Scotland: Devolution

Lord Thomas of Gresford Excerpts

Wednesday 29th October 2014 Lords Chamber

[Baroness Stowell of Beeston]

Certainly—and I speak for the leadership of my party—we are clear that the best way in which to deal with this is through English votes for English laws within the House of Commons. That is something that we can tackle and deal with quickly.

[Lord Thomas of Gresford (LD)]

So much of the legislation affects England and Wales. When the noble Baroness says England, does that include Wales?

[Baroness Stowell of Beeston]

Certainly in the context of legislation that affects England and Wales only, of course that includes Wales.

I assure the House that my right honourable friend the Leader of the House of Commons and chairman of the Devolution Committee, to which I have already referred, will do everything that he can to resolve the West Lothian question before the election, and I applaud his efforts and commend them to this House. It cannot be clearer that now is the time for a better and fairer settlement for the whole United Kingdom. We are absolutely committed to the timetable set out for further devolution to Scotland. We are committed to providing further powers to Wales and to meeting the special needs of Northern Ireland. We on the Conservative Benches are committed to bringing forward a solution to the West Lothian question before the end of this Parliament. There will be a time and a place for a constitutional convention but that should not be a device to prevent the other issues before us being addressed now. We are all responsible for ensuring that decisions are made fairly and in the interests of all people in the United Kingdom. Now, more than ever, we must uphold that responsibility. I beg to move.

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[Lord Thomas of Gresford]

My Lords, it was a great pleasure to hear the noble Baroness, Lady Quin, deal with the most outstanding achievement of the Welsh Labour Government, and that is to put a charge of 5p on plastic bags.

Home rule is a Liberal invention. Mr Gladstone said in Aberdeen in September 1871:

“This United Kingdom which we have endeavoured to make a united kingdom in heart as well as in law, will, we trust, remain a united kingdom. If the doctrines of Home Rule are to be established in Ireland, I protest on your behalf that you will be just as well entitled to it in Scotland. Moreover I protest on behalf of Wales, in which I have lived a good deal and where there are 800,000 people who to this day, such is their sentiment of nationality, speak hardly anything but their own Celtic tongue—I protest on behalf of Wales that they are entitled to Home Rule there”.

Mr Lloyd George echoed those sentiments in 1891, calling for “Home Rule all round”. Jo Grimond believed that power was not to come top-down, as the noble Baroness said, but to spring up from the people. He wrote:

“I find it difficult to see how, if the case for Scottish and Welsh self-government is accepted at all, any powers can be reserved to the UK government except foreign affairs, defence, and the wider issues of economic policy linked to a common currency and common trade policies”.

This was the model in the Hooson Bill for a Welsh Parliament in 1967, which I drafted myself.

Home Rule is not independence. We in Wales agree with Mr Gladstone that this is a United Kingdom of the heart, as much as of political economy. The first impact of the Scottish referendum on Wales was to reduce the support for independence for Wales from 7% to 3%. This was according to a BBC random poll of over a 1,000 adult respondents between September 19 and 22. This is not in the least surprising. Welsh nationalism has always been focused more on cultural identity, tinged perhaps with a little bit of arson, rather than political power. The Scottish referendum campaigns revealed only too starkly the impact that independence was likely to have upon the economy in the relocation of banks and of industry, upon the pound in the pocket, upon relationships world-wide, upon defence obligations and upon jobs.

It was argued by the yes campaign that Scotland paid more in taxes than it received; it would easily be more than self-sufficient, and they could afford to go their own way without detriment to the people. This calculation, dubious in itself, was in any event dependent upon the total success of all their claims in negotiations with the rest of the United Kingdom. That assumed a hearty goodwill and a desire on the part of the taxpayers of England, Wales and Northern Ireland to underwrite the economy and banking system of an independent country north of a newly defined border. It was a fantasy.

Wales is not Scotland. We raise in taxes only 70% of the money we spend. It is not because we are weak or poor in ability or ingenuity; it is because our basic industries of coal, slate and steel are exhausted. Wales shares its wealth, as the noble Lord, Lord Birt, said. We did not call it Welsh coal when it was mined.

However, today, according to key economic indicators published by the Office for National Statistics last July, we are the poorest part of the United Kingdom. We had hoped that a devolved Government would lift us economically, but it has not happened. Public services in education and health are falling behind England. It is clear that a devolved Government in Wales requires some form of equalisation funding.

The Barnett formula, while generous to Scotland, as the noble Lord, Lord Lang, pointed out, underfunds Wales, according to the Holtham commission, to the tune of some £300 million a year. We need fair funding: a needs-based formula which would restore parity to our communities and our public services. As an immediate stop-gap, the Holtham commission recommended a “Barnett flaw”. If anybody wants to know what that is, perhaps they would like to buy me a drink afterwards and I will explain.

In the medium term, a formula must be devised which takes into account an ageing population in Wales, the additional health burdens which mark a post-industrial society, but above all the need to revive and develop the Welsh economy and create jobs. I remain wholly committed to devolution. There are signs of progress. The coalition agreement in paragraph 24 recognised the concerns of the Holtham commission and undertook to establish a process similar to the Calman commission in Scotland. This resulted in the Silk commission and we are currently putting through this House part 1 of its proposals, which will chiefly introduce borrowing and taxation powers. It is a sad commentary that the Government in Wales refuse to hold the referendum which would bring those taxation powers into operation.

We also have it in our Liberal Democrat manifesto to implement part 2 of the Silk commission, which will move Wales to the reserved powers model called for—

[Lord Elis-Thomas]

Did I hear the noble Lord right? Did he accuse the Government of Wales of refusing to hold a referendum on taxation powers? How can a Government possibly hold a referendum on something which has not yet been passed by this House?

[Lord Thomas of Gresford]

I am sorry, I did not quite catch what the noble Lord said.

[Lord Elis-Thomas]

I am grateful to the noble Lord for allowing me to intervene again. I heard him imply that the Welsh Government had refused to hold a referendum on tax-varying powers in Wales. How is it that a Welsh Government, or any other Government, for that matter, can hold a referendum on a matter which has not yet been legislated?

[Lord Thomas of Gresford]

That is the stated policy of the First Minister of Wales, as the noble Lord knows perfectly well.

We have in our own manifesto the intention to implement part 2 of the Silk commission, which will move Wales to the reserved powers model that was called for by Jo Grimond and which operates at the moment both in Scotland and Northern Ireland. We hope that normal political processes will operate to install in the Assembly a Government which will use the levers that they are being given to deliver the infrastructure upon which an expanding economy depends: outstanding education in accordance with Welsh traditions and a healthy NHS. Let us see if Scotland can match us then.

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[Lord McAvoy (Lab)]

My Lords, this has been a powerful debate, with some very powerful speeches made by some very powerful speakers. It would take me too long to go through every single one of them but particular mention must be made of the former Secretaries of State for Scotland, my noble friend Lady Liddell of Coatdyke and the noble Lord, Lord Forsyth of Drumlean, as well as of the noble Lord, Lord Lang of Monkton.

I share the view of a number of noble Lords that the most dangerous time was not before the referendum. I believe that the most dangerous time is now. If we do not handle this collectively, if we do not handle it properly in a collegiate way, it will lead to an inevitable separation and a separate Scotland. The word “Westminster” has become an epithet—an insult. This has been contributed to by Mr Farage and by Mr Salmond. There is a disengagement between the so-called establishment parties and the public. The noble Lord, Lord McConnell of Glenscorrodale, mentioned this disengagement in the context of Westminster and the Scottish Parliament. The paradox is that, in Scotland, more people turn out for Westminster elections than they do for Scottish Parliament elections, so there is a quandary there.

More powers are guaranteed for Scotland within the agreement. Although a lot of people do not like this or that power promised in the vow, as it has come to be known, if we do not deliver on it, we are guaranteed trouble. More powers for Scotland are guaranteed, regardless of what the SNP says. We guaranteed these collectively during the referendum campaign and we must deliver on that. My party has always led on devolution and we will engage with the Smith commission in a spirit of openness and partnership with the other political parties. As has been mentioned, it is a good thing for the Scottish National Party to be involved in that.

There are a couple of things that I have been confused about all night. There have been constant attacks on the Barnett formula, and it has been stated by some very knowledgeable people that it is not based on need. Since I came into politics, although I have not studied the Barnett formula—I would not want to be up all night—I have always been told that it is based on need, and in Scotland's case that it is based partly on the geographical nature and the large physical area of Scotland. There is a new gospel out, but I certainly believed that that was part of the calculation, along with the lower incomes in Scotland and social factors. The Barnett formula has been a great boon to Scotland, because it shares the resources of the United Kingdom with a poorer part of the country. However, I accept that there is concern about the democratic deficit, and I think that there is merit in that. I am not a mathematician but, surely, if the Scottish Parliament collects more of its own spending, there is a hope that the Barnett formula—but before I can finish, the gloom and doom merchant from Drumlean is shaking his head at me. He is starting to intimidate me. In the fullness of time, I hope that the Barnett formula can be a less important consideration in the overall look, especially in financial matters.

[Lord Thomas of Gresford]

The Barnett formula quite simply, as far as Wales is concerned, is a multiplication of departmental spending from the departments devolved to Wales by the population, which is 5.3% of the United Kingdom. That is where the money comes from; it has nothing at all to do with need.

[Lord McAvoy]

As I said, if you started to debate the ins and outs of the Barnett formula, we would be here a long time. I am being honest in telling your Lordships' House that my understanding of the formula since I came into politics was always that it was based on need.

I want to address the serious question of EVEL. If we get to the stage that there are two classes of Members of Parliament, it will come across as trying to take party advantage of a situation. The noble Lord, Lord Bew, mentioned the Northern Ireland situation. I do not recall the Labour Party in my time in the House of Commons making too much of the fact that there were Ulster Unionist MPs who more or less voted with the Conservatives, because my party and I took the view that that anomaly was worth carrying for the sake of the United Kingdom. I do not recall the noble Lords, Lord Forsyth of Drumlean or Lord Blencathra, or other Conservative Peers, mentioning the injustice of that situation all those years ago. So they seem to be a bit picky about it. There is a danger that that sort of seemingly political calculation by the Conservative Party could ruin its approach to the Smith commission.

My party supports a royal commission and a constitutional convention, because it is clear that we have to establish a mode of operation through the entire United Kingdom that will be settled, will last and endure and will be of value to all the people of the United Kingdom.