Scotland: Devolution

Lord Wallace of Tankerness Excerpts

Wednesday 29th October 2014 Lords Chamber

[The Advocate-General for Scotland (Lord Wallace of Tankerness) (LD)]

My Lords, the House has heard a very important and comprehensive range of contributions on complex and interlinked constitutional issues. I am pleased that we have had the opportunity to hear such a range of views and perspectives from all parts of our United Kingdom; it has been very important to hear views not just from Scotland but from England, north and south, as well as from Wales and Northern Ireland.

I was delighted to hear the contribution of the noble Lord, Lord Lennie, in his maiden speech. I understand that he is not only a Newcastle United fan but a participant in the Great North Run. No doubt that will allow him the stamina to take part in debates that go on for the best part of six hours. He summed up a recurring theme of our debate when he talked about the disconnect between politicians and voters that needed to be reduced. He entertained us and he informed us, and I know that the House looks forward very much to his contributions to your Lordships’ House in the future.

As noble Lords will have heard, the issues considered in this debate fall into three broad categories. The first relates to Scotland and the fulfilment of the joint commitment by the three party leaders to deliver more powers to the Scottish Parliament in light of the referendum no vote. The second category of issues relates to how to ensure that power is properly devolved and decentralised to all the nations, communities and individuals who comprise all parts of our United Kingdom. The third, separately but rightly—not as an alternative to devolution within England—considers how we might address the so-called West Lothian question, which has come about as a consequence of devolving power to specific parts of the United Kingdom.

I will address first the issue of the referendum in Scotland. It was legal and fair in its conduct and decisive in its outcome. It is important that we reflect on the points made by a number of noble Lords, including the noble Baroness, Lady Liddell, and the noble Lord, Lord Birt, who highlighted the appalling treatment of Nick Robinson in a country which ought to take pride in the freedom of the press and of the media. My noble friends Lord Stephen and Lord Forsyth also highlighted some of the many real problems that were encountered during the referendum. We should not lose sight of these when we think of what kind of Scotland we want to see in the future.

Some noble Lords questioned the fact that the Scottish Parliament devised the referendum. It was important that the referendum was, as it were, made in Scotland. In its immediate aftermath, we heard today of the conspiracy theories that counters at polling stations were filling in blank ballot papers. If the referendum had been devised at Westminster, the view that it was all a trick and a conspiracy would still be echoing loud and clear. The referendum was devised by the Scottish Government—they had everything going for them, and they lost. That is what makes the result decisive.

The people of Scotland expect that the interests of 100% of Scotland within the United Kingdom are taken forward. No one is under any illusion that a no vote was a vote for the status quo or that, somehow or other, we are out of the woods. As the noble Lord, Lord Hennessy, said—I think he spoke for many of us, myself included—our relief has been suffused with anxiety. As the noble Lord said, we are all seeking to achieve a strong and lasting settlement across the United Kingdom.

That is what we intend to do. The vow made by the Prime Minister, the Deputy Prime Minister and the leader of the Opposition has already been put into practice. My noble friend Lord Selkirk of Douglas sought the reassurance that that would be adhered to. Even those who contributed to your Lordships’ debate, who were sceptical about the commitments made, nevertheless all agreed that it was essential that that promise is honoured. It has been honoured. The Command Paper setting out the parties’ positions was due by the end of October. In fact, it was published two weeks ago. It is continuing to be honoured with the work of the Smith commission. It will be honoured because we have undertaken that the heads of agreement, which we look forward to the noble Lord, Lord Smith of Kelvin, announcing, will be taken forward with clauses by Burns Night.

Equally, the Scottish National Party should remember the statements it made ahead of the referendum that it expected it to be a once-in-a generation or once-in-a lifetime event. Nicola Sturgeon, whom I congratulate on becoming, as she will become, the First Minister of Scotland, said one year ahead of the referendum—on 18 September 2013—that this was a once-in-a lifetime opportunity for Scotland. If our parties are expected to honour commitments, the least we can expect is that the Scottish National Party will honour its commitment to the people of Scotland that this is for once in a generation.

The commission chaired by the noble Lord, Lord Smith of Kelvin, was up and running on 19 September. His terms of reference make it clear that the recommendations will deliver more financial, welfare and taxation powers, strengthening the Scottish Parliament within the United Kingdom. Last week, he convened the first meeting of cross-party talks to reach agreement on proposals for further devolution. All 10 nominees from each of the represented political parties attended. The noble Lord has said that they have,

“committed to work together to achieve a positive outcome to this process”.

The noble Lords, Lord McConnell and Lord Foulkes, emphasised the importance of this being, as it were, a principles-based approach rather than a horse-trading approach. I believe that that is what the noble Lord, Lord Smith, indicated after that first meeting. The parties have agreed a set of principles which include, but are by no means limited to, forming a substantial and cohesive package of powers, enabling the delivery of outcomes that are meaningful to the people of Scotland, and strengthening the Scottish devolution settlement and the Scottish Parliament within the United Kingdom, including the Parliament’s levels of financial accountability. The noble Baroness the Leader of the Opposition, as well as the noble and learned Lord, Lord Hope of Craighead, and my noble friend Lord Glasgow, sought an express assurance that that would be within the context of the United Kingdom honouring the outcome of the referendum. There is also a principle that it will not cause detriment to the United Kingdom as a whole nor to any of its constituent parts.

However, this process is not just about the parties. The referendum saw an opening up of civic engagement, and the noble Lord, Lord Smith, has made it clear that he wants to hear from all the various groups to ensure that the recommendations that he produces are informed by views from right across Scottish society. By St Andrew’s Day, he intends to publish heads of agreement. As I have indicated, the Government are committed to turning these recommendations into draft clauses by Burns Night 2015. It is a demanding timetable but that is because the demand is there, in Scotland, to see change delivered, and it is a demand that we intend to meet.

Scotland will have further powers but we believe that that must be within the context of Scotland being a part of the United Kingdom. It must not start to unravel the fabric that binds us together, because that would be a denial of the outcome of the referendum. However, I very much share the view expressed by the noble Lords, Lord McConnell and Lord Elder, that the exercise of these powers is vital to the whole range of devolved responsibilities. It would be very refreshing to get the political debate back on to how we improve education, health, transport, agriculture, sport and local government in Scotland.

Not surprisingly, the question of funding was raised. I certainly take the point made by the noble Lord, Lord Empey, who referred to the “ATM approach”—a point reiterated by the noble Lord, Lord Kerr of Kinlochard—where there has been spending by the Scottish Parliament without responsibility for raising the funding. Indeed, my noble friend Lord Purvis of Tweed highlighted that fiscal responsibility gap. One of the objects of those who served on the Calman commission—as I did, along with my noble friend Lord Selkirk of Douglas, and the noble Lord, Lord Elder—was to address that and to ensure that there was greater accountability for spending. Therefore, with the additional tax powers come additional responsibility and accountability.

We have been clear as a Government that the act of devolution in and of itself should not result in a change in the budget, but it is important to note that this is also one of the key principles highlighted by the Smith commission. However, we have been equally clear—this addresses a point raised by my noble friend Lord MacGregor of Pulham Market—that if decisions are taken by the Scottish Government which result in a lower tax yield than the current arrangements, the Scottish Government will have to take spending decisions in line with that reduced tax yield. The noble Lord, Lord Kerr, will put me right on this but I think that the Azores judgment means that where tax is fully devolved and there is a shortfall, it cannot be topped up.

The noble Lords, Lord Blencathra and Lord McAvoy, made the point that, as more tax-raising powers are devolved, the amount of money transferred to Scotland under the Barnett formula will decline.

[Lord Forsyth of Drumlean]

Can my noble friend just deal with the point in the so-called vow where it says that our resources will be shared,

“equitably across all four nations”?

How is that consistent with keeping Barnett? Can he also deal with the notion that, by giving the Scottish Parliament more tax-raising powers, Barnett can be phased out? If the tax base in Scotland is lower than the uplift in the Barnett formula, compared to the average for the United Kingdom, how will that gap be filled?

[Lord Wallace of Tankerness]

My Lords, an important issue which was always there but was articulated well, not least by the former Prime Minister, Mr Gordon Brown, in the latter stages, was the notion of the social union; the equitable arrangement within our United Kingdom where, if one part of the kingdom is thriving, there is a transfer of resources to a part that is not doing so well. That is one of the important things that binds our United Kingdom together and I see that as an equitable distribution of resources within it.

[Lord Turnbull]

I query why a country which claims to be more prosperous than the United Kingdom as a whole is the recipient of the highest transfer compared with Wales, which is the poorest part but receives a much lower transfer. That cannot be equitable.

[Lord Wallace of Tankerness]

The noble Lord, Lord Turnbull, quoted very accurately the words used in the statement in the Daily Record. As I indicated to my noble friend Lord Forsyth, with all his success in getting more money, it is the base line that is applied. With regard to Wales, it is understood and recognised—

[Lord Purvis of Tweed]

If the Minister will give way I will, for the information of the House, quote from the public expenditure statistical analysis by the Treasury in 2013 which shows that in 2008-09 the DEL resource grant, which may well be considered the transfer, was 7.7% of all of the grants for that year. The plans for 2015-16 are 7.96%, which is below the population share for Scotland. The point has been made about how you would balance that grant with the further tax powers. This is the work of the fiscal federalism principles of looking over a 10-year profile over economic cycles to make sure it is a balanced and fair proposal. The Strathclyde commission did it; the Liberal Democrat commission did it. There is work being done to inform this quite considerably.

[Lord Wallace of Tankerness]

My Lords, with respect to my noble friend who I know has studied it in great detail, I hesitate before going down the line of a 10-year fiscal federalism profile. I was about to answer the point made by the noble and learned Lord, Lord Hope of Craighead, and the noble Baroness, Lady O’Neill, with regard to the Supreme Court. The Scottish National Party has made a specific proposal. It would be wrong to second guess the Smith commission, but on the noble and learned Lord’s point about the role of the Supreme Court, if you have got a single market you should have a common set of principles and legal interpretation. This is very important and, as he will be well aware, both my own department and the Scottish Government established working groups during the passage of the Scotland Act 2012 to look at the role of the Supreme Court with regard to devolution issues. These are now compatibility issues and I hope that the Smith commission will have regard to that work, as both working groups reached very similar conclusions. I hope that gives some reassurance to the noble Lord.

The commitment to deliver further powers for Scotland is of course in keeping with this Government’s record in decentralising power. As my noble friend the Leader of the House has indicated, this Government have made huge progress in devolving both responsibility and funding for schemes to a local level. Local enterprise partnerships and the ambitious city deals programme, which has been mentioned by a number of noble Lords who have contributed to the debate, are clear examples of our commitment to empowering local leaders to take decisions which best fit local circumstances and needs.

That is a demonstration of open-mindedness about how more powers might be devolved. We certainly do not believe that power should be hoarded at the centre but that it should be devolved to the nations, communities and individuals that will benefit from it. I was struck, in the course of our debate, by the very important contributions from those with a rich experience in local government: the noble Lords, Lord Smith of Leigh and Lord Beecham, and my noble friends Lord Shipley and Lord Tope. They shared very constructive ideas with your Lordships’ House as to how we might improve existing arrangements, what new ones might be made and how powers might be used more imaginatively in our communities, our cities and those parts of the country which are not immediately connected with a major city. That is clearly an agenda which must be pursued as we go forward examining a whole range of constitutional issues.

With regard to other devolution of power within England, my noble friend Lord Dobbs referred to Walter Scott and the path to the Highlands and the danger for an Englishman. Treading into devolution for England by a Scotsman is almost as dangerous. I always tread very carefully indeed. From what was said this evening, it is very clear that this is something which should be addressed. As I indicated earlier, this is not an alternative to the so-called EVEL; it is a both/and rather than an either/or.

As my noble friend Lord Greaves, the northern home-ruler, said, there is no consensus in England as to where we might go. There must be an opportunity for further debate. The noble Lord, Lord Prescott, made a very clear case for greater devolution within England. He said that the regions of England had to be consulted as to where they might go. There are proponents of regional government throughout England. There are difficult issues over the possibility of the creation of extra layers of government. There have been advocates of a separate English Parliament, although that raises questions over location and composition, and whether it would be any more decentralised than the present arrangements. While in Scotland there was a settled role of the Scottish Parliament, the picture in England is less clear. My noble friend Lord Tyler indicated that my own party advocates provisions of flexible and responsive devolution on demand. There is a wider debate to be had. My noble friend Lord Shipley set out a strong, healthy agenda for such a debate.

[Lord Blencathra]

The latest polls show that 78% of people in England favour English votes for English laws. That seems fairly like consensus to me.

[Lord Wallace of Tankerness]

I was coming on to the question of English votes for English laws. I do not believe that English votes for English laws is an answer to the whole question of devolution within England; I think that that point is accepted. As my noble friend Lord Tope said, it is not a question of if—it must be a question of how. Moving on to the point raised by the noble Lord, Lord Blencathra, and numerous contributors to the debate with regard to English votes for English laws, I was going to say, “Over the last few weeks,” but my noble friend Lord Macgregor reminded us that the issue was live when he entered the House of Commons in 1974 and my noble friend Lord Lexden reminded us that it was live when Mr Gladstone and Joseph Chamberlain were in the House of Commons. This matter has generated debate and questions for well over a century. The welcome transfer of powers to Scotland, Wales, Northern Ireland and the London Assembly, and the prospect of further devolution have created not just an anomaly but a complex one. The asymmetric devolution of powers to these bodies makes the issue of which MPs’ constituents are affected by which laws a highly varied one. It is not a simple question with an easy answer, but we nevertheless should seek an answer, as my noble friend Lord Macgregor said. It is a question of fairness.

Each of the three main UK parties in the United Kingdom Parliament has expressed its views on the West Lothian question. This House has considered the issue. We have had the views of the McKay commission and reports such that of the democracy taskforce. My right honourable friend David Laws has noted that a grand committee should be appointed proportionately to vet laws that will apply only in England, joined by Welsh MPs when matters affecting Wales are debated.

The noble Lord, Lord Elis-Thomas, mentioned that Bills have a territorial extent. I know that my own Office of the Advocate General looks at all Bills with regard to whether legislative consent Motions will be required in Scotland. It can be complex. The Marine and Coastal Access Bill in which I took part is an example that was referred to by my noble friend Lord Greaves. Although my noble friend Lord Blencathra said that it could be relatively easy, I remember when the legislation was going through the House of Commons with regard to the increase of tuition fees under the Labour Government. When that passed, I was the Minister with responsibility for higher education in Scotland and I knew full well that that had far-reaching consequences for Scotland, which led to the Further and Higher Education (Scotland) Act 2005. It is not always easy. This matter deserves careful consideration.

[Lord Foulkes of Cumnock]

The noble and learned Lord is absolutely right. Will he deal with the point that I raised that, for more than 300 years, until 1999, all Scottish legislation—on education, on health and on the legal system—was dealt with by this Parliament by a majority of English, Welsh and Northern Irish Members?

[Lord Wallace of Tankerness]

The noble Lord is right. That was one of the reasons we established the Scottish Parliament. It is a matter which I think ought to be addressed—and far better that it be addressed where there is cross-party working and consensus-forming. That was the basis on which we established the devolved Administrations, and I do hope we can work on a cross-party basis to address this important issue as well.

[Baroness Royall of Blaisdon]

On the EVEL issue, is the noble and learned Lord content—I do not wish to try to put fissures in the coalition—that the committee that has been set up by Mr William Hague, of which the noble Baroness is a member, is a committee of people from Westminster behind closed doors looking for a quick-fix solution? Is the noble and learned Lord himself content with that as a way forward?

[Lord Wallace of Tankerness]

My Lords, my experience is that Cabinet committees tend to be that. They are Cabinet committees. However, as we have experienced in this debate, the debate is not confined to those members of the committee. It would be very helpful if there were contributions from not just the two coalition parties, which, as the noble Baroness points out, are not entirely at one in this, as the article by my right honourable friend David Laws has shown. It would be very healthy if we had views, not only from the other political parties but others as well.

[Lord Cormack]

I am extremely grateful to my noble and learned friend. A variety of views on English laws have been expressed in the debate. But surely one message has come through very clearly: people do not want to rush this. Many people who have made this point have also said that this is an appropriate subject for a commission or a convention.

[Lord Wallace of Tankerness]

My Lords, we are not just going to park it. I was coming on to the very point that my noble friend makes about the convention. I have a whole list here—I am not going to read it out—of noble Lords who have talked about a convention—that constitutional change should be achieved through a convention. I make it clear that the Government will consider proposals for the establishment of such a convention because, while debate is needed in both Houses, it is important that we engage with the public as well. We should not simply be continuing our constitution behind closed doors, if that is what the noble Baroness the Leader of the Opposition was suggesting. We must listen to other people’s views and opinions on this. The noble Baroness, Lady Quin, and my noble friend Lord Thomas of Gresford said it should not be a top-down approach. Many of us would accept that view.

[Baroness Royall of Blaisdon]

My Lords, I know that the noble and learned Lord wishes to finish, but, that being the case, that the Government are open to having a constitutional convention, which is extremely welcome, why is it that they are bent on taking a decision on EVEL before the general election and before a constitutional convention has been set up?

[Lord Wallace of Tankerness]

A view has to be taken on some issues. My noble friend Lord Maclennan has been an advocate of a constitutional convention probably longer than anyone else I can recall. He was perhaps suggesting that the proposals that might emanate from the Smith commission should go to a constitutional convention. I believe there are some things which cannot wait and to try to do that would give rise to allegations of bad faith. We have heard in our debate a whole range of issues which a constitutional convention should raise. My noble friend Lord Steel talked about the role of the second Chamber. Should it be a second Chamber that reflects the different regions and nations of the United Kingdom? The noble Baroness herself mentioned votes at 16, which would be an important constitutional change, one which, again, I think is ripe for debate. It is important that we respond to the suggestions and concerns raised. Our structures need to be responsive to that.

In conclusion, the United Kingdom is the strongest family of nations the world has ever seen. My noble friend Lord Thomas reminded us of what Mr. Gladstone said—that home rule must be in the heart as well as in the law. Many of us feel that it is something that is in our DNA and in our hearts. Together we have made remarkable discoveries and inventions, delivered changes that have improved the lives of citizens not just in the United Kingdom but globally. Together we have one of the most stable currencies in the world. Through our strong internal trade links, we create jobs across the United Kingdom. Together, we make our savings and our pensions more secure. These are valuable things. They should perhaps have been said better and more often during the campaign, but I think that they did actually get through. We must remember that the people of Scotland at the end of the day voted to remain together in the United Kingdom. It is important that we engage not only the people of Scotland as we go forward but that we recognise that the referendum campaign threw up some important issues, not least the disconnect that so often exists between the people and those in power. That is an important issue that has to be addressed.

I am sure that we agree that we should try to do this with the maximum degree of consensus. Perhaps the watchword for us all is to deliver a strong and lasting solution for all the United Kingdom.

Motion agreed.