Scotland Bill

Lord Gordon of Strathblane Excerpts

Tuesday 24th November 2015 Lords Chamber

[Lord Gordon of Strathblane (Lab)]

My Lords, I welcome in particular three speeches: first are the two maiden speeches this afternoon from the noble Lord, Lord Campbell of Pittenweem, and the noble Baroness, Lady McIntosh of Pickering; the third is the speech of the noble Lord, Lord Smith of Kelvin. In a debate on the Smith report, it is vital that one of the key issues to consider is whether the Bill meets in full what the report—adopted by all five parties—called for. It was vital that we heard directly from him that it does. I congratulate him on a very fine speech and it was very nice to see him back in the Chamber. I will also say that the three former Secretaries of State for Scotland did not do badly this afternoon, either; all of them made very good speeches.

We are where we are. The vow, the panic of the three party leaders, was frankly ludicrous but we are where we are. I judge this Bill partly by how far it meets the recommendations of the Smith commission but also by how far it genuinely delivers accountability. When you get into accountability, it is impossible to decide whether the Bill is good, bad or indifferent until we have the full fiscal framework. That does not mean delaying the Bill; it may mean asking the people who are examining this to maybe work a wee bit harder. Meetings once a month is frankly rather leisurely. What is wrong with once a week? Why can we not get them moving on this? It is impossible to reach a decision and the SNP are quite right. It is a disgrace that the Bill left the House of Commons without this ever being debated. I said to one of the SNP MPs the other day, “You guys should surely have made sure that this was fair to Scotland before you passed it,” and he said, “We’re leaving it to the Scottish Parliament to do that for us.”

That is fine for the SNP but it is not actually fine for either the Conservatives or the Labour Party to have allowed it through without scrutinising it properly. I hope that we will have that scrutiny here.

[Lord Forsyth of Drumlean]

Does the noble Lord think it is conceivable that it might have dawned on the SNP that in moving from a block grant, which is 20% more per head of population than the rest of the UK, towards a point where a large part of that is substituted by a tax-raising power where the tax base is not 20% higher, there is going to be a gap? Does he think that they are deliberately not reaching agreement because they do not want to face an election telling the Scottish people that there will be less money?

[Lord Gordon of Strathblane]

If the noble Lord waits until the end of my speech he will find that on this, as on so many other things, we are totally of one mind. The problem is that we had a very narrow escape last year. The fall in the oil price is not the fault of the SNP but had the vote gone 10% the other way we would have been landed in a situation where Scotland would be heading for bankruptcy very quickly. We lost our independence through bankruptcy way back in 1707 and the Darien scheme and we could well have been returned to it. It is vital that we put a cost on things.

Everyone has concentrated on the no vote and whether the vow mattered. I am rather more interested in the 45% of my fellow countrymen who voted for independence on a false prospectus because this document—the White Paper—which I imagine every Scot read cover to cover before using it as a very convenient doorstop, predicated oil revenues in 2016-17 of £6.8 billion. The oil revenues are of course a lot smaller. They then sneaked out a document without any ministerial statement, published in Oil and Gas Analytical Bulletin two hours before the Parliament closed for the summer recess, predicating oil revenues of £0.6 billion in 2016-17. That is a hole of very nearly £6 billion and compared to the proportionate effect of anything that George Osborne has in mind in welfare, it is six times worse than anything George Osborne is thinking about. We are heading for super austerity in Scotland if we are going to balance the books. It amazes me that my fellow countrymen are not constantly quizzing the SNP saying, “What taxes are you going to raise or what services are you going to cut to bring the books into balance?” They need not exactly balance—I fully accept that you can borrow—but you cannot go on borrowing for ever and ever.

It is very important that we put price tags on things, and there is a price tag I invite the Minister to consider. There was an amendment in the House of Commons asking for the Government to appoint a body, including representatives nominated by the Scottish Parliament, to estimate the effect of full fiscal autonomy. I think it should be possible to do that. It was voted against by the Government on the premise—mistaken, in my view—that we have done the sums already and we all know that. The trouble is that the Scottish people do not believe you. It is a tragedy and it is very unfair but I am afraid it is true. We need something that people believe in. The SNP rejected it because they did not think that anything appointed by the Conservative Government would be impartial because they are against full fiscal autonomy.

Now I am fairly certain that full fiscal autonomy is a disaster and I agree with the noble Lord, Lord Forsyth. I think the SNP feel it is a disaster as well but do you think they are going to admit it is a disaster? If full fiscal autonomy is a disaster then full independence, which goes one step further, is even worse. The SNP is unlikely to do that. It is more likely to pick holes in the way that the sums were calculated. That is why the report of the committee chaired by the noble Lord, Lord Hollick, is so important and that it is so important that we debate it.

Reference has been made, particularly by the noble Lord, Lord McCluskey, to the absence of the SNP. It is not our fault that it is not here: it has been given ample opportunity to have representatives here. It is very important that we hear the SNP viewpoint on what methodology is used to calculate the reduction in the block grant. I am quite prepared to take representations from the SNP and put them forward as amendments on the block grant here, if only to give them an airing. However, who knows? I might even agree with them. Nobody knows, because we do not know what the block grant reduction system will look like. It is very important that we get adequate information on that.

Likewise, we must make sure what the fiscal framework actually means. It is very complicated, and I entirely respect and do not mock the idea of it being negotiated behind closed doors. That is perfectly sensible. I think that we will have to wait for a complete package before either party wants to admit what they are negotiating on, because there will be trade-offs and compromises. I do not regard compromise as a dirty word in politics; it is what politics is all about. I am quite happy to wait until the conclusion of the process, but the parties must be told that there is no deal without the process being complete. Why should it be singularly the Scottish Parliament which can reject this purely on the grounds of the fiscal framework being wrong?

There was an interesting article last week, just before the committee of the noble Lord, Lord Hollick, reported, from Anton Muscatelli, the principal of Glasgow University. He said that, depending on which system is chosen, there could be a disastrous effect on the block grant. That was echoed by the committee in its report. To be honest, my concern is that whatever system is chosen, there will be a bad deal for Scotland, because the economics of independence, or of much more devolution, do not work. It is better to have a system where we spread risk throughout the entire United Kingdom.

I fully accept that the Scottish Parliament is elected; I am not. If its Members choose to go for that deal, that is entirely up to them and I will respect that decision—I will not leave Scotland as a result, or anything like that—but they must tell the Scottish people first. It is all very well accepting a bad deal if you think you will feel better about it because you are independent and doing it yourself. That is fine—I fully respect that—but to deceive the Scottish people would be totally wrong. So there is quite a lot we could go for here, but it is very important that we nail in advance any suggestion that the Treasury is choosing unfavourable methods of calculation—otherwise, the SNP will blame that for the breakdown of negotiations.

--- Later in debate ---

[Lord Dunlop]

I thought that the noble Lord, Lord Smith, answered that question very well. He put it in the context of an agreement, every aspect of which they signed up to—but, clearly, the SNP is a party that believes in independence, and therefore the whole context should be seen in that light.

The Deputy First Minister has agreed that finalising the fiscal framework is essential to delivering the Smith commission proposals. To touch on what the noble Lord, Lord Smith, said earlier, in the debate, he has spoken to both Governments and is confident that talks will deliver a fiscal framework in line with the principles set out in the agreement. As I said in my opening speech, talks have been constructive. We have agreed every step jointly with the Scottish Government and are working hard to agree a fiscal framework that is built to last, and is fair for Scotland and for the UK as a whole.

[Lord Gordon of Strathblane]

Without in any way wishing to hold up the Bill, is it not possible to increase the work rate of those working on the fiscal agreement? Meeting once a month seems pretty leisurely to me.

[Lord Dunlop]

I assure the noble Lord that these are ministerial meetings of the Joint Exchequer Committee. In between those meetings, very intensive work is going on to agree the fiscal framework. If, unlike me, you believe—