Scotland: Independence Referendum

Lord Bourne of Aberystwyth Excerpts

Thursday 30th January 2014 Lords Chamber

[Lord Bourne of Aberystwyth (Con)]

My Lords, it is a great pleasure to follow the noble Lord, Lord Nickson, speaking with great authority on Scottish currency, and with perhaps unique impartiality, as his ancestors plundered on both sides of the border. It is a great pleasure to congratulate my noble friend Lord Lang on the securing of this debate. He showed quiet passion and devastating analytical skill in examining the question of Scottish independence. I will also look at the question of currency, but before doing so, I will say how good it was to hear from my noble friend Lady Goldie, who is not here at present, on the occasion of her maiden speech. I have known her for many years. She, of course, led the Scottish Conservatives in the Scottish Parliament while I led the Welsh Conservatives in the National Assembly for Wales. We often had the opportunity to compare notes, policies, horror stories and war wounds—metaphorically, of course. We often joined forces on devolution issues. I know, as she has demonstrated, that she will be a massive asset to your Lordships’ House. I can well understand why Holyrood is trying to hang on to her.

I want to focus on two quite separate issues. The first relates to the desire of the Scottish National Party, in the event of a yes vote for separation, to keep the pound sterling. The proposals of that cheeky chappy Alex Salmond are, of course, incredibly dangerous. It would be open to Scotland, on a strictly legal basis, to use the pound sterling as its currency without any negotiations with the rest of the United Kingdom, in much the same way as Panama uses the United States dollar or Montenegro uses the euro. This would not be a currency union but a decision to have no independent Scottish monetary policy. That would be a disaster for Scotland and it would not be good news for the rest of the United Kingdom either.

Therein, of course, lies the problem for a single currency, because it clearly needs a single monetary policy with a single banking regulation and an integrated fiscal policy. These issues are very much central to what the Governor of the Bank of England, Mark Carney, was setting out in his warning yesterday. It is inconceivable that the remaining United Kingdom—England, Wales and Northern Ireland—would not seek to exercise considerable influence over Scottish fiscal policy, to say the very least, before agreeing to a currency union. Indeed, in all honesty, what we have seen of currency unions in recent years should lead us not to want to touch such a project with a disinfected bargepole.

At the same time, the Scottish nationalists tell us that they want to be members of the European Union. It is very clear that they will have to formally apply to join and to satisfy the other 28 members of their credentials, which is unlikely. They will also have to negotiate an opt-out from an obligation to join the euro, which is virtually impossible. It can only be imagined what all this uncertainty will do to business and jobs north of the border: two sets of negotiations—one to join a currency and one not to join a currency—would be destined to fail. It is the Alex Salmond constitutional hokey-cokey, which would be funny if it were not so serious.

The second issue that I want to touch on has been mentioned by many noble Lords: the constitutional settlement in the light of a no vote, or even in the event of a yes vote. I passionately hope and trust that there is a vote for continuing a union which I fervently believe benefits us all in every part of the United Kingdom in every sense. If, God forbid, there were to be a yes vote, that would still apply. Many speakers, including my noble friend Lord Lang in his excellent introduction, spoke of the need for a new settlement—unionism that recognises the importance of the devolved arrangements in the United Kingdom. In the wake of the vote there will need to be a constitutional convention to look at the powers, not least the fiscal powers, of the constituent powers of the United Kingdom, and at the English dimension which, so far, is the dog that has barely barked on devolution issues. In the case of Wales, a draft Wales Bill is already being looked at, following the response of the Government to part 1 of the Silk report on fiscal powers. I declare an interest as a member of the Silk commission. Part 2 of the Silk report is due to be presented to Westminster in March and will deal with the appropriate place for decisions on other policy issues. That, too, will be relevant in any constitutional settlement. In short, the vote in Scotland is a watershed. I hope that following the vote—and a decisive no vote—there will be such a convention to work out a lasting constitutional settlement for all parts of our kingdom, not least for England.

Magna Carta in 1215 had Welsh and Scottish chapters. The Act of Union, some 500 years later, provided a lasting settlement. Now, some 300 years after, there has been a new settlement. I think that noble Lords will be able to see a clear trend of constitutional settlements. Such a lasting settlement can only be in the interests of all the nations of the United Kingdom.