Scotland Bill

Lord Soley Excerpts

Tuesday 6th September 2011 Lords Chamber

[Lord Forsyth of Drumlean]

I support what the noble Lord, Lord Foulkes, has said. By the way, Second Readings are divisible, but the tradition is that we do not divide the House on Second Readings. This is an important piece of legislation, and I am afraid that this situation is not really for the convenience of those of us who care deeply about the legislation. If everyone took the 15 minutes which the Companion allows, I would have to wait until 2.30 am to hear the views of the only woman Secretary of State for Scotland, who is number 33 on the list. This is a scandalous way in which to treat Members of this House, and important constitutional business.

[Lord Soley]

My Lords, I, too, support what has been said. I have a strong view about this, because I regard it as an important issue for the United Kingdom. It is very important that we do all that we can to preserve the union. I think that, if we deal with Bills like this in this way—at this moment as far as I can see we are likely to go on beyond midnight—it cannot be desirable for the House. I have to say to the government business managers that it is not good business management to end up in this situation. They have brought people back for two extra weeks as well as bringing the House back a week early, and yet we will still be dealing with this probably after midnight.

[Lord Shutt of Greetland]

I hear what the noble Lord says, but there are a lot of people here anxious to speak. There are in fact three dozen such people. Some have come from Scotland—perhaps on the train or the aeroplane—specifically to speak. Therefore, it would be inconvenient if we did not continue. Everything we do in this place is important. I do not think that we should be looking at this in pecking-order terms. We do know that it is convention—just as the noble Lord, Lord Forsyth, said about voting convention—that we first have what is perceived as divisible business. The usual channels agreed this; it may have been some time ago, but it was agreed, and so I think we should proceed.

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[Lord Soley]

I strongly believe in the United Kingdom as an entity. It is one of the most effective political and economic unions that the world has ever seen. It virtually put an end over a relatively short period to the internecine warfare around the area. Importantly, it also launched Britain as the world’s first industrialised, unified economic and political system, which produced great freedom under the rule of law. We should be proud of that and stand up and fight for it.

One of my regrets about today’s debate is that the Government have chosen to put it all into one day. My noble friend Lord McAvoy pointed out that it would make people in Scotland feel that they have been pushed to the end of the day. Although they would be right to feel that, it is also the United Kingdom which has been pushed to the end of the day, because there would be many more speakers here from elsewhere in the United Kingdom—from England, Wales and Northern Ireland—if this had been a two-day, rather than a one-day, debate. That is a serious failing on the part of the Government.

I am also a strong believer in devolution. I think we got it broadly right and that the broad thrust of this Bill is right but I am worried about the development of the nationalistic agenda in Scotland. I have never really liked the push towards nationalism. One of the things that perhaps Alex Salmond needs to recognise is that if you wrap yourself in the flag of one part of the United Kingdom and suddenly start arguing that you can separate in some clean break into just two separate systems, you are forgetting that there are other parts of the system—Wales, Northern Ireland and England. I might add that the people of Shetland do not talk about Scottish oil. They talk about Shetland oil. I have just come back from a delightful holiday in Orkney. I counted in the first four days there no fewer than 14 Norwegian flags. If I was somebody representing Orkney or Shetland I would be insisting on a referendum in Scotland including a referendum on the future of Orkney and Shetland in Scotland. It is one of the reasons I make this point. The Minister will know the importance of the Orkney one.

One of the important points that has been made—I hope the Government will accept it—is that the referendum needs to be held, as I think the noble Lord, Lord Steel, said, under the Electoral Commission for the United Kingdom. It is completely wrong to leave it to the existing government of Scotland to develop the rules and regulations for an election that affects not just Scotland but the whole of the United Kingdom. We should also remind ourselves that in the settlement on Northern Ireland any referendum in Northern Ireland on its future also requires a referendum in the island of Ireland. There is a very strong case for saying that any referendum on any part of the United Kingdom breaking away ought also to be a referendum within the United Kingdom in much the same way we have agreed for Ireland. That has all sorts of dangers. I am not necessarily recommending it, but follow the logic. If you say one part can just break away the changes will be very significant and very dramatic and we should not go down that road. I actually think the Scottish people will be far too sensible to do that. At the end of the day there is not the will for that degree of independence.

I want to make another point about which I also feel very strongly. It is the idea that somehow or other on this island of just 60 million people, where for 1,000 years we have been mixing and interbreeding, you can suddenly come out and say that this person is English, that person is Scottish and that person is Welsh. I often get people saying to me, “You’re English”. I speak with an English accent. I was born in East London so you could say that makes me English. However, if you look at my background it is actually Welsh, Scottish and Northern Irish. What suddenly gives Alex Salmond or anyone else the right to tell me that I am English? If you ask me what I am I do not say English. I have never identified with England as an entity. I identify myself as British and for me that is important. It seems to me that I have a right to vote in a Scottish referendum if I regard myself as Scottish. I am in the process of looking for a house in Scotland. If I get one in time suddenly I will be Scottish and will be able to vote.

This sort of nonsense makes sense in a larger continental entity. If you are in a continent the size of Europe with 400 or 500 million people you can do this but in an island the size of Britain with four nations it does not make sense. I have strong objections to people telling me what my national identity ought to be. Much of my life has been spent in close connection with Scotland. In many ways, as my noble friends will know, the Scottish education system saved me. I left what by any definition was a failing school in East London aged 15 in the early 1950s. I was turned down even by Ruskin College, believe it or not, but I was accepted by Newbattle Abbey College near Edinburgh. I was accepted by Strathclyde University as an adult student even though I did not have the proper qualifications. I was even, I might add, accepted as a bus conductor on what used to be known as Alexander’s Buses in Scotland where doing the Ruchazie, Castlemilk and Easterhouse runs on a Friday or a Saturday night required a great deal of nerve and the recognition that paying your fare on those nights was a voluntary activity, particularly when someone turned round to you and said, “What is a Sassenach doing taking my money off me?”. This nationalism that has suddenly convinced Alex Salmond that he has some great national identity that he can give to the rest of us is profoundly wrong and profoundly dangerous. When national identities break up, they do not always break up neatly; they often splinter, and splintering is dangerous, which is why I mention this issue of where the referendum is really held—not because I recommend it but because I know that that can be the end of the road if you go down that line.

I would like to talk a bit about the tax issue that the noble Lord, Lord Forsyth, mentioned, but at this late hour it would be better if I did not. He is hitting on a very important point about the impact on the union at the end of the day and the similarities between the various parts of the union. One issue that we have yet to face up to—the noble Lord, Lord Sewel, touched on it—is that in a way the United Kingdom was the first invention of a type of federal system, but it was not and could not be a full federal system because, as he said, England is too big compared to the other parts. But we should consider the relationship between the Parliaments and institutions of the various parts of the United Kingdom. That touches on what the noble Earl, Lord Lindsay, said about the report, which again I would have liked to talk about more. We need to do much more work on that. It has often occurred to me that although I would not recommend that this second Chamber became simply a chamber for the regions of Britain, there is a way that we could use it on occasion for debates about the regions. That is particularly true if you develop devolution within England. The problem is that very often it is said that the Scots feel that they are governed by London and that everything is decided down here. You can have a similar conversation in Cornwall and in parts of the north of England. They feel that London dominates. If you look at the population of the United Kingdom, 25 million people are in that south-east corner bordered by Cambridge, Milton Keynes, Oxford and Southampton. Of course that area is going to dominate the rest—but that makes other people in further-out regions, not only Scotland, Wales and Northern Ireland but other parts of England, feel marginalised. I do not think that the answer to that is to have an English Parliament, but the devolution option is a real and sensible one. Then you would need to find ways in which to discuss the matters that affect all of us, which could be one of the roles—perhaps a limited role—of a second Chamber. It is something that we have never really looked at or thought about in any depth.

I want to end on this point. The United Kingdom is immensely important. If we risk breaking it up, it does not follow, as the SNP needs to understand, that it is going to be a nice, neat, clean split. It could be much more splintered and unpleasant than that, and it would certainly lead in my view to many problems that none of us need have. But to win that argument we need to think about the structures again. The noble Earl, Lord Lindsay, is right to spend some time on that. We need to think about the tax issue, because of the differences that that can create. Other noble Lords have mentioned things such as the educational grants and so on; all these things accentuate difference and play into divisions.

The United Kingdom is a very impressive asset for us. It is particularly suitable to an island of this size; we are not a continent but an island, and it is important to remember that. It is those structures that we ought to look at. I do say to the Government, “For heaven’s sake, in future if you do constitutional Bills like this, don’t think that it just relates to that part of the United Kingdom that we are talking about—it relates to all of us, and we all need to have a say on it”.

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[Lord Wallace of Tankerness]

I do not think that my noble friend has that right. The principal point will be whether it is your sole or main residence. As I have just indicated, it is only if you are an individual who does not have a close connection with any part of the United Kingdom that the number of days spent in Scotland will be relevant. We can clearly debate that, as we no doubt will, in greater detail when we come to Committee, but I seek to reassure my noble friend on that. He also said that the SNP would take the power to have new taxes and would implement them willy-nilly. However, the provisions in the Bill make it very clear that the power to have any new taxes will have to be passed not only by the Scottish Government but by both Houses of this Parliament. An order would not be brought forward to this Parliament unless it had the agreement of the UK Government. Therefore, there would have to be negotiation between the UK Government and the Scottish Government before such an order could be brought forward, and it would be subject to an affirmative resolution of both Houses of Parliament.

The noble and learned Lord, Lord Davidson, wished the borrowing powers to be accelerated. My noble friend Lord Younger put his finger on the matter: there is a pragmatic reason for delaying such powers in the context of the current spending review period. The borrowing of the Scottish Parliament would be aggregated with UK borrowing and, given that the borrowing limits have been clearly identified in the current spending review period, we do not think it right to move at this stage to extend the borrowing powers to the Scottish Parliament before 2015. The exception to that—it is perhaps not a proper exception although it is an important point—is that, in response to representations from the Scottish Parliament and the Scottish Government, we have made prepayments, or a sort of cash advance, in terms of the money required to do the preliminary work for the building of the new Forth road crossing. That has been widely welcomed and it is a pragmatic response to the situation.

The noble and learned Lord, Lord Davidson, asked about the administrative burden and cost of income tax powers. Employers and software providers have already made changes to payroll software so that they can operate the existing Scottish variable rate of income tax. Therefore, the existing payroll software provides for a different rate to operate. Additional compliance costs and burdens may arise if the Scottish Government seek to adapt the existing process—for example, to introduce a greater degree of transparency—by requiring the Scottish rate to be separately identified on payslips and P60s. Further costs and burdens could also arise in relation to the treatment of certain tax reliefs.

The noble Lord, Lord Browne, asked about the working group. There is a high-level implementation group, which involves a number of bodies and organisations with an interest in the detailed implementation of the tax reliefs. It has already met three times and is due to meet again in the autumn. There is also a joint Exchequer group involving Ministers in the Scottish Government, the Secretary of State and the Parliamentary Under-Secretary of State. The group will look at the negotiation of the detailed implementation of these plans. I think that it is due to meet again shortly in the autumn. In addition, separate groups have been looking at issues such as tax on charitable giving and other such detailed issues. These groups have already met, and I assure the House and the noble Lord, Lord Browne, that those meetings will continue.

Finally on finance, the noble Lord, Lord Hughes, asked about the workings of the Scottish rate. He asked, as with chicken or egg, which would come first—the reduction or the block grant. Unlike the Scottish variable rate, the Scottish rate of income tax will require an annual decision from the Scottish Parliament. The proportionate amount will be deducted from the block grant and, if the Scottish Parliament does not set a rate, it will not get the money. It will be obliged to set the rate and to do so in good time before the start of the tax year—again, giving proper notice in terms of collection and to businesses which will have to administer the system.

Related to that, the question of bond issuing was raised by the noble Baroness, Lady Liddell. Although the Bill makes provision for that to be implemented—not by having further recourse to primary legislation but by secondary legislation—it will be dependent on the outcome of a consultation, which is either under way or is about to get under way, regarding the merits of going down that road, taking into account some of the points which the noble Baroness raised.

Linked to this is the question of the Barnett formula, raised by a number of noble Lords, including my noble friends Lord Maclennan, Lord Forsyth, Lord Caithness and Lord Younger, and the noble Baroness, Lady Ramsay. Under the proposals in the Bill, as I have indicated, the Scottish rate of income tax will be reduced by 10p. It will then be for the Scottish Government to decide to levy in Scotland. I am sure a number of noble Lords will wish to debate this further. The Government have made clear in the coalition agreement that we recognise the concerns about devolution funding, but the priority has to be to reduce the deficit and to stabilise the public finances.

The noble Lord, Lord Sewel, said that something should be in the Bill about the formula. The position is that the Scotland Act contains nothing about it and that the Bill, if implemented, is neutral about its future. There will be a block grant but the formula to determine it can be done externally to the provisions in the Bill. We have been duly warned by at least one if not two noble Lords that we will have amendments on this. I note that the noble Lord, Lord Foulkes, and others are liable to bring forward amendments on the question of a referendum. A number of noble Lords have pressed a case for the United Kingdom Government holding a referendum on independence. Their argument is that it is in Scotland’s interests to end the constant constitutional uncertainty and that a clear-cut question will produce a clear-cut endorsement of Scotland’s place in the United Kingdom.

I understand the motivation of those who have argued that case. Many, including the Government, would like nothing more than to see an end to the manoeuvring of separation, which for so long has distracted Scotland from the many other opportunities and challenges on which we might more fruitfully and productively focus. As this debate broadens out beyond this Chamber to the political classes, more questions will be put to the SNP Government, as we saw last week, with important speeches by representatives of the CBI. The dangers of continued uncertainty will become more obvious to people across Scotland if the SNP—“rather coy”, was how the noble Lord, Lord Hughes, described it— carries on ducking questions. It will need to be clear about its plans and its timings.

Perhaps it is too ambitious to hope that tomorrow, when he announces his programme for government, the First Minister will start to say something about that. As noble Lords have indicated, there are crucial questions about the euro or the pound, and about whether it would be the European Central Bank or the Bank of England that would have responsibility. My right honourable friends the Secretary of State and the Chief Secretary to the Treasury raised these questions last week. We will continue to press the Scottish Government on these issues. I take the point made by the noble Lord, Lord McConnell of Glenscorrodale, about the importance of all us waking up to the challenges and positively making the case for the United Kingdom, and for Scotland being part of that.

[Lord Soley]

Will the Minister say what his thinking is about the Electoral Commission’s involvement in any referendum?

[Lord Wallace of Tankerness]

That is an important issue. Under present legislation, the Electoral Commission could be involved in a limited way only if the Scottish Government wished to proceed on their own. The commission is building up an expertise in referendums and has much to contribute, not least in helping to frame questions. In making the case for the union, as the noble Baroness, Lady Liddell of Coatdyke, said, we must challenge the independence case, because you cannot be a little bit pregnant and cannot be a little independent—the independence-lite or devo-max, which seems to be somewhat undefined. The noble Lord, Lord Soley, made an important point, saying that in the United Kingdom we have the most effective political and economic union that the world has ever seen. If we had not had it, today’s debate would be about creating it. When you have peoples bound by a common language in one island or closely proximate islands, why would you not want to come together and be a union, certainly when you look around the world and see other islands or peninsulas that are divided? The thoughtful speech by the noble and learned Lord, Lord Boyd of Duncansby, set out the economic, social and cultural cases for union, which are, indeed, set out in the first volume of the first report by the Calman commission. It was a very good exposition of the positive reasons why Scotland should remain part of the United Kingdom, and I entirely endorse what he said: that we cannot frighten people into supporting the United Kingdom and have to give people an aspirational and inspirational reason for why we believe that this valuable union has served Scotland well over the past 300 years and will serve us well into the future.

I conclude by saying that the genesis of this was in co-operation among parties. I believe and hope that that will continue. I have every confidence that it can continue into the future. My noble friend Lord Sanderson said that the test of this Bill would be whether its passing would help or hinder the cause of the United Kingdom. He is absolutely right. That reflects the terms of reference of the Calman commission. They were referred to by the noble Lord, Lord Browne, and were:

“To review the provisions of the Scotland Act 1998 in the light of experience and to recommend any changes to the present constitutional arrangements that would enable the Scottish Parliament to serve the people of Scotland better, improve the financial accountability of the Scottish Parliament, and continue to secure the position of Scotland within the United Kingdom”.

Those were not only the guiding lights of the Calman commission but are the guiding lights of this Government and, I believe, of this House as we approach this Bill. I believe the Bill delivers on that and that in our deliberations in Committee, we can ensure that it does. I commend the Bill to the House.