down the line of a 10-year fiscal federalism profile. I was about to answer the point made by the noble and learned Lord, Lord Hope of Craighead, and the noble Baroness, Lady O’Neill, with regard to the Supreme Court. The Scottish National Party has made a specific proposal. It would be wrong to second guess the Smith commission, but on the noble and learned Lord’s point about the role of the Supreme Court, if you have got a single market you should have a common set of principles and legal interpretation. This is very important and, as he will be well aware, both my own department and the Scottish Government established working groups during the passage of the Scotland Act 2012 to look at the role of the Supreme Court with regard to devolution issues. These are now compatibility issues and I hope that the Smith commission will have regard to that work, as both working groups reached very similar conclusions. I hope that gives some reassurance to the noble Lord.

The commitment to deliver further powers for Scotland is of course in keeping with this Government’s record in decentralising power. As my noble friend the Leader of the House has indicated, this Government have made huge progress in devolving both responsibility and funding for schemes to a local level. Local enterprise partnerships and the ambitious city deals programme, which has been mentioned by a number of noble Lords who have contributed to the debate, are clear examples of our commitment to empowering local leaders to take decisions which best fit local circumstances and needs.

That is a demonstration of open-mindedness about how more powers might be devolved. We certainly do not believe that power should be hoarded at the centre but that it should be devolved to the nations, communities and individuals that will benefit from it. I was struck, in the course of our debate, by the very important contributions from those with a rich experience in local government: the noble Lords, Lord Smith of Leigh and Lord Beecham, and my noble friends Lord Shipley and Lord Tope. They shared very constructive ideas with your Lordships’ House as to how we might improve existing arrangements, what new ones might be made and how powers might be used more imaginatively in our communities, our cities and those parts of the country which are not immediately connected with a major city. That is clearly an agenda which must be pursued as we go forward examining a whole range of constitutional issues.

With regard to other devolution of power within England, my noble friend Lord Dobbs referred to Walter Scott and the path to the Highlands and the danger for an Englishman. Treading into devolution for England by a Scotsman is almost as dangerous. I always tread very carefully indeed. From what was said this evening, it is very clear that this is something which should be addressed. As I indicated earlier, this is not an alternative to the so-called EVEL; it is a both/and rather than an either/or.

As my noble friend Lord Greaves, the northern home-ruler, said, there is no consensus in England as to where we might go. There must be an opportunity for further debate. The noble Lord, Lord Prescott, made a very clear case for greater devolution within England. He said that the regions of England had to be consulted as to where they might go. There are proponents of regional government throughout England. There are difficult issues over the possibility of the creation of extra layers of government. There have been advocates of a separate English Parliament, although that raises questions over location and composition, and whether it would be any more decentralised than the present arrangements. While in Scotland there was a settled role of the Scottish Parliament, the picture in England is less clear. My noble friend Lord Tyler indicated that my own party advocates provisions of flexible and responsive devolution on demand. There is a wider debate to be had. My noble friend Lord Shipley set out a strong, healthy agenda for such a debate.