Scotland Bill

Lord Selkirk of Douglas Excerpts

Monday 21st March 2016 Lords Chamber

[Lord Wallace of Tankerness]

My Lords, like the noble and learned Lord, Lord McCluskey, I thought that the remarks made by the noble Lord, Lord Dunlop, in replying to the last amendment, when he thanked everybody, were more suitable for the Bill do now pass debate. However, although I did not take part in that discussion, I would not wish in any way to lessen the appreciation I express on behalf of my colleagues to those who have helped to get the Bill to its present state, not least the Bill team, with some of whom I have worked in the past and know of their exceptional quality and hard work. I particularly thank the Minister, who with his customary courtesy has gone out of his way to meet us, engage with us and discuss issues with us—regrettably, not always to any effect from my point of view, but no doubt from his point of view it has been very effective. That is very much appreciated.

Aspects of this process have not been at all satisfactory. The short period that we had in which to look at the fiscal framework was not satisfactory. The Bill could be in a better state than it is and perhaps more favourably reflect the spirit of the Smith commission. The House has not done much to respect, or even give proper consideration to, the points made by the Scottish Parliament’s committee that looked at the Bill. Those are matters of regret and do not augur well for having mutual respect and trying to improve the relationships between the institutions of the Westminster and Scottish Parliaments. But that is where we are.

This amendment addresses the Barnett formula. The Minister referred to the vow in his wind-up speech. I happen to believe that the referendum was won in spite of rather than because of it. However, it is important that we celebrate the fact that we won the referendum and are not facing independence day on Thursday of this week, with one dreads to think what consequences.

I note that, when I stood where the Minister stands now, the most difficult question I ever had to answer in one of these debates came from the noble Lord, Lord Turnbull, who referred to the vow. It says:

“We agree that the UK exists to ensure opportunity and security for all by sharing our resources equitably across all four nations to secure the defence, prosperity and welfare of every citizen”.

It goes on to refer to the,

“continuation of the Barnett allocation for resources”.

I was asked how I could square the equitable sharing of resources with the continuation of the Barnett formula. I struggled to find an answer. I will allow the Minister to find his.

[Lord Selkirk of Douglas (Con)]

My Lords, when the Calman commission sat, the most important principles that it was trying to support were equity and accountability; this echoes what the noble and learned Lord has just said. I remind the House that on 7 September 2004, the day the Scottish Parliament opened at Holyrood, the Reverend Charles Robertson, minister of the Canongate church, was first to speak during the regular time for reflection. He reminded us of the previous uses of the site for the newly-built Parliament. It had been a house of refuge, a soup kitchen for the destitute and Scotland’s largest independent geriatric hospital, not to mention the site of a profusion of well-known and much-loved breweries. Given this history, it is perhaps not surprising that, on that day, the then First Minister, the noble Lord, Lord McConnell, urged MSPs to “raise their game”.

This legislation—the amendment relates to the heart of it—will bring about major changes in the powers and competence of the Scottish Parliament as, for the first time, the majority of funds that the Scottish Government spend will come from revenues raised in Scotland. When the prevailing philosophy has been a culture of spend, spend, spend, popularity is relatively easily won. That will now change as tough decisions will have to be made on how services will be financed.

There seems to be some uncertainty about who observed:

“With great power comes great responsibility”.

Some attribute it to Voltaire. In a debate in the other place in 1817, William Lamb, later Prime Minister Lord Melbourne, made an exhortation to the press. He begged leave to remind them of their,

“duty to apply to themselves a maxim which they never neglected to urge on the consideration of government—‘that the possession of great power necessarily implies great responsibility’”.—[Official Report, Commons, 27/6/1817; col. 1227.]

Similarly, on the same subject, Prime Minister Sir Winston Churchill said:

“The price of greatness is responsibility”.

What Churchill meant was that anyone who aspires to greatness must also be willing to shoulder the accompanying responsibilities. His advice still holds good today.

[Lord Dunlop]

My Lords, as the noble and learned Lord, Lord McCluskey, said, the Barnett formula has been the subject of significant debate during the passage of the Bill and has been raised in various statements and at other opportunities. I do not propose to go over well-worn ground, but I recognise the strong views that the formula evokes, particularly in this House. As has been said at other stages in the Bill’s progress, the retention of the Barnett formula is a manifesto commitment not just of the Government but of all three of the main UK parties. It will therefore continue to determine changes to the block grant resulting from changes in UK government departmental spending.

However, as my noble friend Lord Selkirk noted, the significance of the Barnett formula will be reduced, as over 50% of the Scottish Government’s budget will, in future, come from taxes raised in Scotland. As has been said before, the size of that budget will be determined increasingly by changes in Scottish taxes.

The amendments tabled by the noble and learned Lord call for a memorandum to be published within 30 days of the Scotland Act passing, providing additional detail on the future of the Barnett formula. We are already delivering the intent of these amendments. On Friday, the Chief Secretary to the Treasury placed in the Libraries of both Houses a supplementary technical annexe to the fiscal framework agreement. This sets out in detail how Barnett will operate in future, alongside the adjustments for new tax and welfare powers. Much of the detail of how Barnett operates is already published in the Statement of Funding Policy, which was last updated in November. The details of how the devolution settlement operates are also set out at each fiscal event.

In addition, we have listened to the views expressed in this House about transparency and reporting. The UK Government and the Scottish Government have agreed to report annually on the operation of the fiscal framework. Finally, in response to the House of Lords Economic Affairs Committee, the Treasury has undertaken to look at how the whole operation of the Barnett formula can be made more transparent. We on this side of the House fully expect scrutiny to continue beyond the passage of the Bill and therefore I urge the noble and learned Lord to withdraw his amendment.