Scotland Act 1998 (Modification of Schedules 4 and 5 and Transfer of Functions to the Scottish Ministers etc.) Order 2015

Debate between Lord Maxton and Lord Forsyth of Drumlean

Thursday 26th February 2015 Lords Chamber

[Lord Forsyth of Drumlean]

I shall tell noble Lords the truth of the matter. I do not know if it has been made public before. The reason it happened was that the registrar wished to release the papers in connection with the theft of the Stone of Scone on Christmas Eve in the 1950s, which showed that the then Conservative Secretary of State was then in favour of returning the Stone of Scone to Scotland. It was not returned because at that time Scottish nationalist elements were blowing up postboxes because they had EIIR on them, not EIR, and the then Government decided that to return it at that time would be to give encouragement to those lawless courses. I realised full well that people such as my noble friend Lord Purvis, when those papers were released, would immediately start a campaign and therefore reconsidered the merits of returning the Stone of Scone, on the basis that a treaty, the treaty of Northampton, was signed by the English that promised to do so. As Secretary of State, I felt that, after about 600 years, I ought to maintain the rule of law. It certainly was not a stunt. Given the trouble we were in in 1996 politically, if my noble friend thinks that I thought that returning the Stone of Scone would make one whit of difference, he underestimates my intelligence.

I say to this Government: this constitutional tinkering absolutely has to stop. Look at us—the House of Commons, the other place, went down the other evening at 6 pm. Have we not learnt from the Fixed-term Parliaments Bill? Have we not learnt from the Recall of MPs Bill, which I have been involved in? We have had several debates where I have said, “This is not going to happen. If someone gets into trouble, their party will withdraw the whip and they will not be able to stand”. Very sadly—most unfortunately, I think—Sir Malcolm Rifkind now finds himself with the whip being withdrawn within 12 hours, before any report is given. The whip is taken away from him and he cannot stand. This is coming from a Government who are telling us that Members who get into trouble have the right to face the electorate and the electorate will decide.

This kind of constitutional stuff, which is about partnerships between parties and trying to seize political advantage, was started by Tony Blair and it absolutely has to stop. I very much regret that this House can do nothing about it because of the way that the Government have approached it.

[Lord Maxton (Lab)]

My Lords, can we assume that the noble Lord is agreeing with the idea of having a constitutional commission and convention that would look at the whole of the British constitution before deciding any of these issues?

[Lord Forsyth of Drumlean]

I am grateful to the noble Lord. As he knows, I do favour that. I believe that the Liberals favour having a constitutional convention and the Labour Party favour having a constitutional convention. Perhaps if we called it something else—let us call it a constitutional convocation or a bright idea—perhaps then we could get a consensus. I absolutely agree with the noble Lord: these things need to be considered; they need to carry wholehearted agreement; and, of course, with each step along the road that is made without thinking of the long-term consequences, it becomes even more difficult to unravel and create a proper settlement. So I entirely agree. On that note of consensus, I hope I have persuaded the Minister to withdraw this ridiculous order.

Scotland Bill

Debate between Lord Maxton and Lord Forsyth of Drumlean

Tuesday 24th April 2012 Lords Chamber

[Lord Maxton]

My Lords, it was not my intention to speak on this. Briefly, it was with great pleasure that I listened to the noble Lord, Lord Forsyth, use the term “poll tax” instead of “community charge”. He actually proved the point that the Minister—who has done an excellent job, I have to say—made in the very first debate this afternoon, that if something becomes the common parlance, it should be used as the common parlance.

The real point is that there has yet again been confusion—the noble Lord, Lord Kerr of Kinlochard, did it—between devolution, the democratic process of devolution and independence. They are not the same thing. That is why, although I support what this Bill is doing, I am not sure that this is the right time to do it. I am not at all sure that we should not, first, have had the referendum on independence in order for Scottish people to make up their minds as to whether they want to be an independent country totally separate from the rest of the United Kingdom or they want further devolution. We should let them decide on that first. The second question is just a confusion. There should be one question—independence or nothing else. For me, devolution was always about democracy and not about the separation of the Scottish state.

I have to say to the noble Lord, Lord Forsyth, who made great play of the fact that he sat in the Cabinet and could talk to the Prime Minister when he was Secretary of State, that that is fine. Perhaps he could but he did not represent the people of Scotland when he did so because he did not have the majority of Members of Parliament in Scotland when he was putting Scottish legislation through.

[Lord Forsyth of Drumlean]

I am most grateful to the noble Lord for pointing out my role as opposition while in government. Is it not precisely because his party used that kind of language—of people not having a mandate in one part of the United Kingdom—that the Labour Party now finds itself wiped out by the nationalists in Scotland? It was a very foolish thing to do and by doing so as unionists the Labour Party undermined its own position.

[Lord Maxton]

That may or may not be the case. It will be shown in both the independence referendum and in future elections after that. The fact is that separate Scottish legislation was passed through this Parliament without the mandate of the people in Scotland for that legislation. If it had been part of the same United Kingdom, there may have been a case for it but it was not. It was for separate Scottish legislation passed through Parliament by a party and a Government with no mandate in Scotland to push that legislation through. There is no better example than the poll tax, which the noble Lord himself first raised.

I support what this Bill is doing but I wish that we had waited until we had had the referendum on independence so that that could be put out of the way before we move on to see what further action can be taken on devolution.

Scotland Bill

Debate between Lord Maxton and Lord Forsyth of Drumlean

Thursday 15th March 2012 Lords Chamber

[Lord Forsyth of Drumlean]

My Lords, I know that I am beginning to sound like a broken record.

[Lord Maxton]

Why change the habits of a lifetime?

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[Lord Forsyth of Drumlean]

Further to that point, this is a circular argument. My amendment chose to alter the provisions in the Bill because the test of close connection does not deal with the circumstances that the noble Lord just mentioned. On my reading of new Section 80E, which defines close connection,

“where T has 2 or more places of residence”,

a soldier may have one residence in the family home in Northern Ireland and the other may be barrack accommodation in Edinburgh or some other part of Scotland. As I understand it—the Minister can tell me if I am wrong—under that definition the soldier would be liable to pay Scottish income tax. That is clearly and absolutely not fair. He might be in Afghanistan or Scotland. No one expects him to pay Afghan tax.

I tabled my amendment to suggest a possible remedy, although it may not be ideal—perhaps my noble friend can comment further. I may be wrong but my recollection is that during consideration of this matter in the other place Ministers said that they would come forward with a view. My noble friend seems to be saying, “Well actually, soldiers are the same as everyone else”. They clearly are not the same as everyone else, and are not in the same position as someone who works for the Royal Bank of Scotland who gets posted from London to Edinburgh. I do not want to prolong the debate by talking about the military covenant and so on, but these service men and women are paid very poorly for the job they do, and therefore the burden of increased taxation could be significant.

What my noble friend said was very welcome if it was that where such soldiers are caught by Scottish taxation they will be compensated by having their gross salary increased so that their net position remains the same. That would be fantastic, but can we have that as an undertaking from the Government and perhaps have it written into the Bill at a later stage? Perhaps my noble friend will come forward with an amendment to achieve that purpose. Could we then also work out a system similar to the transfer payment that we mentioned when we talked about the impact of a higher tax rate on welfare payments that would be made in Scotland? Such a system would involve a transfer payment from the MoD budget to compensate for the increased revenue that was being raised from tax in Scotland. The MoD therefore would need to be compensated for that by a reduction in the Scottish block grant.

[Lord Maxton]

I am rather confused by this. After listening to the question of the noble Lord from Northern Ireland, I can see a situation arising in which a soldier could be posted to, say, Edinburgh, and could rightly show that his family, wife and children live elsewhere in the United Kingdom—in Northern Ireland—whereas a single soldier in the next room would be resident in Scotland, and therefore on a different rate of pay.

[Lord Forsyth of Drumlean]

I agree with the noble Lord, which is why my amendment proposes that if they are in military rented accommodation, they should not have to pay. Another way to deal with it would be to give them the choice of where they pay their tax. As it stands, their position is anomalous. I must say to my noble friend that if I were a member of the armed services listening to him saying that there are a number of options that the MoD will look at, I would not be very satisfied. We need clarity, particularly because so many Scots serve in the armed services and so many bases to which members of the forces are deployed are in Scotland. On the argument about accountability, as my noble friend said, many of them will not have had the opportunity to vote in the Scottish parliamentary elections on the taxes that will be imposed on them.

The military are a special case, and my noble friend ought to say that he will take this away and come back with a government amendment to deal with it, either in the terms that he suggested—that the MoD would provide compensation—or some other terms. Simply saying that the Bill provides for it and it is just about applying the test of close connection will not do.

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[Lord Forsyth of Drumlean]

My Lords, we have had a very useful debate. I am most grateful to the noble Lord, Lord Myners, for his contribution, which woke us all up a bit. I am not persuaded by my noble friend’s argument, at the end of which I think we got to the bottom of the matter—it simply is going to be too much trouble and, as regards these people whose tax status changes during a year, there might be rather a lot of them and we are not too bothered about it.

I venture to suggest that for those people the difference between perhaps paying Scottish tax and English tax might be significant. When my noble friend says, “Well you would be dealing with the whole of the Scottish population”, I do not think that the whole Scottish population will change their tax status in any one year. The Revenue is quite capable of dealing with changes in circumstances in a variety of ways. When my noble friend says that he wants to keep it as simple as possible, perhaps I may suggest that the way in which to do that is to drop this whole idea of having a separate Scottish income tax.

This is the Government’s idea and if they are going to change the tax system, they should be able to make sure that it is workable and treats people fairly, and that the answers to our questions are delivered. For the life of me, I cannot see how it can be right that someone who moves from Scotland to England continues to have to pay Scottish tax. Of course, at the other end of this building, none of this was discussed because it was guillotined and there was no opportunity. But I would not like to be a Member of Parliament living in England who receives a letter from a constituent asking why they are having to pay Scottish income tax when they are now living in England. I do not know the answer. If we sent a standard reply from the Treasury saying, “Well, it is administratively simple to make it this way”, that would be a vote lost and a very unhappy constituent.

[Lord Maxton]

When the noble Lord talks about voting, someone moving from Scotland to England would be able to move their vote. They would not be able to move their tax apparently, but they would be able to take themselves off the register in one place and put themselves on the register somewhere else.

[Lord Forsyth of Drumlean]

I would guess that that must be because electoral registration offices have far more staff than HMRC, so it is probably easier for them to cope with these matters. This is an important principle. The idea is that it is just too difficult and too complicated. When we raise the issue of how employers are going to deal with a payroll where people are constantly changing from being liable for Scottish or English tax, we are told by Ministers and the Treasury, “It is very simple. It is just a matter of changing the tax code, so it is not a problem”. But when it comes to the Treasury having to take account of liability, if it is about collecting the tax, then it is far too difficult and complicated. I think we are getting a bit of doublespeak here. I do not say that that applies to the Minister—

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[Lord Forsyth of Drumlean]

It may seem simple to my noble friend and it may have been discussed for 15 months, but I have to tell him that I am not a supporter of this Bill. I thought I made clear at Second Reading why I am not. I am somewhat surprised at the argument that my noble friend has put. The noble Lord, Lord Kerr of Kinlochard, put it quite clearly. I do not disagree about the impact of the policy but what is being said is that, if there is a change in the tax regime that results in the tax base being made narrower and from which people in Scotland will benefit, in addition people will benefit in Scotland by the cost of that change being added to the block grant. To me, that is double benefit and I do not see how that has anything to do with the accountability of the Scottish Parliament.

It arises because the Scottish Parliament is not solely responsible for tax policy, which would be an argument for fiscal autonomy that no doubt the noble Lord, Lord Foulkes, will put to us. However, the scheme in this Bill is a kind of charade whereby the Scottish block is always topped up regardless of the benefits that accrue to Scotland from the changes in the tax base, which cannot be right. I defy my noble friend to explain why, say, the Scots would get the benefit. Let us say that thresholds were raised to £10,000 so that no one earning less than that would pay income tax. That would have a dramatic effect on the Scottish block. I guess that it would be many hundreds of millions of pounds—perhaps £600 million or something of that order. My noble friend is saying that the Scottish Government would be compensated by being given that money, but the people living in Scotland would have benefited from the fact that they are not paying tax on the first £10,000. That cannot be right.

When my noble friend says, “Well, we have all known this for 15 months”, I had not appreciated that the situation was as stark as this. I thought that it might be a one-off thing at the start, but the idea that this should be a continuing matter is not about accountability; it is about giving people a guaranteed budget.

[Lord Maxton]

As the noble Lord understands it, would the reverse be true? If, say, Mr Alex Salmond decides that he has a project that he knows the Scottish people will support and he puts up the income tax to pay for it—for example, a free new hospital or something like that, on which he knows that the Scottish people will support him—will the block grant be cut accordingly to compensate for the fact that more money is now being raised in Scotland?

[Lord Forsyth of Drumlean]

I think the answer to that is no. As has been made clear, we are talking here about the Scottish block being compensated for changes in United Kingdom taxation policy. My difficulty with this concept is that the people in Scotland are within the United Kingdom. They benefit from those changes and then a compensating payment is made to the block grant to compensate for that, which cannot be right.

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[Lord Maxton]

The noble Lord said “late lamented”—Wendy is still very much alive.

[Lord Forsyth of Drumlean]

She may still be alive but she is no longer leading the Labour Party in Scotland. I do not want to ruin what career she may have ahead of her, but in any discussions I had with her I found her to be exceptionally able and far-seeing, looking beyond the immediate prospect of events and what is in today’s newspapers.

I am not enthusiastic about this whole devo train that we have got on. I believed from the beginning that it would lead to the nationalists dominating the Parliament and that it could lead to the break-up of the United Kingdom. I am not particularly smart for thinking that. Enoch Powell was arguing that years ago. All I am saying is if we are going to go down this track, we should anticipate some of the problems and that Barnett is going to be one of them.

I sense that the House probably does not want to discuss this at any more length, so I beg leave to withdraw the amendment in my name and that of the noble Lord, Lord Barnett. I look forward to receiving some criticism by him for not making all the points that he would have made, and for not making them as eloquently as I am sure he would have done.

Scotland Bill

Debate between Lord Maxton and Lord Forsyth of Drumlean

Tuesday 28th February 2012 Lords Chamber

[Lord Maxton]

My Lords, I rise as somebody else who supported devolution. There have been one or two occasions during this evening when I have had my doubts, I must say—but in the main I have supported it, because in my view it is about democracy. That is what distinguishes it from independence, which almost certainly under the SNP would be democratic but does not have to be. It is not a prerequisite of an independent Scotland that it has to be a democratic state, but the fact is that devolution is about democracy. The noble Lord, Lord Forsyth, may sit there and pull faces, but he is one of the reasons why many of us argued strongly for the democratic process of devolution. What we had developed in Scotland was a Secretary of State for Scotland of a Conservative Government who, of course, increasingly had fewer and fewer Members in support in Scotland. Legislation which affected the whole of the people of Scotland was being put through this place with no democratic validity whatever.

There was an alternative, which was to abolish the Scotland Office and do away with separate Scottish legislation altogether. That was not seriously a political option in Scotland. The reason why we argued so strongly for devolution was because we felt that the only way you could get democratic legitimacy in Scotland was to give democratic powers to a Scottish Parliament to make legislation in Scotland for—

[Lord Forsyth of Drumlean]

The hour is late and I am not going to make a speech, but I will just rise to the fly to say one thing. I opposed devolution because I thought that it would lead ultimately to the growth of the demands for independence and would benefit the nationalists, unlike the noble Lord, Lord Robertson. However, if I had realised how much damage devolution would do to the Labour Party in Scotland, I might have been tempted to go along with it.

Scotland Bill

Debate between Lord Maxton and Lord Forsyth of Drumlean

Thursday 26th January 2012 Lords Chamber

[Lord Forsyth of Drumlean]

I will take that as a speech in favour of first past the post. I should declare an interest because the first election I won was for a Labour ward on Westminster City Council. Of the three candidates, I was the only Conservative who was elected and I am sure that it was because my name began with F. That is certainly a good point to make.

[Lord Maxton]

Of course, we know the system that was described in Scotland. In 2007, the name on the list was Alex Salmond for First Minister. Therefore, it was not the party but his name, which begins with an A. Let us remember that he won by 47 votes in one seat in Scotland, which gave him the largest single party in Scotland. Perhaps we already know the system.

[Lord Forsyth of Drumlean]

I wish that I had been sharp enough to have worked that out in response to the noble Lord, Lord Empey. All parties look at this issue from the point of view of party advantage. If you are going to set up a commission to look at this, it has to be clear of the political parties but, ultimately, it has to be agreed among the political parties.

One of the most remarkable things that I have seen in politics was the Labour Party in control of the Scottish Parliament introducing the single transferable vote for local government. It destroyed the Labour Party’s hegemony in Scotland. It was an act of supreme self-sacrifice, which was clearly thought through in the interests of wider democracy—I am sorry but my tongue was stuck to my cheek. We have ended up with four systems, as the noble Lord said. I defy most candidates of all parties, if they knock on a door and ask, “Could you explain to me each of the electoral systems and how they work?”, to get an answer that has any degree of confidence or accuracy. The whole thing has become ridiculously overcomplicated.

The point about constituency boundaries goes to the heart of this idea of representation. The noble Lord, Lord Steel, says that we have lost all that. No, we have not. It is true that the reform of the House of Commons and the parliamentary constituencies Bill took not enough account of this very important reason. But it strikes me that we have 129 Members of the Scottish Parliament, which seems somewhat excessive. Looking at the numbers it would be possible to bring more logic, more coherence and more relevance to the people of Scotland. Moreover, if one is going to look at the electoral system, one ought also to look at the size of the Parliament and its relationship to Westminster and other bodies.

This is an excellent amendment which I do not suppose the noble Lord will press to a vote but I hope that, in responding, my noble and learned friend will consider how this can be dealt with, because there is no doubt that it is damaging to have all these systems operating in Scotland in a way that is not in the interests of the important relationship between elected representatives and their constituents.