Devolution (Scotland Referendum)

Alan Reid Excerpts

Tuesday 14th October 2014 Commons Chamber

[Mr Alan Reid (Argyll and Bute) (LD)]

I am very pleased that on a huge turnout the Scottish people voted by a decisive majority in favour of remaining within the United Kingdom. When we set out on this process, the aim had been to have a referendum that was fair, legal and decisive, and that objective was clearly delivered. Liberal Democrats have long argued for home rule for Scotland and for a very powerful Scottish Parliament within the United Kingdom, and we are now well on the way to achieving that. My vision for Scotland is a country with its own Parliament that raises the majority of its own revenues and can borrow, tax and spend to meet Scotland’s priorities, with the freedom to innovate and reform but which keeps the strength and security of the United Kingdom.

[Sammy Wilson (East Antrim) (DUP)]

Does the hon. Gentleman accept that the more devolution there is of tax, borrowing, revenue and spending powers to any devolved Administration, the greater the instability that arises within its Parliament or Assembly?

[Mr Reid]

The hon. Gentleman makes an important point, but that is why I believe that Scotland should remain part of the United Kingdom. That gives us security not only in defence terms, but in financial terms. Although the Scottish Parliament should have more tax powers, we still need to be part of the United Kingdom for that security. Later in my speech I will outline which taxes I think are suitable for devolving and which I think should remain at the United Kingdom level.

The referendum saw levels of engagement and enthusiasm for politics never seen before. Now that the will of the Scottish people is known, everybody should accept the outcome and harness all that energy and enthusiasm to work together to build a strong, democratic Scotland within the United Kingdom. We want to harness that enthusiasm so that we can see much more participation in our democracy and much more consultation with people, working with them and devolving powers to a local level.

[Mr MacNeil]

The hon. Gentleman talks of a strong, democratic Scotland. Does he not feel that full fiscal autonomy would deliver that strong Scotland?

[Mr Reid]

I do not think the hon. Gentleman was listening to my reply to the hon. Member for East Antrim (Sammy Wilson) when I said that devolving all tax-raising powers was not the right solution. I will deal with that later when I talk about the taxes that are suitable for devolving and those that are best left at United Kingdom level.

Following the decisive vote in the referendum to stay within the United Kingdom, the Government moved quickly to set up the Smith commission, to convene cross-party talks and an engagement process across Scotland. It is vital that that process delivers significant new powers to the Scottish Parliament within the promised time scale, and I am confident that it will. I am sure that in the coming years we will see further progress on constitutional change for the other nations and regions of the United Kingdom, but further powers for the Scottish Parliament must not be held up while those debates take place in those other nations and regions.

The Scottish Parliament already has a significant range of powers to spend money on delivering public services, but powers are lacking on the other side of the equation—raising money through taxation. That has created a democratic deficit. The Scottish Government heap praise on themselves for the things they choose to spend money on and then blame the United Kingdom for the things they choose not to spend money on. Significant tax-varying powers are necessary so that in future we can have a proper democratic debate on how much to raise through taxes and how much to spend on public services. The Scottish Parliament must be given tax levers enabling it to raise the greater part of its own spending. Taxes on income, wealth and property can suitably be devolved. As well as raising money to spend on public services, these are powerful tools to address inequality in Scotland.

Representing a coastal and island constituency, I believe that devolving the Crown estate, with its control over the foreshore and seabed, is of vital importance. That is one of many areas where devolution must not stop at Holyrood; it must be devolved to a local level within Scotland. I am sure that my right hon. Friend the Secretary of State agrees with that.

On welfare and pensions, there should be a single Britain-wide system of entitlements, supporting free movement and residency across Britain with a common set of living standards and entitlements. However, on top of that common set of entitlements, there should be a power for the Scottish Parliament to top up such benefits. Earlier this afternoon, I served on a Delegated Legislation Committee that devolved power over discretionary housing payments. That is a step in the right direction. The power to top up minimum entitlements should be devolved to the Scottish Parliament for all benefits.

While devolving these powers, it is important to help business by keeping the United Kingdom’s single market and unified system of business regulation. It would not make sense to devolve taxes on spending such as VAT, alcohol and tobacco duties, and business taxation. Corporation tax, for example, is best dealt with at United Kingdom level. If it were devolved, one part of the United Kingdom would cut it, and that would lead to a race to the bottom, with business not paying its fair share of taxes and public spending having to be cut. Issues such as foreign affairs, the currency and defence are also obviously best managed at UK level.

These are exciting times. I have no doubt that significant new powers will be passed to the Scottish Parliament within the promised timetable. The long-held Liberal belief in home rule for Scotland within the United Kingdom is close to being realised.

[Several hon. Members]

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