Scotland: Independence

Lord Wallace of Saltaire Excerpts

Monday 16th June 2014 Grand Committee

[Lord Wallace of Saltaire (LD)]

My Lords, I metaphorically tore up my speech before I started. Time is short. This has been a helpful debate and has raised the sort of questions that we will all have to consider over the next 90 days—and well beyond.

We need to remember just how far we have moved. I say that as someone who first joined the Liberal Party machinery of government panel. I was a graduate student in 1965 and we were talking about devolution and regional government. I remember that in 1974 my wife and I, as academics, were invited into the Treasury Constitution Unit that had just been established. Several of the senior officials there could not understand how you could manage a national economy if you allowed any autonomy whatever in financial terms. My wife and I tried to say, “Yes, but in Germany they do it this way, as they do in the United States and Canada”. The officials still could not understand. We have moved a long way already. Think how far we have gone since the Maclennan-Cook discussions of 1996 and 1997; it is some considerable distance.

We are, however, left with the tremendous problem of the democratic deficit in England and its highly centralised pattern of government. We should all recognise that part of that problem is the dominance of London, economically as well as politically. We must all take that economic dominance into account in considering the future of the United Kingdom because London continues to generate an enormous amount of wealth, which needs equitably to be shared around the regions and nations. My noble friend Lord Purvis talks about fiscal federalism, which is about hard bargaining or “finance ausgleich”—who gets what share and how much shall be distributed. That is at the core of Finanzausgleich, which is much better organised than the disorganised US federalism. Incidentally, in established federal systems—as the noble Lord suggested—you can never say that we have reached the end of the journey. Federal politics is about a constant battle between state rights and federal powers. A pull and push in each direction is normal politics—just as in the European Union we have had a constant and continuing battle between those who say that we have to do things at the European level and those who say, “No, we don’t; we have to have it at the nation-state level”. That is what international, domestic and local politics necessarily provide.

The noble Lord, Lord Foulkes, quoted Margo MacDonald, who said that we should all work together for the good of Scotland. I suggest that we should work for the good of the UK, not just Scotland. That is post the Scottish referendum; if, as we all hope, the result is no, we need to address this question. Between now and then, no one could cook up a proposal for a conference for a new union, or constitutional convention that could be agreed or accepted at least half-heartedly by the Mail and the Telegraph. We can raise the question—I encourage all noble Lords to do so: where do we go after September? It raises fundamental questions about the future of the kingdom, including, as the noble Lord, Lord Foulkes, said, the role of the second Chamber of what in some ways then becomes the federal Parliament.

It may well be that at that stage we move towards some sort of constitutional convention. We have to recognise that, against the cynicism of much of the national media and the disengagement of much of our national public, it will be quite a job for all of us as politicians to carry the public with us when we say that a more fundamental look at the balance of our political life nationally, regionally, locally and internationally is needed. After all, the future of the United Kingdom in the European Union is part of the picture. The arguments made by English nationalists for leaving the European Union are not entirely dissimilar from the arguments that Scottish nationalists make for leaving the United Kingdom. Therefore part of what those of us who care about good governance have to do is to link all these different levels together.

As somebody who accepted a job at Manchester University rather than Edinburgh University when I was 26, and therefore have spent my adult life in the north of England rather than in Scotland, I am concerned about the marginalisation of the north of England. I am told that a number of senior officials in local authorities in England have been saying to their Scottish counterparts: “Don’t leave us; we need you. We need you to help us to counterbalance the dominance of London and the south-east.” That is a very important part of this. As one of the relatively small number of people in this Chamber who represent, in a sense, the north of England, I am constantly struck by the assumption that when something happens in London it is important, when something happens in Edinburgh or Cardiff, well we notice it a bit, and when it happens in Bradford, Leeds or Newcastle we are not quite sure what it was, but besides we certainly did not report it, even in what used to be called the Manchester Guardian.

Birmingham is a local authority with a population larger than that of Northern Ireland and roughly comparable to that of Wales. This morning I heard on the “Today” programme a former Minister say that one could not trust Birmingham to run its own schools. There is a mindset inside the Westminster bubble which has accepted that perhaps one can now allow the Scots, the Welsh and the Northern Irish—to a certain extent—to run their own affairs, but one certainly could not allow Manchester or Leeds to do so.

The City Deals are at long last beginning to push power back to what might become the English regions. Part of the conversation we all need to have after September is what we mean by the English regions and whether they will be city regions or something different, and how far one can allow Cornwall to split off from the south-west because we all know that all good Cornishmen hate Bristol. What do we do about the south-east as a whole, which, as the noble Lord, Lord Soley, remarked, is so dominant a part in population and wealth terms of our United Kingdom? How do we ensure that the south-east continues to share its wealth with the rest of the country? The whole of the country, including Scotland, would benefit from the sharing of that wealth; it has to be done. Where do we move on that? We move perhaps towards the discussion of a constitutional convention. All parties need to consider to what extent they put that in their manifestos. They will then have to define what they mean by it. Then, of course, we cannot move towards a constitutional convention unless there is some consensus on it. It has to be cross-party and beyond party if it is to be successful.

Over the centuries the British constitution has been built in a series of fits of absence of mind and occasional crises. We are discussing now something which might be a little more rational and a little more long-sighted—it is very un-English in this respect—but we should go for it. The Government have no policy on this and intend to have no policy between now and the election. However, it is precisely the sort of thing that others ought to be floating if it is felt that we need to think in the round about how the substantial changes in the structure of government in the United Kingdom over the past 20 years have taken us to a point where we need to reconsider some of these fundamentals.

I would add—I say this personally, not as a Minister—that the role of the House of Commons, as such, is also a very important part of this. I have found in 18 years in the House of Lords that the House of Commons leaves more and more legislative scrutiny to the second Chamber, while the first Chamber does, in many ways, less and less.

Therefore, there are very some large issues which we have to consider. We have to attack the public scepticism about democratic politics as a whole. That is also part of this. We have to revive a degree of respect in regional government, regional autonomy and local government. I had not realised how sharp a problem that is in Scotland as well as in England. Then we need to work together across the parties and beyond in order to reshape something.

I have learnt over the past three years that there are many, particularly on the Opposition Benches in the House, who regard compromise and consensus as almost dirty words that are linked to “coalition”. Having been in coalition for four years, I would defend the concept of compromise and consensus in coalition if we are to address these fundamental issues, something the British have been pretty bad at doing most of the time. We are going to have to build a broad coalition of interested parties from all the regions of England, from the other three nations of the United Kingdom and from civil society as well as all parties, in order to promote the good governance that we all want.

[Lord Foulkes of Cumnock]

The Minister has not been supported by any civil servants in the debate and yet he has done a brilliant job. However, I am a bit suspicious when Whitehall does not turn up. That is because my experience over the past few months is that Whitehall seems to be ignoring this issue. Perhaps I may ask the Minister how he is going to feed the ideas that have been put forward by the noble Lord, Lord Purvis, and the questions raised by my noble friend Lord Kennedy, into the Whitehall machine. It is important not only that we have the sympathy of the Minister but that we have the Whitehall machine behind him as well.

[Lord Wallace of Saltaire]

I thank the noble Lord for that barbed compliment. Of course it is purely accidental that I have made a good speech without officials being present. I can assure him that I meet the officials fairly regularly and that I meet my Conservative colleagues fairly regularly. I also talk to Labour colleagues fairly regularly. This is one of those areas where we all share an interest in raising various broad matters. It means that people like the noble Lord, Lord Foulkes, and others should be writing to the newspapers and appearing on radio and television programmes to discuss them. We have at last reached the point where people understand that there is going to be a Scottish referendum, and that is progress. Three months ago you hardly saw any mention of it in the London press. We can now begin to talk about what is to happen after September, and that takes us further.

Those of us who are interested in successful decentralisation within England, which is part of what the coalition Government are now trying to do with the City Deals, want to take them further and link them into the devolution-plus which follows in Scotland, the implementation of the report of the Silk commission for Wales and similar developments in Northern Ireland. That is a very large agenda, and it is not something that the British have been good at handling. The sad history of attempting to discuss House of Lords reform over the past 25 years and more shows how bad we are at considering constitutional reform in a calm way. Let us approach this in a different manner. I assure the noble Lord, Lord Purvis, that as far as I am concerned, I along with many of my Conservative colleagues recognise that after Scottish devolution we will have to move. That is what the three parties in Scotland have just committed themselves to, and that is how we will go forward. I note the point about entrenchment; it is not something that the British constitution has done before. I note the point about a changed role for the Treasury and I note the argument that we need a bigger overview in some form of the structure of the British constitution.

This is a debate that will continue and I trust that all noble Lords will be active participants in it, but this is the point at which, without my officials, I should stop and thank everyone for a very constructive debate.

Committee adjourned at 6.03 pm.