Scotland Bill

Lord Selkirk of Douglas Excerpts

Tuesday 6th September 2011 Lords Chamber

[Lord Selkirk of Douglas]

My Lords, it gives me great pleasure to follow the noble Lord, Lord Morgan, who is a very distinguished historian. He is right to remind us of the powerful call, “No representation without taxation”, and as a historian he will remember that the American colonists particularly had the request of “no taxation without representation”. Both requests are very powerful.

It is customary for Peers to mention past interests before speaking, and in my case I have two. While several of us have served in three parliamentary Chambers, only four members of the coalition in this Chamber have been elected to the Scottish Parliament. Three of them, including the Minister taking this Bill, the noble and learned Lord, Lord Wallace of Tankerness, are Liberal Democrats, but for some reason, which I am sure must have involved a great deal of good fortune, I happen to be the only Conservative in this Chamber to have served for eight years in the Scottish Parliament. The other past interest is that I served on the Calman commission, with other members of this House, including the Minister and the noble Earl, Lord Lindsay, from the Conservative Benches. Along with Labour Members and many others, after more than a year of hard work, we produced a report which was unanimous, and the legislation we are considering is based on those conclusions.

In the 1998 devolution referendum, some 74 per cent of voters in Scotland were in favour of establishing a Scottish Parliament, and the Conservative Party, rightly in my view, decided that it would be wrong to act as disgruntled bystanders on the sidelines and instead that it should participate fully in the democratic process, with a view to making the new institution work successfully in the best interests of Scotland and the union. The noble Lord, Lord Sewel, rightly in my view, said that it was right after a number of years to review the devolution Act and to suggest adjustments. The noble Lord, Lord Steel, said that he regarded this as a second stage. If I may say so, in 10 years’ time there may well be another review and another stage, and that would not be unnatural, given the fact that we are discussing the terms of a voluntary partnership.

When the Calman commission reviewed the devolution legislation and received evidence, the responses were overwhelmingly to the effect that the Scottish Parliament had been a success and indeed a majority of those giving evidence believed that it should have more powers. This brings me to the principles that underlie this entire subject, these being accountability and equity. The Secretary of State for Scotland said:

“The Bill is not about transferring power for power’s sake; it is about creating accountability”.—[Official Report, Commons, 21/6/11; col. 282.]

I have to make my own position very clear on this principle of accountability. I am strongly in favour of it. If the Scottish Parliament is given additional tax-raising and borrowing powers, it is a fallacy to believe that these would necessarily be used irresponsibly, for a very simple reason. All Governments wish to be re-elected, and no Scottish Administration will be returned to power if they force up taxation to an intolerable extent or cut essential services far more than is acceptable to the electorate. Finding the most appropriate level between levying taxation and funding public services will always be a matter of balance and judgment. The devolved Parliament should be allowed to reach such conclusions and put them before the electorate.

The Scotland Bill does not make any specific changes to the method by which grant is allocated by Westminster to the devolved Governments, but I would like to refer to the calls by the noble Lord, Lord Barnett, for his long-standing population-based formula to be replaced by one based on need. The noble Lord, Lord Morgan, referred to the importance of this subject. The position of the coalition Government, as I understand it, is that the top priority is to tackle the deficit and to stabilise the public finances. There is of course no consensus on the needs indicators that would have to be chosen if the formula was ever to be replaced. My own position is that until the legislation we are considering is enacted and is operational, the Government should stay their hand over changing the formula. The Bill we are debating will give the Scottish Parliament the new powers and flexibility it would need if Barnett was to be changed with far-reaching subsequent effects on the block grant.

The executive summary of the Calman commission report made this statement:

“Until such time as a proper assessment of relative spending need across the UK is carried out, the Barnett formula should continue to be used as the basis for calculating the proportionately reduced block grant”.

I mentioned that a needs assessment would be contentious. I can only say that if the results of that assessment reduced the Scottish block grant significantly this would give rise to a third principle. There should be the possibility of substitution if there is to be reduction. In other words, if several billions of pounds were to be chopped off the block grant overnight, the Scottish Parliament would need to have the necessary flexibility to be able to find the most appropriate balance between funding services and levying taxation. This Bill will help to meet that point and makes the Parliament more accountable for the level of a substantial portion of its tax and spending. Indeed, I would contend that if there were to be a reduction in the Scottish block grant without the possibility of substitution, which this Bill will allow, there would be an adverse reaction and friction in Scotland, which could inflict lasting damage on the union.

The question that those who oppose a measure of financial autonomy for the Scottish Parliament have to answer is, “Why are the Scottish people unfit to be allowed a measure of financial responsibility?” I believe that their duly elected representatives should be allowed more discretion to frame their own fiscal policy. They should be allowed to raise more of their own funding as well as to engage in expenditure. While the centuries-old ties that bind the Scots to their more numerous southern neighbours may have been loosened somewhat in recent years, it must be emphasised that the Scots people have shown no appetite for breaking them completely, but they have consistently expressed a desire for their Parliament to have more power.

One of the great benefits of the union is that it replaced centuries of warfare across the border with a sustained era of peaceful development, notwithstanding the odd Jacobite rebellion. In the case of my own family, I am descended from both the Douglases and the Percys, who used to kill each other in very considerable numbers. It always struck me that this was not the best way to settle disputes and, fortunately, the Act of Union 1707 consigned such hostilities to the dim and distant past. In fact, with my father being a Douglas and my mother a Percy, it could be argued that I am a product of the union.

I intend when the time comes to commend to Scottish voters the case for the continuity of the United Kingdom. I take absolutely the point of the noble Lord, Lord Steel, that there must be a straight question on whether or not the people of Scotland want independence, and not a slanted question. I would wish to campaign in the strongest and most positive terms when the planned referendum is held. I do not believe that passionate support for the union is in any way incompatible with backing for giving the Scottish Parliament increased powers, especially over financial matters.

In conclusion, I would like to commend to the House the splendid words of Scotland’s national poet, Robert Burns, when he wrote his famous poem, The Dumfries Volunteers. His words were as follows:

“Be Britain still to Britain true,

Amang ourselves united;

For never but by British hands

Maun British wrangs be righted”.

Just to reassure the House, Robert Burns was by no means a dangerous revolutionary but was indeed one who understood the importance of fiscal responsibility. Just in case anyone may wonder, he was in fact by profession a tax collector and exciseman, who believed in the rule of law.

This legislation delivers an important coalition commitment. It will increase the responsibility and accountability of Scottish legislators and allow the devolved Parliament to come of age.