Scotland: Devolution

Lord MacGregor of Pulham Market Excerpts

Wednesday 29th October 2014 Lords Chamber

[Lord MacGregor of Pulham Market (Con)]

My Lords, I am hugely relieved by the clear decision of the Scottish voters against independence. The consequences if the vote had gone the other way would have been severe indeed for the Scottish economy, but also for the rest of the UK in terms of the economic implications, currency, the division of assets and liabilities, debt, defence, the EU and international bodies and the need to tackle all these issues when we have so many other issues to deal with, not least the continuation of the economic recovery. It would have been severely disruptive and difficult.

We must all confine ourselves to a small number of issues, and I wish to concentrate on two: English votes for English laws, and issues around tax and expenditure, including the Barnett formula. As the Prime Minister, the Government and my noble friend on the Front Bench today have made clear, this is fundamentally a question of fairness. It has nothing to do with “morally wrong”. What is morally wrong about fairness? Frankly, we all know that it is not about morals; it is purely about politics. I believe that that is a very important point.

I shall speak first about English votes for English laws. I have just looked up the Hansard of one of the earlier debates that we had in the House of Commons on devolution shortly after I entered Parliament in 1974, a Scot representing an English constituency. It was in January 1976 on the then Labour Government’s proposals for devolution in Scotland and Wales. A number of colleagues who are now in your Lordships’ House spoke then, and it is interesting to see how many of the points made then are still fresh today. I shall give just one quote from my own speech. I said then:

“Although I accept the list of subjects which”,

the Government,

“have put forward for devolution to the Scottish Assembly … it seems that there will be a growing demand, which is right in logic and fairness, for the same devolution to be given to England. That is a demand that must grow. We have already seen much evidence of that during this debate … There is the feeling that the Scottish people will have a power over the subjects that are devolved to them that is almost total and complete … whereas Scottish Members will be totally involved at Westminster in the discussion of issues that affect England”.

I went on to suggest two possible solutions, and concluded:

“Let us remember that the English also have their rights”.—[Official Report, Commons, 15/1/76; cols. 676-77.]

Tam Dalyell was listening intently throughout that debate and henceforward argued constantly about what became known as the West Lothian question. It must be solved now. We surely cannot continue with a situation in which a Scottish Parliament can have total control over health, education and so many other crucial issues in Scotland—transport, et cetera—while in England, Scottish MPs can continue to vote, sometimes conceivably having the crucial deciding votes, on these same issues in England. It is relevant in this context to note that the Scottish population is 5.2 million while the English population is 53.1 million. In a vote where the Scottish MPs voting on a purely English matter could be crucial, what is fair in that for the 53 million?

I believe that the solution to this lies in the proposal for the Speaker to be able to denote a bill in the UK Parliament as an English Bill and that only English MPs would be able finally to vote on that matter.

[Lord Lea of Crondall (Lab)]

The noble Lord is discussing a very interesting point. Would it be fair to characterise it as a UDI for England approach, although he might not like that phrase? Would that make UDI for Scotland less likely or more likely?

[Lord MacGregor of Pulham Market]

It is really quite simple. If the Scottish people have Scottish issues, as delineated now, voted upon entirely in the Scottish Parliament, then the same ought to apply to purely English issues in the English Parliament, and it should be English Members of Parliament who should vote on them.

I entirely agree with the Leader of the House in the other place when he said:

“We must establish the principle that when this House makes decisions affecting only the people of England, or only the people of England and Wales, those decisions should be made only by, or with the consent of, the MPs elected to represent them”.— [Official Report, Commons, 14/10/14; col. 176.]

It is high time that we did this.

I turn now to tax and spending, both complex and crucial issues. I have just a few quick points. I hope that we can soon have a full debate on all this. First, there are good arguments in favour of more devolution of various tax measures, provided that tax and spending are taken together. In principle, having the possibility to raise or lower taxes, while at the same time recognising that there are spending consequences, is attractive. Borrowing limitations must also be taken into account, as should the consequences for UK tax revenues.

Secondly, what cannot be accepted is the freedom to lower taxes and decrease revenue, with the expectation of consequential upward adjustments in the block grant from the UK Exchequer at the same time.

Thirdly, this raises the whole question of the block grant and the Barnett formula. I well remember the discussions on the Barnett formula in 1976, when the noble Lord, Lord Barnett, was under great pressure to reach conclusions on the expenditure settlement. He has said that, because of that pressure, he had to find a solution to one particular part of the expenditure arrangements and that it was a temporary expedient, never expected to last; he is strongly opposed to its continuation. There is a strong feeling in the country—I have long felt this in East Anglia—that the formula is unduly favourable to Scotland. Current figures show that public expenditure per head in East Anglia, where I come from, is £7,865, in England £8,529 and in Scotland £10,152. I believe that this issue must be addressed.

Fourthly, many have argued that the formula should be adjusted to a needs basis. I have long argued that myself. A committee of this House reporting in 2009 argued that,

“the Barnett Formula should no longer be used to determine annual increases in the block grant for the United Kingdom’s devolved administrations … A new system which allocates resources to the devolved administrations based on an explicit assessment of their relative needs should be introduced”.

I actively believe that this should be introduced and that there should be a transitional arrangement.

In conclusion, I believe that this must all be tackled in the negotiations and that the Barnett formula should go at last. This will be a critical part of the negotiations; I hope that this House will have another opportunity to debate it before they are completed.