Scotland Bill

Bob Stewart Excerpts

Monday 8th June 2015 Commons Chamber

[Sir Edward Leigh (Gainsborough) (Con)]

It is an honour to follow the right hon. Member for Orkney and Shetland (Mr Carmichael) who, apart from being a thoroughly nice bloke who is held in great regard in this House, was a most distinguished Scottish Secretary.

I want to make the Conservative case for as much fiscal autonomy, and therefore responsibility, as is possible. This is a big subject. It needs big positive gestures. We are talking about the future of the nation. We should frame our response to the general election not in the pettifogging detail of the civil service brief, but in the tradition of the great national declarations of the past. I call for nothing less than full home rule for Scotland—or self-rule as I prefer to call it.

The Smith commission really is a dog’s breakfast. No one understands it, and it addles the brain of anyone who tries to read it, as I have done. We have to get out of this love affair with commissions of the great and the good. We are politicians. We must have the vision in this House, as politicians—and, dare I say it, as statesmen—to look at the overall picture.

The election changes everything. We have to come to terms with the sad fact that the SNP has just won all but three of the seats in Scotland. We cannot go on as if we have just had the referendum. We won the referendum, but it was nine months ago. We have had a general election since then and we have to respond to that. The Smith commission was in response to an earlier panicky scare, which led to the vow, and I think the vow has, in a sense, produced an inadequate response.

If we do nothing now—if we do not move forward—we will fall into the same trap as the disastrous response to Irish nationalism. We are about where Ireland was in the 1880s. We now know our response to Ireland was too little, too late. We were wrong to abolish the Irish Parliament in 1801. We were wrong to delay granting Catholic emancipation. We were wrong not to listen to Gladstone in the 1880s. We were wrong not to implement home rule in 1914.

If we are to keep Scotland in the United Kingdom, which is my primary aim as a Unionist, I believe we should move towards full fiscal autonomy for Scotland so that, in broad terms, the Scottish Parliament spends what it raises, with only foreign affairs, defence and pension liability—and the ultimate liability for financial shocks like that in 2008—remaining at the UK level.

I do not argue for fiscal autonomy as some kind of cheap trap: “Ha ha, get rid of the Barnett formula, the oil is slowly running out, make them poorer and they’ll behave.” Aside from the obvious immorality of such a position, nationalism cannot be defeated by imposing poverty—quite the opposite.

The Union is asymmetrical. The English have 85% of the population, and we must be generous. We are never going to get some perfect federal solution. We are better off with the Union. It makes for a larger spirited nation, and it is in our interests as English Members of Parliament to be generous. That means, certainly, English votes for English laws in the very few cases where we are passing laws that only affect England, but Scottish MPs must be part of the discussion. It is a sensible compromise that grants them a role in that discussion but with an ultimate double-veto.

There are several arguments against full fiscal autonomy. First, there is the argument that we must keep something in reserve. That is a Machiavellian argument, but it does not work. If we must keep something so that we have a bargaining tool, what happens when we have just one chip left? If it cannot be given away, it has lost its effectiveness as a bargaining tool, and if it can be given away, the argument fails completely, so I do not accept it.

Secondly, there is the matter of tax competition. We are warned that Scotland will lower its corporation tax or other taxes—we have heard about airport passenger duty—but so what? We should have the confidence to accept competition in tax policy.

[Bob Stewart (Beckenham) (Con)]

I totally agree with my hon. Friend. If Scotland has full fiscal responsibility, it can decide what taxes it sets and how much it takes, and it must have responsibility for spending as well.

[Sir Edward Leigh]

I am grateful to my hon. Friend.

As Conservatives, we believe in responsibility and I believe that we have created in the Scottish Parliament a grievance Parliament. Even after these proposals, the Scottish Government will be able to spend only about 50% of what they raise. They will always be able to blame the United Kingdom Parliament for what goes wrong. Give the Scottish people responsibility and, ultimately, the wheel turns—it always does. The more responsibility one gives to people, the more difficult the decisions they have to take. For example, they might want to increase taxes, but that might lessen productivity; they might want to cut spending on social security, but that might make them more unpopular. Those, however, are decisions for a real Parliament, and they are what we should give to the Scottish Parliament.

It is argued that the EU will not allow us to give value added tax decisions to the Scottish Parliament, but that is something else that the Prime Minister can argue for. If he does not succeed in that negotiation, perhaps some Scottish people will form the view that there might be life outside the EU, but that is for another day.

I do not claim any expertise in the Scottish psyche and I might have got this wrong, but I think we can have closure if we give people ultimate responsibility and if we reassure Scottish people that this is not a trick and that we will keep pension liability within the United Kingdom, as well as the liability for great financial shocks such as those we saw in 1929 or 2008. We have heard about the £7 billion black hole and I understand the Secretary of State, but we can surely carry on having the discussion. We can also carry on discussing social security. People argue that we cannot give away social security, because we have to have a larger pot to help the poor, but that is something for an enabling Bill and to discuss with our colleagues in the Scottish Parliament. If they do not want to take full fiscal responsibility now, that is their choice and they must be allowed to make it. We should at least look at the Bill in an atmosphere of co-operation and toleration for each other’s views, with a determination on the Government Benches—the Unionist Benches—to make things work, to have some sort of closure on the issue, and to re-create people’s faith in our United Kingdom Parliament, because I believe that the result of the referendum showed that that faith is still there.

After the failure of his 1886 and 1889 Home Rule Bills, Gladstone warned:

“We are bound to lose Ireland in consequence of years of cruelty, stupidity and misgovernment and I would rather lose her as a friend than as a foe.”

No one is arguing that we are in that position, but we might still lose Scotland if we create an unsustainable situation, which we are in danger of doing, so let us use these four days in constructive debate. The referendum showed us that Scotland has not yet given up on us; nor should we give up on it. If we want things to stay as they are, things will have to change; we must move forward in a spirit of co-operation.