Scotland Bill

Lord Wallace of Tankerness Excerpts

Tuesday 8th December 2015 Lords Chamber

[Lord Crickhowell (Con)]

My Lords, I have not spoken previously in this debate but am prompted to do so partly because for a long time I was a member of the Constitution Committee and therefore take a good deal of note of what it says. I am also prompted to speak partly because of what has just been said. The trouble is that we do not have a written constitution but we are advancing ad hoc, step by step, and it is a very dangerous process. We will very shortly be debating a Wales Bill and I can just see it happening—we will be told that the Welsh Parliament has to be made permanent and cannot be altered by this British Parliament. This is a matter that affects the United Kingdom as a whole and therefore we should take seriously the clear observations of the Constitution Committee and of my noble friend Lord Forsyth.

[Lord Wallace of Tankerness (LD)]

My Lords, as the noble Lord has just indicated, it is very clear that there are implications for the rest of the United Kingdom. It is just a great pity that the Government will not accede to the request from all sides of the House and all parts of the United Kingdom for a constitutional convention, in which many of these relationships could be properly looked at. The right reverend Prelate reminded me that we have to be careful with the wording here. To say so stridently that the Scottish Parliament and the Scottish Government are permanent will start raising doubts about whether anyone would think anything else. That is why care has to be taken here.

In the 1990s I was part of the Scottish Constitutional Convention. It came up with the blueprint for the Scottish Parliament, which, to its credit, the Labour Party, elected in 1997, faithfully put into legislative form. I remember many discussions in the constitutional convention about how to entrench the Parliament. We kept going round in circles on the issue of parliamentary sovereignty and on whether we should have a referendum. In the end, the convention decided that it could make no such proposal. The Labour Party proposed a two-question referendum. My party and I were opposed to that as it was not what the convention had agreed, but I think that I was wrong. The fact that we had a referendum in 1997 and that the Parliament was established on the basis of a very strong popular vote in Scotland meant that it found its own form of political entrenchment. We could go round in circles here having a highbrow constitutional discussion on the nature of the sovereignty of Parliament.

The noble Lord, Lord Norton of Louth, used the words “political reality” in moving his amendment. At the end of the day, we come back to political reality. I say to the noble Lord, Lord Cormack, that if the people of Scotland voted to abolish the Scottish Parliament, primary legislation in this Parliament would be required for that to happen, but of course if this Parliament chose to ignore what the people of Scotland said, that would bring about a constitutional crisis because political reality would kick in. That is why I also disagree with the amendment in the name of the noble and learned Lord, Lord Hope of Craighead. He is saying that if the Parliament were removed, it would have to be done not only on the vote of the Scottish people but on the vote of the Scottish Parliament. The Scottish Parliament might well vote to get rid of the Parliament because it was not doing a particularly good job. Therefore, you do not give the veto to the people whom you want to get rid of and who have a vested interest in keeping the Parliament.

These things are hypothetical because, quite simply, I do not see them happening. That is why I think that political reality is more relevant to this debate than highbrow discussions on parliamentary sovereignty. As ever, I give way to the noble Lord, Lord Forsyth.

[Lord Forsyth of Drumlean]

On the subject of political reality, is it not the policy of the noble and learned Lord’s party to have a constitutional convention with a view to creating a federal United Kingdom? What happens if we have a provision in law saying that the Scottish Parliament as it stands is permanent and the rest of the United Kingdom wishes to alter the structure and have a federal constitution along the lines that he suggests and that is blocked because of these provisions? Perhaps he thinks the political reality is that what he wishes for will never happen, but surely it is wrong to create inflexibility, given that he and his party accept that the present system is not a stable, lasting settlement.

[Lord Wallace of Tankerness]

The noble Lord makes a very good point. But under any federal system there would be a Scottish Parliament. I echo again Section 1(1) of the Scotland Act 1998: there still would be a Scottish Parliament. It may have a different form and different powers, but there still would be a Scottish Parliament. I do not think anyone is suggesting that the Scottish Parliament that we refer to in Clause 1 of this Bill is for ever frozen in aspic or that it would not inherit other powers at some time to come.

The issue is indeed one of political reality. We are also duty bound to have regard to the wording of this part of the clause.

[Lord Forsyth of Drumlean]

Is the noble and learned Lord saying that when the clause heading says:

“Permanence of the Scottish Parliament”,

this is not referring to all the powers and privileges of that Parliament but just to the name, and that the powers could be changed? Is he saying that the effect would be that we could take away all its powers but, provided that there was still a building and something called the Scottish Parliament, that would be covered?

[Lord Wallace of Tankerness]

Let me get back to political reality. I do not believe that that would happen. But I think it is very likely that we will have some measures in the future—probably the not-too-distant future—under which more powers are given to the Scottish Parliament. Therefore, it comes back to the same thing: to the political reality. If there was a move resulting in a constitutional convention or a federal system for the United Kingdom, which my colleagues and I aspire to, the political reality of that would see it delivered.

I have much sympathy for the points made by the noble and learned Lord, Lord McCluskey, because I simply do not know what is meant by,

“with due regard to the other provisions of this Act”.

No doubt the noble and learned Lord, Lord Keen, will tell us in his reply what the importance of including those words is.

I also wonder what is meant in subsection (3), which says:

“In view of that commitment it is declared that the Scottish Parliament and the Scottish Government are not to be abolished except on the basis of a decision of the people of Scotland voting in a referendum”.

I do not think that the “people of Scotland” is anywhere defined in this. Is it the people resident in Scotland, which was the qualification for the referendum in 2014? At that time, many noble Lords received many representations from expatriate Scots living abroad or living in London who consider themselves to be part of the people of Scotland. So would they be part of the referendum that is proposed by the Government with regard to the future of the Scottish Parliament? That is why I think that the wording proposed by the noble and learned Lord, Lord Hope, in the second part of his amendment—

“a majority of those voting at the referendum”,

which has been held in Scotland—has greater clarity than the Government’s wording of this particular clause.

Just as Parliament could, technically, repeal the Statute of Westminster of 1931 but would never dream of doing it, the constitutional reality of the sovereignty of Parliament is not relevant to this. At the end of the day, what will matter is what the people actually want.

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[Lord Lang of Monkton (Con)]

My Lords, I had not intended to speak on these amendments because I thought that I would prefer to speak on Clause 1 stand part. However, it might save time if I speak now, not least because the debate has already ranged very widely over a number of more general points.

I also wanted to speak at an early stage to thank those noble Lords—in particular my noble friends Lord Norton of Louth and Lord Forsyth, and the noble and learned Lord, Lord Hope of Craighead—who made polite reference to the report of the Constitution Committee. My noble friend Lord Forsyth’s excellent speech in particular, in which he managed, in that wonderful tone of slightly supressed indignation, to quote from the report, reminded me just how strongly the committee felt about it when it prepared that report. Committees tend to present reports in fairly moderated terms, but these are very serious issues. Indeed, we were in a pretty bad mood to start with because we had already produced a report on the draft clauses, which came out some time before this Bill appeared, in which we drew the attention of the Government to some seven major points of constitutional principle that we thought should be replied to. The reply we eventually received was just more than two lines long. We had to express pretty considerable indignation at that.

While I am on the same theme, it is also a matter of regret to us that the Government have not yet been able to reply to our latest report, which we particularly hoped to have had ahead of the start of this Committee. I hope that that response will appear very soon.

In our report, we criticised very strongly the progeny of the Bill and the fact that the Government had committed to accept the Smith commission’s terms. I will not dwell on that point any longer; it has been very well covered by other noble Lords. We also placed strong emphasis on the importance of the position of the United Kingdom and, with all this demand-led devolution that has been going on, of stabilising and securing the sovereignty of the United Kingdom for the future. I am glad to say that another instalment of our work is on its way to your Lordships in due course on the union and devolution, which will cover that theme and, I hope, carry it forward.

Reverting to this debate, the clause we are looking at and the amendments to it are about sovereignty, which is a clear, absolute and easy-to-identify concept. All the amendments are about protecting it from potential inroads that arise from all the changes made in the other place that depart from the simple request made by the Smith commission. It is a declaratory clause. As my noble friend Lord Norton pointed out at Second Reading, by making a declaratory clause the core of a new parliamentary Bill it has been drawn up in the face of the Government’s own guidance on drafting legislation, which deplores such treatment.

Not only is it unwise, but it also compromises the subject by adding specific changes that were not requested by Smith. They are changes that weaken the principle of sovereignty, in particular the requirement under subsection (3) that there should be no abolition of the Scottish Parliament without a referendum for the Scottish people. Smith did not request that. That is not declaratory; it has specific substance. How does it protect the sovereignty of the United Kingdom?

I also ask my noble friend the Minister: why do the Government think that the Scottish National Party wanted that amendment to the Bill? It does not believe in permanence; it wants impermanence. It wants to undermine sovereignty and provoke the United Kingdom Parliament. Ultimately, it wants to break up the United Kingdom. Every extra concession granted makes that more possible.

The noble and learned Lord, Lord Wallace of Tankerness, referred to political reality. Yes, no one believes that the Scottish Parliament will be abolished and no one wants it to be abolished—you cannot put the smoke back in the bottle—but why compromise the position with qualifications of this kind in this important Bill? The Scottish National Party talks a lot about the sovereignty of the people—what one might call the “Braveheart philosophy”—but we have to wonder whether the clause makes the issue justiciable. Might some Scottish judge at some future date rule that the combination of permanence and a Scottish referendum in a statute overpowers the sovereignty of the United Kingdom Parliament? I do not know the answer to that, but I know that at Second Reading a number of my noble and learned friends identified this area as one that needed close attention.

[Lord Wallace of Tankerness]

The noble Lord has talked much about the sovereignty of the United Kingdom Parliament, as have other noble Lords. In a very recent lecture the right honourable gentleman the former Attorney-General Mr Dominic Grieve said about that:

“Today, at least in theory, this means that any government with a parliamentary majority could pass a Bill requiring us to collectively worship the moon every other Tuesday. Provided the Queen were minded to give royal assent to it … then that would be the law of the land and we could be punished for not complying”.

Is he really happy that the sovereignty of Parliament, which he asserts so vigorously and to which he is so wedded, could lead to the kind of outcome that the right honourable gentleman Mr Dominic Grieve said could happen?

[Lord Lang of Monkton]

As I do not know the context and full detail of what my right honourable friend the former Attorney-General said, I can hardly answer the noble and learned Lord. But I hope that sovereignty can be reconciled with common sense and realism. Certainly that would be my objective.

There is a threat to the sovereignty of the United Kingdom which is potentially raised by the wording of these clauses, and the intrusion of new elements into them which cloud out the specific issues of principle. If a court in Scotland did overrule the power of the United Kingdom and managed to pass a judgment that said that the United Kingdom Parliament was overruled by the view of the Scottish Parliament, it would not be devolution but separation. We must not plant the seeds for such a development in this legislation.

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[Lord Keen of Elie]

On the last point, just to be clear, that is what I am saying.

[Lord Wallace of Tankerness]

Maybe I can help the Minister. Perhaps he is saying that this is all just declaratory, because after all it does not matter what you put in new subsection (3). That subsection just makes the permanence referred to in new subsection (1) conditional because there are conditions there which, if fulfilled, would not make it permanent.

[Lord Keen of Elie]

If I can complete the journey around the houses that the noble and learned Lord has begun on that point: it appears that new subsection (3) simply underlines the political structure—the declaratory statement contained in the clause as a whole. The noble and learned Lord, Lord Hope, observed that of course it goes a step further in so far as it introduces conditionality to the abolition of the Scottish Parliament, which I acknowledge. As to it being,

“a decision of the people of Scotland voting in a referendum”,

that term is capable of clear and objective definition in due course. Respectfully, however, it appears that that wording is sufficiently clear for these purposes.

--- Later in debate ---

[Lord Keen of Elie]

I notice what the noble and learned Lord says with regard to new subsection (3) in Clause 1.

[Lord Wallace of Tankerness]

Section 1(1) of the Northern Ireland Act 1998 also refers to the fact that it is a declaration that:

“Northern Ireland in its entirety remains part of the United Kingdom and shall not cease to be so without the consent of a majority of the people of Northern Ireland voting in a poll held for the purposes of this section”.

Subsection (2) goes on to say:

“But if the wish expressed by a majority in such a poll is that Northern Ireland should cease to be part of the United Kingdom and form part of a united Ireland, the Secretary of State shall lay before Parliament such proposals to give effect to that wish as may be agreed between Her Majesty’s Government in the United Kingdom and the Government of Ireland”.

Obviously there is a context to that, but does the noble and learned Lord think that it might be helpful to add a further subsection indicating that, if a wish is expressed by a majority in a poll of the people of Scotland that the Scottish Parliament should be repealed, the Secretary of State will bring forward the necessary legislation to give effect to it?

[Lord Keen of Elie]

With respect, it does not appear to me that the two situations are immediately comparable. In those circumstances, it does not appear to me that that would add to new subsection (3) in Clause 1. I renew my submission that the noble Lord should withdraw the amendment.

Scotland Bill

Lord Wallace of Tankerness Excerpts

Tuesday 24th November 2015 Lords Chamber

[Lord Wallace of Tankerness (LD)]

My Lords, we on these Benches very much welcome the fact that we now have this Bill before us and congratulate the Minister on introducing it.

Many times before today, and already in this debate, the history of the Bill has been well rehearsed. Reference has been made to the agreement among the three party leaders and the fact that on the morning after the very successful outcome of the referendum—which showed that the people of Scotland did, by a significant margin, wish to remain part of the United Kingdom—the Prime Minister announced the establishment of the commission under the chairmanship of the noble Lord, Lord Smith of Kelvin. I am delighted to see the noble Lord with us today. As has been said, there was a very exacting timetable for the publication of the commission’s proposals, which were due before St Andrew’s Day last year, with the draft clauses due before Burns Night. I had some engagement in those days with the Scotland Office, the Cabinet Office and the Treasury, and the work that was put into meeting that particular deadline is a great tribute to the staff. Since then, in the light of further discussions, there has been some refinement of the clauses, but we on these Benches believe that the commission’s recommendations and proposals—taking forward, as they did, the agreement among the three party leaders—are delivered in full in this Bill we have before us. The noble Lord, Lord Smith of Kelvin, has also indicated that, and we look forward to hearing more precisely what he thinks about the detailed provisions of the Bill.

We also support the Bill because it is a further step along the road to federalism, which for my own party has been the ultimate destination for many years. Indeed, the Scottish Liberal Democrats’ contribution to the Smith commission was based on Federalism: The Best Future for Scotland, the report produced by a commission chaired by my noble friend Lord Campbell of Pittenweem. We very much look forward to hearing his maiden speech today. He brings to this House great expertise and experience, not just in politics but also outside politics, in particular on this subject. We also look forward to the maiden speech of our fellow member of the Faculty of Advocates the noble Baroness, Lady McIntosh of Pickering.

While it is important that we support this Bill, as the noble Lord, Lord McAvoy, echoed, the House must do its job properly—a job of proper scrutiny. I think that is more incumbent on us, given that the three principal parties actually agree on the Bill. As I said at our briefing last week, I think we should be haunted by the Child Support Agency which went through Parliament with the support of all parties. Those of us who were Members of Parliament at the time know how much our constituency mailbags and surgeries expanded because, I think, something that was agreed by all parties did not perhaps get the scrutiny that it should have had. If we seek to improve on the Smith commission proposals and do so in the spirit of the commission, then we should feel that we can certainly do so.

[Lord Reid of Cardowan]

In fairness, since the noble and learned Lord said that we have to give this scrutiny, I should ask him the same question that I asked my noble colleague here. How can we give it scrutiny if an essential, central, crucial part of it—the fiscal framework —is not available for us to scrutinise? Does he have a view on how it might proceed? My noble friend gave us his view that we should have a degree of trust and wait to see how things develop. Does the noble and learned Lord have a view?

[Lord Wallace of Tankerness]

My Lords, I do. If I start answering that partly now, I will probably end up repeating myself. I certainly will address the point that the noble Lord, Lord Reid of Cardowan, asks.

I see the Bill as having a number of different parts, dealing with constitutional issues, fiscal issues, welfare issues and what might be described as miscellaneous provisions issues. On the constitutional issues, the commission recommended that,

“UK legislation will state that the Scottish Parliament and Scottish Government are permanent institutions”,

and that,

“The Sewel Convention will be put on a statutory footing”.

Clause 1 of the Bill does indeed state that the Scottish Parliament and the Scottish Government are permanent institutions, and it is claimed, as the Minister said, that it should not encroach on the sovereignty of Parliament. I certainly believe that federalism would be a better guarantee of the long-term establishment and entrenchment of the Scottish Parliament, but that is not on offer—it was not before the Smith commission.

During the Scottish Constitutional Convention—there are a number of noble Lords present who were party to that convention—we had many agonising debates as to how we might best entrench the Scottish Parliament that we were intent on establishing. We came to no really good conclusion. When the Labour Party, in Opposition in 1996, recommended and proposed a referendum, my party colleagues and I were opposed to that. In retrospect, I think we were wrong. The fact that we had a referendum in 1997 with such an overwhelming result—both on the Parliament itself and on its tax powers—means that there was a political entrenchment that no amount of legal debate, legal argument or legal wording was ever going to establish. While it is undoubtedly the case that, technically and legally and in constitutional theory, Parliament can repeal what has been said here, nevertheless the fact that it is suggested that there should be a referendum before there is any abolition of the Scottish Parliament lends a political entrenchment which is very welcome indeed.

With regard to Clause 2, I note that what is in the Bill is almost literally what the commission proposed—that it should put on a statutory footing the Sewel convention—because it states:

“But it is recognised that the Parliament of the United Kingdom will not normally legislate with regard to devolved matters without the consent of the Scottish Parliament”.

Those are the words that Lord Sewel used on 21 July 1998. Of course, in practice, legislative consent Motions have been extended by Devolution Guidance Note 10 to include Bills in the United Kingdom Parliament which confer new powers or responsibilities on Scottish Ministers and the Scottish Parliament. By definition, if we are conferring new powers, the powers cannot already be devolved. My question for the Minister is: why is the clause limited to the very narrow, literal expression used by Lord Sewel in July 1998? In practice, that wording plus Devolution Guidance Note 10 has worked. Strictly speaking, this Bill does not require a legislative consent Motion because it is conferring new powers on the Scottish Parliament. Are two categories of legislative consent Motions envisaged and, if not, why not just put the whole practice of legislative consent Motions on to the statute, rather than limit it to the words of Lord Sewel during the passage of the Scotland Act 1998?

With regard to welfare powers, we believe—and it was reflected in the outcome of the Smith commission report—that it is consistent with the principle of securing a social union that many welfare benefits are rightly reserved to the Westminster Parliament, but we support the proposals for the Scottish Parliament to have power to create benefits in the areas of its devolved responsibility: housing, carers, disabilities and discretionary payments in areas of welfare. As the noble Lord, Lord McAvoy, said, no doubt they need to be looked at in more detail so that they deliver what was said on the packet, and we will certainly do so.

It is also important to remember that with that power goes responsibility. There is not much point if people go around promising more in terms of top-up benefits unless they are prepared to say where the money will come from to pay for them. It is an inevitable consequence of having a mixed welfare system—partly devolved, partly reserved—that the Scottish Government and the United Kingdom Government will have to work more closely together. That in itself cannot be a bad thing; we hope that it will generate more collaborative working than we have sometimes seen in the past.

The amendments made in the other place have to some extent taken away the concern that there was a veto, which is welcome. I always thought that the veto case was totally overstated. I think it is a question of practicality. I remember that when I was in the Minister’s position of having to answer to your Lordships’ House, I asked: “What is actually meant by this?”, when we were dealing with the draft clauses. The example given to me was: “If the Scottish Parliament decides that it wants to have a top-up benefit for left-handed redheads, frankly, the social security system does not have a database for that, so we could not agree to it until such time as we had one”. It was therefore not unreasonable that such a mechanism was included to allow the practicalities to be resolved.

There are one two other specific provisions. The commission recommended that there should be,

“a formal consultative role for the Scottish Government and the Scottish Parliament in designing renewables incentives and the strategic priorities set out in the Energy Strategy and Policy Statement”.

Clause 58 refers to “Renewable electricity incentive schemes”, but it does not refer to heating schemes. I am not sure that any explanation has been given as to why heating schemes should not be included, given the wider remit of the Smith commission proposals.

I echo some of the comments made by the noble Lord, Lord McAvoy, on equality. However, I think it is important that we ensure that the basis of equalities legislation in the United Kingdom is in no way diluted through devolution.

With regard to the Crown Estate, the commission recommended that there should be devolution of management to the Scottish Parliament—or, more practically, to Scottish Ministers—and onward devolution to the communities of Orkney, Shetland and the Western Isles, and indeed, other local authorities. Many of us here are hugely suspicious about whether a Government in Edinburgh who seem to spend all their time centralising, as the noble Lord, Lord Maxton, said during Questions today, will actually adopt the spirit of decentralising power further. The noble Lord, Lord Smith of Kelvin, in his personal comments on the commission, stressed the importance of devolution going beyond Edinburgh. We may wish to examine amendments along the lines of those moved by my right honourable friend Alistair Carmichael in the other place to leapfrog, as it were, and genuinely ensure the empowerment of local communities.

Turning to the fiscal powers, we now have full income tax, aggregates tax, air passenger duty—the latter, too, having been recommended by the Calman commission on which I served. Can the Minister indicate why aggregates tax is included now? We did not include it before because we were awaiting judgments from the European Court of Justice. An update on where we are on that, and why the Minister thinks it is possible now when it was not in previous legislation, would be welcome.

We owe it to your Lordships’ Select Committee on Economic Affairs to respond to the report that it has given us, which undoubtedly has aroused some controversy. I certainly understand and recognise the frustration that we do not yet have the fiscal framework. In response to the noble Lord, Lord Reid of Cardowan, I believe that it is important that we should have sight of that at some stage in our proceedings, but I just utter this word of caution. We cannot do this in a political vacuum. Delaying the Bill at this stage would effectively give the SNP Government a veto on the progress made, and that would not be particularly desirable either. The Minister said that John Swinney was on record saying that he wanted this agreement. We must take that at face value, but, equally, those of us who are immersed in Scottish politics well know that, if something went wrong and we did not manage to reach agreement, they are the masters and mistresses of turning that to their account, and the finger of blame would point unequivocally at your Lordships’ House. Those who have made milking grievances a master art would be only too pleased to have a narrative of betrayal.

[Lord Reid of Cardowan]

I have a great deal of sympathy with what the noble and learned Lord says, because, on the one hand, we have the cause of rational scrutiny, and on the other the imperative of politics—of keeping a vow. My worry is actually politics: I worry that, in capturing the minutes, we will lose the hours. In other words, if the criticisms being made are correct, then we might have a political storm at present if we were to do as was suggested and in any way delay the Bill, but if the criticisms are correct, we will have decades of such grievances and political problems in future. I probably come down on the same side as the noble and learned Lord on this: the imperatives of the politics are necessary today, but it is essential that the Government recognise that this fiscal framework has to come back at some stage before we get to the end of this process. Otherwise, we are having to make the devil’s alternative choice.

[Lord Wallace of Tankerness]

My Lords, nothing I said takes away from what I said at the outset: that it is very desirable that we see the fiscal framework. The Government should take from all sides of the House that there has been a view to that effect. While I think it is nonsense to expect the Government to reveal their negotiating hand in this debate, it is not unreasonable to ask, perhaps, for more transparency to show that progress is being made, and for the Government to enunciate some principles as to what they wish to see in the fiscal framework.

For example, one hopes that the Government’s negotiating stance is to seek fairness on all sides—for Scotland and the rest of the United Kingdom. Their role is to take in the whole of the United Kingdom, not just the rest of the United Kingdom. The no-detriment principle should be at the point of devolution: that there is no detriment one way or the other when a particular tax is devolved. There should be a form of indexation—I do not underestimate the difficulties, but it should be one which in itself is neutral, with an automatic mechanism to avoid an annual row.

[Lord Forsyth of Drumlean]

Does not the noble and learned Lord think that there is a great irony that the Scottish nationalists are arguing that it is essential for the Scottish Parliament to be able to consider the Bill alongside the fiscal framework, in order to ensure the best interests of Scotland, when this is a Bill that will affect every part of the United Kingdom and the House of Commons has not had an opportunity to do what the nationalists are saying is essential, and quite rightly so, in a Scottish context?

[Lord Wallace of Tankerness]

My Lords, I am not sure what, if anything, was said in the House of Commons about the lack of the fiscal framework when the Bill was being debated there—in fairness, I am sure that it was discussed—but what I have said is that the Government should be seeking to negotiate for the whole of the United Kingdom: there should be fairness all round with regard to this.

Crucially, we should make it very clear that Scotland should bear the full fiscal consequences of its own decisions. There has been some suggestion somewhere that there has been a bit of “cake and eat it”: that somehow or other, if things go wrong, Westminster will top it up. There are those of us who believe that the important rationale for more tax powers is accountability, but that goes out the window unless—for better or worse—the Scottish Parliament accepts responsibility and accountability for the consequences of its decisions.

In conclusion, the important thing that many of us want is to get on and use the powers. From next April, there will be the Scottish rate of income tax. We look forward, once this Bill is implemented, to more than £15 billion-worth of tax powers and £3 billion-worth of welfare.

[Lord Lamont of Lerwick]

I am most grateful to the noble and learned Lord for giving way and apologise for having hesitated for a moment; I was just reflecting on what he had said. I strongly agree with him about the Scottish Government accepting responsibility when they have the power to make individual decisions relating to rates of income tax. He said they must be accountable because they have the responsibility, but is that not utterly inconsistent with the idea of the second no-detriment principle which seeks to safeguard them and does it not make a nonsense of the responsibility that they have?

[Lord Wallace of Tankerness]

I look forward with interest to what the Government have to say on the second no-detriment principle. If I may say so, one of the shortcomings of the Smith commission report—I am sorry, this will have to take up a bit more time—is that it just gives a heading on page 26 that says:

“No detriment as a result of UK Government or Scottish Government policy decisions post-devolution”.

It then says:

“Where either the UK or the Scottish Governments makes policy decisions that affect the tax receipts or expenditure of the other, the decision-making government will either reimburse the other if there is an additional cost, or receive a transfer from the other if there is a saving. There should be a shared understanding”.

Scotland has powers over the threshold and rates of income tax. As I understood it—no doubt the noble Lord, Lord Smith of Kelvin, will be able to tell us—if for example, as was indicated, the United Kingdom Government were to change the definition of an income tax payer, that could have an impact on Scottish tax rates. I see that as the other detriment that would have to be addressed. It is certainly how I understood it—but more important is how the Government understand it. Thank goodness I do not have to answer for that any longer.

This should actually be an exciting time. The two most exciting elections I fought in Scotland were in 1999 and 2003, when we had got the constitutional settlement and were debating how we would use the powers we had. That made for real political debate. We should be able to use the powers imaginatively. Parties should be able to debate how we set out an agenda for an enterprising Scotland, a more socially just Scotland, a greener Scotland and a fairer Scotland, and how we can benefit all its communities—not just in the central belt but from the islands down to the Borders. This Bill is not an end in itself. It is a means to try and improve the governance of Scotland and the accountability of that governance, give the Scottish people an opportunity to take more decisions into their own hands and build the kind of Scotland we want to see. The Bill has our support.

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[Lord Lang of Monkton]

The double detriment point. To do so would be to the detriment of my speech.

A similar problem attaches to the shared powers over welfare, whereby the House cannot assess how the vital intergovernmental relations will operate without the revised memorandum of understanding and joint ministerial committee structure now still being negotiated. Our report has therefore suggested that, as with the Economic Affairs Committee’s concern about the lack of a fiscal framework, a delay in the progress of the Bill may be necessary to allow for proper scrutiny of the welfare provisions.

I agree with my noble friend the Minister about the desirability of calming things down, but I hope that in his winding-up speech he can reassure me and the Constitution Committee on a number of points. Clause 1, on enshrining the permanence of the Scottish Parliament, seems simple, straightforward and declaratory, but it could have profound constitutional significance. The Government now appear to seek to compromise the United Kingdom Parliament’s competence with regard to the devolved institutions, first by stating their permanence in statute and secondly by creating conditions involving a referendum that have to be met before the UK Parliament could move to abolish them.

It is of course completely implausible to suggest that such a course would ever be contemplated, but the concept of parliamentary sovereignty is a fundamental principle of the United Kingdom’s constitution and it has long been understood that no Government can bind their successors. In seeking to limit Parliament’s powers in this manner, the Government are introducing confusion and uncertainty about the nature of parliamentary sovereignty where once there was none.

Clause 2 compounds this concern. By giving the Sewel convention a statutory basis, the Bill opens the door to judicial intervention on the right of Parliament to legislate. It risks creating a route through which the courts might be drawn—inappropriately but perhaps inescapably—into an area hitherto within the jurisdiction of Parliament alone: its competence to make law. That is serious enough, but it seems to me that the original meaning and purpose of that convention may have already mutated, with no debate or authority from Parliament, into something much more far-reaching, which could breach the whole principle of devolution: that power devolved is power retained. Even the word “normally” in the clause raises clouds of uncertainty and the prospect of judicial involvement.

Our committee believes that it is now vital that the Government clarify the purpose and reach of the Sewel convention as stated in Clause 2. Can my noble friend confirm that the guidance note GGN2, issued in 2005, to which the noble and learned Lord, Lord Wallace of Tankerness, referred, did not change the purpose of the convention in any material way? In addition, the combined impact of Clauses 1 and 2 could be dangerous and no thought seems to have been given to this. These two clauses might not be just declaratory and, taken together, could have far-reaching consequences. Will my noble friend also confirm that in the final analysis, no devolved Parliament or Assembly is entitled to veto legislation passed by the sovereign United Kingdom Parliament?

[Lord Wallace of Tankerness]

The noble Lord is raising an important point. Does he agree that, as we now have a system under Standing Orders whereby legislation passed by both Houses can be vetoed by a subset of the House of Commons—namely, English MPs—the Government have already sold the pass on the sovereignty of Parliament?

[Lord Lang of Monkton]

The noble and learned Lord identifies precisely the kind of confusion and obfuscation which endangers the sovereign nature of this United Kingdom Parliament. It is a very important area and I hope we are able to pursue it further.

The Bill also has significant implications for England. Considerably fewer issues will now be reserved, and the West Lothian question will consequently intensify. By increasing the scope of matters devolved to the Scottish Parliament, the number of issues to which the new English votes for English laws procedures will apply will increase. This will add to the complexity of establishing whether new legislation deals solely with devolved matters. I do not believe enough consideration has been given to that, and further confusion will flow from matters that are shared between the two Parliaments.

Our report commented on several other matters of concern, but the recurring theme was that no serious consideration seems to have been given to the implications of the Bill for the union as a whole. We need to articulate a coherent vision for the future shape and structure of the union if the ongoing process of reactive, ad hoc devolution, demand-led and indiscriminately granted, is to be stabilised. No major constitutional measure that does not take account of its implications for the United Kingdom as a whole can possibly claim the right to provide for an enduring settlement. It is that wider challenge of stabilising the union, and rationalising devolution within it, that your Lordships’ Constitution Committee is engaged with in our current inquiry.

--- Later in debate ---

[Lord Dunlop]

The noble Lord anticipated what I was going to talk about. He is always very prescient about these matters. I want to explain why the Government believe that the Bill can proceed without delay and without compromising the detailed scrutiny of the fiscal framework, which Parliament rightly expects to carry out. First, there are the practicalities around delivering the promises that we made. People in Scotland made a decisive choice to remain part of the United Kingdom. They voted for a more powerful Scottish Parliament with the strength that comes from our union of nations. To achieve this, voters in Scotland will expect to go to the polls next May knowing what powers the Scottish Parliament and the Scottish Government will have, so they can cast their votes knowing how the parties will use those powers.

It is important to get the Scotland Bill to Royal Assent before the Scottish Parliament elections next year. A number of noble Lords have made that point in this debate. That is for a very good reason. It is not just a political priority for the Government. I believe—this has been confirmed in the debate today—it is a priority shared by the Labour Party and the Liberal Democrats, too. If we seek to delay the Bill now, it will be very difficult to meet that timetable, which is one that Scottish voters expect and one that the UK Parliament has adhered to every step of the way so far.

[Lord Wallace of Tankerness]

I am very grateful to the Minister for picking up the question of when we will see the fiscal framework. Everyone without exception said that it was really required. Will he explain what he means when he says that the Bill must “be there” before the Scottish elections? Does he literally mean the Scottish elections, or does he mean when purdah starts before the Scottish elections? Is the deadline the first Thursday in May or the last week or March?

[Lord Dunlop]

To answer the noble and learned Lord’s last point, we absolutely need the Act by the time the Scottish Parliament breaks for the election.

The second point I wanted to make is on ensuring that the fiscal framework receives detailed scrutiny. There has been widespread support around the House for that concept. I reassure noble Lords that both Governments aim to complete the framework as soon as possible to give both the Scottish Parliament and the UK Parliament time for due consideration of it. As mentioned by several noble Lords, the Government will keep updating Parliament after each negotiation session, as we have done. We will invite all relevant committees to look at the framework, including Lords committees and the Scottish Affairs Committee in the Commons. We will welcome their comments.

If legislation is needed to implement the framework, both Houses would be involved in that in the normal ways. There was such legislation in 2012, with primary legislation debated in both Houses. As I said in my opening speech and reaffirm now, the Government’s firm intention is for the fiscal framework to be available to the Scottish Parliament and both Houses of this Parliament before the Bill completes its passage. In response to my noble friend Lord Griffiths, I confirm that the intention is for this to be a detailed written agreement.

[Lord Dunlop]

On my noble friend’s first point, it has been evident from the debate today that the framework is of critical importance. It raises very complex issues that need to be worked through to get it right. That is exactly what we are doing. I repeat what I said: the Government’s firm intention is for the fiscal framework to be available to the Scottish Parliament and both Houses of this Parliament before the Bill completes its passage. Clearly, a range of procedural options are available. We will need to consider them nearer the time in light of how negotiations progress.

[Lord Wallace of Tankerness]

I would be grateful for further clarification from the Minister because he said, I think, in the very useful briefing he gave for Peers last week, “If the fiscal framework gives rise to further legislation”. Could he elaborate on what he has in mind there? What kind of legislation would that be? Would it be amendments to this Bill, or fresh primary or second legislation?

Smith Commission: Implementation

Lord Wallace of Tankerness Excerpts

Monday 8th June 2015 Lords Chamber

[Lord Dunlop]

My Lords, I am not sure exactly where the SNP stands now on full fiscal autonomy. Its position seems to change by the day but I am absolutely clear, and the Government are clear, that full fiscal autonomy would be bad for Scotland. By the end of this Parliament, it would leave a £10 billion funding gap that would have to be addressed by higher taxes or larger spending cuts in Scotland. The noble Lord is absolutely right that one of the benefits of being part of the UK is that which comes from pooling and sharing resources, so that public expenditure remains relatively stable when revenue flows such as oil and gas are so volatile.

[Lord Wallace of Tankerness (LD)]

My Lords, I welcome the fact that the Government are honouring their commitment to bring in a Bill to deliver the Smith commission proposals. However, does the Minister accept that when responding to the request of the First Minister of Wales for a constitutional convention before the referendum, the Prime Minister accepted that there would need to be an open, involved and comprehensive conversation about the kind of union we want to see and that, 15 years after the process of devolution started, we should consider the best way to go about doing so? What consideration are the Prime Minister and the Government giving to that very necessary constitutional convention?