Scotland Bill

Debate between Lord Forsyth of Drumlean and Lord McCluskey

Wednesday 24th February 2016 Lords Chamber

[Lord Forsyth of Drumlean]

My Lords, I would like to speak briefly to my Amendment 11, which would delete the words,

“without the consent of the Scottish Parliament”.

The noble and learned Lord, Lord Hope of Craighead, has, in Amendment 7, tabled an amendment which I think came from the Scottish Government. I have to say that I do not particularly like that amendment, which is supported by my noble friend Lord Norton of Louth, because what it sets out is what has actually happened by grandmother’s footsteps over the years, as the noble Lord has just pointed out.

The original basis of the Sewel convention was as a kind of courtesy. It was a convention that we would not normally do something without telling, asking or consulting the Scottish Parliament first. However, it has been turned into a veto for the Scottish Parliament on legislation that affects devolved matters. That is a huge change from what was intended at the time of the passage of the original Scotland Bill in 1998. I am clinging to the past with my amendment. I thought that the convention had gradually been changed into something far greater and therefore my amendment seeks to take out,

“without the consent of the Scottish Parliament”.

I also support the amendment in the name of my noble friend Lord Cormack, which would leave out “normally”. I know that the Minister is a very successful advocate and a very important Scottish lawyer but perhaps I may give him a little bit of advice based on my experience as Secretary of State. When the noble and learned Lord, Lord Hope of Craighead, was the Lord President of the Court of Session and the noble and learned Lord, Lord McCluskey, had a distinguished career as a Scottish judge, both of them gave me quite a hammering on occasion. I discovered that if I got into a fight with them, I usually lost. I am not a lawyer but it seems as clear as night follows day that the word “normally” is going to be a problem. We had a long debate about this in Committee and I cannot for the life of me understand why the Minister has not brought forward amendments to deal with it.

[Lord McCluskey]

Has the noble Lord thought of suggesting to the Minister that perhaps he could take an informal word from the noble and learned Lord, Lord Mackay of Clashfern, who also had a rather distinguished career in the law?

[Lord Forsyth of Drumlean]

Indeed, and there is another voice in support of the amendment tabled in the name of my noble friend Lord Cormack and supported by the noble and learned Lord, Lord McCluskey. It is incomprehensible why the word “normally” should be included.

The noble Lord, Lord Stephen, is quite right. What was the Sewel convention has changed into something else. It is a veto, and that is almost certainly what the Smith commission was thinking of. The noble Lord is absolutely right about that. Amendment 7, moved by the noble and learned Lord, Lord Hope, would in effect give legislative effect to what has come to be the practice. Putting into statute what Lord Sewel, back in 1998, said by way of explanation of how the relationship between the two Parliaments would operate is a complete nonsense—a point made over and over again in Committee.

I am hoping to cast a fly here and catch those on the Opposition Front Bench. The great mantra that we have had from them over and over again is that we absolutely have to be true to the Smith commission and make sure that its recommendations are implemented. Amendment 7 would provide for that. So are the Opposition Front Bench going to speak against an amendment whose effect would be to deliver the Smith commission proposals—something that the noble Lord, Lord McAvoy, said he would never do? I look forward to hearing the response from that Bench. It is clear that Amendment 7 would deliver what the Smith commission is proposing. I do not like it because I would prefer this Parliament to be free to pass legislation, consulting the Scottish Parliament in a courteous way but not giving it a veto, which is what I think the Smith commission was seeking to do. I am utterly opposed to leaving in the Bill the word “normally”, which would almost certainly result in the courts being dragged into a dispute between this Parliament and the Scottish Parliament, and that would be thoroughly undesirable.

For all those reasons, I think I am inclined not to press my Amendment 11 when the time comes, but to switch sides and support the noble and learned Lord, Lord Hope of Craighead, and my noble friend Lord Norton of Louth—who is undoubtedly constitutionally correct—and to support my noble friend Lord Cormack in taking out this word “normally”. There are two words that I would like to take out of the Bill: one is “normally”, and the other is “Sewel”. I tried to do that in Committee and actually got past the clerks an amendment which deleted “Sewel”; but unfortunately, due to the intervention of noble Lords opposite, who argued that it was not really terribly good to alter the name of a clause in that way, I was not able to press it again at this stage in the consideration of the Bill. I think it was the noble Lord, Lord Stephen, who was responsible for that.

I say to my noble friend that the great advantage of accepting Amendment 7 is that we would get rid of “normally” and we would get rid of “Sewel”; and we would have something that is absolutely clear in statute and delivers the Smith commission proposals—which, we keep being told, is what this Bill is all about.

Scotland Bill

Debate between Lord Forsyth of Drumlean and Lord McCluskey

Monday 22nd February 2016 Lords Chamber

[Lord McCluskey (CB)]

My Lords, I shall speak to Amendments 79F and 79G. I have in my hands substantial notes. They were designed to enable me to present an elegant speech full of witticisms, insights and—though I did not realise I needed the permission of the noble Lord, Lord Forsyth—even some political comments. I took part in 1978, from the Front Bench, then occupied by a Government of a different hue, in the first Scotland Bill. I have had a long and lasting interest in these matters. Since I prepared this speech on 13 January much has happened. The field which I hoped to plough has become a dustbowl—so many people have walked through it, including in these debates today.

I shall try to keep my comments short, in light of the well-developed arguments, but clearly the fiscal framework has not been resolved. People have alleged that that is because of the complications. I do not believe that for one second. The civil servants involved are highly skilled and competent and have resolved all the complications. The difficulty is that there is a chasm between the UK Government and the Scottish Government in relation to a simple matter: how much? How much is the UK taxpayer going to have to provide to win the approval of the Scottish Government and, secondarily—the point raised by the noble Lord, Lord Kerr—in relation to borrowing powers? That is also very important.

As has been pointed out, the Smith commission report recorded that the representatives of five Scottish Holyrood parties had agreed the devolution of certain powers. Very well. It also said, at paragraph 95:

“Barnett Formula: the block grant from the UK Government to Scotland will continue to be determined via the operation of the Barnett Formula”.

That is not entirely surprising, considering the make-up of the Smith commission. Turkeys do not vote for Christmas. The members were voting for a continuation of the Barnett formula. The report also contained what was plainly a compromise, namely the so-called no-detriment principle in two manifestations, the first of which is vaguely comprehensible and the second of which is certainly not.

The Scottish representatives on the commission—and they were all Scots—were voting in favour because the Barnett formula was plainly very favourable to Scotland and everyone was afraid of the needs test. In fact, noble Lords who have read John Swinney’s evidence to the committee of this House on the Barnett formula in 2009 will know that that committee tried to pin him down on that. He would not answer, but simply kept repeating, “We want full fiscal autonomy”.

[Lord Forsyth of Drumlean]

Till he found out what it meant.

[Lord McCluskey]

Yes—that was, of course, part of the purpose of the article I wrote for the Herald, which the noble Lord, Lord McFall, was good enough to refer to.

Plainly, the Scottish Government were perfectly entitled to try to secure the most favourable deal they could. It was they who created this timetable that we are being asked to stick to. The timetable was to enable them to go to the electorate in May and present themselves as having achieved a great victory. They created the timetable and we are all supposed to bow to it. I just wonder about that. In relation to the rush to get it through, it also puzzles me that John Swinney is so anxious to get his hands on extra tax powers because, when the Labour Party in Scotland proposed an extra penny on income tax, he replied, “Over my dead body”. Now, we would not wish any harm to the Deputy First Minister, but he has obviously no intention of exercising these tax powers, so what is the rush? It is all to do with the electoral process of the Scottish Government.

Even the devolution of a minor thing, such as the introduction of air passenger duty, could turn out to be worth nothing because, as was pointed out very widely at an earlier stage of the passage of the Bill, Newcastle Airport is going to suffer considerable detriment if all the Scots in the north of England flock to Prestwick, Glasgow, Edinburgh or even further north to take advantage of reduced prices. They are going to suffer a detriment and that detriment is going to have to be met by whom? By the Scottish taxpayer. In other words, the Scottish taxpayer is going to have to find the money to send to Newcastle that has been saved by whom? By the airlines. It is bizarre. The whole thing is slightly mad.

--- Later in debate ---

[Lord Forsyth of Drumlean]

My Lords, I wish to speak briefly to my Amendment 79H, which I hope provides a way out for my noble friend on the discussions which we have had this afternoon, in so far as it suggests that the Bill, when enacted, should not commence until we have had the fiscal framework laid before both Houses of Parliament and there has been an opportunity to debate it. If I were the Minister, I would grab that because the prospect of moving another amendment proposing that we should not proceed to Report but should reconvene the Committee stage on Wednesday is something that I do not relish, as I am sure he does not either. However, if we get the fiscal framework tomorrow, there will be an opportunity for us to discuss it and therefore there will no need for this amendment. I very much hope that we will have it.

When I was Secretary of State and the noble and learned Lord, Lord McCluskey, was a very distinguished judge, he gave me a bit of a hard time on the reforms which we planned for the criminal law, which I am delighted to say the Labour Party subsequently implemented when it was in power in the Scottish Parliament. He said that I chided him about getting involved in politics—however, I would encourage him to get involved in politics. He has made a brilliant case for why we need clarity on the fiscal framework. I am prepared to support all the amendments that have been suggested because I have no idea what the Government’s position is on what the fiscal framework will be. As regards the proposal to have no detriment, it is the only time in 30 years in Parliament that I have seen witnesses reduced to laughter in giving evidence when they tried to explain what the no detriment principle actually means. Ministers cannot tell us what it means. The noble Lord, Lord Smith, cannot tell us what it means. My noble friend Lady Goldie was on the Smith commission. Perhaps she could tell us what she thinks the no detriment principle means. Without having the fiscal framework and without having a definition of that no detriment principle, it is meaningless.

However, my right honourable friend the Secretary of State for Scotland hit the nail on the head when he said that the Scottish Government want to have their cake and eat it. Perhaps that is what the no-detriment principle means. Perhaps during the recess, instead of negotiating and getting agreement in time for us to discuss it, they have all been off to see Mary Berry so that they can produce more than one cake. The difficulty is that you cannot produce more than one cake. When we were in government a long time ago and, faced with an onslaught from the Labour Party, we struggled to find a way of making devolution work, I had two problems. The first was that I could not solve the West Lothian question. I could not find a way of doing English votes for English laws that would not threaten the union and create all kinds of problems about voting on income tax and the Barnett formula. My second problem was that my officials said that if we were to create a Scottish Parliament and give it these powers, it would have to be responsible for raising its own money. That would mean it would have to be funded on a fair basis, compared to the rest of the United Kingdom, which would mean having a means-based system of funding of the same kind that we use to distribute money to local government, the health service and so on. That would mean the Secretary of State’s budget being cut by £4.5 billion.

We were pretty unpopular in Scotland, thanks to the efforts of the Labour Party, which presented us as anglicising Scottish education et cetera—but we will not go there. I thought that coming up with proposals which gave Scotland the ability to pass its own laws and raise its own revenue, but which would result in a reduction in the budget of 25% or so—£4.5 million—would not be particularly popular. I think the Smith commission and others have played around with ideas which seem politically attractive but they have not actually done their homework on the impact these would have. Amidst the language of fiscal frameworks and everything else, it is all very simple: the tax base in Scotland is slightly lower than that in England. Therefore, if you are going to raise your money from the tax base in Scotland you are going to have less to spend. The Barnett formula provides 20% more per head for Scotland than England. It was 25% in my day, but there has been some narrowing. If you take a grant that is 20% higher and replace it with a tax which is 20% lower, there will be a gap. It has suddenly dawned on the Scottish nationalists that their proposal will actually result in less money for services.

It has also dawned on the nationalists that if you give welfare services and the like to Scotland, they have to administer them. They are demanding £600 million to administer welfare services. My goodness, the Labour Party wants to get rid of the bedroom tax; so do the nationalists. There are all kinds of welfare benefits that people would like to see improved. The plan is to spend £600 million on administration, instead of on the benefits. That is crazy, and for what? So that we can say that it is misery made in Scotland because we are spending it on civil servants and a bureaucracy. That is what is being proposed here.

[Lord McCluskey]

I hope the noble Lord, Lord Forsyth, will forgive me for interrupting him. It sometimes happens the other way round. Does he appreciate that the £600 million is more than twice the amount that the Scottish Government indicated, in the White Paper, as the cost of running the whole of Scotland after independence on 24 March 2016?

[Lord Forsyth of Drumlean]

I do love the noble and learned Lord, Lord McCluskey, as a politician making these penetrating points. He is absolutely right; it is real. I am relying on what I read in the newspapers, but that is what they are asking for welfare, behind closed doors. They would rather spend the money on superannuated civil servants, just for the sake of saying, “This is being done in Scotland”. The money is the issue.

By the way, why is the Secretary of State not doing these negotiations? I was going to ring him up last week to talk to him and he was in Africa on Friday while these negotiations were going on. They are being run by the Treasury. If you are in a spending department like Scotland, the very last thing you want is the Treasury running your negotiations. Unusually, the Treasury appears to be being very generous. It is suggesting that the Barnett formula, which gives Scotland 10% of any increase in expenditure in England, should be extended to income tax and that Scotland should get, as of right, 10% of any increase of income tax that is raised in England. How is that going to go down in England? While the Scottish nationalist Government—who want to put up the top rates of tax—force all these top-rate taxpayers to move south and reduce the size of the tax base, the English are expected to send them a cheque to compensate them for the loss of revenue resulting from people moving out of Scotland. They run the benefit system for the disabled and unemployed. If they fail to get people back into jobs or to provide the support, England has to pick up the cost because those benefits are based on performance. No wonder they cannot reach agreement on no detriment or a fiscal framework. This is an argument about having a cake and eating it.

As the noble and learned Lord pointed out, if it agrees the fiscal framework, the SNP is now faced with the horrible prospect of going into a Scottish election and saying either, “We are going to have a bit more independence but we are going to have to make cuts in public services and put up taxes”, or, “We could not get these terrible people at Westminster to give Scotland a fair deal”. The truth is that there were years of lies when people said that Scotland got a bad deal out of the union and that the Barnett formula was unfair: those same critics now cling to that formula like a life-raft. All those people said that Scotland would be better off if it had more powers. By the way, that is not everyone in the Labour Party or elsewhere. All those people turned a deaf ear when people like Gordon Brown and the noble Lord, Lord Darling, who is in his place, warned that if you move to a system which is completely dependent on income tax—an idea which was, incidentally, produced by the Tories to overstep the Labour Party and the Liberals, but was not thought through—you create a situation where you are dependent on a lower tax base and there is no real electoral connection with defence and other UK-based expenditure. Throw in English votes for English laws and you are damaging the United Kingdom.

The fiscal framework, and how it is agreed, is central to whether or not we get a glue, a cement—a fair and balanced system. That is why the Bill should not become an Act and come into force until both Houses have had an opportunity to discuss it openly and fairly, with people in Scotland—who are entitled to fair dealing—seeing what the realities are and being able to make their choice. It is utterly wrong to go into an election pretending it will be all right on the night. If, at the end of the day, the SNP is able to say, “We got a fantastic deal out of Mr Greg Hands. We got extra money over and above Barnett. Vote for us again”, when what matters is long-term future stability, I do not know how long that deal will last; I do not know how it will operate. The Barnett committee, which I served on, and to which the noble and learned Lord, Lord McCluskey, has referred, suggested that, because there is a gap, there should be a 10-year transitional relief and we should move to a needs-based system of funding. I do not know whether that is being proposed or not, but it is essential that we have the opportunity to discuss it.

Why would my noble friend not agree to Amendment 79H, which prevents the commencement of the Bill until we have agreement? What possible reason could he have? The noble Lord, Lord McAvoy, will say that it will be misinterpreted in Scotland and we will be presented as wrecking the Bill. I say to him that it will be proceeding in parallel with the consideration by the Scottish Parliament which is, quite rightly, insisting that it should look at the Bill in the context of the fiscal framework. What is wrong with us proceeding in parallel with it and having a proper debate on both sides of the border? I beg to move.

Scotland Bill

Debate between Lord Forsyth of Drumlean and Lord McCluskey

Tuesday 8th December 2015 Lords Chamber

[Lord Forsyth of Drumlean]

To deal with the point about politicians, after I left the House of Commons in 1997—or was asked to leave by the electorate—I went to work for Flemings as a banker, and was very proud to call myself a banker. Then, when the financial crisis came along, things got so bad that I started calling myself a politician again. Then we had the expenses scandal so I decided to call myself a company director. Perhaps the noble Lord does not realise that there is a problem, not just in Scotland or in Britain but in France, America and elsewhere—you can see that in some of the eccentric choices that are being made now by the electorate—which comes from a complete contempt for the political class. At this time of all times, when money is short—and by the way, we have not seen the fiscal framework, but when the Bill goes through, money will be very short indeed in the Scottish Parliament, when it substitutes a Barnett grant for a tax base—the notion that they could find money to have an extra 40-plus politicians plus all the attendant special advisers, the machinery and the rest, is utterly ridiculous. Therefore I hope that we will not spend very much time discussing this amendment, which is a complete distraction and totally wrong.

However, the noble Lord is perfectly correct to say that there is a problem with the governance of the Scottish Parliament. Can I just gently point out who was responsible for this? When the noble Lord cited all these examples of failures of policy—I could add considerably more—where was the Labour Party? Where was the opposition in the Scottish Parliament standing up to all of this? Therefore the fault did not lie in the lack of a second Chamber but in the opposition to the SNP and in the case of my own party, which gave it the ability to be in government by supporting it in government, some criticism could be made. However, this is not an argument for a second Chamber but for having vigorous Members of the Scottish Parliament, who I hope will be elected in May, doing the job they are required to do.

As regards numbers in the proposals there is already great confusion—we will come on to this later in the Bill—about the boundaries of constituencies and responsibilities. I was very struck by a poll by ITN, when it discovered that some huge number of the Scottish electorate—90%, I think—had absolutely no idea what powers were going to be conveyed by the Scotland Bill on the Scottish Parliament. When asked, a similarly higher percentage—well over 50%—were of the opinion that whatever the powers were, they did not go far enough. Therefore there is a job to do for the Scottish Parliament in engaging with the electorate and a job for the opposition. It is true that they are failing in a wide range of policy matters, but a House of lairds—a bunch of people calling themselves senators—will not resolve this problem. Fortunately, however, it is not a problem for this House but for the Scottish Parliament.

[Lord McCluskey (CB)]

My Lords, I may be brief. I made points in my Second Reading speech which the noble Lord, Lord Lyell, has referred to. We are all agreed about one thing: there is a problem. Whether the unelected House of Lords is the right place to start giving a lead in that matter is something entirely different. I would not fashion the problem in precisely the words that the noble Lord, Lord Foulkes, has mentioned—the one-party state. I think I have previously used the expression that was made well known by Lord Hailsham, “an elective dictatorship”, because in substance that is what you have in the Scottish Parliament at the moment. The Scottish National Party, for its own reasons, whips its MPs so effectively that there is no dissent, and for reasons that I mentioned at Second Reading, the weakness of the opposition is palpable. There are good people and, by the way, one or two good committees as well, but the committees of which I have experience, which are largely to do with justice, are not satisfactory.

I therefore agree with the noble Lord, Lord Maxton, that there is a problem with having an elected House. The great thing about the House of Lords is that it is not elected, therefore we are not answerable to constituents, and because very few of us are left with ambition, having reached an age and a state in our careers when ambition is no longer available to us, we can say what we think. However, that is not a popular idea in the country generally.

I am not sure that I am totally committed to the idea of an elected second Chamber but there must be some system. One forgets that many of the institutions that are extremely powerful in shaping the political debate and the political results in this country are not elected at all. I mention, for example, the press, which is said to be free and independent. It may be free, and it is independent of government, but in no sense is it elected by anyone. I get no say in who appoints the editors of the Times or the Sun or, for that matter, the Daily Mail, and they have considerably more influence than this House over what happens in this country, but they are not elected either.

This may be just a start but I feel that there is a duty on those of us who share the idea that there is a real problem to publicise that problem in Scotland and to try to persuade the Scottish electorate and the people generally that it has to be tackled, although perhaps not in this way. However, I certainly support the idea that “something must be done”—an expression which I hesitate to use because of its antecedents.