Scotland: Devolution

Lord Higgins Excerpts

Wednesday 29th October 2014 Lords Chamber

[Lord Higgins (Con)]

My Lords, 50 years ago, referendums were virtually unknown. Since then they have become increasingly fashionable. This is very often prompted by the argument that referendums are democratic. However, I have always felt that that is not really the case, at least not if you are trying to find the best form of democracy. Referendums tend to produce a situation that is really the dictatorship of the majority. I go along with Edmund Burke in taking the view that the better system is a representative system of parliamentary democracy, in which Members of Parliament are elected as representatives, not as delegates.

I therefore had considerable misgivings about the proposal for a Scottish referendum and I feel bound to say that my worries have been amply justified. We have avoided falling over the cliff to which many noble Lords have referred in terms of the vote going the wrong way but, at the same time, the referendum has made more acute many of the underlying problems which might otherwise have been dealt with in a more considered and leisurely manner. We now have to deal with a whole series of things and I feel it might have been better if we had not had the Scottish referendum at all.

That is water under the bridge but what has come out clearly in this debate is how acrimonious much of the debate in Scotland was. The situation was exacerbated by the panic ahead of the vote following the so-called vows by the party. As far as I can establish, these vows were made with absolutely no consultation whatever with their parties. It was further exacerbated by the immediate reaction of the Prime Minister following the vote, which set down a very tight timetable—a timetable reaffirmed by my noble friend the Leader of the House.

My noble friend did not deal at any great length with the ways in which the West Lothian question, which has been such a feature of this debate, would be dealt with. My own feeling is that it would be a serious mistake to try to deal with the problem by primary legislation. Making changes to the Standing Orders in the other place might be a better way of dealing with it. Perhaps the Speaker of the Commons could simply certify a Bill as being an English Bill, in the same way that he certifies whether a Bill is a money Bill. I suspect that the number of purely English Bills would be far fewer than one might think. Then there might be voluntary abstinence on the part of Scottish Members from voting on particular items where such matters were clearly dealt with in Scotland by the Scottish Parliament and so ought to be matters for English Members in the English Parliament. We should be very cautious about anything formal and certainly not establish such a thing as an English Parliament, which would undoubtedly lead to the break-up of the United Kingdom. The same problem would arise if we had two classes of Members of Parliament. That would also tend to lead to further fragmentation.

I turn quickly to the implications of the devolution of further tax-raising powers to the Scottish Parliament. In particular, I hope that the Smith commission will look very carefully at how the system will work if tax is devolved more to Scotland and there is then a situation where the Chancellor of the Exchequer has to deal with the consequences. We want a clear mechanism. I presume the Scottish situation would have to be clarified first and the Chancellor would then decide how he ought to respond. I also have some doubts about the motivation for having greater tax paying and, in particular, income tax changes in Scotland. If it is merely to alter the various rates and allowances, it is not clear why the situation in Scotland should be so different that they need a different set of rates. The difference between the two countries is not so great as to argue for it. If there is to be more devolved control over taxation in Scotland, it may be that the Scottish Parliament and the Scottish people would feel that they would get some benefit from it. The Government’s White Paper makes it clear that whatever changes are made in the devolution of taxation to Scotland ought not to result in a change in the balance of the allocation of resources between the two countries. If this goes ahead, I feel that there will be considerable disappointment in Scotland at the effect that controlling income tax rates and allowances actually gives.

Finally, because time is running out, I turn to the question of the balance between the two economies and, in particular, the Barnett formula. My noble friend Lord Lang of Monkton, in his splendid speech, spelt out very clearly all the problems associated with the so-called Barnett formula and, in particular, the allocation of the block grant. The present situation is not fair on England and the block grant probably needs to be adjusted. This point came out to some extent in the course of the referendum campaign. One must wish the Smith commission well on a very difficult range of issues. It will have to decide how to reconcile the devolution of tax powers to Scotland with the overall macroeconomic management of the economy by the Chancellor of the Exchequer on behalf of the United Kingdom as a whole.