Relevant document: 17th Report from the Constitution Committee.

3:08 pm
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Lord Wallace of Tankerness (Liberal Democrat)

My Lords, I have it in command from Her Majesty the Queen to acquaint the House that Her Majesty, having been informed of the purport of the Scotland Bill, has consented to place her prerogative and interest, so far as they are affected by the Bill, at the disposal of Parliament for the purposes of the Bill.

In moving that the Bill be now read a third time, I wish to inform your Lordships' House that since the Report stage of the Bill the Scottish Parliament has given its full support to the legislative consent Motion in favour of the Bill, with no Division required. The Government welcome the Scottish Parliament's support for the Bill.

Clause 12 : The Scottish Government

Amendment 1

Moved by Lord Wallace of Tankerness

1: Clause 12, page 7, line 18, leave out first "the"

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Lord Wallace of Tankerness (Liberal Democrat)

My Lords, these minor and technical amendments, which are a cue for those who wish to leave to do so, will ensure that all references to "Scottish Executive" in Section 44 of the Scotland Act are amended to "Scottish Government". Clause 12 of the Bill renames the Scottish Executive as the Scottish Government. This clause was included in the Bill following increasing use of the term Scottish Government by the Scottish Administration, indeed by the UK Government and the public as well. Clause 12 will ensure that the use of its legal and public name is consistent. The current clause does not encapsulate every mention of the Scottish Executive within Section 44 of the Scotland Act and these amendments will ensure that the policy intention underlying Clause 12 is fully implemented. I beg to move.

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Lord Forsyth of Drumlean (Conservative)

My Lords, I am not going to make a speech about the relevance of the definite article, but I wonder whether my noble and learned friend might help me by giving some understanding of why it was felt necessary to change the name of the Scottish Executive to that of the Scottish Government, but not at the same time to change the name of First Minister to that of Prime Minister. Given that we apparently have a Scottish Government and a Scottish Cabinet, why has he not felt it necessary to make a change to the title of the leader of that Government? I ask that question not in order to make mischief but to underline the point as to what is going on here.

The Scottish Executive were called the Scottish Executive with very good reason: in order to demonstrate that power devolved is power retained, and that we did not have competing governments in a unitary system. If you are going to have separate governments, you have to have separate roles within some kind of federal structure. I do not know whether my noble and learned friend even considered changing "First Minister" to "Prime Minister of Scotland". Looking at the behaviour of the First Minister in Scotland, Prime Minister is probably not a grand enough title-there may be other titles which would be more appropriate, given the all-encompassing role which he carries out-but in order not to delay proceedings, I will not elaborate on that matter. I would be most grateful if my noble and learned friend could explain to me why it was thought necessary to change just this aspect of the nomenclature of the Scottish Administration.

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Lord Wallace of Tankerness (Liberal Democrat)

My Lords, as ever, I am grateful to my noble friend for raising a pertinent point. As I explained in moving the amendment, the term Scottish Government, albeit technical, is widely used publicly. Indeed, I think I am right in saying that it was first ever used by the Scottish Administration in a document which I rather suspect the late Donald Dewar and I co-signed in 1999 or 2000. It is not only used by the Scottish Administration but has been used by the UK Government, and is used widely within the public. We therefore think it makes sense to amend the Act to reflect this public perception and avoid the potential for confusion, if indeed the popularly used name differs from the one required for legislation, contracts and legal matters.

As I am sure my noble friend will agree, while there have been regular references to the Scottish Government as opposed to the Scottish Executive, the term "First Minister" is one which has stuck. There has been no attempt or suggestion to use the term "Prime Minister", or any public use of it, to refer to the person who holds that office and there is a clear distinction between the two. I hope that I am not giving anyone encouragement, or they might start to use the term "Prime Minister". Clearly, that has not happened. We are seeking here to bring into line the public perception and the legal requirements. On that basis I hope that your Lordships' House will agree to these amendments.

Amendment 1 agreed.

Amendment 2

Moved by Lord Wallace of Tankerness

2: Clause 12, page 7, line 18, leave out second "the"

Amendment 2 agreed.

Clause 21 : Speed Limits

Amendment 3

Moved by Lord Wallace of Tankerness

3: Clause 21, page 13, line 31, after "of" insert "regulations under section 86 or"

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Lord Wallace of Tankerness (Liberal Democrat)

My Lords, during the Committee and Report stages my noble friend Lord Forsyth of Drumlean tabled amendments to give Scottish Ministers the power to make regulations to make provision for regulating the speed of all classes of vehicle on special roads in Scotland. We had some spirited and interesting debates on this topic and at Report stage I indicated that the Government's position was to accept the principles underlying my noble friend's amendment and I committed to bring forward amendments at Third Reading so that the amendments properly deliver the desired effects that my noble friend set out. In particular, I highlighted that the amendment would require redrafting to ensure that the power to set different speed limits for different classes of vehicle applied to all roads except those covered by the 30 mph limit, not just special roads, which are effectively motorways in this context. That is what the Government have done and what Amendments 3 to 7 achieve.

The Government have included powers in Clause 21 of the Scotland Bill to allow Scottish Ministers to determine the national speed limit on roads in Scotland, and a power to make regulations to specify traffic signs to indicate that limit. The powers currently set out in the Bill are limited to cars, motorcycles and vans under 3.5 tonnes. We listened carefully to the arguments presented by my noble friend and other noble Lords on the Benches opposite. Together with the case made by the Scottish Parliament and the Scottish Government for the Bill to provide for the devolution of powers to set different speed limits for different classes of vehicles, we decided to accept the position put forward by my noble friend.

Amendments 3 to 7 will give Scottish Ministers the power to make regulations regulating the speed of all classes of vehicle on roads in Scotland and will make some consequential amendments. This will enable Scottish Ministers to set a national speed limit that is different for different classes of vehicle. On that basis, I ask noble Lords to accept the amendments. I beg to move.

3:15 pm
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Lord Forsyth of Drumlean (Conservative)

My Lords, I am most grateful to my noble and learned friend for tabling this amendment and for accepting the principle of the amendments that, as he indicated, I tabled at an earlier stage of the Bill. After I do not know how many thousands of words that I have spoken on the Bill on all the issues that have been raised, he will realise that it is a matter of great comfort to me to know that I have extended the powers of the Scottish Parliament to enable it to set speed limits for caravans and lorries. That no doubt will be my epitaph in respect of the consideration of the Bill. Just to ensure that this is on record, I think that it is ridiculous to have different speed limits north and south of the border, but if we are going to go down that track then clearly it is essential that there should be consistency.

I am grateful to my noble and learned friend and to the Secretary of State for Scotland, who I know may have had to press the Department for Transport a little in order to ensure this minor victory for extra powers to the Scottish Parliament.

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Lord Wallace of Tankerness (Liberal Democrat)

My Lords, I thank my noble friend. I think I am right in saying that, since the Bill was introduced, this is the only amendment that will actually extend the powers of the Scottish Parliament. For that, I am extremely grateful to him.

Amendment 3 agreed.

Amendments 4 to 6

Moved by Lord Wallace of Tankerness

4: Clause 21, page 13, line 33, after "the" insert "regulations or"

5: Clause 21, page 13, line 40, at end insert-

"( ) Section 86 (speed limits for particular classes of vehicles) is amended as follows.

( ) For "Secretary of State" in each place substitute "national authority".

( ) After subsection (6) insert-

"(7) The national authority in this section-

(a) as respects the driving of vehicles on roads in England and Wales, is the Secretary of State;

(b) as respects the driving of vehicles on roads in Scotland, is the Scottish Ministers.

(8) Regulations made by the Scottish Ministers under this section are subject to the affirmative procedure.

(9) Before making any regulations under this section the Scottish Ministers must consult with such representative organisations as they think fit.""

6: Clause 21, page 14, line 21, at end insert-

"( ) In section 134(4) (provision as to regulations under sections 86 and 140) after "Regulations made" insert "by the Secretary of State"."

Amendments 4 to 6 agreed.

Clause 22 : Speed limits: supplementary

Amendment 7

Moved by Lord Wallace of Tankerness

7: Clause 22, page 14, line 28, leave out paragraph (b) and insert-

"(b) omit paragraph (f) (sections 86(2) and 88(1) and (4))."

Amendment 7 agreed.

Clause 35 : References of compatibility issues to the High Court or Supreme Court

Amendment 8

Moved by Lord Wallace of Tankerness

8: Clause 35, page 27, line 34, at end insert-

"( ) The Lord Advocate or the Advocate General for Scotland, if a party to criminal proceedings before a court consisting of two or more judges of the High Court, may require the court to refer to the Supreme Court any compatibility issue which has arisen in the proceedings otherwise than on a reference."

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Lord Wallace of Tankerness (Liberal Democrat)

My Lords, the amendments that I tabled in Committee reflected some of the points made in Committee and the agreement that had been reached between the Government and the Scottish Government to ensure that a legislative consent Motion in support of the Bill was tabled in the Scottish Parliament. The amendments at that stage included provision for compatibility issues to be referred to the higher courts in certain circumstances to allow these issues to be dealt with quickly.

On Report, I said that I was still considering whether the law officers should be able to refer certain compatibility issues to the Supreme Court without the permission of the High Court, and what the role of the High Court should be. I also indicated that I would continue to discuss these matters with the Lord Advocate.

The amendments that I have tabled extend the powers of the law officers and allow certain compatibility issues to be ultimately considered by the Supreme Court where the law officers consider it appropriate to do so. The Lord Advocate is content with these amendments.

Clause 35 already makes provision for the law officers to require a lower court to refer a compatibility issue to the High Court. This can be done before the trial is concluded. On receiving the referral, the High Court can either decide the compatibility issue itself or refer it to the Supreme Court. We expect the High Court, in making this decision, to take account of the views of the law officers.

Amendment 9 ensures that if the High Court decides to determine the compatibility issue itself, then the law officers will have a right to appeal the compatibility issue to the Supreme Court once it has been determined by the High Court. In these circumstances, the law officers will not need the permission of the High Court or the Supreme Court to appeal. This means that where one of the law officers refers a compatibility issue to the High Court then either law officer can ensure that the issue is ultimately considered by the Supreme Court, should the High Court decide to look at the issue itself.

In addition the Bill already allows the High Court to refer a compatibility issue to the Supreme Court, where the compatibility issue has not been referred to it by a lower court and the High Court is considering the issue on an appeal. Amendment 8 extends this power, by allowing the law officers to require the High Court to refer the compatibility issue to the Supreme Court. Law officers can only do this if the compatibility issue has not been referred to the High Court by a lower court, and the High Court is considering the issue on an appeal. Referring the issue will enable the Supreme Court to decide on it earlier, which will be helpful where the compatibility issue will have implications for other cases. These amendments improve the Bill and enable compatibility issues to reach the Supreme Court more quickly, where this is appropriate, while respecting the importance of the role of the High Court in relation to these issues.

As I said in our earlier debates, we have come a long way in reaching agreement on the role of the Supreme Court in Scottish criminal proceedings, and I am grateful for the contributions made to the debate, including those made by the expert group that I set up chaired by Sir David Edward, by the review group led by the noble and learned Lord, Lord McCluskey, and by other members of your Lordships' House. I trust that all who have been involved in this work consider that the provisions in the Bill will result in improvements to the way in which convention and European Union law issues are dealt with in Scottish criminal proceedings. I beg to move.

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Lord McCluskey (Crossbench)

My Lords, I welcome both Amendment 8 and Amendment 9, which, I understand, are being taken together. As for Amendment 8, I wrote to the noble and learned Lord the Attorney-General for Scotland some time ago suggesting that this would be an appropriate power to be included in the Criminal Procedure (Scotland) Act 1995. My view, which he has echoed, is that this power, used when thought necessary, could sometimes be useful to speed up cases going through the courts. It is clear that the two law officers, the Advocate-General and the Lord Advocate, can be trusted to use this power only in circumstances where it would serve the interests of justice, namely by preventing delay.

I believe I understand the purpose of this amendment and of Amendment 9, but could the noble and learned Lord explain one or two matters? The first is the exception made in the words that conclude Amendment 8,

"otherwise than on a reference" .

Could he explain precisely the purpose of those words? The second point relates to Amendment 9, to Clause 36. This disapplies subsection (5) to certain appeals taken by either of the two law officers. Why is this particular subsection disapplied? The answers will assist those practitioners who may have been confused by the considerable changes that have taken place, both in the Bill itself initially, and in the proceedings in this House to what is now Part 4 of the Bill.

Would the noble and learned Lord also explain under what circumstances and at whose instance a criminal case might be referred to the Supreme Court before the stage at which the facts of the case have finally been determined, and before the case itself has been finally determined by the court below? May I ask in particular, with regard to the commencement provisions in this Bill, when it is envisaged that Part 4 of the new Act will be brought into force? In asking that, I recognise that the Lord Justice-General-the Lord President-will have a considerable amount of work to do in preparing an act or acts of adjournal to cover the new matters. I have no doubt that he will have to consult widely on that; however, I hope that it could be done within months, rather than in any longer period. When is it envisaged that Part 4 will be brought into force?

I made an error in speaking to the Committee some time ago. I referred at that stage to the judges who had been consulted by the noble Lord, Lord Hamilton, before he put in his written representations. I mentioned that one of them was the noble and learned Lord, Lord Phillips of Worth Matravers. In fact, the two judges referred to were the Lord Chief Justice of England, the noble and learned Lord, Lord Judge, and the Lord Chief Justice of Northern Ireland, Sir Declan Morgan. I apologise to the noble and learned Lord, Lord Phillips, for that mistake.

Finally, I express my thanks to the Advocate-General for Scotland for the very careful and considerate way in which he has dealt throughout with the Bill and all the representations he has received. Two groups made a considerable contribution to the shape of the Bill and I shall mention them in a moment. The Advocate-General said that he would listen, which he undoubtedly did. He also made judgments with which I am happy to say that I agree. The two bodies are those mentioned by him. The group led by Sir David Edward, known as the expert group, made a substantial contribution to analysing the problems. Secondly, there was the group of experts that I had the honour to chair. We could not call ourselves the expert group because that name had already been appropriated by Sir David Edward's group, so we called ourselves "the Supremes". However, we kept that name to ourselves for reasons of modesty and to avoid confusion with the pop group of the same name. Between us and with the help of others in your Lordships' House, we now have in the Bill a scheme for appeals on human rights issues in criminal cases in Scotland in the Supreme Court, and for other compatibility issues, that is greatly superior to the one that somehow found its way unannounced into the Scotland Act 1998. Time will show whether I am right.

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Lord Browne of Ladyton (Labour)

My Lords, for the reasons set out in his initial remarks by the noble and learned Lord, Lord McCluskey, I also support these amendments. They improve the provisions of the Bill, to which my noble and learned friend Lord Boyd of Duncansby has made a significant contribution over time, as have those others mentioned by the noble and learned Lord, Lord McCluskey. I understand that the exercise of a power of this nature has proved beneficial in the past to the administration of justice in Scotland and that it would be to the detriment of the powers if it were not included in the provisions of the Bill.

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Lord Wallace of Tankerness (Liberal Democrat)

My Lords, I thank the noble and learned Lord and the noble Lord, Lord Browne, for their welcome for these amendments. As I indicated, they reflect listening and working together, not only between the various groups but between the Lord Advocate and me and the respective officials in the United Kingdom and Scottish Governments. The noble and learned Lord, Lord McCluskey, made the point that the amendments will allow an opportunity for cases to be expedited in certain circumstances. Very often, these are circumstances in which a number of cases are waiting for a determination before they can be resolved.

The noble and learned Lord asked why the words,

"otherwise than on a reference",

appear in Amendment 8. As I sought to explain, these relate to circumstances in which a case is being heard by the High Court on appeal. Therefore, it is different from a situation in which the High Court deals with a case on referral. Those words apply to an issue that comes up on an appeal that should be referred to the Supreme Court.

The disapplication of subsection (5) is the subject of Amendment 9. As I tried to explain in speaking to the amendment, it is anticipated that if there has been a referral from a lower court to the High Court on appeal, it will be possible for either law officer then to refer to the Supreme Court without a requirement for leave from either the Supreme Court or the High Court of the Justiciary. I hope that explains it.

The noble and learned Lord also asked when it is anticipated that these changes will come into effect. I cannot give him a clear date but I share his expectation and hope that it can be done in a matter of months. As he rightly points out, there is considerable preparatory work to be done. I strongly suspect that an act of adjournal will be required, which will need work by the Lord Justice-General, the Lord Justice Clerk and the court authorities in Scotland. However, we hope to make good progress in implementing this.

3:30 pm
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Lord McCluskey (Crossbench)

Before the noble and learned Lord sits down, will he reflect on this debate and draw the attention of his colleagues in government to the fact that the considerable improvements that have been made to the criminal justice appeals system in Scotland were achieved in a Bill discussed in this House by unelected Members who made all the necessary changes, including those that he made? There is perhaps a lesson there for those who are considering what changes to make to the constitution and powers of this House.

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Lord Wallace of Tankerness (Liberal Democrat)

The noble and learned Lord is, I suspect, going slightly wider than the Bill, but I am sure there will be many lessons learnt from the way that the Bill has progressed-not least the way in which we have dealt with it. I pay tribute to those within your Lordships' House who have contributed in debates and representations, as well as to others outside your Lordships' House who have contributed too. What we have at the end is something worth while, given that some months ago we did not have the easiest circumstances. I obviously wish to confirm that although the group that I set up was referred to as the expert group, that in no way detracts from the expertise of the group chaired by the noble and learned Lord, Lord McCluskey. I was very conscious that when he, along with Professor Sir Gerald Gordon and Sheriff Charles Stoddart, came to see me, I was in the presence of the two people who had taught me criminal law in the late 1970s. I certainly listened very carefully to what they and the noble and learned Lord said, and I am pleased that the position we have reached appears to command support across the House. I therefore commend the amendment.

Amendment 8 agreed.

Clause 36 : Convention rights and EU law: criminal appeals to the Supreme Court

Amendment 9

Moved by Lord Wallace of Tankerness

9: Clause 36, page 29, line 5, at end insert-

"( ) Subsection (5) does not apply if it is an appeal by the Lord Advocate or the Advocate General for Scotland against a determination by the High Court of a compatibility issue referred to it under section 288ZB(2)."

Amendment 9 agreed.

Clause 45 : Short title

Amendment 10

Moved by Lord Forsyth of Drumlean

10: Clause 45, page 33, line 22, leave out "Scotland Act" and insert "Scottish Income Tax, Enabling of Scottish Taxation and Borrowing, and Miscellaneous Provisions (Scotland) Act"

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Lord Forsyth of Drumlean (Conservative)

My Lords, I am not terribly keen on this Bill, but I do think it is appropriate that it should say on the tin what is contained in the Bill. The title "Scotland Bill" is somewhat bland, replicates the previous Scotland Bill and gives no indication whatever as to what it is about. I was struck the other day-in the way that one is struck when reading the Sunday papers in Scotland-to read an article by the shadow Secretary of State for Scotland in the other place, Margaret Curran, in which she said that it was ridiculous that no one in Scotland had acknowledged how much was in the Scotland Bill. She also said that although the Scottish Parliament had finally given-what a surprise-its legislative consent to a Bill that was actually enormous in terms of its implications and the powers it transferred to the Scottish Parliament, no one had gone out and explained to people how much was contained in the Bill.

I come from a slightly different side of this argument, but I entirely agree that it is a matter of extraordinary surprise to me that the Scottish media and the Scottish people seem to be completely ignorant of what is contained in the Bill. What my amendments-I am also happy to move Amendment 11-do is change the title from the "Scotland Act" to the "Scottish Income Tax, Enabling of Scottish Taxation and Borrowing, and Miscellaneous Provisions (Scotland) Act". It is a modest proposal. It meets all the rules in terms of Bill titles, and I am sure that in the way that my noble and learned friend has shown such generosity of spirit in respect of caravans and the speed with which they travel on our roads, he will not have the slightest difficulty in accepting the amendment because it will help Margaret Curran and others who believe that by appeasing nationalism we will avert the catastrophe of the balkanisation of Britain and the break-up of the United Kingdom. It will help them to show just what has been achieved, and it may also warn the electorate of what it is about to face. Nothing in all the discussions that we have had on the Bill and all the amendments has really changed the potential damage that the Bill could do.

The provisions in respect of Scottish taxation need to be highlighted in the Title. In order to increase expenditure by 8.5 per cent, the Scottish Parliament will need to increase the basic rate of income tax by 25 per cent. We are back with the poll tax and local government capping where, in order to achieve comparatively small increases in revenue, very large increases in taxation are required because of the gearing effects. Despite my best efforts and those of a number of other noble Lords, the coalition Government have refused to have any kind of referendum procedure or lock on the use of these powers. At the very least, we ought to make it clear that the Bill is introducing for the first time since 1707 a separate Scottish income tax which can be set at any level and where the revenue from it, relative to the baseline expenditure of the Scottish Parliament, is such that very large increases in tax will be required to achieve comparatively small increases in expenditure.

It is also important that the Title lets people know that the really big issues arising from devolution and the instability created by the creation of the Scottish Parliament without addressing the West Lothian question or the Barnett formula-I am sorry that the noble Lord, Lord Barnett, a man who has been forced to travel through life bearing the burden of a formula named after him with which he profoundly disagrees, is not in his place-have not been addressed. There is the whole issue of moving to a needs-based system of funding before introducing a taxation plan. None of those things is included in the Bill. Therefore, to call it the Scotland Bill is misleading because it is clearly not dealing with the key issues arising for Scotland as a whole; it is concerned mainly with tax.

I resisted the temptation to table any further amendments. I regret that my noble friend Lord Sassoon is not in his place. I received a copy of a letter which he sent to the noble Lord, Lord Browne, concerned with those sections of the Bill which create the extraordinary power for this Parliament by Order in Council to create new taxes thought up by the Scottish Government. That is a huge, monstrous constitutional step, but these days they come along every day. We have to deal with them, not least in our domestic environment in this House. A huge constitutional innovation is being made.

My noble friend Lord Sassoon sent me the copy of the letter. I saw it just after the deadline to table amendments, which is probably just as well, because I might have been tempted. I can only assume that the people who drafted the letter in the Treasury were the same people who thought that they could change the tax regime for charities and that it would go through without any difficulty. In the letter, my noble friend says that there is nothing to worry about in respect of the exercise of these powers because the Treasury will have a code, a set of criteria as to what taxes Mr Alex Salmond and the Scottish Parliament can ask this House and the other place to pass on a secondary legislative procedure. That is startling in its naivety. It will mean that from the moment the Bill receives Royal Assent, which is before any referendum campaign on independence, the Scottish Parliament and its First Minister will be able to exploit its provisions to create mischief. If the Scottish Parliament decided that it wanted a window tax or something even more disastrous-perhaps a tax on salmon fishing or estates owned by landlords who are not resident in Scotland, or to introduce a local income tax or any other kind of tax-the notion that the Treasury would be able to say, "Actually, it doesn't meet the relevant criteria so we're not going to put those measures through on secondary legislation in both Houses", is startling in its political naivety and opens up a whole new area of conflict between Westminster and Edinburgh in the area of taxation which should not arise.

Therefore, at the very least we should make it clear in the Title of the Bill that it is enabling of Scottish taxation. That is very important because the tax powers that the Scottish Parliament enjoys-the variable rate and the limited ability to change only the basic rate of income tax by 3 pence in the pound-are abolished by this Bill. What people voted for in a referendum is being abolished. The Government have repeatedly refused to allow a referendum to bring in these new additional sweeping powers. At this late stage, exhausted by my efforts, I plead with my noble and learned friend at the very least to put in the Title of the Bill some indication of what he is about to explode unexpectedly on the hard-working people of Scotland. There is an issue here because the Bill also provides for additional borrowing powers, and borrowing is simply tax deferred. Therefore, Scotland's yet unborn will have to pay higher taxes on the back of these borrowing powers.

I know that people say, "Ah well, these are only powers. They may not be used", but anybody who has read Alex Salmond's manifesto will know that the chances of these powers not being used are pretty remote. They are about as great as the Deputy Prime Minister deciding that he is not going to put Lords reform in the Queen's Speech. It would require a damascene conversion and a huge change, and it is not going to happen. To be fair to the First Minister, the numbers are against him. The Chancellor gave the Scottish Parliament a free ride in the run-up to the Scottish elections-which shows how generous of spirit he is-meaning that it did not have to make any reductions in expenditure to deal with the budget deficit. That has meant that in year two it has had to make two years' worth of reductions.

Alex Salmond is making all kinds of additional promises. If the noble Lord, Lord Barnett, gets his way and Scotland is funded on a needs basis, according to Professor Bell at Stirling University the Scottish block budget will be reduced by 4.5 billion. As it happens, on current yield, the entire product of Scottish income tax which can be raised on this 10p rate comes to the same amount-4.5 billion. Therefore, if Scotland were funded on the same basis as the rest of the United Kingdom and if the gap were made up by increasing taxation, you would have to double the basic rate of income tax. That might make Alex Salmond a bit unpopular at the polls and he might lose the election, but I suspect that he will make use of these arguments and point to the inequity of the Bill. The Bill provides a means of funding on too narrow a tax base. I agree with Alex Salmond and the nationalists when they say that you cannot fund a country on that basis. If you are going to go down this road, you need to broaden the tax base available to Scotland.

In short, in the brilliant image put forward by my noble friend Lord Lang, this Bill is a Trojan horse. It creates further instability and will not be the last word. It is another step down the slippery slope. When I was Scottish Secretary, my shadow, George Robertson-now the noble Lord, Lord Robertson of Port Ellen-issued the immortal judgment that devolution would kill nationalism stone dead. I am sorry that he is not here to enjoy his triumph as we take yet another step down this road of appeasing nationalism, which in my view will simply add to more and more demands for powers. On this new journey on which we are embarking, the case for additional taxation powers will be valid because of the very narrowness of the tax debate.

I am just thinking of the arguments that my noble and learned friend might use against this amendment. I guess he will say that there are important changes to the judicial system and important other changes. The ones that Mrs McTavish will notice when the Bill is enacted and when the powers are available to the Scottish Parliament are the ones that will hit people in their pockets. It is a foolish measure and one that, like devolution itself, will disadvantage Scotland in the long run. Prior to devolution, Scotland had a voice at the centre of government and was able to influence affairs as they affected Scotland. Now we have the Prime Minister and the First Minister meeting occasionally under a picture of constituencies showing how many had been won by the SNP.

We used to have a system in which the Secretary of State for Scotland was able to see the Prime Minister three or four times a week and be involved in all key committees. I do not seek to re-engage in that whole debate, but we have lost influence. We have had the advantage, in a way that the Germans do not understand with regard to Greece and other countries in the European Union, of having a system of fiscal transfers within one unitary state. This is unravelling it, and it is a great mistake. At the very least, there should be a warning on the tin and my noble and learned friend should accept my amendment. I beg to move.

3:45 pm
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Lord Steel of Aikwood (Liberal Democrat)

My Lords, I suspect that the amendments tabled by my noble friend Lord Forsyth are a substitute for what would in the House of Commons be a debate on Third Reading of the Bill, which we do not have in this place. I have four things to say about the Bill's passage.

First, I echo strongly what the noble and learned Lord, Lord McCluskey, said a few moments ago about the significance of the amendments that we have debated in this House against the relatively skimpy progress that the Bill made through the other place. He made a serious point, although he did so with his typical good humour. It demonstrates again the value of this House as a revising Chamber that has done very serious work on the Bill.

Secondly, I express my thanks and, as I am sure that the whole House agrees, I pay tribute to the Advocate-General, my noble and learned friend Lord Wallace of Tankerness, for the skilful, attentive and good-humoured way in which he has piloted this Bill through all its stages. He has been a model of how a Minister should react and I am very grateful to him. My mind goes back to the days when I stopped him being the prospective Liberal candidate for Dumfries to make way for an SDP candidate. He was slightly cross at the time but I think it was the best thing I ever did for him as he has done extremely well since then. I thank him warmly for his role as Minister on this Bill.

Thirdly, picking up a point made by my noble friend Lord Forsyth, it is interesting that the SNP Government have given their consent to the passage of the Bill despite earlier having called it everything from a poisoned pill to a dog's breakfast. In other words, they have suddenly realised, late in the day perhaps, that this UK Government-London Government as they like to say-are doing something constructive and useful for the people of Scotland, and not just in the area of criminal law, to which the noble and learned Lord, Lord McCluskey, referred, but in the area of taxation. Although I pay tribute to my noble friend Lord Forsyth for the assiduous way in which he has tabled a whole series of amendments and enlivened our debates, I fundamentally disagree with him in his pessimistic view of the role of the Bill, shortly to be Act. First, it sets the requirements of the Scottish Parliament not only to spend money on services for the people of Scotland but to take some responsibility for raising that money. We should support that objective.

My noble friend may have a legitimate point in suggesting that the tax base is too narrow but, as I have said on previous occasions, I am quite sure that this Bill is not the end of the story. There will probably have to be other devolution measures on taxation matters in the future, but this is a substantial first step. This issue will not just affect the Parliament. In my view, it should affect the whole level of political debate in Scotland because there will not only be an obligation on each of the political parties to spell out to the electorate what they would like to do in education, health, employment and all the other things for which they are responsible, but they will also have to say how they will raise the money and how much they will ask the citizens to pay.

Far from being pessimistic about this, as my noble friend is, I am optimistic about it. I believe that it will enliven and should certainly deepen political discourse. For all those reasons I welcome the Bill and I look forward to it being an Act of Parliament very shortly.

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Lord Kerr of Kinlochard (Crossbench)

I strongly endorse and echo what the noble Lord, Lord Steel of Aikwood, said in tribute to the Minister. His patience has been exemplary; he has had to exercise it a lot. I promise that I shall not test him very much this time.

I agree with the noble Lord, Lord Forsyth of Drumlean, about the Title of the Bill but for slightly different reasons. It is a bit of a ragbag Bill, as it includes Antarctica, speed limits and so on, and I think the miscellaneous provisions bit of his Title would have been quite appropriate. However, I do not press the point. I am more concerned that under the Title "Scotland Bill" one would expect to see the great issues dealt with. My feeling is that we have missed an opportunity to deal with the great issues. It seems to me that we have not, as the noble Lord, Lord Forsyth, said, addressed the real accountability deficit issue, particularly because the tax changes permitted in the Bill are so small, and although we have debated its merits and demerits, we have not addressed the problem of the Barnett formula at all. I have also discovered-I am sure everyone else knew this before-the extraordinary animal, the no detriment principle, which seems to reduce greatly the accountability of the Scottish Parliament.

If we are to have, as we probably will have, an option in the referendum for further devolution, it seems a great pity that we have not defined its parameters and its ground rules in the Bill, with a sunrise clause. I would have liked it to do that because I am Scottish and Scots like to know what things mean. I am sure that between now and the referendum date, there will be definitions of further devolution. I am sure that the position taken by the Prime Minister in his speech in Scotland-that there will be no definitions until after the Scots have said no to independence, and that further devolution will be on offer but will not be defined until later-is unsustainable. I hope it is unsustainable as I think it is a very dangerous position. It would lack credibility in Scotland-and does lack credibility. People do not know whether he means it.

There is a need to define what we mean by it. If the option means complete fiscal autonomy-and the Scottish consultation document suggests that this is in the mind of the Scottish Government-surely the ground rules need to be spelt out in advance. If we see Scotland as the Athens of the north-and of course it is-we need to take great care to ensure that we are not building in a relationship similar to that today between the other Athens and Berlin, Frankfurt and Brussels. How would we reconcile fiscal autonomy for Scotland with the continuing monetary integration of the United Kingdom? What changes would we need to make to arrangements in London? Would the composition of the Monetary Policy Committee of the Bank of England need to be changed to ensure that there was a voice on it responsible for representing the distinct interests of the Scottish economy?

Conversely, would there not need to be some ground rules constraining fiscal autonomy in Scotland that were similar to the failed stability and growth pact in the European Union that did not save the real Athens? These issues need examination and I am sorry that we have not done that during these debates. However, perhaps we are not the right people to do it. The debates in this House have been of a very high standard, but on the whole the participants have been advocates, principally of the status quo. Unfortunately we have not had among our number a single representative of the advocates for independence.

What we need for our own education and the education of the Scots before a referendum is not advocacy but analysis. Therefore, although I agree with most of the arguments made today by the noble Lord, Lord Steel of Aikwood, I do not think that the kind of continuing debate that he hopes will take place-he claimed that we had not heard the end of the story-will necessarily be very satisfactory. As he said, it will be conducted by the political parties, and there is a fair degree of cynicism out there about the parties. And to an extent it is justifiable, since the majority party up there favours not further devolution but independence, and down here there are strong voices, such as that of the noble Lord, Lord Forsyth, expressing concern about this degree of devolution, let alone any more.

Some of my arguments could also be applied to the independence option. How would fiscal autonomy work? What is the likely depletion rate from the North Sea? It is a function of the likely world oil and gas price. The political parties are not best placed to produce credible estimates of the range of possible prices of North Sea oil and gas five or 10 years ahead. What is the likely assumption about the price of electricity? If the Scots go ahead with their renewables programme, and if the coal-fired power stations are closed down after the nuclear ones, Scotland will presumably-I do not know; I am not an advocate-become an importer of electricity. What would be the price of that electricity?

In short, what are the economics of autonomy? What would the tax take have to be to make the books balance, assuming no Barnett formula? I do not think that the electorate will take an answer that comes from politicians. Quot homines tot sententiae. Politicians will not produce a single answer. I hope that the Minister will reflect on whether we do not need, as a complement and a supplement to the very useful debates that he has conducted so well on this Bill, to encourage an agreement between London and Edinburgh on the establishment of some kind of independent commission to look at fiscal autonomy, in both possible scenarios.

4:00 pm
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Lord Sutherland of Houndwood (Crossbench)

My Lords, the noble Lords, Lord Kerr and Lord Forsyth, raised a series of questions about the significance of the Bill that are perhaps taking us further than the Government intended this afternoon. I want to add one comment to what has been said. If the discussions of the consequences of this Bill, let alone of a referendum that includes a so-called devo-max question, are to be spread to other political parties and other political views, they should also be spread to the people of the rest of the United Kingdom because this Bill makes the West Lothian question more pointed and full fiscal autonomy would certainly make the West Lothian question more pointed. It is pointing towards the federalisation of Great Britain, which is not a question for the Scots alone. It is a question for the whole of the UK.

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Lord Selkirk of Douglas (Conservative)

My Lords, I agree entirely with what the noble Lord has just said. First, I have two past interests: as an MSP for eight years and as a member of the Calman commission. I note with pleasure that all five Members of this House who served on the Calman commission are in their place. We had the support of a significant number of very highly qualified academics who gave us some expert advice during the time we sat, which was well over a year, when a great deal of evidence was taken. I particularly remember evidence being taken in the constituency of the noble Lord, Lord Forsyth, as well as in many other parts of Scotland. What was very significant was that a decisive majority welcomed the Scottish Parliament and believed that it had been a success.

I think the Minister should be strongly congratulated on his handling of the Bill, which has not been altogether simple or straightforward, but I think he has done it with tremendous skill. One point I would make is that it has been overshadowed, to some extent undeservedly, by endless arguments about the processes needed for the Scottish Government's planned referendum. It is very welcome that the noble Lord, Lord Forsyth, has put down this amendment giving us this opportunity for this debate because the Bill produces the largest transfer of fiscal power from Westminster since the union.

The noble Lord, Lord Kerr of Kinlochard, said that there is an accountability deficit. I submit that the Calman commission and this Bill in particular address that deficit and make it very clear that-to sum it up in one sentence-if there is a reduction in the block grant from Westminster, there should be the opportunity for substitution. More than that, the elephant in the room throughout our discussions on the Calman commission was that there is a possibility that if a needs-based grant replaces the Barnett formula, the provision for Scotland might be greatly reduced, and if that were the case, it would be very necessary for the Scottish Parliament to have the flexibility to find the best level between essential services and taxation. I have to say that if a Government cut essential services far too far or raise taxes far too far, they will be voted out of office. The sanction is, of course, electoral and of the people. Certainly for me-and, I think, all members of the Calman commission-the two principles that weighed were accountability and equity. I mention equity because if in future there are proposals that go further than the Calman commission, it is extremely important that the representatives of all parts of the United Kingdom be consulted and thoroughly involved because it would have implications for their countries as well.

The Scotland Bill, so titled, is important because its very existence demonstrates that the present devolution settlement is not set in stone and can be adjusted to meet Scottish aspirations without destroying the United Kingdom. I note the sentiments expressed by the Prime Minister in his speech in support of the union, which he made in Edinburgh earlier this year. In that address he made a point of saying that the changes made by the Scotland Bill need not necessarily be,

"the end of the road".

He went on to say:

"When the referendum on independence is over, I am open to looking at how the devolved settlement can be improved further. And, yes, that does mean considering what further powers could be devolved. But that must be a question for after the referendum, when Scotland has made its choice about the fundamental question of independence".

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Lord Forsyth of Drumlean (Conservative)

If my noble friend thinks that there are further powers that could be devolved, why did the Calman commission not recommend them?

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Lord Selkirk of Douglas (Conservative)

My noble friend is putting into my mouth words that are not there. I am not making any such suggestion, but if he listens to what I have to say, he will see the logic of my argument. As the Prime Minister said, let us hold the referendum, preferably on a less dilatory timetable than the Scottish Government are proposing, with a single question-to that extent, I disagree with the noble Lord, Lord Kerr of Kinlochard-asking whether or not the Scots wish to leave the United Kingdom. Time should also be given for the implementation of the new powers and to see how they work. That is the answer to my noble friend Lord Forsyth.

Any moves beyond the terms of this Scotland Bill would be bound to affect the constitutional future of England, Wales and Northern Ireland, and MPs and other representatives in other professions would have to be very fully involved in any future discussions. I thought we got the balance right when we were on the Calman commission. We took an enormous amount of evidence; we considered it very thoroughly, and at the end of it all the commissioners came to a unanimous conclusion. I certainly stand by what was expressed by that commission, and I believe that all the other commissioners do as well, including the other four who are with us this afternoon.

A great many will advocate the clear merits of Scotland remaining as part of the long-standing, extremely successful partnership that is the United Kingdom. I do not believe that a unionist stance is in any way incompatible with giving support to the increased powers granted to the Scottish Parliament in the legislation that we have been debating.

I welcome the fact that the Scottish Parliament has agreed that the UK Parliament should consider the proposals in this Bill and, by passing that Motion unanimously, has given it its backing. I checked this morning, by ringing the Scottish Parliament Information Centre, SPICe, whether this had gone through unanimously, and it did; there was no vote. I say to my noble friend Lord Forsyth that that includes the Conservative group of 15 MSPs, and I welcome that.

We have before us a very significant and substantial reordering of devolution. It should be enacted in timely fashion and, in my humble opinion, the title should be kept in place.

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Lord Maxton (Labour)

My Lords, it was not my intention to speak on this. Briefly, it was with great pleasure that I listened to the noble Lord, Lord Forsyth, use the term "poll tax" instead of "community charge". He actually proved the point that the Minister-who has done an excellent job, I have to say-made in the very first debate this afternoon, that if something becomes the common parlance, it should be used as the common parlance.

The real point is that there has yet again been confusion-the noble Lord, Lord Kerr of Kinlochard, did it-between devolution, the democratic process of devolution and independence. They are not the same thing. That is why, although I support what this Bill is doing, I am not sure that this is the right time to do it. I am not at all sure that we should not, first, have had the referendum on independence in order for Scottish people to make up their minds as to whether they want to be an independent country totally separate from the rest of the United Kingdom or they want further devolution. We should let them decide on that first. The second question is just a confusion. There should be one question-independence or nothing else. For me, devolution was always about democracy and not about the separation of the Scottish state.

I have to say to the noble Lord, Lord Forsyth, who made great play of the fact that he sat in the Cabinet and could talk to the Prime Minister when he was Secretary of State, that that is fine. Perhaps he could but he did not represent the people of Scotland when he did so because he did not have the majority of Members of Parliament in Scotland when he was putting Scottish legislation through.

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Lord Forsyth of Drumlean (Conservative)

I am most grateful to the noble Lord for pointing out my role as opposition while in government. Is it not precisely because his party used that kind of language-of people not having a mandate in one part of the United Kingdom-that the Labour Party now finds itself wiped out by the nationalists in Scotland? It was a very foolish thing to do and by doing so as unionists the Labour Party undermined its own position.

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Lord Maxton (Labour)

That may or may not be the case. It will be shown in both the independence referendum and in future elections after that. The fact is that separate Scottish legislation was passed through this Parliament without the mandate of the people in Scotland for that legislation. If it had been part of the same United Kingdom, there may have been a case for it but it was not. It was for separate Scottish legislation passed through Parliament by a party and a Government with no mandate in Scotland to push that legislation through. There is no better example than the poll tax, which the noble Lord himself first raised.

I support what this Bill is doing but I wish that we had waited until we had had the referendum on independence so that that could be put out of the way before we move on to see what further action can be taken on devolution.

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Baroness Liddell of Coatdyke (Labour)

My Lords, it had not been my intention to speak in this debate but the nature of our discussion since the noble Lord, Lord Forsyth, introduced his amendment has spurred me to my feet. A lot of the debate we are having today is the debate we have been having in Scotland for the past 50 years. The argument for devolution began at the time of the Act of Union. Had the Act of Union been framed in a different way, there would have been no need for devolution. The noble Lord was Secretary of State for Scotland some years before I held that post. When he was Secretary of State for Scotland he oversaw the equivalent of 13 different government departments because of the nature of the legislative settlement post the Act of Union and the growth of Scottish legislation; namely, everything from the nature of the Scottish church to the nature of the Scottish legal system to the nature of Scottish education, and then some.

I am a committed devolutionist. I came to it rather later than some of my colleagues, such as my noble friend Lord Robertson of Port Ellen. I came through the trade union movement and looking at some of the issues that affected trade unionists in Scotland and the history of the very distinctive Scottish Trades Union Congress, which has very different origins from the Trades Union Congress. It is rooted in communities rather than in organisations and its history grew from that. Out of that I became committed to devolution.

I have to say that I have been extremely sceptical about this legislation. I do not disparage the work of the Calman commission. I pay tribute to it. In another time and place, it would have been appropriate to have this legislation. But I have to say that the people of Scotland are not remotely interested in it because there is a bigger debate. There is a more significant debate that we need to enter into. Some of it has been touched on today and it is unfortunate that, in this kind of forum, very little of it will be disseminated to the people of Scotland.

Yesterday in this Chamber we saw the start of a debate about the future of this House which has a devolution relevance. If we were in a situation where we were looking, not in a haphazard way, at the development of the British constitution, we would be looking at the role that this Chamber can have as part of devolution, not only for Scotland, Wales, Northern Ireland and London but how the regions of England fit into it as well. However, we have not gone about our constitutional change in a coherent way: we have done it in a piecemeal way and now we are running to catch up.

I have been a parliamentarian for a number of years-although not as long as many people in this House-and my major regret about the Bill is that there is a real sense of, "Well, we have started so we have got to finish". When this Bill began its process the debate in Scotland was different in nature from the debate that we are having today. I would do nothing to prevent this Bill from reaching the statute book-whom am I, an unelected representative, to do so?-but I regret that, in looking at the issues involved, we did not properly address matters such as the Barnett formula. As the noble Lord, Lord Kerr of Kinlochard, said when he was talking about the consequences of fiscal autonomy, we keep parking the Barnett formula.

I hate to admit it but I was around when the Barnett formula was drawn up, together with the noble Lord, Lord Donoughue, and the redoubtable Joe Haines, in the late 1970s. No one envisaged that all these years later the Barnett formula would still be the hook that gets us out of trouble. We have to be consistent and coherent, as the noble Lord, Lord Barnett, has been, when looking at the Barnett formula. It is unfortunate that, while we have included within this legislation fiscal, taxation and other changes, we have not taken the opportunity to look properly at the Barnett formula.

I join with others in commending the work of the noble and learned Lord, Lord Wallace of Tankerness. Since I came into this Chamber I have discovered that every time there is an intractable problem it tends to be the noble and learned Lord who is put up to the Dispatch Box to deal with it. It is a measure of his skill and good humour that we have got to where we are today.

It is inevitable that we will be revisiting these issues because the world in which we are coming to our conclusions today is so different from the world in which we started this process with the Calman commission and in the other place. We have learnt a lot from this debate but, like my noble friend Lord Maxton, I believe it should perhaps have been done in a different time and in a different way.

4:15 pm
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Lord Browne of Ladyton (Labour)

My Lords, those who have been engaging in our deliberations on the Bill and following its process cannot have failed to notice that not only have we been able to consider it today-a Tuesday-but that we have not had to wait until the fag end of the day's business to do so. Of course the deep irony is that this is the day on which we least needed to get on early to consider the matters before us. However, we are moving through the Bill at a pace, and as we are nearing the end of our consideration of it I think it appropriate for me to make a few remarks.

I do not think that anyone could disagree that the Bill has been subject to rigorous scrutiny during its passage through this House, and I am confident that it is a better Bill because of that scrutiny. At least two Members of the House-my noble friend Lord Foulkes of Cumnock and the noble Lord, Lord Wallace of Drumlean-have made significant contributions.

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Lord Browne of Ladyton (Labour)

I am sorry-it is Lord Forsyth of Drumlean. On this occasion I cannot even give the excuse that I am tired. In Committee and at Report these two noble Lords paid assiduous attention to almost every detail of the Bill and ensured that we all had the opportunity to scrutinise it rigorously.

I also want to thank the noble and learned Lord the Minister. I extend my thanks beyond him to the Bill team and to officials in the Treasury who have shown me the greatest courtesy. In a sense they have supported me by giving me access to substantial amounts of information on the Bill. Throughout this process they have engaged with our Benches and with my noble and learned friends Lord Davidson and Lord Boyd of Duncansby, and my noble friend Lord Eatwell, who have shared the responsibility for our Front-Bench work on the Bill. They have engaged with us very positively and I am exceptionally grateful to them for that: it has made my job much easier. I think that we have improved the Bill particularly on the issue of references to the Supreme Court-a process in which my noble and learned friend Lord Boyd of Duncansby has been intimately engaged. The process has been wholly satisfactory and I think that we can all be satisfied with the final result.

I feel duty bound to inform noble Lords of the conversations with the Government that have taken place since Report on the issue of the conditions for using the extraordinary power to add new devolved taxes that is now contained in, I think, Clause 23. There was significant consensus across the House that it would be valuable to place in the Bill the conditions for using this extraordinary power-first, to safeguard its use by the Executive, and, secondly, as a way of obtaining the buy-in of the Scottish Parliament on these criteria. As I was substantially responsible for encouraging that consensus across the House, I have a responsibility for, in a sense, disappointing the House at this stage in the debate.

As I have also been very careful to say at all stages of the Bill, we have to be mindful of the political realities that we currently face. We have been treated to some interpretation of those political realities in our rather extended and diverse debate on the Bill, but one has become used to that in considering some of its aspects. The political realities are such that the Government's commitments at Report were unsatisfactory, as I said in the debate. In essence, a year after enactment they are to bring forward a report on implementation of the financial provisions which will make specific reference to the list of conditions for using this power. That is the issue that exercised my and other noble Lords' minds. Significantly, we have learnt since Report stage that the report will also be submitted to the Scottish Parliament, which will have an opportunity to thoroughly debate and agree to the provisions. That at least provides the opportunity for the engagement of the Scottish Parliament that I sought. However, it is not guaranteed to happen and I am not overplaying it.

Those additional facts, combined with the clear priority of the LCM-the legislative consent Motion, which was to be debated before we came to Third Reading-were, on balance, enough for it to be considered unwise to bring forward further amendments on this issue. With some reluctance I accepted that conclusion, despite being aware that I was disappointing the expectations of many noble Lords, and noble and learned Lords, in the House. I had encouraged those expectations, so to that extent I apologise. If it has in any way damaged my relationship with noble Lords or reduced their view of my worth to this House then I shall have to endeavour over the course of the coming months and years to remake that. However, that is where we are.

I turn now to the amendments of the noble Lord, Lord Forsyth of Drumlean, as somebody has to. I do so with some reluctance because I know how it encourages him to come back.

I start off by saying that I have sympathy with his analysis of the paucity of understanding of the full implications of this Bill in Scotland. I agree with him that we ought to ensure that the Bill is better understood in Scotland. I almost immediately part company with him thereafter, for two reasons-first, because renaming the Bill will do little to address that deep-seated problem for which many of those in devolution parties have to take responsibility. It is inappropriate to expect those who do not support devolution but seek independence for Scotland to trumpet the opportunities and potential benefits of a piece of legislation that reinforces devolution. Although it will probably never settle the argument of Scotland's relationship with the rest of the United Kingdom, for some people in Scotland-and I expect this to continue throughout the rest of my life-if properly understood, it will strengthen the union.

The responsibility lies with us. It is potentially helpful, but not the answer, to simply change the Long Title of the Bill. I understand why the noble Lord, Lord Forsyth, seeks to do that, but you do not have to listen to him for very long to realise that it is a vehicle for him to articulate arguments that he has been articulating to the people of Scotland for some time in the confident knowledge that, if he lives long enough, some day he will be proved correct. The fact of the matter is, with all due respect to the noble Lord, that although we listen to him intently and I enjoy immensely his ability to make an argument, the people of Scotland stopped listening to him a long time ago. It is unfortunately true and I am sorry about it, because they would be better informed, perhaps, if on occasion they did listen to him-but they stopped listening to him a long time ago. That is part of the problem. The British tourist abroad, speaking slowly and loudly, does not work any longer with Scotland. Those of us who put ourselves forward for political office have an obligation to make our arguments in a much more sophisticated way and go with the grain of people's expectations. Of course, we all have responsibility for generating those expectations, as indeed I did-and disappointed expectations at Report on this Bill. Those of us who believe in the union all have our DNA to some degree in the state of the Scottish scene at the moment, and we have a responsibility to deal with the issues and challenges generated from that.

This is a good Bill, and I fundamentally disagree with the noble Lord, Lord Forsyth, in that regard. It is a constitutionally significant Bill, and the new tax-raising and borrowing powers are worth in the order of 5 billion to 6 billion, marking an historical development in the financial accountability and autonomy of the Scottish Parliament. Furthermore, measures such as the devolution of drink-driving and speed limits as well as the regulation of air weapons ensures that the devolution settlement continues to respond to the needs and aspirations of the people of Scotland.

In recent months, much reference has been made to a new, notional devolution settlement, or maximum devolution, which for the most part has taken the form of a fill-in-the-blanks exercise. But ultimately politicians are kidding themselves if they think that the people of Scotland are interested in some esoteric debate about devo-max versus devo-plus versus the status quo. This Bill is the consequence of a sensible process; its origins lie in the Calman commission, and I repeat my thanks to those Members of this House and others who served on that commission. The work that they did has not been given the credit that it deserves, and it is well worth revisiting the argumentation for the recommendations that gave rise to the Bill. The Bill presents the people of Scotland with a clear and concrete vision for the future of devolution, a vision that is evidence-based, thanks to the Calman commission; has the support of Scottish business, Scottish civic society, experts and academics; and will when properly understood and implemented support the future prosperity and aspirations of Scotland within the union.

The fundamental reason why we need to deliver this Bill is that we promised it in all of our manifestos to the Scottish people, and the worst thing that we can do for the union at this stage is to fail to keep our word. That would be the most persuasive evidence that those who want to break up the union could have that we cannot be trusted to keep our word. Regardless of whether we think in retrospect that the time is not now right for this, in dealing with the people of the United Kingdom, and in particular with the people of Scotland in the current environment, the time is always right to keep our word. We have to keep our word to the people of Scotland, and then we have to move on.

We know what we have to move on to do: we have to address the issues that will be debated in Scotland. That will involve what I think will be the greatest political challenge of my political lifetime-Scotland's future in the union, an issue which is about to come to a head. Having kept our word to the people of Scotland, we can with credibility move forward to make the arguments for why Scotland is better off staying in the union, and why it is better for the union of the United Kingdom for Scotland to continue to be part of it. As I have said before, I agree with the noble Lord, Lord Kerr of Kinlochard, that that debate needs to be informed by independent analysis and research so that nobody can say that the facts being put forward have been filtered through some sort of political process or other.

Many of us would like not to have to face that battle, but we have to do it. We in this House and from this Parliament can hold our heads high and say that we delivered what we promised to the people of Scotland in response to a process which was logical, supported by them and analysed and understood at the time-and that we can be trusted to keep our word in the future. I hope that as we pass the baton for this legislation back to the other place, those who manage the business there will allow our elected representatives sufficient time to do what they have prevented them doing until now-to debate this Bill in a way that explains to the Scottish people what its potential is. I suspect, however, that that will be another hope that will be dashed by the way that we manage business.

I am not entirely sure whether our scrutiny of this Bill proves the case for the status quo as far as your Lordships' House is concerned. However, as a recently introduced Member of this House who has come from the other place, it has proved to me that this place certainly does a better job of debating the details of legislation. I have immensely enjoyed the quality of the debate. I may not have always been able to persuade your Lordships of the rightness of my argument, but I thank all those who took part in our debates for their contribution to them.

4:30 pm
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Lord Wallace of Tankerness (Liberal Democrat)

My Lords, I thank my noble friend Lord Forsyth of Drumlean for introducing these amendments. I will try to say something about them but, as my noble friend Lord Steel of Aikwood said, they have also provided your Lordships' House with an opportunity to have something more akin to a House of Commons Third Reading debate, which has been very useful. I am very grateful for the comments that have been made from all parts of your Lordships' House and wish to express my appreciation for the kind personal words that have been said.

I hope that I can do justice to a number of the comments that were made, but perhaps I may start by referring to the amendments. I understand and know where my noble friend comes from, and I would wish to join others who have paid tribute to him for his diligence in our proceedings on the Bill. He has highlighted a number of issues, and while I know that he will not always necessarily have been satisfied with the replies, he has at least prompted consideration and detailed scrutiny of the Bill, which is one of the purposes of your Lordships' House. His amendments give him a hook to hang a number of points on. I know that he is not happy with the Bill, and I suspect that we will disagree on this just as we disagreed 14 or 15 years ago on devolution. Nevertheless, I respect the view that he has maintained over a long period.

In tabling the amendment, my noble friend sought to improve the drafting of the Bill, which is a criterion for getting an amendment accepted at Third Reading. I am sorry to say that I do not think the amendment meets that test. One learns interesting things in dealing with these Bills. The purpose of the Short Title of the Bill is that it must give sufficient indication of the content in a way that is not misleading; it cannot be argumentative or a slogan; it becomes the Short Title of the Act when passed, so it needs to be helpful to users and not unwieldy; and, above all, it must be short. With due respect, my noble friend's amendment does not meet that test.

I accept one part of his argument. It is important that people in Scotland, as well as in other parts of the United Kingdom, recognise what the content of the Bill is because these are important and profound changes. It is up to all the political parties to ensure that the knowledge is there and that debate in the Scottish Parliament now focuses on how these powers will be used. There are important powers relating to airguns and speed limits but also with regard to taxation as well as the fact that stamp duty on land transactions will be disapplied in Scotland in 2015. When it comes to forward planning, the Scottish Parliament cannot sit around for very long before we start to get the colour and shape of how it will use these new powers and how it can do so imaginatively in a way that has not been done across the UK as a whole. I hope that, in taking forward these powers, there will be debate about their use.

On the issue mentioned by my noble friends Lord Selkirk of Douglas and Lord Steel of Aikwood, the purpose of the legislation following on from the Calman commission was indeed to increase the accountability and responsibility of the Scottish Parliament. I think that it was in his Donald Dewar lecture that my noble friend Lord Steel reflected on just how unsustainable it would be for a Parliament to persist over a long period almost wholly dependent on a grant voted to it by another Parliament. That, and the need to increase the accountability of the Scottish Parliament, are things that those of us who sat on the Calman commission were very conscious of. We also sought to get to a balance, as my noble friend Lord Selkirk said, between accountability and risk. Within a social union, many of these risks are shared, and better shared across a union of 60 million people than 5 million.

Perhaps the most important change relates to income tax. As Calman commissioners, the evidence that we received suggested very much that income tax was the tax that most people could recognise as having the most direct personal impact on them and therefore the one most likely to deliver that accountability.

I do not accept that the changes are too small; I believe that they will lead to greater accountability. The noble Lord, Lord Kerr of Kinlochard, suggested that we should have gone much further and had a debate during the passage of the Bill on some of the wider powers that have been discussed in the media and political forums over recent weeks and months. However, as the noble Lord, Lord Browne, said in welcoming the Calman commission, it was the consequence of a considered process. If one looks back at the constitutional convention that sat in the 1990s, which led ultimately to what was in the Scotland Act 1998, and the provisions suggested by the Calman commission, which deliberated and then led to the legislation before us today, we see a process whereby political parties-sometimes not as many as we would like-have joined in and reached a consensus without reflecting their own concerns and viewpoints. We have then been able to take that consensus forward, present it to voters in an election and subsequently go forward to legislation. I do not think that that would have been at all possible with regard to some of the perhaps more far-reaching issues that the noble Lord, Lord Kerr, referred to in terms of dealing with this legislation.

I say to the noble Lord, Lord Maxton, and the noble Baroness, Lady Liddell, that I recognise there are judgment calls about whether the timing is right. However, I share the view of the noble Lord, Lord Browne of Ladyton, that the manifestos of the Conservative Party, the Liberal Democrats and the Labour Party at the last election each made a promise. We do not need to be terribly imaginative to write the script of those who wish to advance the cause of independence and say, "Look, they promised you that and Westminster has not been able to deliver it. How much more can you actually trust Westminster?" That is a script that we will not let them write. It is right and proper that we have proceeded with this Bill.

My noble friend Lord Forsyth was sceptical about whether, if at a future date the Scottish Government or Scottish Parliament espoused devolving a particular tax, Westminster would be able to stand up to them. Let us recall-

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Lord Forsyth of Drumlean (Conservative)

It was not about devolving a particular tax, but about inventing a completely new tax.

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Lord Wallace of Tankerness (Liberal Democrat)

My Lords, similar arguments apply whether it is for a new tax or the devolution of corporation tax, which is not a tax that the Scottish Parliament currently has. The more general point is that the Scottish Government actually asked for devolution of excise duties and corporation tax and the United Kingdom Government did not believe that the case had been made. This Government made it clear that we would not devolve further taxes unless there was evidence presented and a case made. In these particular examples, we took the view that no case had been made. There was no evidence and therefore it was resisted.

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Lord Forsyth of Drumlean (Conservative)

There is a distinction between creating a completely new tax and devolving an existing tax. Corporation tax is an established tax in the Finance Bill. If Alex Salmond thinks of a completely new tax, all that is required for it to be imposed is for an Order in Council to go through both Houses of Parliament. That is a completely new and novel procedure and quite different from an argument about who will administer or levy an existing tax.

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Lord Wallace of Tankerness (Liberal Democrat)

I apologise if I misrepresented what my noble friend said. However, the response is similar. Having identified criteria, whether in the Bill or not-we have had debates on that-the point I wish to make is that there are criteria there and the United Kingdom Government have shown that they are not a pushover. We set out criteria regarding devolution of existing taxes; we stood by that and I have no reason to doubt that having set out criteria regarding the devolution of any future tax, we would have to be satisfied before bringing forward to this and the other House an order to devolve further taxes.

Could I pick up the point of the noble Lord, Lord Kerr of Kinlochard, and the noble Baroness, Lady Liddell? She said that a different debate was going on. The two debates are not mutually exclusive. The difference is that while there has been a lot of talk by the Scottish Government about change, this Bill actually delivers change. However, many of us want to get on to the wider debate. Inevitably there will have to be a debate on process-the shorter the period devoted to it the better-but there are important issues. The noble Lord, Lord Kerr of Kinlochard, clearly set out at least one of them: fiscal autonomy and its relationship to monetary policy. The conclusion of the Calman commission was that there was not much difference between fiscal autonomy and full independence. Clearly these are questions that will be debated in a much wider forum in the lead-up to a referendum.

There is an important issue about Europe and an independent Scotland's relationship with the European Union. I respectfully suggest that a person with the knowledge and expertise of the noble Lord, Lord Kerr, free from any party-political baggage, could give a view on that which people would listen to and would be an important contribution to a debate. I hear what is said about an independent commission. It might be a triumph of hope over experience, but I hope that there will be opportunities for independent think tanks and people with expertise and renown in their specific fields to come forward and express their views on the issues that will inevitably emerge in any referendum debate.

Having two questions was suggested by the noble Lord, Lord Kerr. I do not believe that that is sustainable. There is a clear difference between a debate on independence and a debate on the democratic processes for further devolution, as the noble Baroness, Lady Liddell, said. They are two different things and to put the two on the one ballot paper would be mistaken, not least because of the point made by the noble Lord, Lord Sutherland, and my noble friend Lord Selkirk. Whether one aspires ultimately to a federal United Kingdom or not, further devolution involves other parts of the United Kingdom. It will not be possible in 18 months to get the kind of consensus that would give a buy-in from other parts of the United Kingdom as we were able to achieve through the work of the convention and manifestos in 1997, which led to the original Scotland Act and, for that matter, the Wales Act. We have established a process to take forward a package of proposals that has already been put to the people in parties' respective manifestos and has now been legislated for by this Parliament. That is why the Government believe that we should go for a single clear question about whether Scotland should remain part of the United Kingdom. Our view is very clear that it should.

4:45 pm
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Lord Kerr of Kinlochard (Crossbench)

My point was not about process-I do not want to get into questions of process-but the distinction is one without a difference. If Scotland had full independence on the prospectus in the Scottish Government's consultation paper, it would still be using the United Kingdom currency. In my judgment, when the Scots applied for membership, the European Union would not insist that they adopt the euro forthwith, but it would probably ask for some sort of undefined commitment at a future date. Therefore, there would still be the problem of fiscal autonomy alongside continuing monetary integration. That problem would exist in a scenario of either devo-max or independence, so it needs to be addressed.

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Lord Wallace of Tankerness (Liberal Democrat)

I do not dispute that. It needs to be addressed. It is one of the key issues that those who advocate ultimate fiscal autonomy or independence must address. I do not think that the noble Lord is suggesting that it would be suitable for inclusion in the Bill, but it is an important issue that has to be properly and fully addressed in the debate that we will undoubtedly have on the independence referendum.

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Lord Martin of Springburn (Crossbench)

For the sake of getting things on the record, I am very heartened to hear the Minister say that he is keen on having one question alone on the ballot paper. For the record, is that the policy of the Government or will there be a situation in which the Prime Minister may say something different?

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Lord Wallace of Tankerness (Liberal Democrat)

My Lords, it is fair to say that in the consultation paper that we launched on 10 January it was made clear that a single question was the preferred position of the United Kingdom Government. I am happy to say that the responses that we have received to that consultation give great support to that position.

In conclusion, I again acknowledge the benefit to the Bill of consideration and thorough scrutiny in your Lordships' House, and not just in those areas where amendments have been made as a result of our debates. Through our debates we have explored many of the issues that we will continue to face as we move to the next important phase of implementing legislation. I echo the thanks not only to those who have taken part in the debates but to those who have supported me and my noble friend Lord Sassoon in them. While there have clearly and importantly been divisions-it would be very boring and impossible to achieve total consensus-it is not usual for a Bill to be supported by all three United Kingdom parties. However, there has been a note of consensus, which has been welcome. I also welcome the scrutiny. Whether noble Lords were supporters of devolution back in 1998 or support every clause here, I hope we recognise that we are stronger within a United Kingdom in which we devolve powers to the appropriate level and work together to pool resources and risks across the country for the benefit of all. That is what the Bill seeks to advance. It is part of developing and continuing support to maintain the United Kingdom, of which all noble Lords and I are very proud. I ask my noble friend to withdraw his amendment.

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Lord Forsyth of Drumlean (Conservative)

My Lords, I am devastated by that response. I am very disappointed in my noble and learned friend. I actually understood the criteria for the Short Title of a Bill, but I remember having a great struggle with the Scottish Office, which wanted to call a Bill the "Criminal Justice (No. 3)(Scotland) Bill" and I wanted to call it the "Crime and Punishment (Scotland) Bill". I think that in the end I won that particular argument, but the legislation was promptly repealed by the Scottish Parliament, only to be reintroduced later as a populist measure in the same terms.

I do not accept that the Short Title I propose is too long. That was the only argument against the amendment that my noble and learned friend advanced in his interesting and helpful speech. One of the criteria is that the Short Title should not indicate advocacy or a point of view. I resisted that, although I was tempted. My draft suggested a Bill "to ensure that Scotland becomes the highest taxed part of the United Kingdom", but the Public Bill Office felt that that did not meet the criteria. However, it would at least have warned people about what was coming down the legislative track.

As my noble and learned friend guessed, I tabled the amendment because I suspected that under our rules we do not normally make speeches when we are considering a Motion that a Bill do now pass. I suspected that people would want to get a few things off their chest. I shall resist the temptation to respond to all the points that were made, but I am also devastated by the remarks of the noble Lord, Lord Browne, who tells me that the people of Scotland stopped listening to me some time ago. I should be very grateful if he could tell me afterwards when it was that they were listening to me.

I have to say to my noble friend Lord Selkirk of Douglas, who said that I should note that the Scottish Parliament, including the Conservatives, had unanimously approved the Bill, he should note that the Scottish Parliament's committee came forward with 45 different amendments to the Bill, which would have amounted pretty well to independence, and which the committee said it would insist upon. What my noble friend should note is that Scottish Parliament seems to change its mind very radically very quickly. When people change their mind very radically very quickly on important constitutional issues, alarm bells should start ringing and people should start thinking about what is going on here. I have to say to the noble Lord, Lord Browne, who gave a romantic picture of the genesis of the-

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Lord Selkirk of Douglas (Conservative)

Is my noble friend aware that in the Scottish Parliament there has been a great debate within the SNP as to whether the Bill is a block or a wedge? The SNP decided to agree to the legislative consent Motion. Is that not very much a step in the right direction?

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Lord Forsyth of Drumlean (Conservative)

Not at all, because the SNP has clearly decided that the Bill is not a wedge and will help it to get independence. In that respect, I entirely agree.

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Lord Forsyth of Drumlean (Conservative)

Only if you believe everything they say in the Scottish Parliament. It is perfectly clear what has happened here. One of the extraordinary things about this whole issue of devolution is that for a long time one of my allies in opposition to devolution was the First Minister, Alex Salmond. He refused to join the constitutional convention, and when he went back to Scotland to be a-I am sorry, I nearly said something that I would have regretted-to take a leading role in the SNP in the Scottish Parliament, having stood on a platform in 1998 with Donald Dewar to campaign for the Scottish Parliament, he denounced devolution as a complete disaster. Now he goes around presenting himself as the champion of those people who want devo-max. When you look around, there does not seem to be anybody who wants devo-max, or who can at least explain what it is.

I have to say to my noble friend that the nationalists have been completely opportunistic about devolution. In the beginning, they thought, like the noble Lord, Lord Robertson, that it would kill nationalism stone dead. When they realised what my noble friend Lord Lang and others, including our previous Prime Minister, Sir John Major, were warning-that it would be a slippery slope that would lead to their objectives-they changed their position in order to get it. Then they flip-flopped. At each point where further concessions have been made, they have put them in their pocket, which is why they voted unanimously, and moved the agenda on. What the noble Baroness, Lady Liddell, said, is absolutely right: the Bill is completely out of time. It is as relevant as the Daleks to youngsters nowadays-although I believe they are making a comeback. I have no doubt that devolution in another Bill will be coming back in due course.

The noble Lord, Lord Browne, says that this has all been part of some great process. I was devastated by the remarks of the noble Lord, Lord Maxton. The fact is that this Bill's genesis was a deal put together by the unionist parties after, very bravely, Wendy Alexander, who was then the leader of the Labour Party in the Scottish Parliament said, "We ought to have a referendum on independence and Alex Salmond needs to put his case to the Scottish people". She was right then, but the rug was pulled out from under her by Gordon Brown as Prime Minister because he had an attack of the jitters that the referendum might go the wrong way. As a result, the Labour Party was left with no policy, so it said, "We'll set up a commission"-does this sound familiar?-"because we are not sure what we're going to do next". It set up a commission and, very foolishly, the Conservative Party and other parties joined in a commission to rescue it.

That is the genesis of the Calman commission. It was to come up with something that would stop Alex Salmond winning the subsequent election, which everybody accepted-did they not?-was impossible because the rules of election to the Scottish Parliament had been devised by the very clever Donald Dewar and other clever people to ensure that no party would ever be able to get an overall majority. Just like the notion that devolution would kill nationalism stone dead, that turned out to be another myth. The result is that we are now faced with a nationalist majority committed to an independence referendum. The noble Baroness, Lady Liddell, is absolutely right: that is the issue now. The Bill has been left stranded as an orphan that is not even discussed in the Scottish media.

Although the noble Lord, Lord Kerr, and I disagree on the objectives here, he is absolutely right when he criticises the fact that the Prime Minister went up to Scotland and spelt out in a brilliant speech the case for the union but then went on to say, "Of course, after you have voted against independence, we will discuss more devolution", without saying what that would be. That was a huge error because of course, once again, Alex Salmond picked that up, put it in his pocket and now, as far as he is concerned, the debate is about what extra devolution we are going to get. At some point, those of us who are unionists have to stop sliding down the slippery slope, define what the issues are and give the people of Scotland an opportunity to determine them. No doubt that will happen in due course.

I just wanted to say-

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Lord Forsyth of Drumlean (Conservative)

For a man who made a whole speech on my amendment without even mentioning it, I think the noble Lord is skating on thin ice-not for the first time, I may add. My speech in support of my amendment was in perfect order, but I can see that I am beginning to irritate the noble Lord, which is the last thing I want to do.

I say one thing in tribute to my noble and learned friend Lord Wallace of Tankerness, who is the Kate Adie of the House of Lords, and my noble friend Lord Sassoon, who is, sadly, not here-I thought he enjoyed our debates on the Scotland Bill. I guess that I have probably not made their life particularly easy. I think that the whole point of this place is that it challenges legislation. That is increasingly important. The Bill illustrates that. As the noble Lord, Lord Browne, said, this Bill sailed through the House of Commons without any proper discussion whatever because it was guillotined. In the manifesto of the Conservative bit of the Government-I know that we have put a lot of emphasis on our manifesto promises-we promised that would end the automatic guillotining of Bills in the other place. We have not done so, as exemplified by this Bill.

I should also like to say how much I appreciate the work of officials in the Treasury and the Scottish Office. I do not think that they have had a particularly easy time but, having produced a Bill such as this, I do not think that they deserved a particularly easy time. This House has shown its worth in respect of this Bill.

At the end of all those hours of work, nothing has changed other than the wretched speed limits. So what have we achieved? I hope that in considering the implementation of the Bill, not least on the very unusual tax-raising powers, my noble and learned friend will at least think about how to avoid some of the pitfalls, which I believe were seen on all sides of the House. I have very great pleasure in begging leave to withdraw my amendment.

Amendment 10 withdrawn.

In the Title

Amendment 11 not moved.

Bill passed and returned to the Commons with amendments.