Queen’s Speech

Lord Lawson of Blaby Excerpts

Monday 1st June 2015 Lords Chamber

[Lord Lawson of Blaby (Con)]

I hope the noble and learned Lord, Lord Woolf, will forgive me if I do not follow up his remarks on the important issue of human rights, because we have limited time and I would like to focus on the issue of Scotland.

The noble Lord, Lord Dunlop, made an excellent maiden speech. As the responsible Minister, he has a hard road to hoe in our debates on this issue, as he will increasingly find—I am sure he is expecting this—and I wish him the best of luck. We have been very privileged. I have been a Member of this House for nearly a quarter of a century, but I cannot remember three more distinguished maiden speeches than those we have heard today.

As far as Scotland is concerned, like other noble Lords who have spoken, I am a committed supporter of the union. I am a unionist on the grounds of history and of sentiment, and indeed for hard-headed defence considerations—but not at any price. The question before us is this: what form of constitutional settlement should we seek in the light of last year’s referendum and the promises made at that time, followed by the sweeping success of the SNP in last month’s general election?

In my judgment, the Smith commission did as good a job as it could in the wholly inadequate time available to it, but its work was far too hurried and the outcome inevitably defective. In any event, it has been rejected by Scotland’s triumphant First Minister, so it is a case of back to the drawing board. Moreover, as my right honourable friend the Prime Minister has insisted, fairness to England must be an integral part of the new constitutional settlement, and this was outwith the terms of reference of the Smith commission. I join those on all sides of the House today who have called for the setting up of a full-blooded constitutional settlement covering both of these interlocking dimensions, but not all the other important constitutional issues that will be raised in this debate. That would cause inordinate delay and time is not on our side.

Among the most important issues to be decided is the degree and nature of Scottish fiscal autonomy. The Smith commission recommended a significantly increased degree of fiscal autonomy, and since the election, the Prime Minister has hinted that this might be taken slightly further. But fiscal autonomy has two meanings. The first essentially concerns the freedom to decide whether Scotland is to be a high tax and high public spending economy or a low tax and low public spending economy. That is fair enough, but the second meaning of fiscal autonomy concerns the freedom to borrow, and this raises very big issues indeed which have scarcely been addressed at all. The Smith commission decided that Scotland should have increased borrowing powers for certain specified purposes, subject to Treasury approval, but that merely raises the issue without settling it.

It is no accident that in a number of developed federal constitutions, the subordinate Governments are granted a high degree of fiscal autonomy in the first sense, subject to an overriding balanced budget constraint. The precise nature of the borrowing constraint and the method of its implementation has to be a central pillar of any new constitutional settlement. For a Scottish Government would be borrowing in sterling, the currency not of Scotland but of the United Kingdom as a whole, yet that discipline seems to be far from the present thinking of the SNP, which presents itself as a means of escaping from what it calls “austerity”. And austerity is all about borrowing—to be precise, the means of reducing and eventually eliminating the budget deficit. We have only to look across the Channel at the travails of the eurozone in general and Greece in particular to see the centrality of the problem of separate national authorities borrowing within a common currency area. As I well recall, we in this country faced the issue to a lesser but still serious extent with Liverpool’s excessive and irresponsible spending and borrowing in the 1980s. The position of Scotland, of course, is hugely more important and more serious, and so far has scarcely been addressed at all.

The other major issue for a Scottish constitutional settlement is, as I have already mentioned, fairness to England. The Government appear to be committed to the EVEL proposal: English votes for English laws. I believe this to be objectionable in principle and unworkable in practice. It is objectionable in principle because those of us who wish to preserve the union cannot wish to see the Westminster Parliament composed of two separate classes of MP with separate voting rights. It is unworkable in practice for reasons well explained by, among others, the Prime Minister’s old politics tutor, Professor Bogdanor, in an article in the Guardian last September. Unlike most of what appears in the Guardian, it is well worth reading. In a nutshell, the proposal—which so far as I am aware has understandably never been attempted in any other serious democracy—would make effective and coherent government impossible. It would, incidentally, also lend itself to gaming: a Government dependent for their existence on the support of Scottish Members would have little trouble in ensuring that all their legislation had a Scottish dimension.

The only workable solution, as my noble friend Lord Forsyth has already pointed out, is that which was adopted a little under a century ago when southern Ireland seceded and Northern Ireland was given a high degree of home rule under the Stormont Parliament—accompanied by a significant reduction in the number of Ulster Members of Parliament. A marked reduction in the number of Scottish MPs may lack the theoretical logic of the EVEL proposal, but it avoids the divisiveness of two classes of Westminster Members and is eminently workable, as the Northern Irish precedent has shown. It is essential that it is seriously considered by the much-needed constitutional convention.

I have one final and more fundamental point. The outstanding success of the SNP in last month’s general election reflects a number of factors, but most obviously a reawakening of the sentiment of Scottish nationalism. I have never been among those who decry nationalism. It is true that there have been occasions in history—never, happily, in this country—when terrible things have been done in its name, and that is equally true, as indeed we are vividly reminded today, of religion. But that is not widely considered a reason for abandoning all religion. Nationalism is important because people need a sense of togetherness and belonging, and because democracy is unworkable without it; for it is the nation which constitutes the demos. The union will not be saved without a reawakening of British nationalism.