European Union (Referendum) Bill

Debate between Lord Forsyth of Drumlean and Lord Kerr of Kinlochard

Friday 24th January 2014 Lords Chamber

[Lord Kerr of Kinlochard]

I entirely agree with the noble Lord. The point that I am trying to make is: because the renegotiation is envisaged to take place before the referendum, the date set for the referendum in 2017 cannot be right. It does not work.

[Lord Forsyth of Drumlean]

I am struggling with this argument because we are going to have a referendum in September on whether Scotland should remain part of the United Kingdom. The proposition then is that the referendum should be held before the negotiation. I did not think that the noble Lord had any difficulty with the idea of that referendum.

[Lord Kerr of Kinlochard]

It depends on where you are starting from. It is not an easy position, but if the position of the noble Lord, Lord Forsyth, is that he wants to get us out anyway and we should not bother with renegotiation, that is fine. Why not? However, the Conservative Party’s position, as clearly explained in the Prime Minister’s Bloomberg speech—in which, by the way, he was speaking explicitly as leader of the Conservative Party, not as Prime Minister—was that he hoped to renegotiate a different relationship with Europe, put it to a referendum and recommend that we stay in the European Union. I am just saying that that timetable does not work. It does not add up.

At Second Reading, a lot of noble Lords commented on the date. A lot of noble Lords made the point—better than I am making it—of the unwisdom of locking the negotiators’ feet in concrete and putting them under time pressure. That is not a wise idea. The noble Baroness, Lady Falkner of Margravine, said the date was arbitrarily picked out of the air. We have not been told in this debate why it has to be 2017, other than that was the date in the Bloomberg speech.

Electoral Registration and Administration Bill

Debate between Lord Forsyth of Drumlean and Lord Kerr of Kinlochard

Monday 14th January 2013 Lords Chamber

[Lord Kerr of Kinlochard]

My Lords, I was sorry not to be in the House on Tuesday when tributes were paid to the departing Leader. What was said was very well said, I wish I had been there to say something too.

When my name appeared on this amendment, I was summoned by the noble Lord, Lord Strathclyde, to explain myself. There was a little bit of the headmaster’s study about it, but it was done with his customary style and charm. I will explain to the House why my name is on this amendment in exactly the terms that I explained it to the noble Lord, Lord Strathclyde. It is for reasons that are to do with Scotland. I believe that the largest threat at the moment to the constitutional settlement in these islands is the secession referendum in Scotland next year. The First Minister of Scotland is an extremely skilful politician, and one needs to be very careful of being complacent about where the public opinion polls are. The Scots, who are extremely good at grievances, have in the boundary changes and the changes to the number of constituencies, a very real grievance. Unusually for the Scots, the grievance is real. The reduction in the number of constituencies in England will be 6%, in Scotland it will be 12%.

When we were debating the Parliamentary Voting System and Constituencies Act, I argued several times that we should take due account when we were considering the size of constituencies and the size of the franchise—the 5% either way—we should take account of peripherality and sparsity, the distance from London, the difficulty of the MP’s job, and the difficulty of getting round the constituency if it was an enormous one. I remind noble Lords that the coastline of Argyll is longer than the coastline of France. If we look at the results, we see that leaving aside the four island constituencies, the two Scottish island constituencies, and the two on the Isle of Wight, the average Scottish constituency fetches up considerably larger than the average English constituency. This seems to be a perverse reading of the principles of peripherality and sparsity.

I do not wish to see this proceeded with in advance of the secession referendum in Scotland. It would be perpetually argued in the campaign that the numbers show Westminster less and less willing to listen to Scottish concerns and that defending Scottish interests requires secession, something I profoundly disagree with.

I remind noble Lords that the suggested reduction to 52 seats in Scotland is on top of the reduction from 72 11 years ago. The number went down in 2005 to 59, now it is to go down again to 52. The reason it went down in 2005 is to do with devolution. Once we have dealt with the secession threat, once we have secured the right result on the referendum, we need to come to the West Lothian question, but I do not believe that any of us in this House believe that the right answer to the West Lothian question is to make it more and more difficult for Scottish Members of the United Kingdom Parliament to do their job. I think that most of us believe that the right answer is to have Scottish MPs not voting in the Westminster Parliament on matters where they would be voting only on English, Irish or Welsh law. If we succeed, I think that we will have a chance to come back to the question. That is the moment when we should consider how many Westminster seats there should be for Scotland.

Urged by the noble Lord, Lord Strathclyde, and because I have great respect for the clerks, I have considered very carefully the question of relevance. I admit that I have considerable difficulty with a definition of “relevance” which is so narrow and so far removed from what the outside world would understand. The subject matters of the Parliamentary Voting System and Constituencies Act and this Electoral Registration and Administration Bill are inextricably intertwined. The argument was explained most clearly in our earlier discussion in Committee by the noble Lord, Lord Elystan-Morgan. The intertwining is particularly close during the present transitional phase as regards registration. Every constituency in the land is changed by the PVSC and it seems quixotic to use data which are so out of date and will be so radically altered by the new registration arrangements. The matters clearly are closely connected. We see from the quotation from Erskine May circulated with the Leader’s letter that amendments relating to the purposes of the Bill, if it has only one or two purposes,

“or touching on matters closely connected with them”,

can be considered as relevant. I cannot conceive of anything more closely connected than the issues that we are talking about now.

Were we in the House of Commons, and were we being guided by Erskine May, there would be no question but that this was an admissible amendment to the Bill. After deep thought, I am encouraged to stick to my guns by the advice that we heard from the noble Baroness, Lady Boothroyd, when she told us of her experience in handling such tricky matters in the other place. I was heartened by what she said. She urged us to rise to our responsibilities. It is for us to decide; we cannot delegate that task to the clerks to decide for us. It is for us to make up our minds, and it is in that spirit that I maintain my support for the amendment and hope that the Committee will vote for it.

[Lord Forsyth of Drumlean]

My Lords, I was intrigued as to why the noble Lord had put his name to this amendment. I was particularly intrigued, because of his background as a very senior civil servant whom we all held in very high regard, as to why he would go against the principle, which has been upheld in this House, that we accept the advice of the clerks. The noble Lord is arguing is that, where the players on the field do not like the result, they should have a vote on whether they agree with the referee. The noble Lord prayed in aid the noble Baroness, Lady Boothroyd, for whom I have even more regard—indeed, I voted for her as Speaker in the House of Commons—but the position in the other place is completely different. They have a Speaker, and I say to the noble Lord that, if we go down this road, we may very well end up with such a situation in this House, which would be a very bad thing indeed.

However, it never occurred to me for a moment that the noble Lord would bring Scotland into the argument. He takes as his title, Lord Kerr of Kinlochard. Kinlochard is at the bottom of the loch by which I live; I look at Kinlochard. I have to tell the noble Lord that the people in Kinlochard are not beset with the question of how many Members of Parliament represent them. In fact, their view of Members of Parliament is probably best not repeated in this House. To argue that the nationalists will use the legislation to exploit opposition to the United Kingdom is utterly ridiculous. Alex Salmond wants there to be no Members in the House of Commons from Scotland and to argue that he is going to be concerned by a reduction in the number of Members is ridiculous. To be fair to the SNP, it has always accepted that in return for more powers—which they call devo-max—there should be a reduction in the number of MPs. This is a wholly spurious argument. If the noble Lord had said that he was supporting this amendment because he thought it would help the Labour Party to win the next election, I could have understood the argument, but I have to say that his argument cuts no ice with me at all.

What is the origin of this? How have we got into this mess? Why are we faced with this problem? The answer is that the Deputy Prime Minister is cross. He is cross that, despite repeated warnings, his Bill—which was not properly thought through—crashed on landing in the other place. He said something quite extraordinary the other day. Before he had even heard the Prime Minister’s speech which is to be made in Europe, he said that he was going to go to Europe in order to translate the Prime Minister’s speech on Europe from double-Dutch to Dutch. What we are seeing today is that the Deputy Prime Minister is capable of going from cross to double-cross, because that is what this is. It is a double-cross.

Scotland Bill

Debate between Lord Forsyth of Drumlean and Lord Kerr of Kinlochard

Tuesday 24th April 2012 Lords Chamber

[Lord Forsyth of Drumlean]

What about the amendment?

[Lord Kerr of Kinlochard]

I strongly endorse and echo what the noble Lord, Lord Steel of Aikwood, said in tribute to the Minister. His patience has been exemplary; he has had to exercise it a lot. I promise that I shall not test him very much this time.

I agree with the noble Lord, Lord Forsyth of Drumlean, about the Title of the Bill but for slightly different reasons. It is a bit of a ragbag Bill, as it includes Antarctica, speed limits and so on, and I think the miscellaneous provisions bit of his Title would have been quite appropriate. However, I do not press the point. I am more concerned that under the Title “Scotland Bill” one would expect to see the great issues dealt with. My feeling is that we have missed an opportunity to deal with the great issues. It seems to me that we have not, as the noble Lord, Lord Forsyth, said, addressed the real accountability deficit issue, particularly because the tax changes permitted in the Bill are so small, and although we have debated its merits and demerits, we have not addressed the problem of the Barnett formula at all. I have also discovered—I am sure everyone else knew this before—the extraordinary animal, the no detriment principle, which seems to reduce greatly the accountability of the Scottish Parliament.

If we are to have, as we probably will have, an option in the referendum for further devolution, it seems a great pity that we have not defined its parameters and its ground rules in the Bill, with a sunrise clause. I would have liked it to do that because I am Scottish and Scots like to know what things mean. I am sure that between now and the referendum date, there will be definitions of further devolution. I am sure that the position taken by the Prime Minister in his speech in Scotland—that there will be no definitions until after the Scots have said no to independence, and that further devolution will be on offer but will not be defined until later—is unsustainable. I hope it is unsustainable as I think it is a very dangerous position. It would lack credibility in Scotland—and does lack credibility. People do not know whether he means it.

There is a need to define what we mean by it. If the option means complete fiscal autonomy—and the Scottish consultation document suggests that this is in the mind of the Scottish Government—surely the ground rules need to be spelt out in advance. If we see Scotland as the Athens of the north—and of course it is—we need to take great care to ensure that we are not building in a relationship similar to that today between the other Athens and Berlin, Frankfurt and Brussels. How would we reconcile fiscal autonomy for Scotland with the continuing monetary integration of the United Kingdom? What changes would we need to make to arrangements in London? Would the composition of the Monetary Policy Committee of the Bank of England need to be changed to ensure that there was a voice on it responsible for representing the distinct interests of the Scottish economy?

Conversely, would there not need to be some ground rules constraining fiscal autonomy in Scotland that were similar to the failed stability and growth pact in the European Union that did not save the real Athens? These issues need examination and I am sorry that we have not done that during these debates. However, perhaps we are not the right people to do it. The debates in this House have been of a very high standard, but on the whole the participants have been advocates, principally of the status quo. Unfortunately we have not had among our number a single representative of the advocates for independence.

What we need for our own education and the education of the Scots before a referendum is not advocacy but analysis. Therefore, although I agree with most of the arguments made today by the noble Lord, Lord Steel of Aikwood, I do not think that the kind of continuing debate that he hopes will take place—he claimed that we had not heard the end of the story—will necessarily be very satisfactory. As he said, it will be conducted by the political parties, and there is a fair degree of cynicism out there about the parties. And to an extent it is justifiable, since the majority party up there favours not further devolution but independence, and down here there are strong voices, such as that of the noble Lord, Lord Forsyth, expressing concern about this degree of devolution, let alone any more.

Some of my arguments could also be applied to the independence option. How would fiscal autonomy work? What is the likely depletion rate from the North Sea? It is a function of the likely world oil and gas price. The political parties are not best placed to produce credible estimates of the range of possible prices of North Sea oil and gas five or 10 years ahead. What is the likely assumption about the price of electricity? If the Scots go ahead with their renewables programme, and if the coal-fired power stations are closed down after the nuclear ones, Scotland will presumably—I do not know; I am not an advocate—become an importer of electricity. What would be the price of that electricity?

In short, what are the economics of autonomy? What would the tax take have to be to make the books balance, assuming no Barnett formula? I do not think that the electorate will take an answer that comes from politicians. Quot homines tot sententiae. Politicians will not produce a single answer. I hope that the Minister will reflect on whether we do not need, as a complement and a supplement to the very useful debates that he has conducted so well on this Bill, to encourage an agreement between London and Edinburgh on the establishment of some kind of independent commission to look at fiscal autonomy, in both possible scenarios.

Scotland Bill

Debate between Lord Forsyth of Drumlean and Lord Kerr of Kinlochard

Wednesday 28th March 2012 Lords Chamber

[Lord Kerr of Kinlochard]

My Lords, I do not want to repeat what I said in Committee on this. Although I am sure there is much force in some of the points made by the noble Lord, Lord Lang, they are no doubt points that the Scottish Parliament would have in mind, were it minded to exercise the power that this clause would confer upon it. I do not agree with the noble Lord, Lord Forsyth of Drumlean, that there is some constitutional impropriety. I do not understand his constitutional argument.

The constitutional principle in regard to taxation is that those paying the tax—those on whom it will be levied—should have voted for it. I see no constitutional objection to the Scottish Parliament having the power to levy another tax, given that only Scots or people resident in Scotland will be paying it. As I said before, I see no difficulty about them having the power to vary an existing tax, for example the rate of VAT. I do not see a constitutional principle there. I referred in Committee to the example of differential sales taxes across the United States of America. There are many taxes that are different between states.

I conclude my remarks by saying that I see a lot of sense in the amendment we will come to in a moment, which suggests a procedure and safeguards that could be built into the system, which I could support. I also understand the economic arguments that the noble Lord, Lord Lang, advanced and it is very important that they should be in the minds of the Scottish Parliament when it chooses whether to exercise the power conferred on it here, but I cannot see the constitutional principle. I do not follow the ship money argument.

[Lord Forsyth of Drumlean]

It is very straightforward. We are talking about devolution here, not about establishing a federal system. As someone said, although I cannot remember who, power devolved is power retained. The ability to create a completely new tax—a window tax, or whatever—has to reside with the other place down the Corridor. Within our constitution, in order to create a new tax, you have to have a finance Bill. It used to have to be on the Floor of the House of Commons when it came to Committee, and there is a set of procedures that needs to be followed. It is completely different from devolving the power to set a rate of tax, which this Bill purports to do and is the commitment made in the manifesto.

My constitutional problem is that that ability of the House of Commons to discuss, through a long-standing procedure, the imposition of taxation is being undermined because all that it requires now is an Order in Council, which by convention cannot be voted on in this House and cannot be amended. That is no basis upon which to create new taxes on the people. It is the nature of the procedure that is the constitutional outrage as far as I am concerned, not the nature of giving the Scottish Parliament the ability to raise a particular tax.

Scotland Bill

Debate between Lord Forsyth of Drumlean and Lord Kerr of Kinlochard

Wednesday 21st March 2012 Lords Chamber

[Lord Forsyth of Drumlean]

My Lords, this is the amendment that I was speaking to previously. It is a device that provides for a referendum in England on Scottish income tax powers. I tabled the amendment in order to discuss the letter that my noble friend Lord Sassoon circulated, following our debate on the Bill on 15 March.

I suggest that the English should have a say on this because of the extraordinary revelation in Committee on the position of the Scottish Parliament if a change in taxation policy were to be introduced by the Chancellor of the Exchequer—as has happened today, for example, when he raised to just over £9,000 the allowance before people pay income tax. The no-detriment principle is not in the Bill but has, as I understand it, been agreed between the Government and the Scottish Government, or has been proposed as part of the arrangements. I see that in the Written Statement today concerning the negotiations on legislative consent—which we can debate at a later stage—those arrangements go even further.

The idea is that Scotland would benefit from the reduction in income tax that people paid as a result of the increase in allowances, but that England would send a cheque to compensate for the reduction in the tax revenues in addition. The argument for having the 10p tax is that it will affect only a small proportion—by the way, Ministers keep saying that it is 30 per cent; I think we were told today the precise figure by the Office for Budget Responsibility. Hitherto, the assumption has been that about £4.5 billion would be raised by the 10p rate of income tax and that if the Scottish Parliament wanted to spend more it could put that income tax up. The proposition that, because the 10p rate does not raise £4.5 billion any more because people in Scotland are paying less tax, people in England should have to pay more tax to send an addition to the Barnett formula-determined part of the block seems to me to drive a coach and horses through the whole argument of accountability.

If my amendment were accepted and the proposition was put to people in England by a referendum that the Scottish tax powers should operate in that way, I think that there would be an overwhelming rejection, because it is completely unfair and unworkable and will create great difficulty.

In his letter to me, which has been circulated to Members of the Committee, the noble Lord, Lord Sassoon, goes on to deal with another issue, which is benefits. If, as has happened today, the Chancellor raises the thresholds at which people pay tax, that means that there will be a change in their entitlement to benefit. There is a requirement here for changes in people’s eligibility for benefit and the effect that that has in Scotland to be compensated for by taxpayers in England. In his letter, my noble friend says that I should not be too worried about that because the costs are likely to be low. I hope that this letter will be put in the Library or in a form which people outside the House can access.

In the annexe to the letter, my noble friend sets out a little flowchart, which starts with the Scottish budget being £28 billion and Scottish income tax receipts being £4.8 billion. Then, the Scottish block is adjusted downwards by £4.8 billion to create headroom for the Scottish rate of income tax, which means that the Scottish budget is £28 billion, and the block grant is £23 billion because the Scottish income tax receipts would be £4.8 billion. The UK Government raise the personal allowance UK-wide, estimated by the OBR at £3.5 billion. The OBR forecast of the impact on Scottish income tax receipts is a reduction of £100 million. Therefore, receipts from the Scottish income tax are expected to be reduced to £4.7 billion. Therefore, the Treasury adds £100 million to the Scottish budget to offset the impact of what is called UK policy change and the outcome is that the Scottish Government’s budget remains the same.

This is “Heads you win, tails you win” economics. It is completely unfair. It is just reinstating the block grant. I am no advocate of this policy, but if the Government want to go down this track the sensible thing to do would be to give the Scottish Parliament control over the allowances and the rates. This is nonsense. It also applies to changes in the benefit position, because people’s entitlement to benefit will be altered by their net income. If the Scottish Parliament were to put up tax, which it will certainly have to do, and Scotland becomes the highest-taxed part of the United Kingdom, as it certainly will, that means that people’s entitlement to benefit will increase. The cost of that will fall on the English taxpayer. I raise this because, if my noble friend accepts my amendment, which is to give the people in England a referendum on this scheme, I do not think these proposals will stand the test of time. If, as I suspect, he will not accept my amendment, then I urge him to abandon this ridiculous no-detriment principle. The no-detriment principle is a no-accountability principle. It drives a coach and horses through the whole philosophy and thinking of the Bill. I have no idea where it came from. If he is going to maintain this no-detriment principle, then it ought to be written on the face of the Bill. It should not be the product of a quiet deal that no one knows anything about, which flies in the face of what was said in the manifestos of those parties that committed themselves to introducing the Calman proposals. I beg to move.

[Lord Kerr of Kinlochard]

My Lords, it is déjà vu all over again. I supported the noble Lord, Lord Forsyth, the last time he raised the matter. Although I do not agree with this amendment, I am very glad he has moved it, because it enables us to discuss it again. I had not understood the no-detriment principle. It was painstakingly explained to me by the Minister and the noble Lord, Lord Sassoon. I have not been favoured with the letter of the noble Lord, Lord Sassoon, so forgive me if I am behind with the debate. As it was explained, it is indeed exactly as the noble Lord, Lord Forsyth, says. However, look at it the other way round. It would be paradoxical if the basic tranche of income tax, before the Scottish tax is added in on top, was reduced. The Scots would receive a cheque from the United Kingdom Exchequer. That seems to be very odd. However it is politically even odder, and possibly unsustainable, if it is the other way around. Supposing Chancellor Balls had decided that we needed a higher level of spending, and therefore a higher level of taxation. The Scots would have to send a cheque and they would have paid the higher level of taxation, so would have had less to devote to the higher spending which the proceeds of the tax would have brought in. I do not understand this no-detriment principle.

I draw from that unsatisfactory example exactly the opposite conclusion from the one the noble Lord, Lord Forsyth, draws. I go with the noble Lord, Lord Steel of Aikwood. It seems that we need more but I apologise to the noble Lord, Lord Forsyth, as he was saying much the same today. The trouble with this Bill is that it is a Sir Clive Bossom Bill. Sir Clive Bossom calls on the leader of his party, then the leader of the Opposition, when he joins the House of Commons. The only sentence he gets out of Mr Churchill is, “Bossom, eh? Neither one thing nor the other”. That is what is wrong with this Bill. It is not actually devolving real accountable taxing authority to the Scots. It is still the block grant system with a little add-on which is presentational rather than substantive. I would much rather see a genuine devolution of taxing power. I would start with indirect taxes. Then you will not have any of the problems of defining who the taxpayer is, residence and so on. I would start at that end. I would concede from this Parliament to the Parliament in Edinburgh much greater power in order to deal with the real deficit, which is the accountability deficit. I accept that as a consequence of that, one would have to have a rather strict control on the macroeconomic effect of a degree of fiscal autonomy, so that we did not see a repetition of what we see in continental Europe right now. I accept that that follows.

However, it would be better to get into that area than to pretend to do devolution of taxation and end up with this rather miserable little measure. I understand its logic; I used to work in the Treasury. It is the logic of the Treasury office of accounts. It is the logic of the public expenditure side of the Treasury. It is a book-keeping logic. However, if you think of its economic effect—if you think of it in economic terms—it is absurd.

Scotland Bill

Debate between Lord Forsyth of Drumlean and Lord Kerr of Kinlochard

Thursday 15th March 2012 Lords Chamber

[Lord Kerr of Kinlochard]

The noble Lord, Lord Forsyth, has drawn attention to a point of principle here. Creating special categories is, by definition, undesirable. It is probably the case that every single person who meets the three categories listed here would qualify as having a close connection under the other tests of what a close connection is. It is very unlikely that any of them would not meet the test of residence and the number of days resident, so why create this special category? I cannot see a practical argument for it but I see an argument of principle against it.

[Lord Forsyth of Drumlean]

My Lords, I do not think the Minister made the case for having this in the Bill when he was trying to give an example of someone who might be caught, notwithstanding the reminiscences of former Liberal MPs for Scotland, or whichever party they were from. This does not exist nowadays. If you were an elected Member and there was an idea that you were avoiding Scottish income tax, the practicalities would be death and destruction. The measure is completely unnecessary. As the noble Lord, Lord Kerr of Kinlochard, who was advertised on the annunciator as the noble Lord, Lord Norton of Louth—I say this in case Hansard gets it wrong—said, this is a bad principle.

On the earlier amendment, I referred to there being a real injustice in respect of the armed services and I was arguing for a specific provision for them. My noble friend responded by saying, “We think that the existing tests cover it and therefore I am not going to do it”. I cannot reconcile these two competing bits of logic. If his position is that the criteria provide a clear view as to whether or not you are caught, why single out Members of Parliaments? I suspect its origins can be found back in the debates about the impact of a Scottish income tax and whether Scottish MPs would be caught, and that has been written into the Bill.

The provision is completely unnecessary and I hope that my noble friend will think about taking it out. Apart from anything else, it would reduce the number of column inches of legislation which a Government committed to it would produce. I beg leave to withdraw the amendment.

--- Later in debate ---

[Lord Kerr of Kinlochard]

My position is diametrically opposed to that of the noble Lord, Lord Forsyth, on the general power. I agree with him that it would be good not to have the accountability element so heavily dependent simply on the extra tranche of income tax. However, it is up to the Scots to decide how or if they wish to move further, and on which taxes. The general power seems wholly reasonable, and for us to pick and choose air passengers or whatever seems a rather bad idea.

Mine is not a complete laissez-faire position. As I said in my debate with the noble Lord, Lord Sewel, on a previous day in Committee, a counterpart to a general power is a mechanism for neutralising the macroeconomic effect. You would be very rash to start to recreate the situation that we have seen in the eurozone with Greece and Germany. That is why I am very nervous about having devo-max or devo-plus, unless and until the monetary or borrowing consequences of greater fiscal autonomy are spelt out. When we come to the borrowing bit of the Bill, I will have something to say.

I do not know what the right rate is for air passenger duty, and I consider it irrelevant to the debate on the Bill. I doubt very much that Mr Salmond, with his green credentials, would follow the noble Lord, Lord Forsyth, in thinking that a lower rate would be the right one. There are many taxes other than this one that he might prefer to lower. But it is up to them, following the procedure that would require consultation with us. The lead should come from them.

[Lord Forsyth of Drumlean]

The noble Lord says that it is up to them. They want this power and Calman recommended it, and it is not in the Bill because the Government have not included it, even though they have been telling us that the Bill will implement the Calman recommendations. The legislative consent Motion that was considered by the committee of the Scottish Parliament specifically requests that it should be a condition of Scottish consent to the Bill that the air passenger tax should be included.

[Lord Kerr of Kinlochard]

As always, the noble Lord, Lord Forsyth, follows precisely the recommendations of the Scottish Parliament committee.

Scotland Bill

Debate between Lord Forsyth of Drumlean and Lord Kerr of Kinlochard

Tuesday 28th February 2012 Lords Chamber

[Lord Forsyth of Drumlean]

Perhaps the noble Lord would care to read the Scottish nationalists’ manifesto.

[Lord Kerr of Kinlochard]

Yes, but the innuendo today was that they must not be allowed to talk to foreign Governments because they would try to persuade them in some way to leave NATO. That is a big jump. Of course it is in the Scottish National Party manifesto; we have all read it. However, again in this debate, I have been worried by the splendid attack of the noble Lord, Lord Foulkes. He said that he is up for the fight. It is easy to have this kind of fight when the opponent is not in the ring. We ought to be careful about insulting somebody who is not here. I am happy to be insulted because I am here. However, the fight should be conducted out there on the hustings. Here, we should try to avoid insult and innuendo.

[Lord Kerr of Kinlochard]

It may well be true that it is their choice. If so, it is a great mistake. I hope it is the view of all in this House that it would be very good if they were here. While they are not here, we should try to avoid insult. It does not do us any good when our debates are reported in Scotland.

[Lord Forsyth of Drumlean]

I did not say anything that was insulting, and I do not do innuendo. I am quite direct. I said that the First Minister should not use his position to make the case against Britain being in NATO. There is nothing insulting about that. Nor is it an innuendo. Equally, the First Minister, who is paid from my taxes, should not go around the world arguing against our nuclear deterrent. He should concentrate on his duties as First Minister. There is nothing insulting about that, and there is no innuendo.

[Lord Kerr of Kinlochard]

I am sorry but I am not aware that the First Minister is going around the world arguing that people should leave NATO or that Britain should leave NATO. I am sure that he is saying that, if elected, he would choose to leave NATO. The innuendo is the implication that he is undercutting the policy of the British Government policy by saying that Britain should leave NATO. I do not think that he is doing that. I do not know what he is doing; he does not have somebody here to tell us, which is a pity.

I intervened on the amendment to ask the Minister whether there has been any proposal from the Scottish National Party for the inclusion in the Scotland Bill at this point—because Clause 27 is where it would fit—of a provision that would clarify or increase the role that it should play in EU negotiations, in the delegation that comes from these islands or in the preparation of the positions that the delegation will advance. I ask that because I do not know the answer. Last summer, as I recall, the Scottish Government indicated that they wanted something of the sort. I do not know what they want. I would like to see the proposal, if it is around. Are the Government sitting on a suggestion from Edinburgh that has not found its place in the Bill because they did not agree with it? If the Scots came forward with something at this stage, would the Government insert a clause in the Bill?

It is worth addressing the question of whether, as you give a bit more devolution, you should give a larger role in the preparation of a position for certain councils. I do not know whether that would extend to the presence of a representative such as a Minister from the Scottish Government in the ministerial team. I remember days when that was the case. When we first joined the EU in the 1970s, we were always represented in the Fisheries Council by a Minister from the Ministry of Agriculture, Fisheries and Food, and by a Minister from the Scottish Office, operating in tandem. I will not comment on whether that was a good arrangement. The noble Lord, Lord Williamson, will have a better memory of it than I.

The German Länder are represented in the back row of many councils that deal with domestic affairs; they do not have a speaking part. I would not recommend that anybody look at Belgium, but if we do, we see that in many councils the Walloon and Flemish Ministers attend alternate meetings. That is ideal for those negotiating from a different point of view from that of the Belgian Government, because it means that the Minister never knows what happened in the previous council and it is possible to score some runs at his expense.

When devolution happened, a concordat was prepared in London and negotiated with Edinburgh that laid down detailed rules on what kind of issues the Scots should be consulted on in full. I do not know how well that has worked; I have been away. If it is not working well, it could be looked at again; there is no issue of principle there. As we devolve a little more, maybe we ought to devolve a slightly bigger role in the preparation of such things.

These are my questions for the Minister. Has anybody asked? Has anybody specified what is wanted? What would the Government’s attitude be?

--- Later in debate ---

[Lord Kerr of Kinlochard]

If the deficit is not important to the argument made by the noble Lord, Lord Sewel, what is the answer to mine? It is perfectly possible for the Scots, and reasonable, to decide the form in which they should be taxed.

[Lord Forsyth of Drumlean]

Perhaps I could help the noble Lord by asking him a question. If his position is that the Scottish Parliament should be free to invent any tax and raise it at any level as part of the devolved settlement, why do we need to bother with having both Houses of Parliament approving it?

[Lord Kerr of Kinlochard]

I agree that the Bill proposes a very eccentric procedure. I was going to go on to say that, first, on practical grounds, I would hope that no one would set up differential tax systems inside the United Kingdom. Secondly, I would not disagree with the argument of the noble Lord, Lord Forsyth, against the particular procedure for vestigial approval which is laid down here. My argument is on the point of principle of the noble Lord, Lord Sewel. Those who should be in the lead on the forms of taxation in Scotland should be the Scots; that seems to me to be clear.

I am disappointed with this bit of the Bill—

[Lord Kerr of Kinlochard]

Yes, that is reasonable. We certainly agree on the macro point. We disagree on whether there is a point of principle about forms of taxation. I would like to pick up on the other point made by the noble Lord, Lord Steel, about the Prime Minister's speech in Edinburgh. Here, I disagree with the noble Lord, who says that we should proceed to have the referendum as soon as possible, which would give us a couple of years to work out what devo-max means. I do not know why we do not put into this Bill what we think devo-max means, with a sunset clause. I follow the argument that the referendum should have only one question but there is a genuine problem in that the Sir Alec point made by the noble Lord, Lord Steel, certainly applies in Scotland. People up there do not really believe that the London Government intend, once one has had the referendum and if its answer is no to independence, to confer a further substantial degree of devolution.

[Lord Forsyth of Drumlean]

My Lords—

[Lord Kerr of Kinlochard]

May I finish my argument? That is not widely believed up there. One could set out the definition that this Parliament believes would be right for further devolution. I do not expect the noble Lord, Lord Forsyth, to agree with me because he does not want any more, but the Government indicated that there would be consideration after the referendum of a further degree of devolution—your Prime Minister said it. I understand why that will not happen unless the referendum says no to independence—that is obvious—but I cannot see why one cannot specify that now.

[Lord Forsyth of Drumlean]

Perhaps the noble Lord can help me. He is quite right: I think this is a dreadful Bill which was introduced for political reasons, and that the best thing we could do with it is bin it—drop the whole thing and get on with the referendum. That is my position. However, it is a minority position, and we have the Bill and we are considering it. We are considering a clause on which the noble Lord, Lord Sewel, who after all was the midwife of the Scotland Act and believes in all this stuff, and I are agreed that it is a huge transfer of power. To me, that is devo-max.

I have no idea what the Prime Minister was thinking of when he said that there would be more devolution after it had been decided that Scotland would remain in the United Kingdom. I cannot think of anything that could be added that is not already in this Bill. This clause which we are considering, for example, provides enormous scope to introduce new taxes, so I would say that this is devo-max. The noble Lord is absolutely right that the people of Scotland do not know about it, because nobody is actually reporting it. We are all debating something that is already here in this Bill, and which was actually delivered by the previous Labour Government—with the support of my party, which I must say was very foolish. Having said that, what does the noble Lord, Lord Kerr, mean when he says that we should have something added? What would he add to this Bill that would be devo-max? Can he tell me?

[Lord Kerr of Kinlochard]

That is a very fair challenge and I have no complete answer. In respect of taxation, I would argue that devo-max should be precisely what the noble Lord, Lord Sewel, does not want: that the Edinburgh Parliament should be entitled to decide on the forms of taxation. There would need to be the macroeconomic control, which he and I would need to discuss, but the forms of taxation within a given tax take—or rather within a given deficit control, because that is where the control would be—seems to be something which should be devolved in principle. I have made my point and I do not see the point of principle here. I would argue that the difficulty with devo-max is: who is going to specify it? I cannot see Mr Salmond's interest in specifying devo-max, because he wants independence—

Scotland Bill

Debate between Lord Forsyth of Drumlean and Lord Kerr of Kinlochard

Thursday 26th January 2012 Lords Chamber

[Lord Kerr of Kinlochard]

It is a question that could be raised again, given that we have a legislative workload on Scotland and that we would benefit from hearing the views of the Scottish National Party.

I have an additional point, and here I agree very strongly with what the noble Lord, Lord Wigley, said. I do not want to see the balkanisation of Britain. The first casualty, though, could be the language of constitutional debate. We really should not be using language like “rigged” or “fixed”. If there was someone here to answer and hit back at us in this debate, it would be bold and brave to use such language; it is not bold and brave to use it when there is nobody here to speak for the side that one is attacking. To accuse someone who is not represented here of being devious seems very unwise. We have very serious constitutional questions to address. I am a unionist. It is very important for the future and the health of the union that we address these questions in sober, polite and reasonable parliamentary language.

[Lord Forsyth of Drumlean]

Could I ask the noble Lord about the interesting argument that he is developing about the importance of having people from the Scottish nationalists in this House? Would he apply that to UKIP? When he talks about language, I recall that the noble Lord referred to Members on this side, who are rather more sceptical about Europe than he is, as the Tea Party. Was that an appropriate use of language?

[Lord Kerr of Kinlochard]

I am delighted that the noble Lord remembers—I thought it was one of my most polished impromptus and that it had fallen by the wayside. I have no views on and nothing to say about UKIP. We are talking about Scotland and the party that won a landslide election victory last year and should be represented in this House.