Scotland Bill

Lord Stephen Excerpts

Monday 22nd February 2016 Lords Chamber

[Lord Elton]

My Lords, we should be coming to a conclusion, so I do not wish to detain your Lordships for long. However, I remark that my noble friend Lord Selkirk, in a wonderfully elegant and skilful speech, invited your Lordships, not unreasonably, to delay the Bill. What gives my noble friend Lord Forsyth’s amendment weight and reason is the joint letter from the two chairmen of the two senior committees of this House, which has scarcely been addressed in this debate at all. They have both said, after considerable deliberation, that it would not be proper or wise for us to proceed until we have the fiscal framework before us. We therefore have to find some means of doing that—if possible keeping within the timetable, which is an unreasonable one. It was not unreasonable to start with but it has become so because of the extraordinary foot-dragging of the seeking of the agreement itself. That is not our fault.

It is also important to remember that we are here for a purpose. It is the reasonable purpose of seeing that the legislation we pass is fit for purpose and does not handicap unnecessarily or unfairly any part of the United Kingdom. From what I have heard this afternoon I understand that that is something we cannot fairly do until we have the framework.

What other devices are there to achieve this compromise of timing? I am sure it is already in my noble friend the Chief Whip’s mind but there is, of course, the device of recommitting clauses that have been taken in Committee at a later stage when circumstances change. I remind the noble and learned Lord, Lord Hope—I hope I have got my procedure right—that the clause stand part procedure is in Committee and therefore there are no opportunities to suddenly excise a clause that has already been voted in. It is asking to decide the same issue twice in opposite senses. Therefore the idea of a recommital which gets round that decision seems a reasonable one. I put that to your Lordships as well as my noble friend Lord Forsyth’s plan B, as it were, which also has its merits, but I think they are less good because there would be less chance to do anything with this Bill once it is on the statute book.

[Lord Stephen (LD)]

My Lords, all of this emphasises the need for more open government. We have very limited information on the fiscal framework negotiations and neither Government have won plaudits for transparency and openness. From the UK Government there has been little more than, “We met. Good progress was made,” and possibly, occasionally, an overview of the agenda. I quote from the meeting held as recently as last Friday. This is supposed to be us coming to the end of the negotiations:

“MINISTERIAL MEETING ON SCOTTISH GOVERNMENT’S FISCAL FRAMEWORK – 19 FEBRUARY 2016”—

the title takes up more space than the minute of the meeting, which states:

“The Rt Hon Greg Hands MP, Chief Secretary to the Treasury and John Swinney, Deputy First Minister and Cabinet Secretary for Finance, Constitution and Economy met in London today. They had a useful further discussion on Scotland’s fiscal framework. The discussion made progress in a number of areas. The two governments have not yet been able to reach an overall agreement”.

This is the sort of information that we as parliamentarians are being asked to rely on. The UK Government appear to believe that this is the best way to conduct these intergovernmental negotiations. I suspect that a major reason for this is the Treasury, which has a long track record of secrecy in all matters and doubtless feels that this has served its purposes well over the decades. The annual Budget negotiations with spending departments is probably the best example of this. By default we accept that the Treasury tends to be secretive, but I do not believe that this makes for good government. The more open we can be, the better. People should be encouraged to get more involved in politics and helped to understand government and the issues facing Governments. Too much is still done behind closed doors. This is a very big issue for the future of Scotland and the United Kingdom. So far everything has been done behind closed doors.

There is another dimension to this beyond the issue of secrecy. At both UK and Scottish levels we have been asked to, “Trust us, we’re the Government”. Governments, however, can be trusted only so far and Governments are ultimately answerable to the people and to the parliaments. Their powers are not, and must not be, unfettered. There can be real advantages to openness, particularly when they are dealing with, and are answerable to, the parliaments.

However much we may wish to support the passage of this Bill, there will come a point when we have to say that we need to see the fiscal framework, at least in its final draft form. This week we are reaching that final point with the Bill. We are supposed to move on from the Committee stage today to Report on Wednesday, but the negotiations between the Scottish and UK Governments are still to be concluded. Indeed, it is widely reported in the media that there is still a dispute. As parliamentarians in this Chamber, we have not been told the detail of this dispute but it is certainly all about the detail of the formula to be used, or indeed which formula is to be used, to calculate the funds to come to Scotland once the new tax-raising powers have been introduced. Surely there is bitter irony in negotiating this with an SNP Government, because with independence there is no formula and no safety net. The situation as we all understand it is that all that is swept aside: goodbye Barnett, goodbye population weighting and goodbye all forms of protection.

It seems inconceivable that we can proceed to complete Parliament’s consideration of the Bill without much greater openness and clarity on this issue and on the fiscal framework and all its clauses in general. Ideally, the terms of a final agreement need to be revealed to us. However, failing that and accepting that the UK Government cannot force a final agreement, we need to see the full draft of the fiscal framework identifying the area, or areas, of dispute and explaining the different proposals of the two Governments. Without that, the progress of the Bill is in serious danger of grinding to a halt, so I am very sympathetic to the view of the noble Lord, Lord Forsyth.

My noble and learned friend Lord Wallace of Tankerness has suggested, for example, that we might be able to pass the Bill subject to a commencement order, which would require a legislative consent Motion from the Scottish Parliament. The noble Lord, Lord Forsyth, has suggested another possible approach today in the event that we cannot reach a final, agreed position on the fiscal framework. All these arguments carry considerable force and a lot of work needs to be done on this in the coming hours. However, all of us know that stopping the Bill now, and stopping it in the House of Lords, would have huge practical and symbolic consequences, which could threaten the delivery of the extra powers promised to Scotland ahead of the Scottish Parliament elections in May. There would be the most profound political consequences. So, as we have listened carefully to the noble Lord, Lord Forsyth, we should listen carefully to the Minister’s response.

[Lord Hughes of Woodside]

I accept the point that the noble Lord has made about the dangers but does he not see that that is precisely what the SNP is playing for: to prevent an agreement before the election, as that is what it will fight the election on?

[Lord Stephen]

If that is the case, we must flush the SNP out on this, and we must be transparent and open about the progress that has been made and what is being offered by the UK Government in terms of the fiscal framework. The UK Government must be prepared to defend their position as fair and reasonable.

Whatever the result today, I believe that the arguments for greater openness and transparency on the fiscal framework will apply with even greater force when we reach Report. That will be the critical stage for the future success of the Bill.

[Lord Hollick (Lab)]

My Lords, the Economic Affairs Committee, which I chair, and the Constitution Committee both concluded after extensive inquiry that, in the absence of any information about the fiscal framework, it will be impossible for the House to assess whether the Bill will cause detriment to all or part of the United Kingdom. As the noble Lord, Lord Forsyth, pointed out, we are talking about billions of pounds which could move between the rest of the United Kingdom and Scotland, so this is no small matter.

I think the Government have accepted the logic of that position, which is why we are taking Parts 2 and 3 out of order in today’s Committee. In his opening remarks, the Minister said that there will be ample opportunity on Report to scrutinise the fiscal framework. If, as he has hinted and as newspapers have reported, the fiscal framework is to be published in the next few days, would he agree that ample scrutiny can take place only if the procedural rules of Committee stage are applied to Report stage? Will the Minister confirm that he and his noble friend the Chief Whip will press for that?