Scotland: Devolution

Lord Turnbull Excerpts

Wednesday 29th October 2014 Lords Chamber

[Lord Turnbull (CB)]

My Lords, in my 35 years in Whitehall, I spent more time on public spending than on anything else, so the Barnett formula was never far from my thoughts. It was therefore with some alarm that I heard that “The Vow” by the three party leaders referred to continuing the Barnett formula. If that means continuing it as it operates now, that is an outcome that I would strongly oppose.

However, the actual text of the vow may offer some reassurance and a hint of a way forward. The front page of the Daily Record of 16 September says:

“And because of the continuation of the Barnett allocation for resources, and the powers of the Scottish Parliament to raise revenue, we can state categorically that the final say on how much is spent on the NHS will be a matter for the Scottish Parliament”.

Thus, if Scotland has a significant control over its revenue, it will ultimately control what the level of spending is on any devolved service. That condition can be satisfied by a wide range of Barnett formulae. It does not commit us to precise figures or method of calculation.

Note also a reference earlier in the vow to,

“sharing our resources equitably across all four nations”.

There is no way that the Barnett formula, as currently operated, can be regarded as “sharing our resources equitably”. Its main flaws are, first, that it adjusts the population proportion with a long lag. If, as is the case in Scotland, the growth of population is slower than in the rest of the United Kingdom, Scotland is always over-rewarded. Secondly, this flaw is compounded by the fact that, when eventually there is an adjustment to the population ratio, it applies only to the increment of spending in England at the next spending review; no attempt is made to correct past overpayment.

The best analogy I can produce is from income tax. Someone sends in a tax return and the inspector finds that the coding has been too generous. But instead of recouping the error in the next year, the inspector applies a new, less favourable coding, but only to the change in income from this year to the next. In this way, all the previous errors, which in the case of Scotland are all in the same favourable direction, are allowed to accumulate. They have now reached grotesque proportions.

Scottish public spending is now £1,600 per head greater than in England and £500 per head greater than in Wales. These are huge sums in relation to income per head, of the order of £20,000 a year. This disparity funds policies in Scotland, such as care for the elderly, university fees and prescription charges, which are simply unaffordable elsewhere in the UK. To put it another way, a Scottish family of four receives the same social security benefits as an English family, but on top receives an extra £6,000 per year in what we used to call the social wage.

What is the explanation for this? The answer, in a word, is appeasement. Over 30 years, neither Conservative nor Labour Governments wanted to confront voters in Scotland. When the House last considered this in the committee chaired by the noble Lord, Lord Richard, in 2009, it was suggested that the way forward was to relate the transfers to needs. But, as Mr Salmond—not Lord Salmond—frequently boasted, Scotland is a prosperous nation. Scottish Government figures claim that Scotland has a GDP per head 11% higher than that of the United Kingdom as a whole. Wales, on the other hand, has a GDP per head of about 25% lower than the UK average.

Had I served on that committee in 2009, I might well have signed up to the recommendation to move to a needs basis. In my time at the Treasury in 1993, we investigated that, although it came to nothing. However, I draw noble Lords’ attention to the analogy of the rate support grant, which is a needs-based thing, which turned out to be a statistical nightmare. I no longer think that this needs basis is necessarily the right answer when the freedom for Scotland to raise taxes is being expanded. Instead, we could move to a much simpler system under which all nations get a block grant of the same per capita amount and the devolved Assemblies are given the freedom to top that up, or not, as they please. In the process, as the noble Lord, Lord Empey, mentioned, they would assume a proper accountability.

The other change is that the population ratios—

[Lord Forsyth of Drumlean]

I am grateful to the noble Lord, and I agree with everything that he has said. Is not the problem with his recommendation that there would be a huge gap in the Scottish budget, which would mean that Scotland would end up as the highest taxed part of the United Kingdom and worse off in terms of public services?

[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.

--- Later in debate ---

[Lord Wallace of Tankerness]

My Lords, an important issue which was always there but was articulated well, not least by the former Prime Minister, Mr Gordon Brown, in the latter stages, was the notion of the social union; the equitable arrangement within our United Kingdom where, if one part of the kingdom is thriving, there is a transfer of resources to a part that is not doing so well. That is one of the important things that binds our United Kingdom together and I see that as an equitable distribution of resources within it.

[Lord Turnbull]

I query why a country which claims to be more prosperous than the United Kingdom as a whole is the recipient of the highest transfer compared with Wales, which is the poorest part but receives a much lower transfer. That cannot be equitable.

[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—

Transparency of Lobbying, Non-Party Campaigning and Trade Union Administration Bill

Lord Turnbull Excerpts

Monday 13th January 2014 Lords Chamber

[Lord Campbell-Savours]

My Lords, I spoke in Committee on this matter, so I shall be brief today. My concern is that special advisers often have more influence on ministerial decision-taking than do Members of Parliament, because they have daily access.

I want to tell a story of an incident that I experienced in 1999 on a train coming from my former constituency of Workington to London. To my side in the carriage was the Member of Parliament for Blackpool and opposite were two young men who were on their way to London, and we struck up a conversation. They told us that they were going to London to lobby in the department on the need to introduce new gambling legislation. As Labour MPs, we had absolutely no idea that discussions were going on in the department about gambling and gambling legislation. That was in 1999—some 14 years ago. Those two young men were going to meet the special adviser in the department concerned. I was very interested and asked them how they had made contact. They explained that they had done so at a political level, locally to start with, and had then been referred to the special adviser. There was no need as far as they were concerned to see Ministers.

In that particular case, the embryo of the debate had started with access from the industry directly to political advisers in the department. The discussion would then permeate within the department between, as has just been said, civil servants and the special advisers, to the exclusion of Parliament and individual Members of Parliament. I find that deeply troubling. One of the reasons why I want special advisers to be included in the Bill is that I want that process to become more transparent, so that individual Members of Parliament can at least see what is happening within a department, what influences are being brought to bear and the dangers that might arise. If those special advisers then organise meetings between various groups and Ministers without Members of Parliament being aware of the scale of the lobbying going on—I know that I am making a very subtle point—it is at that point that Members of Parliament need to know that such relationships are being forged. That is why I strongly support the amendment proposed by the noble Lord, Lord Tyler, and I hope that we have the opportunity to vote on it.

[Lord Turnbull (CB)]

My Lords, this is the first time I have got involved in this Bill.

The current structure is indeed rather peculiar: lobbyists or lobbyist consultants are to register themselves and report those whom they represent, but we will find out whom they lobby only by an indirect process of interrogating a list of external meetings of all kinds that Ministers and Permanent Secretaries have attended. The case for this amendment is that lobbying takes place with a much wider group of people, which in a typical department would be about five or six individuals. I was a Permanent Secretary for 11 years in three departments and I do not think I ever had a conversation with a lobbyist as defined in this Bill. The lobbying always took place with officials who were working on the policy or were experts on the subject or were working on a Bill team.

Should we extend the requirement to civil servants? Well, there are 412,000 of them, so we have to define whom we mean. The people working on a policy would probably include the senior Civil Service, which is probably about 3,000 people. The logic of this Bill is that we extend the requirement to assemble and publish a list of external meetings—of course, these are not only meetings with lobbyists—to a very much wider group. In my view, there would be a lot of dead-weight cost in this: most of those contacts are part of the regular and desirable interchange between government and industry. In the White Paper that launched this whole process, it was stated:

“The Government does not wish to create an obstacle to necessary interaction with policy makers”.

If that is the price—that we extend this to all of the senior Civil Service, who then have to report all external meetings involving not just these people but everyone—in my view that is a price too high.

On the other hand, I am taken by the arguments about special advisers. There are now 98 of them; there were 38 in 1997 at the exit of John Major’s Government; there were about 74 by 2010; the number dipped for about three months but now there are 98. If I really had to distinguish between the amendments in this group, I would vote against Amendment 2 but for Amendment 3.

[Baroness Royall of Blaisdon (Lab)]

I rise to speak to Amendment 2 in the name of the noble and learned Lord, Lord Hardie, my noble friend Lady Hayter and myself, which extends the parameters of who needs to be lobbied to prompt registration to include special advisers, civil servants and PPSs.

I, too, welcome the enhanced transparency in relation to reporting that was mentioned by the Minister in response to the earlier debate. However, I believe that will not be enough if the subjects who are principally lobbied are not asked to report. There has been progress, but it is simply not enough.

Both today and in Committee, a powerful and clear case has been made by former Ministers, former senior civil servants—which includes those in the Diplomatic Service, pursuant to the discussion we had in Committee—and former special advisers as to why the remit of the Bill must be extended if it is to have proper impact. As the noble Lord, Lord Norton of Louth, said in Committee, the target is normally the Minister and you therefore have to focus on the channels for reaching the Minister. The Permanent Secretary, as we have heard, is not a significant channel for this purpose. Indeed, the lobbying industry itself has said on numerous occasions that,

“we do not make personal representations to Ministers or Permanent Secretaries”.

So there we have it from the horse’s mouth. Yet the Government did not provide any convincing reason for why only meetings with Ministers and Permanent Secretaries should be subject to the provisions in Part 1. I hope that this short debate will persuade the Minister that there need to be some changes to this Bill in order to make it properly creditable.

Civil servants here and in Brussels should be included, not because there is any suggestion that they are conducting themselves in any inappropriate manner but to fulfil the purported aim of the Bill—that is, transparency. Last week it was revealed that there had been 130 meetings between representatives of the alcohol industry and the Government since 2010. The BMJ investigation showed that they had an extraordinary level of access to the Department of Health, which later decided to U-turn on the question of minimum unit pricing. It was a comment from the Minister for Public Health on the “Today” programme on Wednesday that caught my attention. Of those 130 meetings, she said, “But most of those were with officials”. Precisely. If the Bill is to increase transparency, the public should have access to this information.

I turn to special advisers. Naturally, I support Amendment 3 in the name of the noble Lords, Lord Tyler and Lord Greaves. Special advisers should certainly be subject to the same level of transparency, given how closely they work with their Ministers and the influence that they can and do have on policy. The case has already been well made but I make no apology for returning to the News International lobbyist Fred Michel, whose case proves quite how large the loopholes in the Bill are. He was summoned to the Leveson trial after DCMS released 164 pages of e-mails between him and Adam Smith, the then Secretary of State’s special adviser. This came to light only in what I am sure everyone would agree were quite extreme circumstances. Again, if the Bill is to increase transparency, the public should be able to access these details.

Given the stance taken in Committee, I imagine that the Minister may well object by saying that the provisions in our amendment are disproportionate; indeed, the noble Lord, Lord Turnbull, has just made that case. Of course that argument cannot apply to extending the Bill to cover special advisers—that should be a given now—but, if proportionality is the Minister’s only concern, I hope that he will commit to bringing an amendment back at Third Reading that at least includes special advisers, civil servants and Parliamentary Secretaries. There is time for the Government to work on an amendment that could ensure that these people are included in the least bureaucratic way.

The Minister may also point to the fact that the limits that the Government have put in the Bill mean that there is no obvious place to publish such information. In Committee I asked the Government to look at the least bureaucratic way of extending the scope of those lobbied, but they do not seem to have taken the opportunity to find a solution. We can provide the Minister with two solutions. No doubt the Minister will be aware that on the website data.gov.uk, the meetings between special advisers and newspapers editors, proprietors and executives are already published, so there is no convincing argument why that cannot be extended. The other solution may have been provided by the noble Lord, Lord Norton of Louth, and it is elegantly simple: the Minister, when publishing details of his own meetings, publishes information about the meetings of civil servants and special advisers in his department.

This House has explained—very graphically, in many ways—the problems relating to the Bill and its extent, but we have also pointed the Government towards solutions. I very much hope that they will accept these amendments. If not, I trust that they will go away and come back with an amendment at Third Reading that takes these crucial issues into account.