Dominic Raab
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(10 years ago)
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Mr Dominic Raab (Esher and Walton) (Con)
I beg to move,
That this House recognises the outcome of the referendum on Scottish independence; welcomes the freely expressed will of the people of Scotland to remain British; notes the proposals announced by Westminster party leaders for further devolution to Scotland; calls on the Government and Her Majesty’s Loyal Opposition to bring forward proposals that are fair and reasonable for the whole of the United Kingdom, following a period of public consultation to enable people in all parts of the Union to express their views; and, in particular, calls on the Government to ensure such proposals include a review of the Barnett formula and legislative proposals to address the West Lothian question.
I begin by thanking the Backbench Business Committee and its formidable Chair, the hon. Member for North East Derbyshire (Natascha Engel), who is not in her place today, for the opportunity to have this debate. I would also like to thank the right hon. Member for Birkenhead (Mr Field) for making common cause in co-sponsoring the debate and the motion. I thank, too, the 81 hon. Members from four parties who signed in support of the motion.
The great Scottish inventor of the telephone, Alexander Graham Bell, coined the phrase:
“When one door closes, another opens”.
For my part, I thoroughly welcome the outcome of the Scottish referendum and the decision of the Scottish people to remain part of the United Kingdom, but I also recognise—I say this at the outset—the division and the divide it has left north of the border and the consequences that need to be picked up south of the border. In the spirit of Bell, I want to focus on the positive opportunities ahead—opportunities to give greater expression to the Scottish desire for self-determination short of secession, and indeed opportunities for a wider democratic renaissance across the whole of the United Kingdom.
In truth, we have made some progress under the coalition. As a result of the Scotland Act 2012, the Scottish Government will raise around 30%—up from 14%—of their own tax revenue. All parties now pledge further tax-raising powers and greater control over social security. I say to those representing Scottish seats who want further devolution beyond the current consensus that I am rather sympathetic, and I will look at and listen to their ideas with an open and sympathetic mind.
Of course, beyond the UK, devo-max, as it is termed, can draw on a variety of federal models, including those of Germany, Canada and even Spain. Scottish National party Members and others will have noted that this would take us well beyond what was promised in the vow of the main party leaders in the Daily Record on 16 September.
Mr Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)
The hon. Gentleman’s party leader, the Prime Minister, said during the referendum campaign that everything was possible and all was on the table. Does the hon. Gentleman disagree with that?
Mr Raab
This may be the easiest intervention I get today, but I do agree that everything is on the table and that everything is possible. In fact, if the hon. Gentleman listens closely as I develop my speech, he will find that I am rather sympathetic to taking further steps toward financial devolution, which the hon. Gentleman and his colleagues have proposed.
Equally, there needs to be recognition that with greater financial freedom and power, Scotland must expect to bear some additional responsibility. I am sure that as a matter of principle—regardless of the practicalities—all hon. Members would agree with that. A new deal for Britain must be fair to all parts of Britain. In my view, that means two things. First, if we went down the road of devo-max or fuller financial devolution, it would eventually render utterly untenable the Barnett formula used by the UK Government to subsidise the devolved Administrations. That formula is based on outdated spending patterns and population numbers and is already divorced from any objective assessment of real need across Britain. If Scotland now wants greater powers to tax and spend—as I said, I am sympathetic to that—it cannot expect the Union and taxpayers across the Union to keep subsidising them to the hilt on such an arbitrary basis, without fuelling resentment in other parts of the UK. I note that that is also the logic of the SNP submission to the Smith review. I have it here and will happily read it later.
Jonathan Evans (Cardiff North) (Con)
Does my hon. Friend not find it curious to hear these sotto voce interventions of SNP Members defending the Barnett formula, which is recognised as unfair to Wales and is vehemently opposed by Plaid Cymru, the SNP’s allies in the House?
Mr Raab
As usual, my hon. Friend makes a cogent and eloquent point. That point is actually made by the SNP in its submission to the Smith review—that the logical consequence of full financial devolution would indeed mean the overhauling of the Barnett formula. I thus say to SNP Members that there may be potential for a nascent consensus on some of this—if it can be reached and grasped.
Hywel Williams (Arfon) (PC)
Does the hon. Gentleman agree with the Prime Minister when he said in the Liaison Committee this morning that Barnett reform was “not on the horizon”?
Mr Raab
I suppose it depends on how broad, far and deep is one’s horizon. [Interruption.] Let me pursue that a bit more, because I want to be clear about it. Today’s motion does not seek to ride roughshod over the vow. It calls for a review of Barnett without prejudice to what would follow. I do not see how anyone on any side of the debate could possibly refuse to countenance consideration of the impact of further financial devolution on the rest of the UK. That would have to entail a review of Barnett.
Mr Mike Weir (Angus) (SNP)
There is almost a point of agreement here. In our proposals to the Smith review, we said:
“As part of any agreement, the Barnett Formula should continue to be used to determine Scotland’s resources during any transitional period”.
We are seeking full fiscal responsibility and in that event there would obviously have to be changes to Barnett.
Mr Michael McCann (East Kilbride, Strathaven and Lesmahagow) (Lab)
Will the hon. Gentleman give way?
Mr Raab
I am going to make some progress before I give way again. I have been very generous so far.
We must also consider points south of the border, where many people bristle over the fact that Scottish public services already receive over £2,000 more investment per person each year than some parts of England. That investment does not just subsidise free prescriptions and university tuition; in proportion to its population, Scotland has twice as many nurses and ambulance staff as England, and 43% more police officers. However, this is not just a southern gripe. Scotland’s public spending per person on housing and community, for example, is twice as high as that of the midlands, Yorkshire or Humber and the north west, and by comparison with Scotland, Wales gets a poor deal too. I am sure that Members representing Welsh seats will want to make that point for themselves.
Mr Raab
I am going to make a small amount of progress, but I will happily take an intervention a little later. I am conscious of the time restraints. I have been told that I have 15 minutes tops, and I want to respect that, because otherwise I shall get into trouble with you, Madam Deputy Speaker.
I know that colleagues in the Scottish National party will argue for the retention of North sea oil revenue in return. Rather than ducking that argument, I want to address it head-on before I give way again. I say to SNP Members that, personally, I accept that basic logic in principle, but it must surely take into account all the British taxpayers’ money that was originally invested in the extraction of the oil, and it also requires us to think far more seriously about the geographical allocation of financial resources across the board. I am sure that they will accept that logic, as it follows theirs. Given the new findings of shale gas across England and the draining of oil production from the North sea, I doubt that this is the lottery ticket on which the SNP is betting, but I cannot deny that it is a natural consequence of pursuing the constitutional logic of financial devolution.
Can we not agree, at this stage at least, to arrange the independent review of the Barnett formula for which the motion calls, in the light of proposals from the main parties and across the board, so that the implications for those in the rest of Britain can be examined? Surely their voice, their interests and their concerns cannot be locked out of the debate for ever. Can we not reasonably agree that, subject to areas of spending that will be devolved, the remaining revenue allocated across Britain should follow a needs-based approach, which is precisely how revenue is allocated internally in Scotland?
Mark Lazarowicz (Edinburgh North and Leith) (Lab/Co-op)
Does not focusing the debate on the Barnett formula mean focusing it much too narrowly? If we are looking at expenditure, should we not look at the expenditure that the Barnett formula does not fully reflect? Should we not look at the income that the state receives, and the pooling and sharing of resources? If we are to have a review, let us look at the whole picture, rather than picking just one aspect of it.
Dr Sarah Wollaston (Totnes) (Con)
Surely it cannot be right for someone who is living with, say, heart disease or cancer to suffer because an extra £203 per head has been allocated elsewhere owing to an accident of geography. Surely all Members want a settlement that is fair to individuals with long-term conditions, wherever they live in our United Kingdom.
Mr MacNeil
Let me say something instructive to the hon. Gentleman. He has mentioned subsidies for Scotland a couple of times. If he is going to talk about subsidies, he should understand that referring to expenditure in Scotland in terms of the Barnett formula is cherry-picking. It represents only two thirds of spending, and that is just identified spending: there is another third of non-identified spending. Talking about the Barnett formula is a trick used by Tories and Labour Members to suggest that certain moneys are spent in Scotland. They are not talking about the whole pie; they are talking about two thirds of the pie. That is the trick.
Mr Raab
If the Barnett formula is not subsidising Scotland to the degree that concerns some of us, why is the SNP so averse to any review of it, let alone change? However, as was pointed out by the hon. Member for Edinburgh North and Leith (Mark Lazarowicz), this is not just about the Barnett formula. The second price of further devolution must be steps to bridge the democratic deficit between Scotland and the rest of the Union. As in the case of the Barnett formula, south of the border it smarts that Scottish MPs in Parliament still vote on matters concerning England—from social care to school reforms—that in Scotland have been devolved to the Scottish Government.
There are various ways in which we could address the so-called West Lothian question. Others will have different views, but I believe that, as a minimum, any new legislation should implement the common-sense plan presented in 2008 by my right hon. and learned Friend the Member for Rushcliffe (Mr Clarke) to restrict Scottish MPs from legislating at Westminster in Committee and on Report on issues that do not affect Scotland. I suspect that, far from creating deadlock—which is what has been put about—that would lead to a rather healthy spirit of compromise. A United Kingdom Government who were reliant on Scottish MPs would retain the power of initiative, and England would have a democratic shield to prevent such a Government from imposing their will on it without consent.
Tom Greatrex (Rutherglen and Hamilton West) (Lab/Co-op)
As I am sure the hon. Gentleman knows, of the 460 pieces of primary legislation proposed by the Government since 2001—the year of the first post-devolution Parliament—eight have been England-only. “English votes for English laws” may suit a headline, but it does not address the real issue—the much more significant issue of the way in which power is distributed around the UK as a whole.
Mr Raab
The hon. Gentleman has made his point very calmly and sensibly, but it seems to me that if we managed to work out how to determine questions such as these for the Scottish Parliament and to enable Scottish devolution to take place, it is not beyond the wit of man or woman to work out how we can redress the balance for England, while also ensuring that the other constituent parts of the United Kingdom have an equal voice. I am sure that the hon. Gentleman would not want his words to be taken as suggesting that he does not believe in the principle of democratic equality. However, as he says, the implications of further Scottish devolution go well beyond England. I look forward to hearing the contributions from Welsh and Northern Irish colleagues, given their unique interests and special circumstances. I say, as an English MP, that their voices must be heard.
Mr Raab
I think the hon. Gentleman will find that London is part of England, and will, by definition, be considered.
I must refer briefly to the amendment tabled by the Leader of the Opposition on behalf of the Labour party. The amendment, which was slipped on to the Order Paper at the last minute, strips out and opposes, in express terms—
Madam Deputy Speaker (Mrs Eleanor Laing)
Order. The hon. Gentleman may wish to address the issues to which the amendment refers, but he cannot speak to it, because it has not been selected for debate.
Mr Raab
Thank you, Madam Deputy Speaker. I bow to your instructions and guidance.
The proposal, as it was, strips out and opposes, in express terms, any consideration of the Barnett formula. It strips out and opposes, in express terms, any attempt to address the West Lothian question. The Leader of the Opposition seeks to entrench democratic inequality and financial unfairness, for the sake—I fear—of short-term electoral expediency. If we are looking together at a long-term deal for Britain that is good for the whole of Britain, that is utterly unsustainable. I think that our debate will have established, at the very least, that the formal position of the leadership of the Labour party—I recognise that there are diverse views among Back Benchers—is now crystal clear. The Leader of the Opposition is opposed to, and is blocking, reform that would ensure that the legitimate concerns of those who represent English seats were addressed.
Let us think beyond the nations. Devo-max could spur democratic reform well beyond devolution. We still have one of the most centralised systems in any western democracy. We still have what is effectively a system of “one size fits all” governance, magnifying the effects of bad policy and suffocating local innovation. I recognise that the coalition has taken steps in the right direction—for instance, it has established locally elected police and crime commissioners, and has given councils a bigger slice of the tax revenue from the sale of new homes—but Whitehall still grips 80% of the purse strings. In other advanced countries, an average of about half of local or regional government spending is financed by local tax revenue.
I think it is fair to say, on the basis of material from the Adonis review to the Heseltine report, that across the political spectrum there is now a groundswell of ideas on how to deliver stronger local democracy—by providing incentives for local business growth, by promoting home building, or, more broadly, by tailoring policy to local needs whilst ensuring that it is accountable to the taxpayers who will ultimately foot the bill. Bringing decisions on those key issues closer to those who vote and who pay for them might not be a silver bullet, but it will play an important part of rebuilding trust in our democracy.
We should all recognise that the no vote in September’s referendum will not end the Scots’ yearning for more control over their own lives, but, rather than those on either side resenting it, the rest of Britain should look on it as an opportunity for democratic renewal, which must take place across the whole Union. As Graham Bell put it,
“we often look so long and so regretfully upon the closed door that we do not see the one which has opened for us.”
I commend the motion to the House.
Mr Reid
The vow that was made in the run-up to the referendum—just before polling day—was that the Barnett formula would continue. I think any reasonable person would interpret that as meaning it would continue as it is. I note that the hon. Gentleman’s party leader made that promise in the run-up to the referendum. I assume that his party leader went through the policy-making procedures of his own party before he made that promise. [Interruption.] As an outsider, I have always assumed that the policy-making procedures of the Conservative party were that the leader made policy. None the less, the hon. Gentleman is a member of the Conservative party, and his leader made that promise and I would expect the party to adhere to the promise made by its leader.
Mr Reid
The coalition agreement has been adhered to. At my party’s conference in October—it is usually in September, but the SNP chose a date that falls during our conference for the referendum—we passed a motion that the Barnett formula would be continued. The hon. Gentleman is correct that we had a different policy in the past, but we have a democratic policy-making process in our party, and the party, through its democratic policy-making processes at our annual conference, has voted that the Barnett formula should continue.
Mr MacNeil
No, I do not recall that—[Interruption.] I don’t! But again, that should be seen in the context of whether there is a new electoral mandate or other trigger points. It is quite simple and I explained it in response to the first intervention. The hon. Gentleman has delayed progress in the Chamber by making a fatuous intervention that I had already addressed. Let me get back on track and away from the hon. Gentleman’s diversions.
On the Barnett formula—I address the hon. Member for Esher and Walton (Mr Raab) with this point—it must be remembered that London has the greatest per capita payment and highest Barnett spend, with Northern Ireland in second place. That, too, must be understood in context. When people talk about Barnett spending, they mean identifiable spending, which is about two thirds of the spending round pie. There is also non-identifiable spending such as defence, which is concentrated in the south of England. The UK Government seem unable to tell us where defence spending is spent—they used to, but it became a political hot potato. By contrast, the United States of America can list non-identifiable spending not only at state level but at county level, although it seems beyond the wit of the UK Government to identify down to that point.
Mr MacNeil
The review we are looking for, in the context of the Barnett formula, is one with full fiscal autonomy for Scotland where we are rid of these interminable rows and where Scotland spends what Scotland earns. The big point is that Scotland is a wealthy nation that has, each and every year for the past 33 years, provided more tax revenue than the UK average to the Treasury and the Exchequer at Westminster. Members overlook that point.
Mr MacNeil
I am really sorry, but I have been too generous in giving way. Members overlook that point when they talk about the Barnett formula, and the hon. Gentleman may want to come back to it in his summing up.
Like it or not—the hon. Members for Aldershot (Sir Gerald Howarth) and for New Forest East (Dr Lewis) did not like it—the big jumping off point is now the vow. Whether Tory or Labour Back Benchers like it or not, that is the truth of the matter. The vow must be seen in the context of what was happening at the time it was made. On 10 September, the Prime Minister said:
“If Scotland says it does want to stay inside the United Kingdom, then all options of devolution are there, and all are possible.”
The right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown), the former Prime Minister—Gordon Brown, for those at home watching who might not be absolutely certain who I mean—said:
“The purpose of the Scottish Parliament should be to use the maximum devolution possible”.
Mr Raab
It is a pleasure to follow the Leader of the House’s rousing summation. I certainly agreed with all the gusto and spirit of his peroration. As we move forward, it is very important that the views expressed in this debate are adequately reflected in the proposals that all the parties make.
I again thank the Backbench Business Committee and all its members for allowing this debate to take place. It is very important that all voices and all parts of the United Kingdom are adequately reflected in such debates. Rightly or wrongly, there is a sense that parts of the Union may have been shut out of the debate, because we did not want to prejudice or interfere in the referendum campaign or to allow points made during it to be twisted or manipulated. Following the referendum, it is therefore important to broaden the debate and open it up to all parts of the United Kingdom—to England, as the Leader of the House said very powerfully, but also to Scotland, Wales, Northern Ireland and to all the constituent parts of the nations. I want briefly to refer to the many great speeches that hon. Members have made.
Mr David Hamilton (Midlothian) (Lab)
I congratulate the hon. Gentleman on bringing forward this debate. The issue at stake is getting fairness right throughout the regions. It is not just about Scotland, Wales, Northern Ireland or, indeed, London, which, as everybody seems to forget, already has an assembly; at the end of the day, we are looking to get to a position where everything is seen to be transparent and fair for all parts of the country.
Mr Raab
I thank the hon. Gentleman for his intervention, and I agree with all his points. Indeed, they were reflected by the hon. Member for Birmingham, Hall Green (Mr Godsiff), who warned of the risk that other parts of the UK may feel discriminated against unless we proceed on the fundamental principle of democratic equality.
Sir Oliver Heald (North East Hertfordshire) (Con)
Will my hon. Friend give way?
Mr Raab
I will make some progress.
My hon. Friend the Member for St Albans (Mrs Main) made a powerful speech on the logic of devolution and the fact that devolution cannot be just a one-way street. The right hon. Member for Knowsley (Mr Howarth) made a strong case for the application of local democracy to the Liverpool area. We heard from the hon. Member for Argyll and Bute (Mr Reid), who made it clear that the Liberal Democrat manifesto to move from the Barnett formula to a needs-based formula has been superseded —that is the nicest way of putting it—by the post-referendum negotiations.
The hon. Member for Moray (Angus Robertson), the SNP leader at Westminster, made a very interesting speech. When we look at the principles, I am not sure that we see a huge difference between what we have each said. I join him in congratulating the new leader of the SNP on her appointment. I pay tribute to Alex Salmond for his leadership. In fact, I will go so far as to quote Alex Salmond who, on the eve of the referendum rally said:
“To our friends in the rest of the United Kingdom, I say this. We don’t seek division, but rather equality”
That is certainly the point of the sponsors of this motion.
My hon. Friend the Member for Salisbury (John Glen) made a typically cogent speech and talked about the importance of addressing the West Lothian question and financial fairness for his constituents, and also about the balance that we need to seek and retain across the UK—