Devolution and the Union

Debate between William Bain and Michael McCann

Thursday 20th November 2014 Commons Chamber

[Mr William Bain (Glasgow North East) (Lab)]

I thank the hon. Member for Esher and Walton (Mr Raab) and the Backbench Business Committee for sponsoring this important debate—the second on devolution in this Chamber since the Scottish referendum in September—although I regret to tell him that I will not be supporting his motion, for the reasons that I will set out.

In that first debate, the House paid tribute to the campaigners and the energising effect that the referendum had had on Scottish democracy, with record turnouts, the public re-engaged in politics, and a decision made about our country’s constitutional future. I hope that we can focus in this debate on why the enduring strength of devolution in the UK won the argument, and on how we can make radical changes to our democracy across the UK which can satisfy people who voted on either side of the referendum in September, as well as the millions more across these islands who want a more decentralised, more democratic and modernised polity in the UK.

Let us be clear about what the current and future parties of Government at UK level put to the people of Scotland in September: increased financial powers to the Scottish Parliament; the retention of the funding model that involves fiscal pooling and adjusting changes in the allocation of resources through the Barnett formula; and the effective entrenchment of the devolution settlement. That promise was not lightly made, and it should be unbreakable and unconditional in its nature, with draft legislation by the end of January and an Act in place early in the next Parliament. That promise was endorsed by the people of Scotland in the referendum, and it requires commitments from all parties in this House. To those who support Scotland staying within the United Kingdom, it means having arrangements for the allocation of shared resources that are not to Scotland’s detriment. To those who still support Scotland leaving the UK, it means abandoning the call to end fiscal sharing expressed by some Members in the name of full fiscal autonomy. That is not compatible with the governance of a modern multinational state, would leave Scotland exposed to wildly fluctuating global oil prices and would mean a £5 billion deficit shortfall for Scotland, according to work done by Fiscal Affairs Scotland on the basis of Office for Budget Responsibility forecasts.

Federal states such as Germany, Canada and the USA all have fiscal sharing; Quebec is a net beneficiary from fiscal transfers from the federal Government in Ottawa, and even in Spain there is not complete fiscal autonomy. So, there is not a major nation state on Earth that is governed in the way the Scottish nationalists have proposed to the Smith commission. If other parties must make compromises, the SNP must accept that it must, too, so I was somewhat perplexed by the position taken by the hon. Member for Moray (Angus Robertson) in his speech: he said he accepted the Smith commission process but would not commit to accepting any of its conclusions or outcomes. We should aspire to offer more to people in this debate and across this country than the politics of grievance offered by nationalists of any variety or by the United Kingdom Independence party.

The reason our current resource allocation arrangements have prevailed from the 1890s onwards is a good one: Scotland has one thirteenth of the UK population but one third of the land mass and more than 80% of the UK’s coastline, it contains some of the most remote rural communities in the UK, and it is more expensive to provide access to health and education there on the same basis as in more densely populated parts of the UK. So if we accept that we should have a common statehood—

[Mr McCann]

Would my hon. Friend not wish to put into that equation systems such as Highlands & Islands Airports Ltd, which provides lifeline services to communities in the highlands? Any attempt to run a privatised or commercial service to those islands simply would not work, which is why we need those additional funds in Scotland, in order to be able to fund lifeline services to those island communities, such as those represented by the hon. Member for Na h-Eileanan an Iar (Mr MacNeil).

[Mr Bain]

Absolutely; what my hon. Friend is saying, as I am arguing, is that if we want a common statehood, we must have the right allocation of resources. That means that we can have devolved management of the health, policing, universities and schools services, but we have the same rights, as citizens, to the most important elements of education, free health care, benefits, tax credits and a state pension. Any constitutional settlement for the future of the United Kingdom should not weaken the rights of citizens to those common standards, because to do so would weaken the case for the United Kingdom for future generations.

Similarly, differentiating the voting rights of Members of this House is an issue that could not be definitively resolved by minds as great as Gladstone, Disraeli and Lloyd George in respect of the Irish question in the past two centuries. It may even escape the Leader of the House, the right hon. Member for Richmond (Yorks) (Mr Hague), notwithstanding his grasp of history, and I suspect a neat solution may elude those Members seeking one this afternoon. In truth, few Bills and few motions before this House do not have effects on expenditure in Scotland or other interests. The recent Modern Slavery Bill started life as an England and Wales-only measure but now contains amendments applying to companies based in Scotland, too. Decisions on taxation, even potentially partially devolved taxes, affect the deficit, public borrowing and, ultimately, interest rates. It would be irresponsible for Members from Scottish constituencies not to have a say on such issues in this House.