Second Reading

Part of Scotland Bill – in the House of Lords at 8:40 pm on 6th September 2011.

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Photo of Lord Sanderson of Bowden Lord Sanderson of Bowden Conservative 8:40 pm, 6th September 2011

My Lords, I never thought that in this House I should have to agree with almost every word that the noble Lord, Lord Foulkes, said. However, that was one of the most interesting speeches that I have ever heard him make; I agree with just about every word.

I understand why we are being asked to pass this Bill into law as a result of the unionist party's Calman commission. It is a good idea that we should do it. We should, wherever possible, have taxation with representation. Accountability matters in these affairs. However, like my noble friend Lord Forsyth, I am worried about tax rates. Everyone who pays income tax in Scotland must be worried when we know that only 2.3 million people in Scotland pay income tax. However, I agree with the Secretary of State for Scotland, who says about this Bill: this far and no further. The reason for that is that there are many things that should be in place before going any further. Can the law be implemented fairly? Do we know for certain that HMRC can cope with the implementation? Most important of all, what is to be the future position of Scotland as a nation?

As someone who has been involved in business in Scotland all my life, I believe that we must have confidence in the future of Scotland, particularly if we are to invest. To have a possible independence referendum hanging over us for any length of time is very damaging to business. I am not at all surprised to see it resulting in decisions in Scotland being delayed. I see from official figures published in July that Scottish GDP increased by only 0.1 per cent in the first three months of this year, compared to 0.5 per cent across the UK in the same period. Scotland avoided another recession, defined as two successive quarters of falling GDP, only narrowly after the economy contracted by 0.5 per cent at the end of 2010. Over the past year, Britain's economy has grown by 2 per cent, compared to 1.3 per cent in Scotland. Surely these comparisons do nothing to give confidence to those of us in the business community in Scotland.

This Parliament has the ultimate responsibility for the well-being of the whole United Kingdom, as has been so well put by the noble and learned Lord, Lord Davidson. The parties represented in this Chamber all believe in the future of the United Kingdom, yet the SNP Government have said that they will hold a referendum at the time of their choosing-no doubt with their own question or questions on the ballot paper. I ask my noble friends on the Front Bench whether we, as the sovereign body, should not be taking a more proactive role in this whole business before we go further down this devolution path. In other words, the test of this legislation for unionists such as me is whether the passing of the Bill helps or hinders the unionist cause.

The problems confronting the union are now huge and must be put right if it is to survive. What is to be done about the Barnett formula and the clear need for change? What is to be done about Scottish MPs voting in the other place on matters in which they have no say in their own constituencies? If any noble Lord wants to read an interesting book, they might like Off Message by Bob Marshall-Andrews. On page 167 he makes his views about that very clear. I am sure many of his colleagues feel the same when things that are debated in the other place-matters that are of no concern to Scotland-get pushed through by the votes of Scottish Members of Parliament.

Then there is the recent example-here I come to what the noble Lord, Lord Foulkes, said-which, as a Scot and a unionist, I find hard to bear. Why must we have students from England, Wales and Northern Ireland paying student fees at Scottish universities, and-pardon the pun-European students and locals getting off scot free? This can only divide rather than unite, and I believe that this sovereign Parliament should ensure, by altering the devolution legislation, that matters such as these are put right. After all, this Parliament has given power to the regions, and it is in Parliament's hands to alter those powers if we think that they are being flouted. Indeed, the chairman of the Scottish CBI said,

"constitution is a reserved matter".

It must always remain so.

I believe that we are nearing the crossroads for the United Kingdom remaining united, and I hope and trust that the Benches opposite, with such high representation in the other place from Scotland, realise that the ice is getting very thin as a result of a lopsided arrangement, which is indeed the Scotland Act. Other countries have proper devolution on a federal model, but this is not the case at the moment in the United Kingdom. I say in the strongest terms possible that our Government must look urgently at this matter of the Scottish referendum. There is no doubt that Scottish business will suffer as long as that uncertainty remains.

As far as the Bill is concerned, can we have an assurance that no further powers in relation to corporation tax-here I agree with the noble Baroness, Lady Ramsay-will be taken until a referendum in Scotland has been held? The Northern Ireland situation is totally different. I know what they are thinking about there. There is no chance that the people of Northern Ireland seek to separate from the United Kingdom, unlike what the Scottish National Party intends to try to do in Scotland.

In preparation for this debate, I came across an article in the Times of 15 October 2008 with the heading:

"Scottish Dependence-The case for independence was never strong".

It was written at the time of the spectacular collapse of the two big Scottish banks. Some of it bears repeating now as this House considers the wider implications of this Bill. It says:

"The credit crunch has already claimed some significant victims. The credibility of Scottish independence is next".

It goes on to explain the case for independence based on North Sea oil reserves, saying that the case now for the small nations, such as Ireland, Norway and Iceland, looks very flimsy. It goes on to say that, given the Scottish banks' situation, an independent Scotland would now be,

"negotiating a rescue package with a foreign central bank".

The article continues:

"It is difficult to argue that the Union is a shackle when, in a strange echo of the generous Barnett formula, a great deal of taxpayers' money is heading from South to North".

That was written in 2008.

I finish with what is said at the end of this article, because it is very relevant:

"The First Minister"- that is, Mr Salmond-

"is, of course, playing a very long game indeed. He has a strategy of inevitable gradualness in which independence is secured in 2017 after a spell of sound SNP government and a Scotland-denying period of Unionist Conservative rule from London".

The article concludes with the sentence:

"The Union that has served them for three centuries may be the only asset in Scotland that has not depreciated sharply", over the last two weeks of the banking crisis. Those were very difficult days in 2008, but it is interesting that the leading article in the Times should make such comments about 2017-a date that is now much closer.

I hope all sides of the House will appreciate that we cannot allow the First Minister of Scotland to make all the running when the future of the union is at stake. We should use the opportunity of this Bill to start flexing our muscles and fighting back.