Scotland Bill

Debate between Lord Forsyth of Drumlean and Lord Maclennan of Rogart

Wednesday 28th March 2012 Lords Chamber

[Lord Forsyth of Drumlean]

My Lords, I do not want to speak at length as I spoke about this in Committee, but I will make a couple of points. I agree with everything that my noble friend Lord Lang has said about this apart from one thing. I am not sure that I would have pressed for a needs-based system to replace Barnett. Indeed, the briefing I got from the Treasury officials was, “Whatever you do, do not agree to a needs-based assessment”. In those days, they said that it would cost us £2.5 billion off the block. Given the evidence we had in the Barnett committee—which, incidentally, was unanimous—we were lucky to have on the committee the noble Baroness, Lady Hollis, who understands the needs-basis system that is applied in local government in other parts of the public service.

If my noble friend Lord Steel is right, the Barnett formula will be replaced by a new one which will be called the cold Steel formula. That is because, if my noble friend has his way, there would have to be huge reductions in the Scottish budget. The idea that by 2016 Scotland can be responsible for raising all the income it spends would mean catastrophic reductions in expenditure or huge increases in tax. This is not alarmist: the figures are all there in the report; the work has been done by people such as Professor Bell at Stirling University.

For historical reasons, Scotland is probably funded to the extent of about £4.5 billion more than it would be on a needs basis. It is not sustainable to argue against the needs-based system for funding the Scottish Parliament when the Scottish Executive distribute the bulk of the money they receive to local government and the health boards using a needs-basis system of funding. The idea that this is somehow alien to Scotland is wrong.

We have a huge political problem in that the overfunding is probably of the order of £4.5 billion. My noble friend Lord Sassoon said earlier that the product of putting 10p on income tax in Scotland would raise about £4.5 billion. So we are talking about the equivalent of half the income from the basic rate and 10p of the income from the higher rates being the additional grant that Scotland enjoys over and above that which would be provided on a needs basis. This is why the amendment of the noble Lord, Lord Barnett, is so important and why, I regret to say, the report produced by this House under the excellent chairmanship of the noble Lord, Lord Richard, has not been implemented and why it needs to be implemented.

If we are going to make this change, it will need to be phased in over a long period. That was the key recommendation of the committee. We need consensus and agreement on this. It is no good this Government or another Government saying, “This is what needs to be done” because everyone will say that they have done it for political reasons. We need an independent and objective group of people to look at the issue and make recommendations, which we then need to implement over time.

It is particularly—I keep saying this—irresponsible to introduce a system of funding which relies on putting up tax while not dealing with the underlying problem. We are heading for a train crash. We will reach a position where the Scottish Parliament will say, “Well, you can raise income tax if you want to spend more”, while they find not only their baseline for income tax but the whole of the element of the block grant which relates to Barnett disappearing as the pressure for moving to a needs-based system of funding becomes impossible.

There is one element of the Calman commission which all the enthusiasts for its recommendations conveniently forget to notice; that is, the recommendation —my noble and learned friend Lord Wallace will remember it well—which acknowledges that this issue of funding will have to be addressed and that we will have to move, in time, to a formula based on needs. That is one of the points made in the Calman commission report. The noble Lord, Lord Barnett, is saying, “Look, accept this amendment and set up the commission. It will take two or three years to work out the methodology and to get agreement on it. Get consensus and then, if the noble Lord, Lord Steel, wants to get to a position where the Scottish Parliament raises all its own revenue, recognise that it will take 20 years if it is not to result in a huge gradient between Scotland and England and huge damage to our public services”.

Who is going to make capital out of that situation and who is going to get the blame? It will be meat and drink, even if Alex Salmond loses his referendum. If you have just won the referendum for the union but then whip away the money and introduce a tax-raising power that makes Scots pay more tax than others, do we really believe that will settle this constitutional question once and for all?

The noble Lord, Lord Barnett, took a large part of a year of my life when I sat on what was a very interesting and fascinating committee. In pressing this matter now, we should listen to this sage advice and not run away from it. The argument put forward by the Government that we cannot deal with Barnett because we are concentrating on budget deficit reduction is a non sequitur if ever there was one. What has dealing with the deficit got to do with putting in place arrangements for funding, not only for Scotland but Wales and Northern Ireland, that are fair to all?

That is the other aspect of this—Wales is suffering quite considerably as a result of the inequity of this formula. If we are to maintain the United Kingdom, which appears to be under great pressure and will be under even more severe pressure because of the economic circumstances in which we find ourselves, it is important that we have a baseline that is seen to be fair and cannot be challenged. There are arguments about marginal seats and all the rest but, broadly speaking, when we distribute money to local government, health and so on, we use a well trodden path of formulas based on need. The Barnett formula, if I may say so, was a fix that followed great anxiety about the SNP winning elections in Scotland. We have been going down this track of appeasing the nationalists in a haphazard and piecemeal way.

It is important, as the Government embark on the huge constitutional change that is contained in this Bill, that we understand the importance of the finance. When my noble friend Lord Steel says, “We will do this”, he is saying what many people in Scotland and endless editorials say—that we must have more powers for the Scottish Parliament. However, I do not think they have looked at the numbers. If you do an opinion poll and ask people whether they would like more powers for the Scottish Parliament, of course the overwhelming majority say yes. However, if you ask them whether they would like to see public services having less money, higher taxes in Scotland or a financial crisis in public services in Scotland, you get a very different answer. The noble Lord, Lord Barnett, in proposing this amendment, is giving us a pathway that, over the next 20 years, will avoid that kind of dysfunction and dislocation within the United Kingdom.

[Lord Maclennan of Rogart]

My Lords, I add my words in support of the general view expressed in this short debate that the time has come for the Government to make clear their attitude to Barnett. However, I do not agree with the proposed amendments, since they are insufficiently explicit about the process that would need to be established to implement the Richard report effectively and fairly. Amendments 30 and 31, which are grouped together, speak of assessing Scotland’s needs. However, if you are to implement the Richard report then you have to assess the needs of the whole of the United Kingdom. Setting up a commission to look solely at Scotland will not necessarily produce a proper outcome.

I would strongly recommend therefore that the Government come forward with their proposals and do not postpone until the Greek kalends grasping the important issue of fairness, which is exacerbating the bad feeling between the different nations of this country; and recognise that it will take some time to establish the fair basis for making these calculations. Consequently, I cannot support the amendments in the form in which they have been drafted, but none the less believe that, as a backdrop to the constitutional developments we are seeing, we need to know that the Government firmly intend to recognise the validity of the principles enunciated by the Richard report.

Scotland Bill

Debate between Lord Forsyth of Drumlean and Lord Maclennan of Rogart

Thursday 15th March 2012 Lords Chamber

[Lord Maclennan of Rogart]

My Lords, I thought that I was going to agree with the noble Lord, Lord Sewel, but I find that I take a third and different position from those advocated by the two noble Lords who preceded me. Like the noble Lord, Lord Foulkes of Cumnock, I am a federalist and I do not believe that federalism is to be identified with the unitary model that the noble Lord, Lord Sewel, recommended. However, we should look at different levels of taxation and at giving greater fiscal responsibility for the matters that have been devolved.

I hope, however, that we will not confuse the issue at this stage, before the federal option has been properly explored and ways of dividing tax-raising powers between the different levels of government adequately set out, so that people not only in Scotland but in Wales, Northern Ireland and England can grasp what this is about. We should include in our explanation details of the provision for the redistribution of the wealth of the United Kingdom to its constituent parts—not only to the four nations but to some of the regions of England, which seem to be doing rather badly out of the Barnett formula.

The timing of the referendum seems inappropriate. It turns not only on whether the earlier referendum gave the mandate to Parliament that the noble Lord, Lord Foulkes, has come round to thinking that it did. It seems to me that at the time—and I am basing my remarks entirely on memory—we were thinking about varying the rates of income tax and not about extending taxation. I was interested to listen to what the noble Lord, Lord Browne of Ladyton, said on that, and I dare say that he has done more historical research on the point than I have. It will be interesting to hear from the Minister, who I am sure will answer these questions, whether the noble Lord, Lord Browne, was right, and I hope that we can accept that there are more than two ways of imparting the responsibility for fiscal tax-raising. There is also a federal way. We should explore that, because it operates more fairly throughout the United Kingdom and will take care of the other countries, whose needs also need to be thought of in this context.

[Lord Forsyth of Drumlean]

My Lords, given the journey that we have embarked on, I suspect that the noble Lord may get his wish if we do not see the fragmentation of the United Kingdom. I have an abiding image in my head of the noble Lord, Lord Foulkes, sitting at 3 am in his underpants responding to these cybernats.

Fixed-term Parliaments Bill

Debate between Lord Forsyth of Drumlean and Lord Maclennan of Rogart

Tuesday 29th March 2011 Lords Chamber

[Lord Forsyth of Drumlean]

I stand corrected by my noble friend, who is very expert on these matters. However, a Motion that says, “This House has no confidence in Her Majesty's Government” is absolutely clear, and it would trigger an election. In the context of this Bill, with a fixed-term Parliament, it is going to change. I accept that, because the nature of the Parliament will have changed. But I would much prefer something clear-cut, simple and explicit. If you want to bring down the Government, you have to pass a Motion of no confidence. That is absolutely clear. If such a motion is passed, the Prime Minister has to go to the country.

I was going to sit down, but my noble friend has set me off again. To turn to a point made by the noble Lord, Lord Tyler, the idea that a Prime Minister should somehow be prevented from going to the country to get the consent of the people for what he is trying to do, to call a general election, is also a deeply worrying change to our constitutional pattern. But I sit at the feet of the noble Lord, Lord Norton of Louth, and I am perfectly prepared to alter my view and go along with this amendment, at least in part under his instruction, because it is a far better thing than Clause 2 as it stands.

I hope that my noble and learned friend Lord Wallace of Tankerness will accept the good advice that has been given him tonight and that at a later stage we will be able to discuss something that is more practical and workable and does not threaten the integrity of the office of Speaker of the House of Commons or the ability of the House to hold the Executive to account.

[Lord Maclennan of Rogart]

This debate has demonstrated the need for the Government to reconsider Clause 2. I am very grateful to all my noble friends and all those who have supported the amendment for raising the issue again and in a different context from the previous debates. The intention is to remove the opportunity for Governments to fiddle with arrangements in any way, and that is a desirable purpose. The amendment also seeks to clarify the circumstances in which a vote of no confidence is deemed to justify the holding of an election. However, although noble Lords have raised the debate, I do not think they have concluded it. There are defects in the drafting of Amendment 50 that need to be considered. No one has suggested that this is a perfect drafting, but I would like to suggest two or three points that could be considered when the Government come forward at a later stage.

The first point is that proposed new subsection (2) states:

“A vote of no confidence will have been deemed to have been passed if the House of Commons”,

does certain things, but those things do not appear to be an exclusive list. It would still allow other circumstances to occur that enabled it to be said after the event that there had been a vote of no confidence. The rubric of statutory interpretation that springs to my mind is the Latin tag, “inclusio unius est exclusio alterius”. That might be the answer to this if that were still the law and still the rule of statutory interpretation, but it is not sufficiently clearly the case to avoid the possibility of a further circumstance being deemed to have been a vote of no confidence.

It also seems to me that there has been a slight conflation between a vote of no confidence and the inevitability of a Government’s fall followed by an election. I listened to the noble Lord, Lord Norton of Louth, with great respect, as I always do, but it seems to me that, even if the Wardlaw-Milne Motion of no confidence had been carried—and of course it was not—it would have been perfectly understandable in wartime if that had led to the demise of the particular Prime Minister or a significant change of Government without any election being held. I think the constitution was sufficiently flexible at that time to make it likely that that would have been the outcome. What we are considering here is the circumstances that trigger an election, and I think that needs to be put beyond doubt. I do not believe, even in the case of the European Community Bill in 1972, that despite what the Prime Minister of the day said it would have inevitably resulted in an election. It seems to me that it might have led to the departure of the then Prime Minister. However, he could easily have been told that there were others who would have been prepared to take his place and preside over the parliamentary majority that existed.

If we want an escape clause—and clearly an escape clause is necessary, even with a fixed-term Parliament—in a constitution that is prime ministerial and not presidential, we must have the possibility of having a vote of no confidence. However, I think the better solution to that is the one proposed already by my noble friend Lord Tyler, which is that the Motion of no confidence should come from the leader of the Opposition. If the Government appear to the party in government itself to be in a shambolic condition, it does seem highly probable that a leader of the Opposition would seize the opportunity to declare that the House has no confidence in the Government. I hope that that is the line that will be taken by the Government in reconsidering this clause, but that the case for reconsidering it is strong I have no doubt. Clause 2 as it stands is ill defined and gives no certainty on what the circumstances are within that two-week period which could lead to the holding of a general election. Amendment 50 is a good stab at trying to clarify which issues need to be addressed. The debate tonight will have given my noble and learned friend Lord Wallace of Tankerness a lot to think about and to discuss further with his colleagues, as I believe is definitely necessary.

Parliamentary Voting System and Constituencies Bill

Debate between Lord Forsyth of Drumlean and Lord Maclennan of Rogart

Monday 24th January 2011 Lords Chamber

[Lord Maclennan of Rogart]

There is one MSP directly representing the area and there are list top-ups for the wider area of the highlands. That does not seem to me in any way to diminish the problem of those who are participating in national debates about United Kingdom issues whose contact with electors ought to be real, not remote. I believe that in matters of taxation, foreign policy, defence and energy policy and in matters directly affecting the prosperity of these areas, their voices should be heard and should be informed by their direct contact.

Although I do not regard the formula in the Bill as ideal, to extract it from the Bill would prejudice further consideration of what would be the better solution. I profoundly hope that we will arrive at a better solution before the Bill leaves this House.

[Lord Forsyth of Drumlean]

Will my noble friend develop that argument? Given that the Bill currently instructs the Boundary Commission to take account of geography and size, will he explain why removing this provision would meet the points that he eloquently expresses? If I may say so, as a Member of Parliament, he very ably represented that huge area of Caithness and Sutherland. It would be helpful if he could explain why he thinks removing this provision would be an impediment to reaching a solution that meets these requirements.

[Lord Maclennan of Rogart]

My understanding is that the Boundary Commission’s discretion to consider this would be removed by Amendment 71B. I think that would be a mistake. I hope that the Government have not set their position in concrete on this issue and will be prepared to return to it later.