Scotland Bill

Lord Watson of Invergowrie Excerpts

Tuesday 6th September 2011 Lords Chamber

[Lord Watson of Invergowrie]

My Lords, I welcome the Bill but I fear that in many ways it is too timid. The coalition Government had a commitment in its agreement to,

“implement the proposals of the Calman Commission”,

but they have fallen some way short of that. We have heard about the aggregates tax, which has been left on the shelf and, pending developments, may yet be brought forward. There seems to be no such proposal on air passenger duty. Half of the yield from tax and savings and investments was recommended by Calman—we have heard nothing of that—and there is to be a restriction on the borrowing powers to £500 million with £200 million in any one year. That is still an increase in one sense, but both the legislative consent committee of the Scottish Parliament and the Scottish Affairs Committee advocated going farther. The Scottish Affairs Committee suggested a figure of £1 billion, with £500 million in a year. I hope that the coalition will be amenable to amendments to that effect at the Committee stage. The powers on borrowing should be brought forward. They are scheduled to come into effect in 2015 and I hope that that can be brought forward to at least 2013.

The additional tax raising powers mean that the Parliament will become more dependent on the tax revenue it raises itself. That is surely a positive move, both for the standing of the Scottish Parliament and in terms of its legislative programme and the work that it carries out. I do not share the fears of the noble Lords, Lord Forsyth and Lord Lang, as to the effects of the Bill’s proposals. The noble Lord, Lord Lang, questioned the settled will of the Scottish people both in terms of the original Scotland Bill and indeed of this one. It is quite clear that the 1977 referendum bore out the assertion that John Smith had made some three years earlier. I would accept that there is no settled will as such among the people of Scotland on this issue largely because it has not had anything like the publicity or coverage, discussion or debate that the original Bill had. However, I believe that there is an expectation that the much quoted “process, not an event” should be borne out.

Around 170 orders under the Sewel convention have been passed through the Parliament over the 11 years of its existence. That is one of the signs of development. There has been a constant change and improvement in the way that the Parliament operates and indeed in its relationship with the UK Parliament. Evolution or devolution is a natural process, though, and should be expected by Scots. The Bill meets their expectations to some extent. I disagree with my good and noble friend Lord Foulkes of Cumnock on one of the points that he made. He fears a process whereby step by step we get closer to what I think he described as the edge of independence. I have more faith in the Scottish people’s understanding of the issues involved in such a major change and what it would mean for their lives.

I also believe that up to now the people of Scotland, when asked to vote on the issue, have shown a clear differentiation regarding what it means to vote for the SNP. The reason for voting for it in Scottish Parliament elections and in UK elections—they voted for it in droves in May this year—was not that the main goal was independence; it was about the perceived competence of the SNP Government over the previous four years. People are capable of making those distinctions. If and when the referendum campaign comes—I support my noble friend Lord Foulkes in saying that it should come sooner rather than later, and I will back him when he comes forward with his amendment in that regard—and the debates and discussions are held, the Scottish media will be well able to air the issues.

If I am confident of anything, it is that the political parties that want to maintain the union will be able to make their case convincingly, although they need to make it more convincingly than they have been doing up to now. If there is no movement with regard to devolution 12 years down the road, while I do not believe that we will have a revolution if there is no evolution—there will not be an insurrection—there could be a revolution in constitutional terms if for some reason it is seen that only the SNP is interested in trying to advance the interests of the people of Scotland, develop its democracy and to some extent meet their needs in terms of greater accountability over the people elected to legislate.

People have mentioned UK-wide parties, but that is probably not quite correct; it is GB-wide parties that we are members of. Those of us in those parties have to accept that political opposition to the SNP’s bid for independence is often based on scaremongering. We seem to be very much on the defensive; we are on the back foot, and generally that is not a position from which anyone has achieved a victory. I have to say on behalf of the Labour Party that we found that out to our cost just four months ago. We largely fought the Scottish election campaign on the back foot, and we are now paying a high price for what I would say was our inability to articulate in advance a positive rather than a negative case for winning support.

To some extent, that is the elephant in the Chamber this evening. Since the Bill was introduced some months ago, not only the goalposts have shifted; we have moved on to a different pitch with a completely different surface. Let us not make any bones about it: the SNP recorded a stunning success in May, one that was supposedly impossible under the electoral system that obtained for the Scottish Parliament. It is wrong to blame the electoral system for what happened. I was personally in favour of that system at the time and remain in favour of a more proportional system. I shudder to think how much more decisive the SNP victory could have been if it had been under first past the post; there would have been no representation by other parties. It is interesting to see the Advocate-General nodding his head there; I think that he would support that point. For all its faults—it is not a perfect system; there is no such thing—by and large the Scottish Parliament’s electoral system has served the Parliament well because it has drawn a line between what happens at Westminster and what happens in the devolved Administrations, and the same is true of Wales and Northern Ireland.

The SNP presented a positive programme for Scotland and was rewarded for that; this is how we in the three GB-wide parties should react. We have not reacted in Scotland since the election in May. There has been a pretty mute response to be honest, partly because the parties are still shell shocked. The Lib Dems have chosen a new leader—I am not sure whether there was an election—the Tories are in the rather entertaining process of doing so, but the Labour Party has so far left the SNP facing an open goal because we have not even been able to put forward a candidate. I hope that will be put to rights soon. All the while, the SNP is getting on with business and is presenting a face to the people of Scotland which no other political party in the country is able to do.

I was interested to see the TNS-BRNB poll on independence published this week. A chart was drawn going back to August 2007, which I believe was when the SNP first published its White Paper on Scotland’s future and mentioned eventually holding a referendum. The question asked—I agree with my noble friend Lord Foulkes that in any poll the questions are fundamental—was: do you agree that the Scottish Government should now negotiate with the UK Government on independence? In August 2007, 35 per cent agreed, while 50 per cent did not. At the time of the May 2011 elections, these figures were 37 and 45 respectively. Now, 39 per cent believe negotiations should be undertaken and 38 per cent do not.

I do not think anyone should be in any way surprised at these figures, given that since the May election virtually nothing has happened in Scotland in political terms that has not been driven by the SNP. This is the wider context of the Bill that we are discussing today and that we will be discussing in the early part of next year. The political landscape and the political context of Scotland have changed dramatically since this Bill first appeared. The Bill is more important than ever because it is a tool which demonstrates to the Scottish people that there are progressive moves—I understand that the noble Lord, Lord Forsyth, will not see it in these terms—within the UK Government on behalf of Scotland, and that the SNP are not making all the running. That is a very important message to get across.

The Bill’s proposals will make a difference to the way the Parliament is perceived because of the accountability that it will bring in terms of tax-raising powers. However, as I said earlier, I agree with my noble friend Lord Foulkes that we need to get moving on the referendum. I urge the Advocate-General to think very strongly about including this in the Bill when it goes to Committee. The delay can serve only the nationalists. If they felt strongly enough about their position, they would have called the referendum more or less immediately after the election in Scotland. Clearly, they do not feel that strongly, so why should we wait and allow them to call it at a time that is most beneficial to them, as they would do naturally as a party? Let us get this debate up front and let us give the Scottish people the chance to make their decision on a straightforward and unambivalent question.

It is quite clear from the debate that took place in another place on this Bill that the SNP is still more concerned with arguing about the inclusion of corporation tax and what it calls full financial responsibility, neither of which, I am sure, would do anything other than reduce the block grant for Scotland. On that point, I would urge some caution with regard to tampering with the means by which the block grant is calculated. My noble friend Lord Morgan urged ending the Barnett formula for reasons that he outlined very clearly—it does benefit Scotland—and your Lordships decided in Committee two years ago that it should be replaced. I understand that, but one has to be careful what one wishes for if one values the union, because ending Barnett, or even changing it dramatically, would be an absolute gift to the SNP.

Finally, I will say a word about the concerns of the noble Lord, Lord Forsyth, regarding the definition of a Scottish taxpayer. I share those concerns. The Law Society of Scotland stated in evidence to the legislative consent committee of the Scottish Parliament that,

“it would be much better if there was a simpler definition that anybody could pick up and read”.

Clause 32 of the Bill was inserted after Report stage in another place, but it has not provided a simple definition. Indeed, proposed new Section 80F, which remains, talks of spending,

“more days of a year in Scotland than in any other part of the UK”.

As the noble Lord, Lord Forsyth, says, your Lordships are not excluded from the elected parliamentarians in respect of that. Just think for a second: it is not at all unusual for your Lordships’ House to sit for 150 days a year. If some of your Lordships were to travel from Scotland on a Sunday—remember, it is where you end the day that counts—that could add to that figure. There are also weekends, the time you may spend out of Scotland during recesses and so on. It would not be difficult to get from 150 days into a position where you were spending more than half of that year in London or another part of the UK rather than Scotland. That needs to be clarified and, I hope, laid out clearly in the Bill.

In closing, I believe that the Bill contains many positive proposals. It enables us to advance to the people of Scotland the case that we can have the best of both worlds—being part of the United Kingdom, while having a devolved Parliament that is responsive to the needs of the people of Scotland and will now have substantial tax-raising powers. I look forward to discussing these and other issues in Committee.