Scotland Bill — Committee (5th Day)

– in the House of Lords at 3:37 pm on 21st March 2012.

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Relevant documents: 17th Report from the Delegated Powers Committee, 17th Report from the Constitution Committee.

Moved by Lord Wallace of Tankerness

That the House do now resolve itself into Committee.

Photo of Lord Wallace of Tankerness Lord Wallace of Tankerness Lords Spokesperson (Attorney General's Office), Lords Spokesperson (Wales Office), The Advocate-General for Scotland, Lords Spokesperson (Scotland Office) 3:38 pm, 21st March 2012

My Lords, in moving this Motion, it may be helpful if I indicate that my right honourable friend the Secretary of State for Scotland tabled a Written Ministerial Statement which has been made available in the Printed Paper Office since this morning. He has also written to the Shadow Secretary of State for Scotland, Mrs Margaret Curran MP, and circulated that letter to other party spokesmen in the House of Commons in which he gives an indication of the consultation. He concludes his letter by saying:

"In making this information available now, I am seeking to balance the need to ensure that tomorrow's debate in the House of Lords is as well informed as possible, with the need to provide Parliament with a full and detailed analysis of the consultation in due course".

I should perhaps have said that the Written Ministerial Statement reflected agreement reached between the United Kingdom Government and the Scottish Government on the basis of which the Scottish Government will be tabling a legislative consent Motion in the Scottish Parliament. Obviously, we shall bring forward amendments to reflect that agreement. They will certainly be subject to debate, and possibly votes, and we will commend them to the House when we meet on Report next week. I beg to move.

Photo of Lord Forsyth of Drumlean Lord Forsyth of Drumlean Conservative

My Lords, I thank my noble friend Lord Wallace of Tankerness for the Written Statement and for circulating the copy of the letter from the Secretary of State. However, without being churlish, I should like to complain in the strongest possible terms about the way in which this legislation is being handled. We agreed to defer the consideration of those parts of the Bill which relate to referendum amendments until after the consultation process had been completed. Your Lordships will recall that we were considering the Bill in Committee when, out of the blue, came the consultation paper, to which responses were required by 9 March. Therefore, we agreed to consider the Bill so that we would be able to debate the issues arising from the referendum on independence with the knowledge of what had happened during the consultation process. As a result of that, the Bill, although it has been before Parliament for well over a year, is being considered right at the end of the Session, so we also agreed that the normal period between Committee stage and Report stage would be truncated.

This afternoon, we are now faced with a two-page letter from the Secretary of State, which tells us very little about the consultation paper but tells us, as my noble friend has just said, that,

"tomorrow's debate in the House of Lords"- that is today's debate-

"is as well informed as possible, with the need to provide Parliament with a full and detailed analysis of the consultation in due course".

When I was a Minister, "in due course" meant six months. We shall have to consider the Report stage of this Bill on Monday and Wednesday and, therefore, the only opportunity that we have to table amendments which relate to the first parts of the Bill is tomorrow. There is absolutely no time for us to take account of the consultation. I very much hope that my noble friend will impress on his colleague, the Secretary of State for Scotland, that it really is unacceptable that we should go into Report stage on Monday without a full analysis and full information relating to the consultation process and an indication of where the Government stand on this. To add a little zest to that, perhaps I may give notice that, in the absence of that undertaking, I will table a Motion for Monday to provide for that.

I turn to my second point which relates to something that is quite unacceptable. I am not being critical here of my noble friend as I know he is the messenger in this respect-I should have said my noble and learned friend; indeed, I may have played some small part in that, but that is another story-and I realise that he is taking the Bill through the House with great courtesy and skill. However, in earlier consideration of these matters, when we raised the issue of legislative consent and whether the Scottish Parliament was giving legislative consent, we were not informed of what we are now informed of: that the Government have done a deal with the Scottish Government, that the concessions made are very extensive, and that they relate to this Bill. Again, we are being told that amendments will be tabled by the Government. Presumably, these amendments will be tabled tomorrow and, therefore, there will little opportunity for us to consider them. However, I have taken the measure of placing a new amendment on the Marshalled List for today which will give us an opportunity to discuss at least some of the issues set out in the Written Ministerial Statement to which my noble and learned friend referred.

In short, this is a major constitutional Bill which has huge implications for people in Scotland and huge implications for people in the rest of the United Kingdom. The way in which the parliamentary process has been handled has limited our opportunity. I have to say to my noble and learned friend that his right honourable friend has treated this House with a degree of contempt. He knew that we were delaying these proceedings to deal with the consultation process, and to give us such a cursory analysis of the consultation, at the very last minute, at 11 o'clock on the day, makes it impossible for us to have a fully informed debate. Therefore, I am not going to spend any time this afternoon discussing the referendum issues. I shall leave that until Monday. Furthermore, I was told at lunchtime today that on Monday there is to be new business which will be tabled to be discussed before the Scotland Bill, so once again our time for consideration of the Bill is being curtailed.

The behaviour of Ministers towards this House is one of the most persuasive arguments I have ever seen for devolution. We are not giving the proper consideration that we should give to a major constitutional Bill with enormous implications.

Photo of The Earl of Caithness The Earl of Caithness Conservative 3:45 pm, 21st March 2012

I wonder whether my noble and learned friend can help me with the parliamentary procedure. We are discussing the referendums this afternoon. When are they going to be dealt with on Report? As my noble friend Lord Forsyth has just said, they were delayed at this stage. Is it likely that we will be discussing them on Monday? If so, those of us who have to travel to the far north of Scotland tomorrow will have precious little time to table amendments. It will give us at least a day or two longer to consider matters and read the Official Report if they are to be dealt with on Wednesday. It is crucial for us in how we conduct our business to know whether the referendum issue will be taken on Report on Monday or Wednesday.

Photo of Lord Foulkes of Cumnock Lord Foulkes of Cumnock Labour

I understand the noble Lord's frustration about the whole process and the way it has been dealt with. The noble Earl, Lord Caithness, makes a very good point, which others made earlier, about the time between Committee and Report. The noble Lord, Lord Forsyth, also made that point effectively.

I think we should absolve the noble and learned Lord, Lord Wallace of Tankerness, of blame in relation to this. He has been faced with great difficulties from a number of sources. I was going to include the noble Lord, Lord Forsyth as one of the people who created some difficulty for him, but I will just put that to one side for a minute. The noble Lord has had to labour with a Cabinet which has only recently begun to realise some of the implications of Scottish independence and what it might mean-to our defence policy and to a range of other things-if it were to go ahead. It has taken some time for it to realise the enormity of the possibility of Scotland seceding from the rest of the United Kingdom, and that is something that the noble and learned Lord, Lord Wallace, has had to deal with. He has also had to deal with a very difficult negotiating body in the Scottish Executive, and its leader in particular. Driving a bargain with it is not easy.

We should consider that earlier this week-and I hope I am not giving any secrets away-we may not have had even this letter and the Statement today if it had not been for the intervention of the noble and learned Lord, Lord Wallace of Tankerness. Admittedly, he was under pressure from the Opposition-both the Front and Back Benches-and no doubt from the noble Lord, Lord Forsyth, as well, but it is to his credit that he got us the Statement. Otherwise we would really have been dealing with it in the dark.

Photo of Lord Forsyth of Drumlean Lord Forsyth of Drumlean Conservative

I am most grateful to the noble Lord. I have no complaint about the noble and learned Lord, Lord Wallace, but I do not know what the noble Lord thinks he has. He has a letter from the Secretary of State that states that his preferred solution, which is to use the existing Scotland Act to provide for a referendum, was supported by a large number of people and that he is hopeful that he can reach agreement with the Scottish Government. Frankly, we have known this for some time. I should like to know what the numbers were, what people said and what the Government's attitude is. What is the point of us debating these matters if we do not know the Government's policy? This has nothing to do with the Cabinet; it is about the conduct of business in Parliament, and we are being short-changed.

Photo of Lord Foulkes of Cumnock Lord Foulkes of Cumnock Labour

That is a point on which I agree with the noble Lord, Lord Forsyth. Indeed, I have a Question down for next Monday asking when the result of the consultation will be published. I had expected it to be published before now, and certainly for this debate-and, if not, at least for Monday's debate. However, we also have the information contained in the Statement made today by the Secretary of State. It makes substantial progress-we will discuss this later-in its reference to transferring tax and borrowing powers, ensuring that the new borrowing regime is sustainable and securing further devolution in future.

As someone who favours devolution, I find all these moves very positive. It is very encouraging to see that agreement has been reached. It is also very helpful to have this Statement so that our debate this afternoon can be informed by the details of the agreement that has been reached. I share with the noble Lord, Lord Forsyth, some reservations about the general way in which the Bill has been dealt with, but in the past few days-in particular, thanks to the noble and learned Lord, Lord Wallace-we have been helped to make the debate better informed and more accessible.

Photo of Lord Stoddart of Swindon Lord Stoddart of Swindon Independent Labour

My Lords, I will not interfere in Scottish matters; I would not dare. However, I have concerns about the business of the House and the way in which the House is being treated. Last Thursday the House sat until, I think, 10.38 pm. Last night it sat until 12.43 am. That is not good enough, particularly when Members of the House of Commons enjoy the privilege of going home very much earlier.

We in this House have repeatedly implored the Government not to bring forward so much legislation that is so badly produced that we have to spend a huge amount of time not only discussing the overload of legislation but correcting the many mistakes that have been made in the framing of that legislation. At the end of every Session, as far as I can remember, we have come up against the problem of time and important Bills have been rushed. The noble Lord, Lord Forsyth, and other noble Lords who spoke were absolutely right to express concern and to raise the matter of rushing through a very important constitutional Bill at the very end of a Session.

I intrude into the debate to express the hope that for the next Session the Government will recall what happened in this two-year Session. If they cannot get things right in a two-year Session, perhaps we may hope that they will reconsider their programme for the next Session to ensure that both Houses of Parliament can consider legislation at a proper pace and level without being kept here in the watches of the night, and that they will produce less legislation that is better prepared so that we can have a little more time to discuss Bills at leisure, at proper length and as deeply as necessary.

Photo of Lord Browne of Ladyton Lord Browne of Ladyton Shadow Spokesperson (Scotland)

The consideration of this Bill in Committee in this House has been peppered with expressions of frustration from all parts of the Committee at the way in which we have had to handle this business. I have already had my say in that regard, and I welcome the noble Lord, Lord Stoddart of Swindon, to the group of us who have had our say and have expressed how disappointed and, in some cases, angry people have been about what has happened. I do not intend to repeat what I have said in the past, which noble Lords who have heard me speak on this subject before will be pleased to hear.

However, I want to add myself to the list of those who will be shown in the record of today's proceedings as not criticising the noble and learned Lord, Lord Wallace of Tankerness, who has not been part of the problem but has been, with many of us, part of an attempt at a solution. I thank him for the fact that we have a Written Statement today, because in the normal timetable of the way in which these complicated matters have to be considered in government-and I know what they are-we would not have had a Written Statement, so he must have persuaded somebody who is fairly senior or fairly influential, which are not necessarily the same thing, to have it prepared for today. I think we are all grateful to him for doing that. I want to record how grateful we on these Benches-particularly the Front Bench but the Back Benches too-have been for the open and transparent way in which the Government and the Bill team have engaged with us on the progress of negotiations with the Scottish Government and in trying to find ways of dealing with these complex and difficult matters in a more efficient way.

Since we last met in Committee, there have been two developments of significance. The noble Lord, Lord Forsyth, referred to both of them. As my noble friend Lord Foulkes suggested, they both raise some optimism for the future handling of the Bill, but they bring with them their challenges. The Written Statement reflects the outcome of the negotiations. I do not know about the noble Lord, Lord Forsyth, but I knew that a negotiation was going on, and I think that, on each occasion that he referred to it, the noble and learned Lord indicated that there would be some negotiated agreement that would potentially involve some change to the Bill, so I expected that.

In my darker moments, I anticipated perhaps greater changes to the Bill than there have been, but I am not entirely sure that we can appreciate the significance of the elements of the negotiation that relate to the financial provisions of the Bill without some significantly greater explanation from the Government and greater time for study of them. I was not aware that these particular negotiations were going on. They adopt into the way that Scotland's budget and the block grant will be adjusted following recommendations from the Holtham report. That report relates to the way in which the Welsh Assembly Government are funded. When I discovered that this morning, I downloaded the executive summary of the Holtham report. It is 72 pages. I do not think my printer would have enough ink in one cartridge to print the whole of the Holtham report.

I have tried to find in that executive summary exactly what this mechanism is and what its implications are. I suspect that I have not succeeded. I suggest to the noble and learned Lord that at some point soon, because we are running out of time, the Government either provide the House with a commitment that we will be given an adequate opportunity to scrutinise properly what amount to significant new details of the process of devolving tax and borrowing powers, or explain the mechanism for doing so, if it can be done in short.

I say no more about that because I broadly welcome the other parts of the negotiation. The parts that are not to do with the financial elements of the Bill are remarkably close to proposals made by those on these Benches for amending the Bill, so we welcome and will support them. However, the bits that relate to the financial elements of the Bill are potentially very complicated. They may be very simple. If they are, they can be explained; if they are complicated, we need to find time because we all want to see this Bill pass in such a way that the legislative consent Motion that has now been agreed is of some consequence.

That element of the negotiations was not entirely in the control of the Government, and I understand that, because the enemy gets a voice, as it were, in these environments, and negotiations take as long as they have to take. They were constrained by the legislative timetable, but it was not guaranteed that they would conclude in time for us to be able to consider them properly. I have no criticism of anyone on the government side. They have reached an agreement, and I am pleased that they have. If it is a good agreement, I will support it.

However, the other part of the understanding we have is exactly as the noble Lord, Lord Forsyth, explained it. We had a clear understanding that if we postponed, as we did, a discussion of the referendum elements of this Bill to 15 March, which was to be a week after the closure of the consultation, we would get a report on the conclusion of the consultation. This may not be parliamentary language, but because we were messed about we had to use 15 March for something else. Now it is 21 March, so the Government have had more time than they expected to formulate properly their response to the consultation.

I am delighted that the consultation appears overwhelmingly to support the Government's position. Since they consulted, in a White Paper fashion, on the proposal and got support for it, one would have thought that somewhere in the government machinery someone has some idea of what they are now going to do with that support. It would certainly be helpful if we could be told what that is as soon as possible. For example, if it involves the acceptance of the recommendation in paragraph 23 of Professor Tomkins' response to the consultation, which I think we all received copies of, to use the Bill to empower the Electoral Commission to start a consultation now about the content and drafting of the question, that is directly relevant to this Bill. However, it may include not that but other things, and there may be a process entirely outwith the Bill that will be the vehicle for taking forward the outcome of the consultation. It is going to be very difficult for us to have a meaningful discussion about these referendum amendments unless we know that.

In fact, if we knew what the Government were going to do, perhaps we could all go home early-having been here until 10.40 pm the other night, that would be a bonus-so some indication may facilitate the handling of the debate. None of us is interested-well, I may not be able to include everyone in this-in prolonging these matters any longer than necessary. I have done a lot, with the support of my Front-Bench and Back-Bench colleagues, to try to facilitate this Bill so that we can get it done in time and in good order. However, a few minutes spent now on indicating how the Government intend to take forward the outcome of the consultation, even if the noble and learned Lord is not in a position to say so in detail, might make the rest of the day much more productive and efficient for all of us. Of course, it might not.

Photo of Lord Wallace of Tankerness Lord Wallace of Tankerness Lords Spokesperson (Attorney General's Office), Lords Spokesperson (Wales Office), The Advocate-General for Scotland, Lords Spokesperson (Scotland Office) 4:00 pm, 21st March 2012

My Lords, I think I might deal with the final comment made by the noble Lord, Lord Browne. I acknowledge the comments that have been made not just about this Bill but about the general timetable, but I hope that noble Lords who have taken part in our debates on many amendments to this Bill feel that we have had constructive debates. Almost without exception, the amendments that have been tabled have been pertinent and have done what this House does-properly scrutinise-and the Bill is the better for that. Although, as the noble Lord, Lord Stoddart, pointed out, we sat until 10.41 pm last Thursday, even in the final three-quarters of an hour we had some important debates. Although we had been sitting for some time, some important and thoughtful contributions were made.

On the point about the Written Ministerial Statement paving the way to a legislative consent Motion, the noble Lord, Lord Browne, fairly described the situation as he understood it. When we debated this before moving into Committee last Thursday, I indicated to your Lordship' House, not for the first time, that work, negotiations and discussions were going on between the Scottish Government and the United Kingdom Government, and that we were hopeful that they would come to a conclusion. On that occasion, I think I said that I hoped that the House, before moving to Report, would have an outcome to these negotiations. I thought that it was important, if it was at all possible, for that Written Ministerial Statement to be available to your Lordships before we met today. I am pleased that in the event that proved to be possible.

There was an encouragingly wide response to the consultation. We received just under 3,000 responses, including many replies from members of the public living in Scotland and beyond. There were contributions from businesses, academics, political parties, trade unions and many others across civic Scotland. A number of these matters will be debated when we move into Committee, but I can confirm that the Government's key proposal in the consultation was that the referendum should be legal, fair and decisive.

In order to provide a legal referendum, we set out our view that a Section 30 order should be agreed to devolve to the Scottish Parliament the power to legislate for a referendum. Initial analysis of the responses indicates clear support for that proposal. A significant majority of those who responded to this issue agreed that powers to hold a referendum should be devolved to the Scottish Parliament. Of these, the great majority supported a Section 30 order.

However, analysis of any consultation is not just a simple matter of counting responses, so I am pleased that our preference for agreeing a Section 30 order was endorsed by a number of constitutional experts, including Matt Qvortrup, Adam Tomkins and Alan Trench, as well as knowledgeable organisations such as the Law Society of Scotland, the Royal Society of Edinburgh and the British Academy.

The fact that it is not just simply a numbers question was highlighted by the point made by the noble Lord, Lord Browne, who picked out a point in the response from Professor Tomkins on the Electoral Commission and the question. There were a number of substantially written points, although obviously not 3,000. We want to make sure that when we bring forward a report-my understanding is that because the original consultation was a command document, any report has to go through the process of becoming a Command Paper-we do proper justice to the quality of the responses that we received.

Obviously, we will be able to say more in the debates. Nevertheless, it is possible to give some clear indication as to where the balance of opinion lies in response to a number of the detailed points-for example, on whether there should be one question or two, and on the timing; clearly, considerably more people want it sooner rather than later-and to indicate some of the specific points made by a number of leading experts.

I hear what my noble friend Lord Forsyth says about today's debate and any amendments that he might wish to table for Report. The noble Lords, Lord Foulkes and Lord Browne, have acknowledged that we have tried to structure a debate today on the referendums in a way that is to the benefit of the Committee. After the appropriate amendment has been moved, I wish to indicate the Government's position by saying something about the consultation. I shall then listen to comments from noble Lords and respond at the end of the debate.

Photo of Lord Forsyth of Drumlean Lord Forsyth of Drumlean Conservative

I am most grateful to my noble and learned friend. Given that Section 30 is the Government's preferred route forward, and given that the consultation process is overwhelmingly in support of that-that is what we are being told-is it the Government's intention to proceed on that basis? As that basis requires the agreement of the Scottish Parliament, is it my noble and learned friend's intention to bring forward some other Bill in the next Session of Parliament to deal with the referendum issue? It is clear that there will be no time to do this with the Scotland Bill.

Photo of Lord Wallace of Tankerness Lord Wallace of Tankerness Lords Spokesperson (Attorney General's Office), Lords Spokesperson (Wales Office), The Advocate-General for Scotland, Lords Spokesperson (Scotland Office)

My noble friend is right to say that a Section 30 order is the Government's preferred route and that it is our policy to negotiate an agreement to that end. However, by the very nature of a Section 30 order, it would not be done through primary legislation. Such an order requires the consent of both Houses of Parliament and the Scottish Parliament before being presented to Her Majesty as an Order in Council for approval. That position has received considerable support. I will certainly endeavour to see how many more of the numbers around that particular point can be put in the public domain so that they can be number-crunched before Monday. I will also ensure that my noble friend's comments on this are drawn to the attention of my honourable friend the Secretary of State. However, from what we have been able to digest, the clear majority of support in the consultation is for that process.

Photo of Lord Forsyth of Drumlean Lord Forsyth of Drumlean Conservative

I am most grateful to my noble and learned friend, but I am actually anxious to save the Committee time. If the position is that the Government are planning to proceed on the basis of a Section 30 order, having had the consultation, and if that needs to be negotiated with the Scottish Government, and if Report, which will be the last opportunity to table amendments, is taken on Monday and Wednesday of next week, then to all intents and purposes the possibility of using the Scotland Bill as a legislative vehicle to provide for an independence referendum that would be monitored and administered by the Electoral Commission with a single question has gone. The Minister appears to be saying that he will proceed on the basis of a Section 30 order, but if he is not successful in that, presumably another Bill will be required in the next Session of Parliament. Is that not right?

Photo of Lord Wallace of Tankerness Lord Wallace of Tankerness Lords Spokesperson (Attorney General's Office), Lords Spokesperson (Wales Office), The Advocate-General for Scotland, Lords Spokesperson (Scotland Office)

I ask my noble friend to forgive me if I have misunderstood or misinterpreted what he said. A Section 30 order can take into account issues such as the use of the Electoral Commission. It can also take timing into account, as it can on the matter of whether there is one question or more. These are the things that we will seek to negotiate in a Section 30 order.

Photo of Lord Foulkes of Cumnock Lord Foulkes of Cumnock Labour

If we go down that route and there is an agreement between the Scottish Executive and the UK Government about a Section 30 order and it is brought forward, can the Minister confirm that it could be debated in both the Houses of this Parliament?

Photo of Lord Wallace of Tankerness Lord Wallace of Tankerness Lords Spokesperson (Attorney General's Office), Lords Spokesperson (Wales Office), The Advocate-General for Scotland, Lords Spokesperson (Scotland Office)

Indeed, not only would it be debated but it would be voted on in both the Houses of this Parliament. If we move into Committee, we can probably have a much wider debate on these matters.

Photo of The Duke of Montrose The Duke of Montrose Conservative

My Lords, we are up against a slight hoolie on this procedure. The interesting Statement given to us by the Minister shows that quite a lot of the measures that are currently in the Bill have been withdrawn, so it is simplified from that point of view. The question then is whether what we are left with is purely a framework Bill into which all sorts of other legislation will be brought. However, from the point of view of this House, it would be a great shame if the legislation on the referendum were not set out in the Bill because there is a strong restraint on this place in that we never vote down secondary legislation, which is what will come before us if we use the Privy Council route.

Photo of Lord Wallace of Tankerness Lord Wallace of Tankerness Lords Spokesperson (Attorney General's Office), Lords Spokesperson (Wales Office), The Advocate-General for Scotland, Lords Spokesperson (Scotland Office) 4:15 pm, 21st March 2012

These are proper issues for debate. It is not the Government's intention to bring forward any amendment with regard to a referendum, as I shall make clear when we come to debate the matter, when issues such as those raised by my noble friend the Duke of Montrose and others can be more thoroughly aired.

I hear the points made by the noble Lord, Lord Browne, on the provisions of the Holtham model, and those made by my noble friend Lord Caithness on when certain issues might be debated on Report. In the spirit in which some of us discussed matters earlier this week to facilitate these debates, I am more than willing to convene a meeting-either in person or on the phone-to see how we can best order business on Report to meet the different needs in different parts of the House, to ensure proper debate on these issues and to see if there is a way in which we can further debate Holtham. I am happy to commit to write and provide additional detail ahead of Report stage to assist noble Lords. It may be useful if we have a dialogue to see how we might facilitate a proper discussion for Lordships on the so-called Holtham model.

With these reassurances, I hope the House will now resolve itself into Committee.

Photo of Lord Sewel Lord Sewel Deputy Speaker (Lords)

Part of the difficulty with the Section 30 route, of which I am in favour, is not merely that we do not vote against orders-except very occasionally-but also that we cannot amend them. That is a real difficulty. If there is a Section 30 order agreement but the House is profoundly disturbed about one aspect, it is the nuclear option to vote against it. That is a very uncomfortable position to be in. It would require almost a draft Section 30 Motion so that the House can express a view on the details before being forced to come to a decision, one way or the other, on the whole order.

Photo of Lord Wallace of Tankerness Lord Wallace of Tankerness Lords Spokesperson (Attorney General's Office), Lords Spokesperson (Wales Office), The Advocate-General for Scotland, Lords Spokesperson (Scotland Office)

I am not sure that a draft Section 30 order exists. However, the noble Lord, Lord Sewel, from his long experience in government, makes an interesting suggestion. The most I can do at the moment is to undertake to reflect on it.

It is not only the responses from the consultation, which will inform much of the content that the United Kingdom Government would wish to see in a Section 30 order, that is of considerable importance today in a debate on the referendum, it is also important to know what issues your Lordships think ought to be included in a Section 30 order. While I do not say that this is a part of the consultation, it is an important part of the process that we have an opportunity, facilitated by amendments tabled by noble Lords, for your Lordships to express views as to what you think should be in the order. I can guarantee that the United Kingdom Government will reflect on those views. I will be very surprised if there is too much difference between our preferences, as expressed in the consultation document.

It is important that noble Lords should take the opportunity today to express their views on what the shape of such a referendum should be and I suggest that we move on to that as soon as possible.

Motion agreed.

Clause 43 : Commencement

Amendment 74B

Moved by Lord Forsyth of Drumlean

74B: Clause 43, page 32, line 27, at end insert-

"( ) Section 28 shall not come into force until 60 days after the Secretary of State has laid before both Houses of Parliament a report on the impact of the provisions of that section on the financial privileges of the House of Commons."

Photo of Lord Forsyth of Drumlean Lord Forsyth of Drumlean Conservative

I am sorry that my noble friend Lord Sewel is not here. I beg your Lordships' pardon. I mean my noble friend Lord Sassoon. It was a Freudian slip. The noble Lord, Lord Sewel, will be forever associated in my mind with the Scotland Bill because he, of course, was the midwife of the legislation.

I am sorry that my noble friend Lord Sassoon is not with us because this amendment relates to the extraordinary revelations that we had at some stage during our 10-hour Sitting on Thursday about how the tax-raising powers of the Scottish Parliament would operate. I see that the noble Lord, Lord Kerr, is in his place. I have always held him in the highest regard. I first came across him when he used to guide us through UKREP in the European Union negotiations on the social chapter. He is not someone who is easily lost to detail. He expressed a surprise that I and lots of people felt. I am of course not a supporter but, as he indicated when we discussed this before, the whole idea of giving the Scottish Parliament a tax-raising power to set the Scottish income tax means that part of the block that has hitherto been determined by the Barnett formula would have to be raised in income tax. If the Scottish Parliament wished to raise more, it would have to raise the Scottish rate of income tax.

Photo of Lord Wallace of Tankerness Lord Wallace of Tankerness Lords Spokesperson (Attorney General's Office), Lords Spokesperson (Wales Office), The Advocate-General for Scotland, Lords Spokesperson (Scotland Office)

I might have got this wrong but is Amendment 74B not about the privileges of the House of Commons? At the moment, is my noble friend limbering up to speak to Amendment 74C? I apologise if I have got that wrong.

Photo of Lord Forsyth of Drumlean Lord Forsyth of Drumlean Conservative

My noble and learned friend is absolutely right. Amendment 74B is indeed about the impact on the privileges of the House of Commons. Everything that I said can relate to that if I think very carefully on my feet. Amendment 74B relates to the previous debate that we also had with my noble friend Lord Sassoon about enabling new taxes to be created in Scotland by Order in Council. That related to new Section 80B created in Clause 28, which is the power to add new, devolved taxes. It says:

"Her Majesty may by Order in Council amend this Part so as to ... specify, as an additional devolved tax, a tax of any description".

I cannot think of an example since ship-money where it has been possible by Order in Council to create a new tax. We have very particular procedures for creating new taxes. The Finance Bill right up until, I think, 1969 had to be considered on the Floor of the House of Commons in Committee. Special rules apply to the conduct of the Finance Bill, including-still, I think-that it is not subject to guillotine. The noble Lord, Lord McAvoy, would be able to help me with that. I certainly think that it is not subject to a guillotine in Committee. The Chancellor of the Exchequer has a leeway, given to no other Minister in the Government, to have as big a Bill and as much time as required. That is because the Finance Bill is central to the whole nature of Parliament, which is about voting and raising means of supply.

The particular innovation in this Bill enables a completely new tax to be created. Mr Alex Salmond might decide he wants a window tax or a tax on landed estates or our local income to finance local government. All that is required is that an Order in Council is approved by both Houses of Parliament. As has already been pointed out, Orders in Council are not normally able to be amended and are not normally voted against in this House. I am most grateful to my noble and learned friend for telling me which amendment I am speaking to. I have tabled this amendment because I cannot understand how, given the position of this House in respect of taxation, it can be right that first, new taxes can be created by order in the other place and, secondly, this House should be involved in consideration of the imposition of new taxes by order. That seems to impact upon the privileges of the House of Commons.

In truth, however, this amendment is simply another opportunity to raise a serious constitutional innovation, which creates very unfortunate precedents. I am hoping that even at this late stage I can impress upon my noble and learned friend that the explanation we were given for these powers being contained in the Bill, when we considered them earlier, was that the Calman commission had recommended that there should be powers in the Bill to provide for additional, specified taxes. This Bill does not provide for additional, specified taxes; it gives a completely open-ended power.

We have just received, as was referred to earlier, an indication of the agreement that has been made in order to get Alex Salmond's permission for this House to continue with the Bill. This is the deal that the Government have entered into. It provides for the inclusion of some new taxes-some of which we have already debated, such as the aggregates levy. Why can my noble and learned friend not amend the Bill on Report and make provision for those specified taxes to be included? I do not like the order-making power. He could put that provision into the Bill and it could be approved, then it would go back to the House of Commons and would be approved there. Why can we not have a list of specified taxes which are to be included rather than this open-ended and highly undesirable procedure, which I believe challenges the very basis of this House? I beg to move.

Photo of Lord Browne of Ladyton Lord Browne of Ladyton Shadow Spokesperson (Scotland)

My Lords, the amendment moved by the noble Lord, Lord Forsyth, seeks by very specific provision to restrict the operation of Section 28 of the Act. We on these Benches are broadly content with the Act, but the noble and learned Lord who speaks for the Government on these matters will, I hope, remember that we moved an amendment seeking to put into the Bill at least a mechanism, which would lead further into secondary legislation, to have some reflection of the criteria that need to be satisfied before either a new or an existing tax could be considered appropriate to be devolved. In response to that amendment, the Government's position was that those criteria were already set out in a White Paper predating the publication of the Bill.

Our position on these Benches is still similar to that of the noble Lord, Lord Forsyth. It would be better if there were some restriction in the operation of Section 28-or, at least, some shape to how it would operate-by reflecting through primary legislation into secondary legislation the criteria that need to be satisfied, since it appears that the Government have a clear and advanced view of what those criteria will be. This is an issue that we intended to return to on Report, having looked at the drafting of an appropriate amendment. I gave notice at the conclusion of the debate in Committee on Clause 28 that that is what we intended to do. To that extent, we are in agreement with the noble Lord, Lord Forsyth, and I think also with the mood of the House when we debated this provision.

Reflecting on the specific terms of the agreement with the Scottish Government, it appears that the Government's position on the aggregates levy is now that it will be devolved, as I understand it, not if but when the issues which are preventing its devolution are resolved. Up until now, I had thought that the conditionality in relation to the devolution of the aggregates levy was in the control of the European court. It now appears, though, that the Government's confidence that these issues can be resolved is such that they were able to agree with the Scottish Government that the aggregates levy will be devolved when that resolution takes place and these issues are resolved.

If that is the case then I agree, with regard to that tax, that it would be more appropriate to have in the Bill a provision that could be activated and brought into force at that point, and that this House and the other place would have an opportunity to consider the implications otherwise for the devolution of the aggregates levy in detail. When we debated that issue, if I remember correctly, the noble Lord, Lord Forsyth, proposed a detailed amendment covering the aggregates levy, and the noble Lord, Lord Sassoon, told him that technically it was broadly correct. I may be misquoting his exact words, but he said that the noble Lord had made a good job of it and that it was fit for purpose. If that is right, at least the Government are in a position where most of the work has been done. That may need to be tweaked, and I dare say that the Government would not want to accept someone else's amendment wholesale and may want to change it slightly, but we could be in a position on Report to have a debate that would do two things: satisfy this House's desire to have a debate about the detail of that tax and its devolutionary implications, and immediately show good faith to the Scottish Government because this would put a provision in the Bill that could be activated to devolve the tax.

I turn to the amendment. One of the coincidences of this amendment coming forward, or it may be not entirely a coincidence, is that this House has been exercised by the issue of financial privilege in some detail in committees, briefings, debates and discussion since the House of Commons recently claimed financial privilege in respect of Lords amendments to the Welfare Reform Bill. When I saw the amendment of the noble Lord, Lord Forsyth, I was not clear exactly what he was getting at, but there was no shortage of briefing available to me about financial privilege.

Photo of Lord Forsyth of Drumlean Lord Forsyth of Drumlean Conservative

I was simply trying to find a way of raising the subject again. There was no deeper meaning behind it.

Photo of Lord Browne of Ladyton Lord Browne of Ladyton Shadow Spokesperson (Scotland)

I do not know whether I am grateful to the noble Lord for that, because I had a very clever ending to this part of my contribution and he has prevented me moving towards it as quickly as I wanted to.

I have never been able to do this before in a debate: I intend to quote the Clerk of the Parliaments. There is a Library note on the issue of financial privilege; it goes into this issue in some detail, and only our Parliament could produce something like this that was so interesting and esoteric. Paragraph 18 of this report says:

"In conclusion, it may be worth making two points ... First, until the Commons asserts its privilege, the Lords is fully entitled to debate and agree to amendments with privilege implications".

It seems, and I am grateful for this, that this is the complete answer to the noble Lord's amendment. It would be ill advised of this House, given that it has that power, to seek for the first time to try to control it with legislation at its own hand. I cannot, as I am sure the noble Lord will be devastated to hear, support his amendment in these circumstances.

Photo of Lord Steel of Aikwood Lord Steel of Aikwood Liberal Democrat

My Lords, my noble friend Lord Forsyth has a technical point about taxation through Orders in Council, but I want to come back to this basic point regarding the Bill: Section 28 talks in bold type about the power to add new devolved taxes. That is something to which my noble friend is opposed; he does not want the Scottish Parliament to have the power to create more taxes, but I do. I think I am right in saying that the Calman commission also wanted to give the Scottish Parliament the power to add more taxes. Going back even to the referendum that we had, I know that my noble friend keeps saying that there is a difference between varying taxes and adding new ones, but that is too subtle a distinction.

Photo of Lord Forsyth of Drumlean Lord Forsyth of Drumlean Conservative

There are three members of the Calman commission here. I am sure that my noble friend Lord Selkirk of Douglas will be able to confirm this. I think the Calman commission said that the Scottish Parliament should have the power to add specified taxes. I am not against the Bill allowing for specified taxes; I am against it being open-ended and subject to that procedure.

Photo of Lord Steel of Aikwood Lord Steel of Aikwood Liberal Democrat

That is where we differ. I am not against the Scottish Parliament having such powers. I want the Bill to be stronger than it is. We are on a constant road on devolution. I still believe that we want to get to the point where the Scottish Parliament has responsibility for raising the money that it spends on devolved matters. The Bill does not go that far but at least it moves in that direction.

I give the Committee a specific example. My noble friend keeps talking about a window tax. Nobody in their right mind is contemplating introducing a window tax in Scotland; not even Mr Salmond has suggested that. However, we used to have a dog licence fee in this country. It was abolished some years ago because it reduced to 37.5p. It was collected by local authorities and it cost so much to collect that it was not worth having.

Photo of Lord Steel of Aikwood Lord Steel of Aikwood Liberal Democrat

My noble friend mutters that it was not a tax. However, I am saying that it could be a tax. There is no reason why the Scottish Parliament should not decide, as a matter of good policy, that ownership of dogs, which can be a confounded nuisance in cities and the countryside, should be subject to tax. That is a perfectly sensible proposition and there is no reason why the Scottish Parliament should not decide that it is one way of adding to its tax take and finances. I am totally opposed to the amendment that my noble friend is pursuing. He is making a good case by trying to undermine the basic purpose of the Bill, while I want the Bill to go further than it does.

Photo of Lord Lyell Lord Lyell Conservative

My noble friend made a powerful speech; indeed, I am half way to agreeing with him. However, our noble friend the Commercial Secretary to the Treasury referred 36 times to this extraordinary Scottish dance, the close connection; perhaps my noble and learned friend on the Front Bench can tell us whether it is a Canadian barn dance, a military two-step or a three-step. That close connection refers particularly to individual payers of income tax. In describing this close connection, my noble friend admitted more than 30 times that the individual payers who are classified as Scottish taxpayers would be nothing to do with this Bill. They could easily be English or other UK taxpayers. I hope my noble friend will take that on board. You can look at new taxes but, for goodness' sake, take care over who will be responsible. If they are not Scottish taxpayers or Scottish voters, we will be in ever deeper water.

Photo of Lord Wallace of Tankerness Lord Wallace of Tankerness Lords Spokesperson (Attorney General's Office), Lords Spokesperson (Wales Office), The Advocate-General for Scotland, Lords Spokesperson (Scotland Office)

My Lords, my noble friend Lord Forsyth indicated that this amendment was a hook on which to hang a wider debate. I listened to the debate on Clause 28, to which my noble friend Lord Sassoon responded and in which the noble Lord, Lord Forsyth, made a number of points. He raised the responsibilities and privileges of the respective Houses of Parliament. The noble Lord, Lord Browne, has given a very clear answer on that. It is also important to point out that our role is in relation to a constitutional question: should the Scottish Parliament have responsibility for a particular tax, or should it remain reserved? It is not about how a tax should be structured, who should have to pay it and exemptions to it. That would all have to be set out in primary legislation by the Scottish Parliament, should a tax be devolved.

I am sure it is accepted on all sides of the House that the question of what should be devolved to the Scottish Parliament is an important constitutional issue. I rather think that if it had been suggested that the House of Lords should not express a view on a power such as that contained in Clause 28, I might be in greater difficulty in trying to respond to an amendment suggesting that it should. However, I hear what my noble friend says about the tax in relation to Clause 28. I do not want to engage in a rerun of the debate that we had when my noble friend Lord Sassoon was responding, or indeed anticipate a debate which the noble Lord, Lord Browne, has indicated he intends to run when we come to Report. I am sure that there will be ample opportunity to do so.

I say to my noble friend Lord Forsyth that I think there is a genuine misunderstanding between us with regard to what the Calman commission meant when it referred to a specific tax. I think there are three other members of the Calman commission in the Chamber at the moment and I am sure that, if I have this wrong, they will jump up. The Calman commission identified some specific taxes such as an aggregates levy, which has been referred to, air passenger duty, landfill tax and stamp duty land tax. These were specified and specific recommendations were made in respect of them. Paragraphs 3.170 and 3.171 of the Calman commission report give a general background as to why we thought there should be a power to devolve other specific taxes in the future. By that, it was not intended that we should nominate in the commission's report, or indeed in a Bill, what these specific taxes might be; rather, it concerned the concept of a specific tax as opposed to devolving a general power of taxation to the Scottish Parliament. I think there is perhaps a genuine misunderstanding on what the recommendation intended. I may have a better understanding of what that intention was, having been party to it.

Photo of Lord Forsyth of Drumlean Lord Forsyth of Drumlean Conservative

Can my noble and learned friend give us two examples of taxes that might be added using this general power which he could not put on the face of the Bill?

Photo of Lord Wallace of Tankerness Lord Wallace of Tankerness Lords Spokesperson (Attorney General's Office), Lords Spokesperson (Wales Office), The Advocate-General for Scotland, Lords Spokesperson (Scotland Office)

My Lords, the point of not putting that on the face of the Bill is to make sure that there is provision for something that might happen in the future. However, one possible tax could be a dog licence tax, which my noble friend Lord Steel mentioned. I wish to make it very clear that it is not the policy of Her Majesty's Government to have a dog licence tax, nor indeed, the last time I checked, was it the policy of the Scottish Liberal Democrats. I hope I will not embarrass my noble friend Lord Steel by what I am about to say but I remember that, in an election when I was leader of the Scottish Liberal Democrats-it must have been the 1999 Scottish election-and my noble friend was a candidate in Lothian, he announced somewhere along the line that he wanted a caravan tax. I had to spend a whole day making it very clear that this was his personal view and not the view of the party. My noble friend seems to be a rich source of potential taxes.

However, one of the taxes that the Calman commission considered was a plastic bag tax, which had arisen in the Scottish Parliament where all sorts of ways had been found to try to see whether it could be brought within competence. That is the context. I hope that before we come back to this matter on Report, my noble friend will look at paragraphs 3.170 and 3.171 and will understand the context in which the recommendation was made.

I may be anticipating the debate we will have next week, but putting criteria on the face of the Bill would undoubtedly give the courts the ability to decide whether they have been met. The question of the extent to which these criteria have been met is, I believe, a political one, and one which Government and Parliament would be best placed to determine when a particular issue presents itself. However, it is clear that we will have an opportunity to return to this so I will not detain your Lordships further. I invite my noble friend to withdraw the amendment.

Photo of Lord Forsyth of Drumlean Lord Forsyth of Drumlean Conservative

I have to say to my noble and learned friend that that was a disappointing response. I thought that if I gave him the chance to discuss this important constitutional position again, having thought about the arguments, he would perhaps say that he would narrow the rather wide focus of the Bill. I wonder how the House would react if my right honourable friend's Budget was implemented with a Finance Bill which said that it would be possible to introduce new taxes by Order in Council, approved by both Houses of Parliament. I think there would be an absolute stampede, yet that is what we are proposing should happen to people in Scotland. Having praised my noble and learned friend, I think that he is just a little bit flippant about this. The reason I brought this issue back was not to waste the time of the House but to underline that something very important is being done here which, as I have said, breaches a principle established in this country after ship money.

I hope that my noble friend Lord Steel is right, because I can think of nothing that would sweep Alex Salmond from power more quickly than announcing that he was going to put a tax on dogs-

Photo of Lord Forsyth of Drumlean Lord Forsyth of Drumlean Conservative

And caravans. I do not want to detain the House, but I know that my noble friend Lord Steel got into some difficulty with dogs when he gave the former President Ceausescu a puppy dog following a state visit in 1974. My noble friend gave one of his puppies to Ceausescu. When they had gone shooting, the birds were recovered by children, so my noble friend sent one of his fine Labradors to Ceausescu. Many years later, when the regime collapsed and the press arrived, my noble friend received a call from an outraged journalist who asked, "Did you give this dreadful dictator a dog?". My noble friend explained that he had done so as a result of a state visit and that it had been a courteous thing to do. The journalist said, "Did you realise that this dog had its own coach, its own servants and a whole palace to live in?". I say to my noble friend that dogs, politics and tax are best not mixed.

My noble friend suggested a tax on plastic bags. The mind boggles as to how large firms such as Tesco and others would operate if there were different taxes on plastic bags north and south of the border.

Photo of Lord Wigley Lord Wigley Plaid Cymru

Is the noble Lord aware that there is a plastic bag tax in Wales?

Photo of Lord Forsyth of Drumlean Lord Forsyth of Drumlean Conservative

I rest my case. I was not aware that there was a tax on plastic bags there, but if it is thought to be appropriate to have a power to introduce such a tax, it should be specified in the Bill-not as part of a general power. However, I can see that I am making no progress on this and I therefore beg leave to withdraw the amendment.

Amendment 74B withdrawn.

Amendment 74C

Moved by Lord Forsyth of Drumlean

74C: Clause 43, page 32, line 27, at end insert-

"(1A) Notwithstanding any other provision of this section, no provision of section 30 shall come into force until the provisions of that section have been approved in a referendum held in England."

Photo of Lord Forsyth of Drumlean Lord Forsyth of Drumlean Conservative

My Lords, this is the amendment that I was speaking to previously. It is a device that provides for a referendum in England on Scottish income tax powers. I tabled the amendment in order to discuss the letter that my noble friend Lord Sassoon circulated, following our debate on the Bill on 15 March.

I suggest that the English should have a say on this because of the extraordinary revelation in Committee on the position of the Scottish Parliament if a change in taxation policy were to be introduced by the Chancellor of the Exchequer-as has happened today, for example, when he raised to just over £9,000 the allowance before people pay income tax. The no-detriment principle is not in the Bill but has, as I understand it, been agreed between the Government and the Scottish Government, or has been proposed as part of the arrangements. I see that in the Written Statement today concerning the negotiations on legislative consent-which we can debate at a later stage-those arrangements go even further.

The idea is that Scotland would benefit from the reduction in income tax that people paid as a result of the increase in allowances, but that England would send a cheque to compensate for the reduction in the tax revenues in addition. The argument for having the 10p tax is that it will affect only a small proportion-by the way, Ministers keep saying that it is 30 per cent; I think we were told today the precise figure by the Office for Budget Responsibility. Hitherto, the assumption has been that about £4.5 billion would be raised by the 10p rate of income tax and that if the Scottish Parliament wanted to spend more it could put that income tax up. The proposition that, because the 10p rate does not raise £4.5 billion any more because people in Scotland are paying less tax, people in England should have to pay more tax to send an addition to the Barnett formula-determined part of the block seems to me to drive a coach and horses through the whole argument of accountability.

If my amendment were accepted and the proposition was put to people in England by a referendum that the Scottish tax powers should operate in that way, I think that there would be an overwhelming rejection, because it is completely unfair and unworkable and will create great difficulty.

In his letter to me, which has been circulated to Members of the Committee, the noble Lord, Lord Sassoon, goes on to deal with another issue, which is benefits. If, as has happened today, the Chancellor raises the thresholds at which people pay tax, that means that there will be a change in their entitlement to benefit. There is a requirement here for changes in people's eligibility for benefit and the effect that that has in Scotland to be compensated for by taxpayers in England. In his letter, my noble friend says that I should not be too worried about that because the costs are likely to be low. I hope that this letter will be put in the Library or in a form which people outside the House can access.

In the annexe to the letter, my noble friend sets out a little flowchart, which starts with the Scottish budget being £28 billion and Scottish income tax receipts being £4.8 billion. Then, the Scottish block is adjusted downwards by £4.8 billion to create headroom for the Scottish rate of income tax, which means that the Scottish budget is £28 billion, and the block grant is £23 billion because the Scottish income tax receipts would be £4.8 billion. The UK Government raise the personal allowance UK-wide, estimated by the OBR at £3.5 billion. The OBR forecast of the impact on Scottish income tax receipts is a reduction of £100 million. Therefore, receipts from the Scottish income tax are expected to be reduced to £4.7 billion. Therefore, the Treasury adds £100 million to the Scottish budget to offset the impact of what is called UK policy change and the outcome is that the Scottish Government's budget remains the same.

This is "Heads you win, tails you win" economics. It is completely unfair. It is just reinstating the block grant. I am no advocate of this policy, but if the Government want to go down this track the sensible thing to do would be to give the Scottish Parliament control over the allowances and the rates. This is nonsense. It also applies to changes in the benefit position, because people's entitlement to benefit will be altered by their net income. If the Scottish Parliament were to put up tax, which it will certainly have to do, and Scotland becomes the highest-taxed part of the United Kingdom, as it certainly will, that means that people's entitlement to benefit will increase. The cost of that will fall on the English taxpayer. I raise this because, if my noble friend accepts my amendment, which is to give the people in England a referendum on this scheme, I do not think these proposals will stand the test of time. If, as I suspect, he will not accept my amendment, then I urge him to abandon this ridiculous no-detriment principle. The no-detriment principle is a no-accountability principle. It drives a coach and horses through the whole philosophy and thinking of the Bill. I have no idea where it came from. If he is going to maintain this no-detriment principle, then it ought to be written on the face of the Bill. It should not be the product of a quiet deal that no one knows anything about, which flies in the face of what was said in the manifestos of those parties that committed themselves to introducing the Calman proposals. I beg to move.

Photo of Lord Kerr of Kinlochard Lord Kerr of Kinlochard Crossbench

My Lords, it is déjà vu all over again. I supported the noble Lord, Lord Forsyth, the last time he raised the matter. Although I do not agree with this amendment, I am very glad he has moved it, because it enables us to discuss it again. I had not understood the no-detriment principle. It was painstakingly explained to me by the Minister and the noble Lord, Lord Sassoon. I have not been favoured with the letter of the noble Lord, Lord Sassoon, so forgive me if I am behind with the debate. As it was explained, it is indeed exactly as the noble Lord, Lord Forsyth, says. However, look at it the other way round. It would be paradoxical if the basic tranche of income tax, before the Scottish tax is added in on top, was reduced. The Scots would receive a cheque from the United Kingdom Exchequer. That seems to be very odd. However it is politically even odder, and possibly unsustainable, if it is the other way around. Supposing Chancellor Balls had decided that we needed a higher level of spending, and therefore a higher level of taxation. The Scots would have to send a cheque and they would have paid the higher level of taxation, so would have had less to devote to the higher spending which the proceeds of the tax would have brought in. I do not understand this no-detriment principle.

I draw from that unsatisfactory example exactly the opposite conclusion from the one the noble Lord, Lord Forsyth, draws. I go with the noble Lord, Lord Steel of Aikwood. It seems that we need more but I apologise to the noble Lord, Lord Forsyth, as he was saying much the same today. The trouble with this Bill is that it is a Sir Clive Bossom Bill. Sir Clive Bossom calls on the leader of his party, then the leader of the Opposition, when he joins the House of Commons. The only sentence he gets out of Mr Churchill is, "Bossom, eh? Neither one thing nor the other". That is what is wrong with this Bill. It is not actually devolving real accountable taxing authority to the Scots. It is still the block grant system with a little add-on which is presentational rather than substantive. I would much rather see a genuine devolution of taxing power. I would start with indirect taxes. Then you will not have any of the problems of defining who the taxpayer is, residence and so on. I would start at that end. I would concede from this Parliament to the Parliament in Edinburgh much greater power in order to deal with the real deficit, which is the accountability deficit. I accept that as a consequence of that, one would have to have a rather strict control on the macroeconomic effect of a degree of fiscal autonomy, so that we did not see a repetition of what we see in continental Europe right now. I accept that that follows.

However, it would be better to get into that area than to pretend to do devolution of taxation and end up with this rather miserable little measure. I understand its logic; I used to work in the Treasury. It is the logic of the Treasury office of accounts. It is the logic of the public expenditure side of the Treasury. It is a book-keeping logic. However, if you think of its economic effect-if you think of it in economic terms-it is absurd.

Photo of The Earl of Caithness The Earl of Caithness Conservative 5:00 pm, 21st March 2012

My Lords, I support what has been said so far. The present situation, as is increasingly becoming clear, is untenable. It goes against the principle that I have been arguing all the way along. I am in agreement with the noble Lords, Lord Foulkes of Cumnock and Lord Steel of Aikwood. I believe that the only sensible way for the Scottish MSPs to be accountable is for them to be able to raise revenue as well as spend it. We are prohibiting that accountability and to me that is a very serious mistake which needs to be corrected at a later stage of the Bill. I think it is untenable for the future and unless we nip this in the bud now, it will be of increasing concern and will lead to a distortion of some of the benefits of devolution. It will become a real Achilles' heel for people. Every time there is a change of allowances in one country that is different from another, we will have these consequences. Now that we know exactly what will happen, we have a real problem ahead of us.

Photo of Lord Lyell Lord Lyell Conservative

Perhaps I may put a gloss on what my noble friend has said about these taxes. He refers to accountability. I make the point that in Clause 30 of the Bill, let alone anywhere else, there is no accountability to English, non-Scottish voters, who will be classified by the Bill as Scottish taxpayers. Where is the accountability? It is not there.

Photo of Lord Browne of Ladyton Lord Browne of Ladyton Shadow Spokesperson (Scotland)

My Lords, I do not support the noble Lord's amendment. In case anyone should be in any doubt about this, I do not support a referendum on any aspect of this Bill because I do not think that it is appropriate for us to make any of the provisions of the Bill conditional on a referendum, either by the Scots, the whole of the UK or indeed the English. I shall perhaps have an opportunity to explain later that referendums are for extraordinary circumstances and this is not one of those sets of circumstances.

Secondly, in this context, I would never support a referendum by the people of England in any event because, in my view, that would be a fundamental misunderstanding of the concept of devolution. Devolution depends on the relationship between the United Kingdom and Scotland and not between England and Scotland. I am not being pedantic; I could go on to say why England, and not Wales and Northern Ireland. The noble Lord nods so I am sure that he gets the point. This is a vehicle for him to have a wider and broader debate and I understand that. It is important that we do not repeatedly categorise these issues as issues between England and Scotland. This is about devolving power to a part of the United Kingdom and holding that part of the United Kingdom in the United Kingdom. We have done it to Northern Ireland and to Wales and we have done it substantially to London in many aspects of public policy.

It is challenging and difficult for this Parliament and for people to understand because it is utterly asymmetric across the country, but, in my view, it is a celebration of the diversity of the United Kingdom. I know that there are those among us-the noble Lord, Lord Steel, is one of them-who would like to see a more federal structure where there was less of an asymmetry and much greater clarity. However, the reality is that many parts of the United Kingdom are not ready for that, as they have made clear to us, and it should not be imposed upon them. Ironically, in the history of devolution in Spain, that sort of structure was imposed on the Spaniards and those who were least interested in it made the most out of it. I say that in passing. So I do not support a referendum. I would certainly not support a referendum by only English voters.

I turn to the no-detriment principle. I thank the noble Lord for raising this issue again. In the absence of my noble and learned friend Lord Davidson of Glen Clova, who is part of our Treasury team and is also a Scottish affairs spokesman, I have to deal with it. I was reluctant to engage myself in the debate the last time it came up, but got slightly frustrated with the misrepresentation of what I thought was the no-detriment principle. I stuck my nose into it, suggesting, indeed, that this letter be written, but it appears that the letter has just given those who wish to misrepresent the no-detriment principle even more ammunition to do it.

The no-detriment principle in this context was first raised, as I understand it, in the Command Paper that accompanied the Bill. My understanding of the no-detriment principle is probably best expressed, interestingly enough, in a paragraph of the Holtham report. This may be entirely the wrong part of the Holtham report for the purpose of the agreement that has now incorporated this into mechanisms for the future between the Scottish Government and the UK Government, but it does what I want it to do. It is paragraph 5.2 of the substantial executive summary of the Holtham report. The executive summary is 72 pages long. I shudder to think what the whole report is like, and I certainly do not intend to spend a weekend between now and the Report stage reading it.

If I have understood the Written Statement from the Secretary of State for Scotland, the principle of no-detriment is now to be qualified by reference to the Holtham report and the mechanism in it about budgets and block grants. If I have misunderstood that entirely then, at the risk of encouraging the same sort of pantomime that we saw earlier in another place, perhaps someone on the Front Benches could either nod or shake their head, but if I am right this encapsulates the no-detriment principle:

"Risks consequent on the actions of the Assembly Government should be borne by its budget and risks consequent on the action of the UK Government should be borne by UK budgets. Risks outside government control and arising from elsewhere should be pooled across the union".

It goes on to refer to how difficult that is to do. I accept that it is very difficult, but as I understand it, that is what lay behind the no-detriment principle. If Holtham is now to be incorporated into that agreement, then that may make it easier.

If that is right, with all due respect to the noble Lords who have supported this interpretation, adjusting the block grant for Scotland in response to policy decisions made by the UK Government in no way undermines the accountability of the Scottish Parliament or the Scottish Government. They are accountable for what they do. The point about the no-detriment principle is that they should not be accountable to their electorate for what the UK Government do. We can call it what we like, but that is essentially what this is trying to achieve.

I see the noble Lord moving in his seat. This is what I fear, of course, when I start to get into this area of complexity. Before I allow the noble Lord to intervene, perhaps I may remind the Committee that when we were discussing the developments before we started on the fifth day of Committee I said at the outset that it would be extremely helpful if, between now and the conclusion of the debates on the Bill, the Government set themselves the task of explaining where we are now in relation to this principle and how it works. It may be that the noble Lord, Lord Forsyth, will never be satisfied that accountability should be encapsulated only in the actions of the Scottish Parliament. He has a very distinctive view about the Bill and about the Parliament's relationship with the rest of the United Kingdom, which few of us share. However, some of us could be satisfied that there might be a way of expressing this with greater clarity than it has been, and perhaps also of incorporating it into part of the Bill before it is beyond amendment so that it becomes clearer than it is at present.

It now appears that we have not only to read a Command Paper but be sufficiently familiar with the details of the negotiations between the Scottish and UK Governments and no doubt adept at finding our way around the full version of the Holtham report to understand how the no-detriment principle will work. I prefer the simple statement in paragraph 5.2. If that is what the Government are about, I support them. If they could find a way of making that clear in a way that we could refer to in future to ensure that that is what will happen when people adjust grants, I would support them even more. I look to the noble and learned Lord, who has not until now dealt with these financial provisions-neither have I-to reassure the House that in the near future there is a mechanism that will allow us to do that.

Photo of Lord Wallace of Tankerness Lord Wallace of Tankerness Lords Spokesperson (Attorney General's Office), Lords Spokesperson (Wales Office), The Advocate-General for Scotland, Lords Spokesperson (Scotland Office)

My Lords, I am in a position similar to that of the noble Lord, Lord Browne, in having to deal with matters that hitherto were dealt with by my noble friend in the Treasury. I fully accept that my noble friend's amendment is a hook. I share the view expressed by the noble Lord, Lord Browne-

Photo of Lord Foulkes of Cumnock Lord Foulkes of Cumnock Labour

Perhaps I may take the opportunity of sending good wishes to the noble Lord, Lord Sassoon, for a speedy recovery.

Photo of Lord Foulkes of Cumnock Lord Foulkes of Cumnock Labour

I assumed that he had retired hurt.

Photo of Lord Wallace of Tankerness Lord Wallace of Tankerness Lords Spokesperson (Attorney General's Office), Lords Spokesperson (Wales Office), The Advocate-General for Scotland, Lords Spokesperson (Scotland Office)

I am sure that, after all the good will that has been expressed, he will relish coming back to the fray next week. I do not for a moment think that he is ill; perhaps I may quash that rumour.

As the noble Lord, Lord Browne, indicated-and perhaps my noble friend Lord Forsyth would accept-to include only the people of England and to exclude the people of Wales, Northern Ireland and Scotland would not be appropriate. We should bear in mind that the proposals in the Bill were in the manifestos of the Conservative, Labour and Liberal Democrat parties, which applied throughout Great Britain at the last election. My noble friend indicated that he wished to return to the issue of the no-detriment principle, which he pursued on Thursday of last week. It prompted my noble friend Lord Sassoon to write a letter. My noble friend asked if it could be put in the Library. I will make sure that that is done, because it has the benefit of a flow chart that I could not begin to describe from the Dispatch Box.

I will try to explain-I accept that I will not necessarily succeed-what the no-detriment principle is about and why we believe that it is fair and does not detract from accountability. I agree with the noble Lord, Lord Kerr of Kinlochard, and with my noble friend Lord Caithness that more accountability is crucial and that the Scottish Parliament should be accountable not simply for spending money but for raising it. My starting point is that it is wrong to suggest that the no-detriment principle is about allowing the Scottish Government to have their cake and eat it.

The first flaw in the argument is to suggest that if there is a tax benefit-for example, through the measure in today's Budget to raise the personal allowance, which I very much welcome-it will accrue to the Scottish Government. It will accrue to Scottish taxpayers, along with those of England, Wales and Northern Ireland. As I will seek to explain, it has an effect on the revenue that would then be generated for the Scottish Government.

Photo of Lord Forsyth of Drumlean Lord Forsyth of Drumlean Conservative 5:15 pm, 21st March 2012

Yes, it does. The effect is that the amount of tax that people pay in Scotland will go down. Therefore, if the Scottish Parliament wished to be compensated for the loss, it would put up the tax so that it remained in the same position.

Photo of Lord Wallace of Tankerness Lord Wallace of Tankerness Lords Spokesperson (Attorney General's Office), Lords Spokesperson (Wales Office), The Advocate-General for Scotland, Lords Spokesperson (Scotland Office)

This is where there is a misunderstanding. This is about making a shared tax base work in a way that is fair and revenue neutral to both jurisdictions. My noble friend Lord Caithness said that if the Scottish Parliament chose to change the allowances, it should bear the responsibility. The whole point of these proposals is that it cannot change the allowances. The personal allowance is determined by the United Kingdom Government. That is the nature of a shared tax base. The argument is that if that tax base is changed, there ought not to be detriment to the Scottish Parliament.

Photo of Lord Kerr of Kinlochard Lord Kerr of Kinlochard Crossbench

Let us look at this the other way around and think about the ease and the political acceptability in Scotland of making the case that if the Chancellor decides to put taxes up, not down, the Scots, in addition to paying the taxes, should send a cheque to London. It is the reverse of the case that the noble and learned Lord has just been discussing.

Photo of Lord Wallace of Tankerness Lord Wallace of Tankerness Lords Spokesperson (Attorney General's Office), Lords Spokesperson (Wales Office), The Advocate-General for Scotland, Lords Spokesperson (Scotland Office)

It is very unlikely to happen, but let us say that the personal allowance had gone down rather than up. It would have been a windfall to the Scottish Government. The argument therefore is that on a no-detriment principle, it should operate both ways. I shall come on to explain that.

I shall try to make this as simple as possible, but it is not readily simple. From April 2016, the income tax base in the United Kingdom will be shared between the United Kingdom and Scotland. With 10p from all rates in Scotland expected to yield between £4.3 billion and £5.6 billion over the OBR's forecast period, the Scottish Government will receive around 3 per cent of UK income tax receipts. The Scottish Government will be responsible for setting their rate of income tax and the United Kingdom Government will be responsible for everything else, including, for example, personal allowances. In such a system, the UK Government must be accountable for decisions that they take on the structure of the tax. Conversely, the Scottish Government must be accountable for the decisions that they take in respect of the rate.

I shall give an example-the example seen in the letter from my noble friend Lord Sassoon, but seen the other way. Last year the United Kingdom Government decided to raise personal allowances from £6,475 to £7,475. This decision cost the United Kingdom Government approximately £3.5 billion across the United Kingdom. Since the proposal in the Bill is to devolve around 3 per cent of income tax, the cost to the UK Exchequer from raising personal allowances would reduce to 97 per cent per cent or around £3.4 billion. The remaining £100 million would fall on the Scottish budget. It would be a cost as a result of a decision for which the Scottish Government were not accountable.

If the Scottish Government had set a budget and a rate of tax and had planned their public expenditure on that basis, and then, some four or five months later, as the result of a decision for which they had no responsibility or accountability, they suddenly found that their budget was £100 million short, the no-detriment principle is intended to make up that difference because it is a decision for which the Scottish Parliament will not have had responsibility. That is why I believe that it is important for accountability, because not to do so means that suddenly a Scottish Government perhaps have to carry the can for particular expenditure to which they were committed but could not longer afford, not through any decision that they had made, but through a decision made by the United Kingdom. The obverse is true; for example, if the Scottish Government get a windfall because the tax base has changed, it is only right that that windfall is recovered by the United Kingdom Government.

Under the no-detriment principle, the UK Government would compensate the Scottish budget for any cost that led to a reduction in the tax, but at the end of the day the cost to the United Kingdom is exactly the same as it would be if this Bill were not implemented-that is, the £3.4 billion that it loses in revenue because of the increase in the personal allowance and the £100 million that it then gives to the Scottish Government.

Photo of Lord Forsyth of Drumlean Lord Forsyth of Drumlean Conservative

I am sorry to persist in this; perhaps I am just being thick. To take the example given by the Minister, which is the same example that I tried to give from the flow chart, if the Scottish Government find that their block grant is short of £100 million as a result of the increase in the allowances, that means that the amount that people are paying in tax in Scotland has gone down. Why can the Scottish Government not just use their tax-raising power to get the £100 million back from the people who have benefited? That is how the model is supposed to work.

If the Minister is not happy with that, why does he not go further and give the Scottish Parliament the ability to change the allowances as well as the rates? In those circumstances, if the Chancellor wishes to raise the allowances and the Scottish Government do not, they do not raise the allowances. I am making the case here for more devolution, not less-not on the grounds that I am committed to more devolution but on the grounds that this is a complete dog's breakfast.

Photo of Lord Wallace of Tankerness Lord Wallace of Tankerness Lords Spokesperson (Attorney General's Office), Lords Spokesperson (Wales Office), The Advocate-General for Scotland, Lords Spokesperson (Scotland Office)

My Lords, I cannot accept that last comment, but I can now see where my noble friend is coming from. I welcome anyone who wishes to express the case for going further. Of course, he is well aware that what has been presented to Parliament here is something that was worked on over a long period of time during which a consensus was achieved. There was never likely to be a consensus in favour of devolution of the whole tax base, as opposed to the tax rate.

My noble friend is basically saying that it should never be the case that a change in the tax base-for example, the increase in personal allowances-should benefit taxpayers in Scotland. He is saying that if the UK Government, who are still responsible for a substantial level of services in Scotland, take tax from the Scottish people, the Scottish people should never be allowed to take the kind of benefit that I believe they should-and I think that he once wrote a pamphlet on the benefit of raising the personal threshold-and the Scottish Parliament should raise its rate of tax to account for that. That is not accountability; that is a decision taken by the UK Government to bring benefits right throughout the United Kingdom.

It would seriously undermine the United Kingdom if Scottish taxpayers were not allowed to receive the benefit of a change to the UK tax base. It could mean that the tax change would reduce the amount of money available to the Scottish Government, so that budgetary considerations and calculations that had been put forward and might well have been voted through by Parliament would no longer be sustainable because of a decision taken by a body other than the Scottish Parliament. That is the essence of the no-detriment rule, and something that lies at the heart of the statement of funding policy.

I will read out the statement of funding policy, because the noble Lord, Lord Browne, might find that it echoes the passage from the Holtham commission that he read out. It says:

"Where decisions taken by any of the devolved administrations ... have financial implications for departments or agencies of the United Kingdom Government or, alternatively, decisions of United Kingdom departments or agencies lead to additional costs for any of the devolved administrations ... the body whose decision leads to the additional cost will meet that cost".

That is where accountability properly lies.

This is not something new that has suddenly been dreamt up. There are probably people in the House who were involved at the beginning of devolution and this principle has been in the statement of funding policy since then. I believe that it is fair that Governments -be it a UK Government or a Scottish Government-should be accountable for the decisions that they make, but they should not be able to export some of the implications of their decisions on to another Government, who should not be held accountable for the decision of another Government.

Photo of Lord Kerr of Kinlochard Lord Kerr of Kinlochard Crossbench

I understand the Minister's logic, which seems to depend on the control total being the block grant. The block grant is what matters. All this stuff about tax is for perception and presentation at the edges. The block grant has to be maintained. Apparently the example in the Sassoon letter, which I have not seen, concerns a case where the Scottish economy would have benefited from the additional buoyancy and spending power of a reduction in the level of taxation paid by Scotland. However, because we are seeing everything through the prism that the block grant is the control, it needs to be maintained in Scotland, so the Scots need to be compensated for the additional buoyancy in the Scottish economy. That is quite difficult politically. The reverse case, which the Minister prefers not to talk about, is almost impossible to present politically in Scotland.

The trouble is that these tax revisions are neither fish nor fowl; they are only a good red herring. We are not addressing the real issue on taxation. I entirely agree with the noble Lord, Lord Browne of Ladyton, that accountability is accountability for spending and for raising the money which you spend. Until we get that and get away from having the block grant as the control, we will have a continuing unsatisfactory situation.

Photo of Lord Wallace of Tankerness Lord Wallace of Tankerness Lords Spokesperson (Attorney General's Office), Lords Spokesperson (Wales Office), The Advocate-General for Scotland, Lords Spokesperson (Scotland Office)

My Lords, I certainly agree with the final point that accountability is as much about what you raise as what you spend. The point at the heart of the statement on funding and the no-detriment principle is that one should not be accountable for consequences which you as a Government would have to see through but which are the result of a decision that you have not made. Having to say why a certain project does not take place-following not a decision that you have made but a decision made by another Government-is not accountability. That is what one is seeking to address, and it links in with what has been said about the Holtham principle. Again, there is an intention there that, if the Scottish Government's tax proposals promote buoyancy in the Scottish economy, that should be to the benefit. Likewise, if they have tax proposals which have an opposite effect-they drive away enterprise and reduce revenues-there should be a negative consequence. A letter is not necessarily the best way to go through this issue but I am certainly open to ways in which we can go through it in more detail. This point links to the Holtham point made earlier by the noble Lord, Lord Browne.

The principal point is that this is not an issue of the Scottish Government getting two bites of the cake. It is to ensure that where a tax decision is made regarding the UK tax base by the UK Government, all taxpayers throughout the United Kingdom are treated in the same way as a result of that decision. It means, too, that if that decision has consequences-either inflating the money coming into the Scottish Government or reducing it-a rectifying amount is paid back or perhaps withheld from the block grant or, alternatively, is paid in addition. I regret that it is not the easiest thing to explain and there may be another way of discussing it other than across a Chamber. However, I emphasise that it is not a question of having your cake and eating it; ultimately, it is a question of ensuring accountability and making sure that the Scottish Government do not become accountable for a decision that is not their own. I cannot put it more simply than that. Although we may well return to this issue, on that basis I ask my noble friend to withdraw his amendment.

Photo of Lord Forsyth of Drumlean Lord Forsyth of Drumlean Conservative 5:30 pm, 21st March 2012

My Lords, I have to say that I think this is a complete dog's breakfast and I agree entirely with the noble Lord, Lord Kerr of Kinlochard. My noble and learned friend has struggled valiantly to try to explain why the Scottish Parliament should not be accountable for a decision made by the Chancellor to change the tax base by altering the allowances. However, he has not dealt with the point made by the noble Lord, Lord Kerr of Kinlochard, about the politics of Scotland having to send a cheque to England, but I thought I would keep off that in case-

Photo of Lord Wallace of Tankerness Lord Wallace of Tankerness Lords Spokesperson (Attorney General's Office), Lords Spokesperson (Wales Office), The Advocate-General for Scotland, Lords Spokesperson (Scotland Office)

I hope that I made it clear in my response but I shall repeat the point. This is reciprocal because it goes two ways. If a change to the tax base led to an increase or windfall for the Scottish Parliament, that would be recoverable-not by England but by the United Kingdom Parliament.

Photo of Lord Forsyth of Drumlean Lord Forsyth of Drumlean Conservative

Indeed, and I understand that, but I am talking about the politics of it in the context of there perhaps being a higher rate of tax in Scotland. I would not like to be the Minister who had to explain why it was necessary. For example-thank goodness the Chancellor did not do it-let us suppose he had abolished tax relief on higher-income pension contributions. That would create exactly the kind of situation under this odd regime in which the Scottish Government would have to send a cheque to England. My noble and learned friend looks quizzical and perhaps I am wrong, but if the tax relief were removed there would be a windfall benefit for the Scottish Government. The product of a 10p income tax would be less, or are we saying that this would apply only to direct changes to allowances in respect of income tax? If that is the case, surely it would be sensible to allow the Scottish Government to make changes to tax allowances rather than compensate them for the effect of changes. There is an idea that they would be caught midway through a Budget by a sudden change-perhaps the £100 million example given by my noble friend-but, as we have seen today in the reduction in the top rate of tax or the increases in allowances, these are normally planned well in advance. Provision is also made in the Bill for the Scottish Parliament to borrow money and to have access to funds where there are changes.

My noble and learned friend has not dealt with the argument. The simple way to deal with this is as follows. If a change is made to the allowances, the revenue consequences will be that the product of the 10p tax instead of being £4.2 billion or £4.5 billion will be £4.2 billion or £4.4 billion. That £100 million shortfall could easily be recovered by increasing the rate of tax. The Scottish Parliament would not be disadvantaged by that because it would simply have to increase the rate of tax. There might be a problem of timing, but there is a provision for borrowing to deal with it, and that would give direct accountability. I agree that it is messy, but for the life of me I do not understand why we are going on with this exercise where my noble and learned friend will not concede that, rather than have a very complicated provision for tax, it would be better to provide that the Scottish Government are able to change the allowances as well as the rate if the UK Government see this as a great administrative difficulty for them.

My noble and learned friend did not deal in his response with the problems that arise from welfare. As I understand it and as his letter points out, eligibility for benefits will depend on net income. That means that if Scotland, as I suspect it will, becomes the highest taxed part of the United Kingdom, net incomes will be lower and therefore it will be necessary for benefits to be increased. Perhaps my noble and learned friend will help me with this. If, for example, the Scottish rate of income tax was higher and the effect was to reduce net incomes and therefore more would need to be paid in benefits, would the Scottish Government have to send a cheque to the UK Exchequer to deal with the consequences of the fact that in Scotland more people were dependent on benefits? Politically, I think that that, too, would be extremely difficult.

As the noble Lord, Lord Kerr of Kinlochard, has pointed out, the no-detriment principle is basically just trying to replicate the block grant and dress it up as income tax. The consequences will be that everyone in Scotland will end up paying higher income tax than people in England in order to finance a vehicle which does not do what it says on the tin.

Photo of Lord Wallace of Tankerness Lord Wallace of Tankerness Lords Spokesperson (Attorney General's Office), Lords Spokesperson (Wales Office), The Advocate-General for Scotland, Lords Spokesperson (Scotland Office)

There is a point that my noble friend is not addressing: no amendment has ever been brought forward to devolve allowances. It would be a major change to make at this stage of the Bill and he has not advanced the idea before but, that apart, it did not commend itself to the Calman commission or to the Government. Is he saying that the United Kingdom Government cannot make changes to a tax allowance which will benefit all taxpayers in the United Kingdom and that, if they do, they will be giving with one hand and the Scottish Parliament will be taking away with the other? That is an untenable position for a unionist to take.

Photo of Lord Forsyth of Drumlean Lord Forsyth of Drumlean Conservative

It is not my idea. It is the noble and learned Lord's idea to introduce a Scottish income tax. We have never had a Scottish income tax. If my noble and learned friend is saying that it is not a good unionist position to have a Scottish income tax along with a UK income tax, I could not agree more. That is what is wrong with the Bill and why I am against it. If you want to go down that road and you have set out the arguments for accountability on that basis, then do it properly and introduce a system that is workable.

Let us leave the issue of allowances. When we have Scottish income tax it will be possible for the Scottish Parliament to set the rate at whatever level it chooses-and not only the basic rate but the intermediate rate and the top rate. Mr Alex Salmond can have a top rate of 60 per cent and a basic rate of 30 per cent if he wants, and you can have a Government in England and the rest of the United Kingdom cutting taxes. Therefore, it is absolutely central to the proposal that there is the possibility-I would say the probability-that people in Scotland will not benefit from wise tax policies such as those pursued by my right honourable friend the Chancellor of the Exchequer today.

When my noble and learned friend says that if you do not have the no-detriment principle people in Scotland will not benefit from increases in the allowances for tax purposes, that is nonsense. It would be up to the Scottish Government. The Scottish Government would find that their block grant was reduced by a set amount, but they could get that set amount by taking the money from the taxpayers in Scotland, who would have benefited from the reduction in the allowances. That is the whole principle. My noble and learned friend shakes his head. The principle is that the Scottish Government are accountable for their spending and they have to raise that money through tax. The change in the allowances means that the tax available to them is less and therefore, if they want to continue the same level of spending, they will have to raise the tax. My noble and learned friend is running away from this because of the administrative difficulties that would be involved in dealing with the allowances.

On the point about there being no amendments on allowing the Scottish Parliament to set the allowances, I shall happily oblige: I shall table one for Monday and we can discuss this again. I shall be interested to hear how someone who is committed to the policy of making the Scottish Parliament accountable can possibly argue against it being able to set the allowances as well as the rates. You would have to have a Scottish allowance, of course, just as you have a Scottish tax, and it would operate in exactly the same way. However, by attacking this principle, my noble and learned friend is attacking the basis of the Bill-and I do so agree with him on that. I beg leave to withdraw the amendment.

Amendment 74C withdrawn.

Amendments 75 and 76 not moved.

Amendment 76A had been withdrawn from the Marshalled List.

Amendments 76B to 84 not moved.

Amendment 85

Moved by Lord Forsyth of Drumlean

85: Clause 43, page 32, line 40, at end insert-

"(4A) The following provisions shall not come into force until the Scottish Parliament has passed a legislative consent motion signifying its consent to those provisions-

(a) sections 12 to 14,

(b) section 27, and

(c) Part 3.

(4B) If the Scottish Parliament fails to pass a legislative consent motion under subsection (4A) within two months of the passing of this Act, then the provisions listed in subsection (4A) shall lapse."

Photo of Lord Forsyth of Drumlean Lord Forsyth of Drumlean Conservative

My Lords, I will speak briefly to this amendment, which relates to the Scottish Parliament passing a legislative consent Motion and certain parts of the Bill not being implemented. This has been slightly overtaken by events given the very helpful Statement made by my noble and learned friend. I am concerned about the substance of what has been agreed in return for the legislative consent Motion. This amendment gives us a good opportunity to discuss some of the issues arising from the legislative consent agreement. We are told that the Scottish Parliament will pass the necessary legislative consent today or this week. Perhaps my noble and learned friend can help us on that.

Photo of Lord Wallace of Tankerness Lord Wallace of Tankerness Lords Spokesperson (Attorney General's Office), Lords Spokesperson (Wales Office), The Advocate-General for Scotland, Lords Spokesperson (Scotland Office)

As I understand it, the Scottish Parliament has sent its response to its Scotland Bill Committee. In that, it indicated in similar terms to our Written Ministerial Statement what the agreement is. It has tabled or will table a legislative consent Motion on the basis of following on from that agreement. That Motion should certainly be dealt with before our Third Reading but obviously I am not responsible for the timing of debates in the Scottish Parliament.

Photo of Lord Forsyth of Drumlean Lord Forsyth of Drumlean Conservative

You have to admire the way that the Scottish Parliament is run. Its committee made 25 major recommendations for changes to this Bill which effectively involve devo-max. They were full fiscal autonomy and a range of other things. Those sat on the table from before Christmas until now. Due to the brilliance of my noble and learned friend, he and his colleagues had a meeting with the First Minister and suddenly everything that the committee said vanished like snow off a dyke. We are told that a procedure will be followed that will result in the Scottish Parliament giving agreement. That really is the accountability that we all came to expect from devolution. We have here one man-the First Minister-deciding what happens and everybody else falling into line. Otherwise, it would not be possible to deliver this.

Fortunately, it does not quite work like that in this House. I have a few points to raise on this issue of legislative consent. The first thing we need on the record is the Government's position on legislative consent. I pressed my noble and learned friend on this before and I hope he will tell us now that he has finished his negotiations. Is the Government's view that legislative consent is desirable but in the absence of it they will proceed anyway, is there a new constitutional principle that we do not do things without legislative consent, or is the constitutional principle that we try to get legislative consent if it is practical? That is very important because it will impinge on the debates that we are about to have on the referendum, where the Government say that they will proceed by Section 30 but Section 30 requires legislative consent. I want to be absolutely clear where the Government are on the issue of legislative consent. In the absence of legislative consent, would the Government still proceed? That is not a perfect example because of course the referendum issue has nothing to do with the Scottish Parliament as it is a reserved power. In respect of non-reserved powers for the Scottish Parliament, where are we on legislative consent?

I want to pick up one thing from the Statement that my noble and learned friend made today on what has been agreed. That is the first section, which says:

"The Government will ensure that changes in the Scottish Government's budget are closely linked to the performance of its economy by adjusting Scotland's budget to reflect new tax powers using the model recommended to the Welsh Assembly in the Holtham Report".

The noble Lord, Lord Browne, who is a man of considerable ability-as we have discovered in the course of consideration of this Bill, as well as from his previous work-has read the Holtham summary, and I expect that he is as unsure of the meaning of that sentence as I am. What does it mean? Does it mean what we have just been discussing and, if so, why does it say,

"changes in the Scottish Government's budget", as opposed to changes in the Scottish Government's income? The Scottish Government's budget is what Alex Salmond dreams up one day and promises the Scottish people, but it has no relation whatever to the Scottish Government's income, as people are about to discover.

The second paragraph says:

"The Government will work together with the Scottish Government over coming months and years to give operational effect to the powers including the block grant adjustment, in a fair and sustainable way and should reach agreement on all implementation issues".

Is this a commitment not to reform Barnett, or to reform Barnett? It is very important that we should be told what the Government have committed themselves to in order to get a legislative consent Motion, which they did not need to get to bring this Bill to the statute book. I congratulate the Government because I had tabled an amendment, which I withdrew earlier, indicating that the Scottish Government should have to pay for the cost of administration of the new income tax system. I am delighted to see here that they have agreed to that. However, it seems very important that we should have clarity from the Government as to what has been agreed on this legislative consent Motion-and I accept that we have moved on since my amendment was tabled.

The last question I have for my noble and learned friend in respect of the legislative consent Motion is: what exactly does this sentence-

"The Government is open to considering what further powers might be devolved after a referendum on independence"- mean? Would that, for example, include giving them powers to decide the thresholds for income tax purposes? Making an open-ended commitment of this kind without specifying it is bizarre, especially in the context of a Bill which delivers extraordinary additional powers that no one seems to know about. Why have the Government agreed to talk about giving further powers, when many of those further powers are already contained in the Bill? When we were discussing these matters earlier in Committee, I was quite firmly and rightly told by the noble Lord, Lord Browne, and by my own Front Bench that we have to concentrate on the key issue, which is whether Scotland wishes to remain part of the United Kingdom. Opening up this question of further powers without saying what they are is a hostage to fortune. I beg to move.

Photo of Lord Foulkes of Cumnock Lord Foulkes of Cumnock Labour 5:45 pm, 21st March 2012

My Lords, I welcome the fact that a legislative consent Motion has been agreed. I also welcome its terms; I mentioned that earlier, and we may have the opportunity to discuss it later on. However, I want to refer briefly to the very important point made by the noble Lord, Lord Forsyth, almost as an aside in his introduction. It was about the speed by which this legislative consent Motion was agreed within the Scottish Executive.

At the end of this week, I am going to one of the most newly independent countries to talk about its request for accession to the European Union. The EU has made it clear to that country that it will not get membership-I am sure that the noble Lord, Lord Williamson, knows exactly what I am taking about-until it can show that there is a clear separation of powers between the legislature, the Executive and the judiciary. It is right that the EU should impose that condition upon the application, and we are going to discuss it and what needs to be done to change the arrangements in the country's constitution.

It occurs to me now that the situation in Scotland, which has come about because of a series of events, is presided over by someone chosen by the First Minister, and that there are committees-my noble friend Lord McConnell knows more about this than any of us, and I know that the noble Lord, Lord Steel, has looked at it carefully-which were supposed to be the checks on legislation as it went through and to challenge and question what the Executive were doing, as indeed they did until the most recent election in Scotland. These committees have SNP majorities. With committees here, where there is a government majority in the House of Commons among committee members, we get a degree of independence and challenge to the Executive. There is none of that in Scotland now.

Even here in the Cabinet-if the situation is still the same, and I understand that it is-before agreement is finally reached, a letter or memorandum is sent around the various departments concerned, agreement has to be reached by the department and there is some consensus. That takes time and some thought. In Scotland now, all it needs is for one man to make a decision that something will happen and it is automatically agreed by his Cabinet and Executive, which are beholden to him, and by his legislature, which is also beholden to him. That is not good for democracy. It would not be acceptable if an independent Scotland applied for membership of the European Union, which is another reason that could rule it out. That situation is very worrying and something that we have not really addressed in this Committee but should have done at some point.

Apropos this concern, I said jokingly in a tweet yesterday-the noble Lord, Lord Forsyth, laughs, but this is a modern form of communication and even people of my age have to get used to it-that Scotland might need a second Chamber, and I referred to it mischievously, as I have done before, as a "House of Lairds", which is just a name for it. I was not suggesting that the hereditary Peers from Scotland should be recalled for that purpose-certainly not the noble Earl, Lord Erroll, for example, but that is another story. Interestingly, from a number of people on Twitter who do not normally agree with me I had a lot of agreement; they are genuinely worried that there is no check and balance on what is decided by the Scottish Executive. This issue is worrying, and it is time that those of us from Scotland who are concerned about Scottish democracy paid some attention to it.

Photo of The Duke of Montrose The Duke of Montrose Conservative

My Lords, I would like to probe a little further the question that my noble friend Lord Forsyth has raised about where we stand on legislative consent Motions. I do not know if what I have will throw any more light on the topic but, as noble Lords will know, we have spent quite a long time considering when a legislative consent Motion might appear. I draw to your Lordships' attention that there is enough evidence from what Ministers have told us that primary legislation does not require legislative consent.

I am sorry to see that the noble Lord, Lord Sewel, is not in his place because much of what I have to talk about refers to what he told us in this House in 1998. He and others in the House will recall that in the Committee stage of the Bill the question of an application of an Order in Council as being the route by which amendments to Schedule 5 could be achieved was discussed. It is just possible that some people's recollections might, like mine, be a little hazy since most of this discussion took place at around 11 pm-something that we were beginning to get used to the other day. There was a serious probing amendment, which said that the power to use the Order in Council mechanism should be removed in regard to Part I of Schedule 5. The mechanism was insisted on by the Minister because it was the Government's intention to make it a condition of procedure that the Scottish Government had to agree to alterations to Schedule 5. Great emphasis was placed on this, which was considered the unequivocal virtue of the Privy Council process. However, the Minister's view was clearly that primary legislation did not require the agreement of the Scottish Parliament; this can be found in Hansard at col. 849 on 21 July. Therefore, the Scottish Parliament would officially have no say in any primary legislation.

Here, today, we will be only too aware that on previous days the Committee has endeavoured to add amendments to the Bill that would bring in more detailed recommendations by the Calman commission and others. So far, all these efforts have been rejected and many of the amendments at this stage appear to aim to introduce them using the Privy Council route at a later stage. From the approach taken by the Labour Government before us, it seems that any or each of these Orders in Council will properly be subject to a legislative consent Motion from the Scottish Parliament, which is different from the one that we are talking about today. As we have proceeded with this legislation, a great deal has been made of the idea that we are looking for the completion of the Motion before we get on to the Bill.

It is important that the procedures that are required should be absolutely clear. Since this is primary legislation, it would appear-from applying the explanations that were offered to us-that the legislative consent Motion is not strictly necessary for the Bill but would be for the statutory instruments to implement it. Could the Minister tell the Committee whether this argument for seeking some sort of agreement with the Scottish Parliament is just part of a concordat or is being introduced for politeness, or whether some legislative measure has recently been introduced that requires its fulfilment? If not, is it not true that in hard legislative terms the consent of the Scottish Parliament is not required?

Photo of Lord O'Neill of Clackmannan Lord O'Neill of Clackmannan Labour

My Lords, at some stage I think we were concerned that this might be a complete waste of time if we were not going to get a legislative consent Motion. Whether it was necessary was not the issue. It was a question of whether there was a nod of approval or acceptance from the Scottish Parliament.

In our lengthy debate last Thursday, some of us raised our concerns about what we considered to be the inadequacies of the committee system in Scotland. It would appear that this concern over those inadequacies is shared by the First Minister in so far as he pays attention to them. We are continually assailed in the Scottish press by the question of which country Scotland should be compared with. Should it be Norway or Iceland? It is not Iceland any more and it certainly is not Ireland. Perhaps Belarus would be an appropriate example of a northern European country that operates on the whim of its leader. However, that will be regarded as an insult to Mr Salmond. Such is his sensitivity and the thinness of his skin that if I were to make such a suggestion, I do not know whether I would get off a plane at Edinburgh Airport tomorrow night, although I would be happy to have a go.

We are also indebted to our new communicator-the new electronic man behind me, my noble friend Lord Foulkes. I have heard it said that he has been called a Twit. I do not think that is an unparliamentary word; it may well be appropriate in this case. I have never known the noble Lord, Lord Foulkes, to express himself in anything like as few words as 140. I am sorry; I meant to say 140 characters. I do not know whether there is a sequential tweet here, but perhaps the relevant material could be placed in the Library so that we could see the Foulkes Twitter sequence.

Coming back to the point, it would be helpful if the Minister could give us some indication of the conversations that he had with the First Minister and how this concordat has been arrived at. If we can reach agreement on that matter so quickly, perhaps other problems can be dealt with in a similarly efficient, if not particularly democratic, way.

Photo of Lord Browne of Ladyton Lord Browne of Ladyton Shadow Spokesperson (Scotland) 6:00 pm, 21st March 2012

My Lords, I support the general tenor of this debate in so much as it encourages the noble and learned Lord to explain the Written Ministerial Statement more fully and how we will take forward-if we are to do so-the agreement that has now emerged between the Scottish Government and the coalition Government. It would appear that that agreement has encouraged the Scottish Government to do no more, according to the Statement as I read it, than to,

"table a Legislative Consent Memorandum recommending that the Scottish Parliament votes in support of the Bill on a further Legislative Consent Motion for the Bill".

That sentence has been somewhat extravagantly interpreted, perhaps for other purposes, by some of my noble friends and other noble Lords.

It is incumbent on us to pay appropriate respect to the Scottish Parliament, which will have to debate a Motion. No doubt some members of that Parliament may disagree with the agreement that their Government have reached. How they vote will be a reflection of the way in which that Parliament operates, which seems to copy our voting discipline substantially, from what I can see: that is, people often conform to the position adopted by their party. I was amused by the idea that a country that did not have a genuine separation between its Executive and its legislature would no longer qualify for membership of the European Union. Given that our Executive seems to be part of our legislature, if we were not already members of the European Union, we might struggle to get membership of it on that criterion.

I approach this issue in this way because I have been on record repeatedly in this Committee as being confident that the Scottish Parliament would pass a legislative consent Motion. I am confident because it has already done it and because many significant Members of the Scottish Parliament have already voted for a legislative consent Motion on most of what is before us in this Bill. To the extent that the Bill has been amended, it has been amended at their request. It therefore did not seem consistent or politically likely that that Parliament would not pass a legislative consent Motion at some stage. I have said this before and I am not saying it now in the knowledge that an agreement has been reached. I have been confident that that would happen. However, I have also said before, and I repeat, that as far as I am concerned that has never been a condition precedent for us getting on and dealing with this Bill. I have been prepared to entertain debate with noble Lords about what we need to do if there is no legislative consent Motion, although I have been confident that there would be one, and it seems that my confidence was not misplaced.

However, from my perspective of the politics of Scotland and where we are at this challenging time, it is important that we keep our word to the Scottish people and pass this Bill, which has its genesis in Calman and prior to that in the Scottish Parliament and all the devolution parties in Scotland. We should proceed to offer these additional powers to the Scottish people through their Parliament. It would then be a matter for the Scottish Parliament to decide whether to accept them, and it would not be our responsibility, and certainly not the responsibility of an unelected Chamber of this Parliament, if it did not offer them.

As far as I am concerned, it has never been a condition precedent of completing this work that we guarantee that there will be an LCM. However, it now appears that there will be one. At least to the extent that we can anticipate that the agreement that has been reached will persuade the Members of the Scottish Parliament to vote for this LCM, I think we can work on the basis that there will be one. However, we need to get more detail from the Government of what this deal that they have struck with the Scottish Parliament actually means.

I have already said this afternoon that the Government should assure the House that Parliament will be provided with an adequate opportunity to scrutinise properly what amount to significant new details on the process of the devolution of tax and borrowing powers. I do not fully understand the relevant paragraphs in the Written Ministerial Statement. We do not have much time to get to grips with them, but we will never do so if no one explains them to us. What exactly does the reference to the Holtham report mean? The noble Lord, Lord Forsyth, referred to the paragraph that states:

"The Government will work together with the Scottish Government over coming months and years to give operational effect to the powers including the block grant adjustment, in a fair and sustainable way".

What does that mean? How will that agreement, when it is reached, be subject to parliamentary scrutiny here in our Parliament?

The next bullet point states that the Secretary of State for Scotland and Scottish Ministers will produce between them,

"annual reports to the UK and Scottish Parliaments on the progress of transferring the tax and borrowing powers to the Scottish Government".

There must be some method of accountability envisaged in this deal that allows this Parliament to be assured that the Bill we are passing in the context of the deal that has been struck will ensure that the Government are answerable for what they are doing in relation to these issues.

I am content that we should continue with this debate provided we are given some explanation of how this process is to be carried out. I am happy to engage, time permitting, in any number of briefings outwith this Committee with Ministers, or with Members of this House more broadly, so that they can explain how this process is to operate. I would also like to be assured that Members of the other place will get the same briefing, because it is absolutely certain that they will get 15 minutes to debate all this and decide it when it gets back to them. They may all be cut off in mid-sentence as they try to tease out what this means. I therefore encourage the noble and learned Lord to come to the Dispatch Box now, or at some stage over the next few hours, and explain how this is to be done.

I have already said that I broadly welcome the other aspects of this agreement-the non-financial elements-because I do not think that they represent the hollowing out of the Bill that was suggested earlier. They are comparatively small concessions. However, as my previous contributions to this debate, and those of my noble and learned friend, have indicated, they are concessions that we were encouraging the Government to implement in another way because we thought they went beyond the Calman recommendations, which we support. Legislative consent Motion conditionality is less relevant to the Bill now than it ever was. In any event, it was never relevant to my support for it. However, we now have a much more complicated environment that has generated the possibility of that LCM. When the noble and learned Lord comes to the Dispatch Box now or at some stage within the next few hours, I urge him to explain to us the implications of that much more complex environment.

Photo of Lord Wallace of Tankerness Lord Wallace of Tankerness Lords Spokesperson (Attorney General's Office), Lords Spokesperson (Wales Office), The Advocate-General for Scotland, Lords Spokesperson (Scotland Office)

My Lords, I am grateful to my noble friend Lord Forsyth for his amendment. He obviously had great prescience in tabling it because it has been debated today when a Written Ministerial Statement has been brought forward paving the way for a legislative consent Motion. As the noble Lord, Lord Browne of Ladyton, made clear, that is what it does-it paves the way for a legislative consent Motion, and it will be a matter for the Scottish Parliament to determine whether to pass it. However, as the noble Lord, Lord Foulkes, indicated, he would be rather surprised if the majority party in the Scottish Parliament did not take the lead from its leader.

I was asked by the noble Lord, Lord O'Neill, for more details. I have not held any direct negotiations with the First Minister on these matters. My right honourable friend the Secretary of State has been primarily responsible for the negotiations involving individual Scottish Ministers. The Written Ministerial Statement sets out the agreement that has been reached and we should be happy to provide further details to facilitate debate on Report. I had already indicated as much with regard to the Holtham proposals. Clearly, if other issues need to be raised, it is only right that I should facilitate that debate. As I think was acknowledged in our short debate before agreeing to go into Committee, a considerable amount of hard work was done to ensure that that agreement was concluded and, in turn, to ensure that that happened before today's debate.

It is difficult for me to make other arrangements while I am here on the Front Bench, but I am more than willing-even at the conclusion of our discussions this evening-to meet noble Lords to arrange for briefings on paper, and perhaps to see what other briefings between Members of your Lordships' House and relevant officials could be facilitated, so that when we come to Report or Third Reading, when there may be a bit more time, your Lordships will be properly informed and briefed.

I certainly pick up the point made by the noble Lord, Lord Browne, that Members of the House of Commons have more than a legitimate interest in these matters, because if this House chooses to pass amendments-and the Government will be bringing forward amendments to reflect some aspects of the agreement that require changes to the Bill-they will also have to be considered in the House of Commons. I certainly want to facilitate such discussions as best I can and, if it is thought suitable-and it is not at a ridiculous hour, which I hope it will not be-I shall be more than happy to meet anyone who wishes to have a preliminary discussion at the end of our proceedings today about how those discussions might best be achieved.

It has always been the Government's intention to secure a legislative consent Motion from the Scottish Parliament in favour of the Scotland Bill, and it goes without saying that we are pleased that we were able to do that in terms of changes to the Scotland Bill and supporting non-legislative arrangements, and that the Scottish Government have also tabled a legislative consent Motion in support of the Bill. It includes finance and non-finance changes. I believe that these changes meet the tests that my right honourable friend the Secretary of State indicated were important, and by which this Government have set store, for any changes to the Bill package-namely, that they are based on evidence, maintain the cross-party consensus that supports the Bill and will benefit Scotland without detriment to the rest of the United Kingdom. We have gone further than in any other Bill in working between parties in Scotland and across the United Kingdom to build on a cross-party consensus. We have carefully considered and-where appropriate and where the case has been properly made-we have taken on board the views of the Scottish Government and Scottish Parliament. This has allowed an agreement to be reached.

My noble friend asked about the legislative consent Motion, and the position was also reflected in the contribution of my noble friend the Duke of Montrose. It may be useful if I say something about legislative consent Motions in the absence of the noble Lord, Lord Sewel, who I am sure would be able to correct me if I got it wrong. During the passage of the Scotland Bill through your Lordships' House, the noble Lord, Lord Sewel, said that,

"we would expect a convention to be established that Westminster would not normally legislate with regard to devolved matters in Scotland without the consent of the Scottish parliament".-[Hansard, 21/7/98; col. 791.]

It is a convention; it is not law. The words "not normally" are there. An example occurred earlier this Session when the Scottish Parliament passed a legislative consent Motion objecting to parts of the Welfare Reform Bill. The Scottish Parliament consented to some parts that were within devolved competence and rejected other parts that had implications for Scottish Ministers. The United Kingdom Government-probably one of my noble friends from this Dispatch Box-moved amendments to excise those parts from the Welfare Reform Bill.

The statement made by the noble Lord, Lord Sewel, has been supplemented in a devolution guidance note and is now in the Memorandum of Understanding with devolved Administrations. I have one here from November 2005, issued by the Department for Constitutional Affairs, which states:

"The convention applies when legislation makes provisions specifically for a devolved purpose. It does not apply when legislation deals with devolved matters only incidentally to, or consequentially upon, provision made in relation to a reserved matter, although it is good practice to consult the Scottish Executive in these circumstances".

There is an important distinction between a convention and a Section 30 order. A number of different orders can be promulgated under the Scotland Act 1998. Indeed, there is a schedule with headings (a) to (j)-possibly more-that state the procedures and processes in respect of each order. I know that noble Lords have had debates in the Moses Room on Section 104 orders, which very often relate to when the Scottish Parliament is unable to give full expression to its legislative proposals because they may well have non-controversial implications for matters or bodies that are reserved. After working with the United Kingdom Government, it is possible to bring forward an order that can then give full effect to such proposals. We recently considered such an order with regard to social housing. There are a number of examples. These are matters of law, and a Section 30 order is used to transfer or make changes to Schedule 4 to the Scotland Act. Schedule 5 sets out the specific issues that are reserved under that Act. A Section 30 order requires the consent of the House of Commons, the House of Lords and the Scottish Parliament. It is not a convention. If the Scottish Parliament withholds its consent, a Section 30 order cannot pass. That is why it has legal effect in a way that the Sewel convention does not.

Photo of The Earl of Caithness The Earl of Caithness Conservative 6:15 pm, 21st March 2012

My Lords, on that point, will the Minister confirm that my noble friend the Duke of Montrose was right to say that we cannot amend a Section 30 order here and that we have to either reject or accept it?

Photo of Lord Wallace of Tankerness Lord Wallace of Tankerness Lords Spokesperson (Attorney General's Office), Lords Spokesperson (Wales Office), The Advocate-General for Scotland, Lords Spokesperson (Scotland Office)

It is generally the case for all orders that they cannot be amended. However, in earlier exchanges, the noble Lord, Lord Foulkes, asked whether there might even be a draft order. Actually, it was the noble Lord, Lord Sewel. My apologies -it seemed to happen so recently. He raised the possibility of a draft Section 30 order. I indicated then that if it related to the important issue of the referendum, we could take the opportunity of the debates that we are, I hope, about to have to get the reflections of your Lordships on these matters.

Photo of The Duke of Montrose The Duke of Montrose Conservative

I am most grateful to my noble and learned friend for giving way. I am very interested in where he has gone with his explanations. It has been an interesting discovery that Section 30 orders can be applied to devolved and non-devolved matters. Section 30 orders can be applied within the legislation. If it is something included in an Act-this is the first time that we have had a new Bill since the 1998 Act-it seems that the legislation does not require the consent of the Scottish Parliament. This is the first time that the devolution guidance note has been before the Committee. It would be interesting to see the whole of the devolution guidance notes so that the Committee is aware of what the noble and learned Lord has to deal with in his negotiations with the Scottish Parliament. We are getting closer to where the legislative terms lie.

Photo of Lord Wallace of Tankerness Lord Wallace of Tankerness Lords Spokesperson (Attorney General's Office), Lords Spokesperson (Wales Office), The Advocate-General for Scotland, Lords Spokesperson (Scotland Office)

I am grateful to my noble friend for giving me an opportunity to make things clear. I rather suspect that the devolution guidance was placed in the Library by the previous Administration, but if there is any need to ensure that it is taken from the back shelf and made more readily accessible, I am sure we will see to that.

Perhaps it is my fault for not having explained it, or perhaps we have just glibly used the expression "a Section 30 order" without explaining it. A Section 30 order is not about dealing with things which are currently devolved. The purpose of a Section 30 order is to transfer issues which are currently reserved under Schedule 5 and devolve them to the Scottish Parliament. Perhaps one of the best examples of that since the Scottish Parliament was established in 1999 is the devolution of railways. There was extensive discussion and negotiation between the Scottish Executive and the United Kingdom Government. A Section 30 order was brought forward to bring about the devolution of railways to Scotland. Railways were not previously devolved. There were limits on that, as the noble Lord, Lord McConnell, will no doubt remember. Section 30 orders do not deal with matters that are already devolved. They are to confer on the Scottish Parliament devolved responsibility and powers in areas that are currently reserved. That is why it is important that they have to be passed by both Houses, as well as asking the Scottish Parliament, "Do you want these powers?".

Photo of The Duke of Montrose The Duke of Montrose Conservative

My noble and learned friend is describing what has been the habit of the use of Section 30 orders, but Section 30 states:

"Her Majesty may by Order in Council make any modifications of Schedule 4 or 5 which She considers necessary or expedient".

Therefore, it can be used for both devolved and reserved matters.

Photo of Lord Wallace of Tankerness Lord Wallace of Tankerness Lords Spokesperson (Attorney General's Office), Lords Spokesperson (Wales Office), The Advocate-General for Scotland, Lords Spokesperson (Scotland Office)

I do not think that that is the way to transfer backwards. That may be possible; I will have to check. It may be possible to go in the opposite direction. I am trying to think whether that has ever actually happened. When the Arts and Humanities Research Council was established, because it had not hitherto existed and because under the scheme of devolution it was a devolved as opposed to a reserved matter, an order had to be brought forward to establish that it would be a UK parliamentary responsibility. I am not sure that it was a Section 30 order. The noble Lord, Lord Sutherland, may have been involved at the time. I certainly was, because I took the order through the Scottish Parliament.

The important point is that it changes the devolution settlement. It changes the boundaries between devolved and reserved powers. That is why it requires the consent of both Houses of Parliament and the Scottish Parliament before it proceeds to Her Majesty in Council.

I hope that I have shown that there is a distinction between that and a legislative consent Motion, which is by its nature a convention. On the basis of those explanations and the undertakings that I have given to try to identify ways in which we can discuss the matter in more detail-

Photo of Lord Kerr of Kinlochard Lord Kerr of Kinlochard Crossbench

My Lords, the noble Lord, Lord Forsyth of Drumlean, raised one other question in his reading of the Statement. I am very grateful to the Minister for his Statement, and I feel much less pernickety about it than the Committee as a whole seems to do. It is a good thing that this agreement has been reached. A number of demands from the north have been dropped. A number of changes that the Government propose to make seem to me perfectly earnestful. The reason why it has been possible to negotiate this successfully is that everyone has decided that it is de minimis-it really does not change the price of fish. That is the trouble with the Bill: it does not attack the real issues.

The noble Lord, Lord Forsyth, referred to the sentence in the Statement in which we are told:

"The Government is open to considering what further powers might be devolved after a referendum on independence".

The noble Lord asked how we should construe that sentence. Scots are good at punctuation. There is no punctuation in that sentence. That, I take it, means, "We are open to considering now, today". It does not mean, "We are open to considering what further powers might be devolved, after a referendum". The Minister had a good Scottish education, so I am convinced that I am reading this correctly. That seems to me to be a move from the porridge oats speech, where I think the punctuation included a comma. Am I right? Am I reading this correctly?

Secondly, what mode are we in? The porridge oats man is very muscular. He is very active.

"The Government is open to considering", suggests to me a rather passive role. The Government will sit there and if anyone turns up with an idea, they may look at it. Are we active or passive? I think that the porridge oats position, the punctuated position, is impossible-after there has been a referendum, then we will consider what more you might get. Scots have long memories. It will not work; that is an unsustainable position. Therefore, I am very glad to see no punctuation in that statement. Are we actively to define what further measure of devolution would be feasible, or are we to leave it to others to devise devo-maxes, devo- pluses and devo this, that and the other? I feel that there is a strong case in logic for being clear before an independence referendum about what would be on offer after it.

Photo of Lord Wallace of Tankerness Lord Wallace of Tankerness Lords Spokesperson (Attorney General's Office), Lords Spokesperson (Wales Office), The Advocate-General for Scotland, Lords Spokesperson (Scotland Office)

They may be very unfair on themselves but officials say, "Blame officials for poor punctuation". I think I will reserve my position on that. I apologise for forgetting to pick up the point raised by my noble friend. As he and the noble Lord, Lord Kerr, correctly identify, the Statement says that the Government will consider further devolution after a referendum on independence. I believe that that is consistent with the position set out by the Prime Minister and with the evolution of devolution to date. It has involved a careful assessment of the evidence.

One could go back to the constitutional convention or the Calman commission. It has involved consideration of its implications across the United Kingdom-it is important to remember that any devolution has implications for other parts of our United Kingdom-and it has generally proceeded with cross-party agreement. Those are all essential ingredients, perhaps not of porridge oats but for moving forward. The Government are committed to continuing to consider amendments to the devolution settlement on that basis. My party and others are doing their own thinking on what that might be, but, as we have seen to date, any substantial progress has been made on the basis of cross-party agreement. That is important.

I make one further point for clarification. My noble friend the Duke of Montrose is right: the word "modify" means to decrease or extend the subject matter of Schedule 5, and I am advised that the order which I took through the Scottish Parliament with regard to the Arts and Humanities Research Council was indeed a Section 30 order that added something to Schedule 5.

Photo of Lord Forsyth of Drumlean Lord Forsyth of Drumlean Conservative

My Lords, we have had an interesting debate. To rescue the Minister, I think that paragraph 3 is headed,

"Further devolution in the future", which qualifies the sentence,

"The Government is open to considering what further powers might be devolved after a referendum on independence".

I think that it clearly means that it is after the referendum.

I noticed that my noble friend did not answer my question when I asked what he could be thinking of, given the scope and nature of the Bill. As I get older, I get more and more interested in gardening. One thing that I have learnt is that it is a big mistake to pull plants up and move them before they have had a chance to settle and put down roots. It seems rather odd that we are discussing a Bill where the tax proposals will not come into effect until 2015-16. The noble Lord, Lord Kerr, wants us to start thinking about further devolution now. If you are going to plant this prickly sort of bush, it is probably a good idea to see whether any flowers are going to appear on it before deciding whether you are going to do more planting. I hope that my noble friend will not be tempted to expand the meaning of that sentence.

I am still unclear about the Government's policy on legislative consent Motions. I am not clear whether they regard them as something which they are prepared to override, but I am clear why the Government do not want to say what they think about that. I entirely agree with my noble and learned friend's analysis of the role of Section 30. I am fascinated, as we move on to the debate on referenda, to hear from him precisely what he is going to do if he cannot get the Scottish Parliament to consent to a Section 30 proposal that contains the conditions which have been clearly laid out by the Prime Minister on a referendum.

In order that we can get to that issue as quickly as possible, I beg leave to withdraw my amendment.

Amendment 85 withdrawn.

Amendments 85A and 86 not moved.

Amendment 87

Moved by Lord Foulkes of Cumnock

87: Clause 43, page 33, line 2, at end insert-

"( ) Notwithstanding the other provisions of this section, no provision of this Act may come into force until a referendum has been held in accordance with section (Referendum about Scottish independence)."

Photo of Lord Foulkes of Cumnock Lord Foulkes of Cumnock Labour 6:30 pm, 21st March 2012

My Lords, we now come-at last, some noble Lords may be saying-to what I understand is the first of two substantial debates on the major question of this Bill. It is the one we have been waiting for with great anticipation, holding off until the report of the consultation has been published, on the referendum. I am not going to manage to do it in 140 words, let alone 140 characters. Although I can say to my noble friend Lord O'Neill that whole stories, whole sagas, can be written in 140 characters. I will give him just one: Heart of Midlothian two, Hibernian nil. That describes 90 wonderful minutes last Sunday which I am sure he would wish to forget.

However, let us get on to the substantive issue of the evening. We are talking about the future not just of Scotland, but of the whole of the United Kingdom. What happens to Scotland in an independence referendum will have a huge effect on the whole of the United Kingdom, some of the detail of which has not yet been examined. We have started discussing and debating them at last-they are principally some of the effects on Scotland. However, the Joint Committee on the National Security Strategy, for example, only recently started to discuss some of the security implications of an independent Scotland, in relation to the independent deterrent, membership of NATO, and a whole range of other things. There would be huge implications for the whole of the United Kingdom if Scotland was no longer a part of it.

Any referendum, or referenda, should be organised on an agreed basis that we all understand-that the Scottish Parliament and all of its Members understand; that both Houses of this Parliament and all the Members understand; and that the Scottish people understand. The UK consultative document is absolutely right in saying that the three essential elements should be that it must be legal, fair and decisive. First, it must be legal because some people will be predisposed to challenge the basis of a referendum that is not carried out on a legal basis. I cannot say nothing will be open to challenge, but there must be a minimal likelihood of it being challenged. That would be something that would be conducted if not by, then with, the authority of the United Kingdom Parliament.

Secondly, it needs to be fair. That will ensure that all of us will be satisfied that we have had the opportunity of putting our case to the Scottish people fairly. Questions about the timing of the referendum, and the question to be asked-I will come back to that in a moment-are absolutely essential in relation to that. People who seek to choose the timing to make sure that they get a maximum vote for separation are not giving the Scottish people the best opportunity to make a balanced judgment about the referendum. That is clearly the idea of waiting until 2014. The euphoria of the Commonwealth Games, the Ryder Cup, and the anniversary of Bannockburn, will get Scots all fired up, even those from Shetland. I am sure the noble Lord, Lord Lamont, will find a way of coming to a specific amendment in relation to Orkney and Shetland as well.

Of course the timing is also being suggested for 2014 because in the run-up to the United Kingdom election, the SNP wants to try to polarise the debate between a certain kind of Scotland and a politically different United Kingdom, and that would also be to its advantage. I will come back to the question to be asked in a moment.

Thirdly, it has to be decisive. It needs to be clear that the referendum will settle the issue. We know from the experience of Quebec that it may not settle it forever, but it must be settled at least for the foreseeable future. If there is a big enough majority against separation, perhaps it will be forever or at least for our lifetimes, or for a generation.

My Amendment 87 is to hold over provision of this Act until the referendum has taken place. The Amendment 88 tabled by the noble Lord, Lord Forsyth, supported by another former Secretary of State the noble Lord, Lord Lang, and by the noble Earl, Lord Caithness, would have the United Kingdom Government take action to exercise their undoubted right to call a referendum by Order in Council. That is clearly unacceptable to the Scottish Parliament. I would not be averse to it, I have made that clear on a number of occasions. However, on the basis that I suggested earlier-that this whole arrangement needs to be accepted by all the parties involved-we must think carefully before exercising that right.

Photo of Lord Forsyth of Drumlean Lord Forsyth of Drumlean Conservative

Is the noble Lord saying what I think he is saying? Is he saying that if we proceeded by using Section 30, and if the Scottish Parliament declined to give consent to that, we should not have a referendum? Then the only alternative would be for the Westminster Parliament to pass the necessary legislation without support. He appears to be ruling that out. I hope he is not.

Photo of Lord Foulkes of Cumnock Lord Foulkes of Cumnock Labour

The noble Lord is anticipating something I am going to say. For once, exceptionally for me, I have written down the argument in some sort of order. I was going to say, before he interrupted me, that we should not rule out such an option if the circumstances made it desirable, or perhaps made it the only acceptable option. That could be because the timing was contrived, in relation to the proposed referendum by the Scottish Parliament, or because we would not succeed because we could not get agreement in relation to a Section 30 order. That is not the preferred option; it is the fall-back position. As I said earlier, the good thing about a referendum organised by the United Kingdom Government would be that it would not only be decisive but it would be legal and would not be open to challenge.

I now come to the other option, which is the proposal of a Section 30 order. I think that is a good arrangement, a clever arrangement and an arrangement that will enable the Scottish Government to legislate for a legal referendum. That would not be likely to be challenged, but it would have to be on an agreed basis. That is why the question raised in our earlier debate about whether the order would be amendable is important. I think the Minister said that, in debating the order, he would consider whether some opportunity might be taken for amendments to be considered. I think that my noble friend Lord Sewel suggested that we might have a debate on a draft order. We may be crossing bridges before we get to them, but that is a good suggestion that would enable us to table amendments.

In this context, the Secretary of State's letter of 20 March to my right honourable friend the Shadow Secretary of State, Margaret Curran, confirms, as did the Minister earlier, that the consultation indicated clear support throughout Scotland for this proposal, including from constitutional experts-the Minister described them earlier-and knowledgeable organisations such as the Law Society of Scotland, the Royal Society of Edinburgh and the British Academy. The Scottish Government have now accepted this, but a Section 30 order still has to be agreed with Scottish Ministers. That is where the difficulty might arise and where the negotiations will be important, where, in the words of the noble Lord, Lord Kerr, we will need to have had our porridge oats, or Scott's Porage Oats. The Minister is negotiating, so that they take a firm line.

Photo of Lord Reid of Cardowan Lord Reid of Cardowan Labour

As regards what might and might not be the ultimate outcome of such discussions, let us be absolutely clear on one thing. If it is a question of Scotland remaining inside the United Kingdom or leaving it, the Scottish people have the right to decide such a question. However, a wider question about the changed nature of devolution within the union cannot be a question just for the Scottish people or for the Scottish Parliament; it must be a question either for the two Parliaments, or for the people of the United Kingdom. Will he make that clear?

Photo of Lord Foulkes of Cumnock Lord Foulkes of Cumnock Labour

I completely agree with my noble friend. I think that needs to be made clear to Ministers. I was going to turn to the issue of one question or two questions in a moment. We need to set targets for our Ministers when they are negotiating and discussing with the Scottish Parliament. In Amendment 89, the noble Earl, Lord Caithness, talks about the referendum being advisory or binding. There has been much discussion about whether any referendums have been advisory or binding. I think some have been advisory but have been accepted as binding. One target that we need to set the Minister is to decide that both Parliaments should agree in advance to accept the result of the referendum and follow it through with the necessary legislation as the will of the Scottish people.

That brings me to my Amendment 94C in this group. I want to deal with the wording of the question. Again, we need to set a target for our Ministers. The wording of the question proposed by the Scottish Executive is loaded; it is contrived to get the maximum result for a yes vote: "Are you in favour of an independent Scotland?". There is no indication what that means. It is a kind of, "Are you in favour of motherhood and apple pie?" question. I think it is the wrong way around. In two of the amendments that I have tabled, I suggest that the question should be the other way around:

"Do you want Scotland to remain part of the United Kingdom?".

That is the key point. It changes the fact that those of us who are in favour of the union would be on the yes side of the argument rather than the no side, which I think would be helpful. It may be that some compromise can be worked out, but I certainly do not think that we should accept the wording that the Scottish Executive has put forward. I think that my suggested wording would be preferable and should be the starting point of the negotiations.

I turn to the point put to me by my noble friend Lord Reid: should there be a second question in the referendum? I think that, like the Government, we, as a Parliament, should make it clear that there should be no question on the referendum other than that which asks whether people are in favour or against separation-in favour or against remaining part of the United Kingdom. I reiterate what I said to my noble friend Lord Reid: that there should not be a second question because devolution and separation are two entirely different concepts.

Once we decide, as I hope we will, to remain part of the United Kingdom-this relates to a point that was raised earlier-we need to consider how much devolution there should be and whether the status quo is enough. By then, the status quo will be this Bill.

Photo of Lord Reid of Cardowan Lord Reid of Cardowan Labour 6:45 pm, 21st March 2012

I entirely support the thrust of what my noble friend is saying, but it is important to recognise that any change in the relationship inside the United Kingdom must be put before the people of England, Wales and Northern Ireland as well as Scotland, not just because it is a different concept, but because it directly and materially affects them. The Scottish people have the right, if they so wish, to leave the United Kingdom, but if there is a desire for a relationship which diminishes, for instance, the role of England, Wales and Northern Ireland in relation to Scotland within the United Kingdom, that is an entirely different matter in practice as well as in concept.

Photo of Lord Foulkes of Cumnock Lord Foulkes of Cumnock Labour

I am not sure that I fully agree with my noble friend on that. The referendums in 1979 and 1997 were both on the basis of the Scottish people deciding.

Photo of Lord Reid of Cardowan Lord Reid of Cardowan Labour

I was careful to say earlier that anything other than leaving or staying in the union must be agreed either by both Parliaments or by the people of the whole United Kingdom. The two instances which my noble friend mentioned were, of course, agreed by the United Kingdom Parliament before they went to a referendum.

Photo of Lord Foulkes of Cumnock Lord Foulkes of Cumnock Labour

I had not appreciated the qualification of being accepted by both Parliaments. If they are accepted by both Parliaments, that will fulfil my requirements and belief.

I have an amendment which suggests a further referendum on devolution-whether we should have the status quo, devo-plus, devo-max or a multi-option referendum. I am not in favour of that now and I shall not press that because that was going to be 35 days after independence. I confess that this amendment has not received universal support; in fact, it has not received any support at all, which is probably why I am not going to press it.

A stronger reason is that we heard a very powerful argument from both Front Benches that the 1997 referendum's second question gives power to Parliament to decide further devolution. If both Parliaments, as my noble friend Lord Reid has agreed, decide on further devolution, I do not think a referendum is necessary.

Finally, there is the question of further devolution which the noble Lord, Lord Kerr, raised in his interesting intervention about porridge oats and punctuation. I agree-and now it seems the Prime Minister agrees-that further devolution needs to be carefully considered. We have got that in the Statement which the Secretary of State made today. It should be carefully considered; as a number of people have said, the devolution we have at the moment-which is the devolution of the Calman commission, the further extension-has been agreed on an all-party basis, and on the basis of consensus and consultation. That should be the basis of any further extension of devolution.

Both my own party, the Labour Party, and the Liberal Democrats, the Minister's party, have commissions looking at this. In our debates on Thursday, we had an indication that already there is a degree of a mandate in relation to further fiscal devolution.

There are other issues in relation to the referendum, such as the role of the Electoral Commission, which I strongly support as being responsible for the conduct of the referendum. Another is the franchise, because while the Scottish Government propose to extend it to 16 and 17 year-olds, I believe there should be no unilateral reduction in the voting age just for one referendum. There are a number of other detailed matters which we will come to in the later amendments.

We now have this agreement on the legislative consent Motion. We have substantial agreement that greater tax powers are acceptable, and that borrowing consent, which we are giving to the Scottish Parliament, is welcome, and that specific areas are now being devolved. Let us not make any mistake about it: this implementation of the Calman recommendations is a very substantial increase in the devolved powers of the Scottish Parliament. We should not be hiding that under a bushel. We should be proclaiming it from the rooftops. Many of the advances have come from pressure from Labour MPs and Labour Peers. It is something I am now proud to support fully. I beg to move.

Photo of Lord Wallace of Tankerness Lord Wallace of Tankerness Lords Spokesperson (Attorney General's Office), Lords Spokesperson (Wales Office), The Advocate-General for Scotland, Lords Spokesperson (Scotland Office)

My Lords, it was thought at one stage that it might be helpful if I indicated the Government's position on these points. I shall do that if the House thinks it would be helpful and at the end I will respond to points made in the debate as well as to more specific points made by the noble Lord, Lord Foulkes.

I also wish to thank noble Lords for helping to try to deal with these issues in two discrete groups. The first group concerns how to legislate for a referendum; for instance, whether there should there be one question or two on the ballot paper, the nature of a binding and advisory referendum, and whether it should be held across the United Kingdom. Indeed, my noble friend Lord Caithness has indicated that he wishes to discuss implications for the Scotland Bill of Rockall and, a place dear to my heart, Orkney and Shetland. Subsequently we will have a debate on one of the later groups on more practical but nevertheless very important matters relating to the referendum, including the role of the Electoral Commission, eligibility to vote in a referendum, and oversight of the referendum.

I want to endorse what the noble Lord, Lord Foulkes, said, when indicating that he supports the Government's view of a referendum that is legal, fair and decisive. I think he said that fairness must be fairness for all, and it is a very important point. We will certainly come to debates on the franchise and the role of the Electoral Commission, but I would want to agree that the referendum must be conducted in a way that is deemed fair to all and that both sides are satisfied and can accept the outcome. There would be nothing worse than to have an outcome where one side or the other was crying foul. In all our views, this means adhering to the well-established rules for referendums, so that neither one side nor the other can claim that there has been a false referendum.

As I set out in my Oral Statement to your Lordships' House on 10 January, the Scottish National Party won a significant victory in May 2011. In that election it campaigned for Scottish independence and its manifesto included a pledge to hold a referendum on independence. But winning an election victory is not sufficient. The SNP did not explain how, in legal terms, it proposed to deliver a referendum either in its manifesto or in the election campaign. Nor indeed did the Scottish Government set out their legal view or their plans for many months. As has been highlighted before in your Lordships' House, this is not a matter that can be avoided. To legislate for a referendum on independence, the Scottish Parliament must have the power to do so, and it is the Government's clear view that the Scottish Parliament does not have that power.

That is why on 10 January we published our consultation paper on how to deliver a legal, fair and decisive referendum. As I indicated earlier, officials are reviewing and analysing the responses and the Government will publish a full report on the consultation, but perhaps I may give some early indications. We received almost 3,000 responses. As I have already indicated, they came from members of the public in Scotland and beyond, and there were contributions from businesses, academics, political parties, trade unions and many others that belong to civic Scotland. I believe this will, and does, provide a sound basis for gauging Scottish opinion on the issues.

The Government's central proposition in the consultation was, as has been said, that the referendum must be legal, fair and decisive. It is important that the responses we received are analysed thoroughly, but I can indicate some of the preliminary results on the key issues. First, on legality, we must turn to the Scotland Act 1998. The Act is clear. The Scottish Parliament cannot legislate on matters reserved to this Parliament, including,

"the Union of the Kingdoms of Scotland and England".

Any Act of the Scottish Parliament is simply not law if it is outwith the competence of the Scottish Parliament. An Act of the Scottish Parliament is outside legislative competence if it relates to reserved matters. The question of whether a provision relates to a reserved matter is determined by reference to,

"the purpose of the provision, having regard (among other things) to its effect in all the circumstances".

We are quite clear that the Scottish Government's purpose in bringing forward a referendum is to secure independence. Their intended effect is to secure a mandate for this to happen. Both purpose and effect relate directly to the reserved matter of the Union. Your Lordships' Constitution Committee, in its report published last month, said:

"An authoritative determination of the legal issues analysed in this chapter could be given only by the courts. Having considered the matter in detail, we are of the clear view that the ... analysis offered by the UK Government is correct. Without amendment, the Scotland Act 1998 confers no legislative power on the Scottish Parliament to ... authorise a referendum about independence".

The committee welcomed the Government's proposal that a Section 30 order be made to devolve power on the Scottish Parliament to legislate for a referendum on Scottish independence.

In our consultation document, we invited views on devolving powers using other legislation, including the current Scotland Bill, and for opinions on the possibility of running the referendum directly from Westminster. We have been clear throughout this process that it is the UK Government's preference to work with the Scottish Government to secure agreement on the way forward. This is not a question about the mandates of Scotland's two Governments. We believe it is about empowering the people of Scotland to participate in a referendum that is legal, and it is crucial that any referendum is beyond legal challenge. To provide for that legal referendum, we have set out our view that the power to legislate for a referendum should be devolved by the use of a Section 30 order agreed by both Governments and subsequently put to, and agreed by, both Parliaments.

Initial analysis of the responses received demonstrates that a significant majority agreed with that approach. That position was not simply supported by the volume of respondents, but by key academic experts and commentators including Professor Matt Qvortrup from Cranfield University, Professor Adam Tomkins of the University of Glasgow, Alan Trench of the University of Edinburgh, and representatives of organisations such as the Law Society of Scotland, the Electoral Reform Society of Scotland, the Royal Society of Edinburgh and the British Academy.

Noble Lords will also have noted that, soon after we published our consultation, the Scottish Government published their own document on 25 January. In that document the Scottish Government also acknowledged the legal problem and accepted that a Section 30 order was the best way to remove doubts about the competence of the Scottish Parliament. We welcome this endorsement, which the Secretary of State has discussed with the First Minister, and we look forward to continuing that dialogue over the coming weeks. Against that background, and indications that the Scottish Government want to reach agreement on these critical matters, I can confirm that we will not be tabling any government amendments on a referendum in the Scotland Bill.

In addition to ensuring that the referendum is legal, the Government have been clear that it should also be fair and decisive. That will be discussed when we debate the second group of amendments.

Photo of Lord Forsyth of Drumlean Lord Forsyth of Drumlean Conservative 7:00 pm, 21st March 2012

When my noble and learned friend says that the Government will not be tabling any amendments to the Bill, he is ruling out using the Bill as a vehicle to run a referendum. The Section 30 procedure requires the consent of the Scottish Parliament. In the absence of that consent-perhaps over the issue of whether there should be one question or two-is he prepared to introduce legislation in the next Session to provide for the referendum to be conducted along the lines that the Prime Minister set out in what the noble Lord described as his porridge oats speech?

Photo of Lord Wallace of Tankerness Lord Wallace of Tankerness Lords Spokesperson (Attorney General's Office), Lords Spokesperson (Wales Office), The Advocate-General for Scotland, Lords Spokesperson (Scotland Office)

My Lords, my noble friend was right to say that we do not intend to use the Bill as a vehicle for introducing provisions for the referendum. I cannot be clearer than that.

Photo of Lord Forsyth of Drumlean Lord Forsyth of Drumlean Conservative

My noble and learned friend was absolutely clear on the point about using the Bill for the referendum. Everyone agrees that the preference has always been to use the Section 30 power, which requires the agreement of the Scottish Parliament. The Prime Minister stated clearly that there would be a referendum; that there would be one question; and that it would be run by the Electoral Commission. In the absence of agreement to that under Section 30, will the Government bring forward in the next Session legislation to give effect to that? If that is their position, I will be happy not to move my amendments and not to waste any more time talking about referenda.

Photo of Lord Wallace of Tankerness Lord Wallace of Tankerness Lords Spokesperson (Attorney General's Office), Lords Spokesperson (Wales Office), The Advocate-General for Scotland, Lords Spokesperson (Scotland Office)

I will make this clear. If agreement could not be reached on a Section 30 order, and if we ensured that the matter was kept out of the courts-which I hope would be the preference of most if not all of us-we would need to consider what other options were open to us to provide a legal, fair and decisive referendum. However, just as we were taken many times down the road of, "What if we cannot get a legislative consent Motion?", which we have now seen is possible, we should make it clear that we are confident that we can reach agreement.

We reached agreement on the Scotland Bill when some said that it would be impossible. We reached agreement that Section 30 was the preferred route of both Governments to deliver a legal referendum. When I made my Statement on 10 January, I could not have said that that would be the case. The Scottish Government publicly stated that they share our view that the Electoral Commission should review the question. In their consultation paper, they state that their preference is for a single, direct question. Therefore, I am confident that we can continue to reach agreement on all these matters. The focus of our efforts must be on doing that rather than on speculating hypothetically. Just as we achieved agreement on the Scotland Bill, I believe that further agreement will be possible.

Photo of Lord Reid of Cardowan Lord Reid of Cardowan Labour

Perhaps I may clarify something in view of our earlier discussion. Apart from the process of Section 30, the substance will count as well. Will the noble and learned Lord be clear with the House that nothing in the Section 30 order arising from any discussions could validate changes in relationships inside the United Kingdom that affect the people of Scotland, and also those of England, Wales and Northern Ireland, unless they are consulted either through their Parliament or Assembly or in a UK-wide referendum? This is an important point and if the noble and learned Lord can clarify it, I will be very happy.

Photo of Lord Wallace of Tankerness Lord Wallace of Tankerness Lords Spokesperson (Attorney General's Office), Lords Spokesperson (Wales Office), The Advocate-General for Scotland, Lords Spokesperson (Scotland Office)

I entirely agree with the noble Lord that the point is important. He made an important distinction between a referendum on whether Scotland should remain part of the United Kingdom, and one on whether Scotland should remain part of the United Kingdom but under a different devolution settlement. He was right that it would have implications for other parts of the United Kingdom. In 1997 the Government of whom he was a member came to power with a substantial mandate to introduce devolution, not only for Scotland but for Wales and Northern Ireland. Parliament respected that mandate and passed the legislation. What we are doing in the Bill, although it brings changes, proceeds from the manifestos of three parties.

The noble Lord made that distinction, and it is the Government's view that there should be a single question on independence and that any other question would be of a different character and therefore would not sit well if it came in the double-question referendum that is sometimes suggested. The point that I was making was that the Scottish Government, in their consultation document, stated that their preference was for a question on independence. We should not lose sight of that, as sometimes it is easy to do.

We believe that a referendum on independence should address the single most significant issue that people in Scotland will face for many generations. That is why in the consultation paper we proposed that there should be a single question on independence.

Photo of Lord Reid of Cardowan Lord Reid of Cardowan Labour

I am trying to be helpful to the noble and learned Lord. I urge him not to place too much emphasis on the fact that the Scottish National Party, which has independence as its core belief, expressed the view that it just wants a discussion and a vote on independence. If it had any other ideas about achieving a different strength or form of devolution, it certainly would not say this. Instead, it would point to an amorphous grouping in Scotland that supposedly demanded it, and would concede it reluctantly-because of course it wants nothing less than independence. The politics and the substance of this are as important as the process. Would it be legal to proceed with an alteration in the relationships of countries inside the United Kingdom without the endorsement of the United Kingdom Parliament or the people of those countries?

Photo of Lord Wallace of Tankerness Lord Wallace of Tankerness Lords Spokesperson (Attorney General's Office), Lords Spokesperson (Wales Office), The Advocate-General for Scotland, Lords Spokesperson (Scotland Office)

My Lords, I was asked on one or two occasions whether it would be legal to have a referendum on so-called devo-max without authority being conferred by this Parliament, either by a Section 30 order or by legislation on the Scottish Parliament. I was very clear that that, too, would change the relationship between Scotland and England and therefore it would be outwith the competence of the Scottish Parliament. I hope that that reassures the noble Lord.

As the noble Lord, Lord Reid, indicated, there are some who support approaches short of separation, such as devo-max or devo-plus. We must be clear that there has been no single, agreed definition of any of these terms. It is the Government's firm view that we should not intertwine questions about the future balance of devolution in the United Kingdom with the question of Scotland's place in the union.

Photo of Lord McConnell of Glenscorrodale Lord McConnell of Glenscorrodale Labour

On the issue of seeking agreement with the Scottish Government on the nature of the question to be posed on the ballot paper, are the Government willing to look at my suggestion as a way not only of compromising between the two positions outlined by the United Kingdom and Scottish Governments but of producing a clearer answer so that people can understand with absolute clarity what they are voting for, and everyone afterwards can accept and understand the result? The question on the ballot paper should be posed not as a yes/no question, either for independence or for remaining within the union, but as a choice between two statements, the first being that Scotland should become an independent country and the second being that Scotland should remain part of the United Kingdom, with voters asked to put a cross on the ballot paper beside the statement of their choice. It would be consistent with the form of words used in the 1997 referendum. It would also give everybody a chance to campaign for their own positive choice, and for them to accept afterwards that the result was fair and not skewed by who had the choice between yes and no in advance.

Photo of Lord Wallace of Tankerness Lord Wallace of Tankerness Lords Spokesperson (Attorney General's Office), Lords Spokesperson (Wales Office), The Advocate-General for Scotland, Lords Spokesperson (Scotland Office)

The noble Lord makes an interesting and constructive proposal. I agree with the object of what he is proposing: it must be a question that is fair and brooks no division or challenge afterwards. This is perhaps relevant for the next group of amendments on the role of the Electoral Commission. It has an important and tried and tested role to play in this, so perhaps this is an issue that we will return to on the next group of amendments.

Photo of Lord Neill of Bladen Lord Neill of Bladen Crossbench

Someone said that the question, or part of the question, might be, "Do you consider the referendum to be legal?". That would be a fatal question to put. It is an extraordinarily difficult legal question, and there is no reason why the ordinary voter should have a view that is entitled to any weight on that. However, he will certainly be asked whether he wants to have one country or two, in the language there is for that. To ask, "Do you think it would be legal?", would be a mistake.

Photo of Lord Wallace of Tankerness Lord Wallace of Tankerness Lords Spokesperson (Attorney General's Office), Lords Spokesperson (Wales Office), The Advocate-General for Scotland, Lords Spokesperson (Scotland Office)

My Lords, I do not think anyone is suggesting putting on the ballot paper, "Do you think it is legal?". That would ultimately be a matter for the courts to determine. The collective view is that we should find a way forward that, as best as anyone can, puts that question beyond doubt. That is why we recommend a Section 30 order as the best way of achieving that.

Let me make progress and allow others to contribute. Early analysis of the consultation responses shows clear support for a referendum with a single question on independence. We will take this support for our position into discussions on the Section 30 order. We must be clear that the Scottish Government in their own consultation paper state that their preference is for a single question on independence.

Finally, on the amendments that consider whether a referendum on independence should be held in Scotland or across the United Kingdom, I readily recognise that a decision for Scotland to leave the United Kingdom would have significant implications for those left in the remainder of the United Kingdom. However, it has already been articulated by the noble Lord, Lord Reid, that the question of whether Scotland remains part of the UK or becomes independent is for the people of Scotland alone to answer.

The noble Lord, Lord Foulkes, said that we should set some targets. I hope that in this debate and the debate on the next group of amendments the Government can get a flavour of what your Lordships believe are the important targets and issues that we should strive to achieve in subsequent negotiations.

Photo of The Duke of Montrose The Duke of Montrose Conservative

The Minister has been most helpful in explaining the Government's position. There is one extra element that it would be interesting to know about: would the Order in Council be specifically limited to one referendum? Multiple referendums would raise even more seriously the problem of the involvement of the other parts of the United Kingdom that the noble Lord, Lord Reid, is worried about.

Photo of Lord Wallace of Tankerness Lord Wallace of Tankerness Lords Spokesperson (Attorney General's Office), Lords Spokesperson (Wales Office), The Advocate-General for Scotland, Lords Spokesperson (Scotland Office)

My Lords, I am quickly trying to look at the draft Section 30 order that was attached to the consultation. It provides for just one referendum.

Photo of Lord Sutherland of Houndwood Lord Sutherland of Houndwood Crossbench

May I ask the Minister a question? He may not want to answer it, but clarification would be helpful. He referred to the Government's belief in the importance of a single direct question. Is that a belief or a sticking point? There is a big difference between the two, and for some of us it would be a sticking point. That is the point raised by the noble Lords, Lord Reid and Lord Foulkes. We have not yet solved the West Lothian question with the current legislation. This Bill will enhance that question in the minds of many people across the whole of the UK. If we were to go further in some undefined form of devo-max, the difficulties would be greater, so I take him back to his point about fairness.

Photo of Lord Wallace of Tankerness Lord Wallace of Tankerness Lords Spokesperson (Attorney General's Office), Lords Spokesperson (Wales Office), The Advocate-General for Scotland, Lords Spokesperson (Scotland Office) 7:15 pm, 21st March 2012

That is an important question. If other noble Lords want to make their contributions, I will reply to it and other points when winding up the debate.

Photo of Lord Williamson of Horton Lord Williamson of Horton Crossbench

My Lords, I have sat through the three and a half hours of this debate. Fortunately, Hansard records our words but not our accents. If it did, it would have to have a little asterisk against mine because, apart from a very brief intervention by my noble friend Lord Neill, I am the only person with a non-Scottish accent who has participated in the debate.

I shall make one point, but it will be quite short. I thank the Minister for what he said in clarifying the Government's position. It is extremely important. In so far as conditions are going to be set for the referendum in the way in which it is presented in the Section 30 Order in Council, it is extremely important that when we finalise that position, we still carry the support, trust and confidence of the people of the other countries of the United Kingdom that the referendum will be fairly drawn up and monitored. There is more than one party to this referendum. There are the Scottish people and there are the people of the United Kingdom as a whole, and confidence in the political process is important.

For that reason, I will say briefly that although these issues are going to turn up-as we know now, in the Section 30 Order in Council and not in this Bill-none the less the points that are raised in the amendment moved by the noble Lord, Lord Foulkes, and that also arise in his Amendment 94C are extremely important. I emphasise that it is extremely important that we stand by the points that are set out in these amendments. The first is that we are talking about whether Scotland should become independent of the rest of the United Kingdom. There must be a clear question on the ballot paper and in the order. The referendum must be carried out in accordance with the provisions of the Parliamentary Voting System and Constituencies Act 2011 and the draft must be laid before each House of Parliament. The two further points in Amendment 94C seem to be extremely important. The timing must be made quite clear. It cannot be left ambiguous. The question must be equally explicit. I think that the question that the noble Lord, Lord Foulkes of Cumnock, has put forward in that amendment is excellent.

We need to stick to these points, although I have this terrible feeling, based on a long period in public life, that when we come to negotiations-and there will be negotiations in relation to this Order in Council-gradually a little change will come in. It will not be exactly as it started off, and by the time we get to the end we may find that we are not carrying fully the confidence of all the people of the United Kingdom. Those four points are extremely important to me. They are negotiating points that we need to stick to. We have to be extremely careful that we do not just fade away into something that is much too mushy. We need to stick to the clear points that we have often discussed here. They are extremely valuable and must be carried into the Order in Council.

Photo of Lord Forsyth of Drumlean Lord Forsyth of Drumlean Conservative

I shall speak to my Amendment 88, which is part of this group. It may help save your Lordships a little time. I am grateful to my noble friend for the statement that he has just made. As I see it, the position is quite clear: the Government are not going to use this Bill as a vehicle.

I tabled my amendment on 13 September, six months ago. Since then, quite a lot has happened. I tabled it because I thought we needed to resolve once and for all the question of whether Scotland should remain part of the United Kingdom, and I thought that the First Minister would use his period in office to drive a wedge between Scotland and the United Kingdom. Nothing that I have seen in the past six months has done anything other than to consolidate that view. It is therefore very important that we get this matter settled, that we concentrate on whether Scotland wishes to remain part of the United Kingdom, and that issues of devo-max and the rest are kept to one side while we do that.

I entirely agree with the noble Lord, Lord Reid, who intervened twice while the noble Lord, Lord Foulkes, was introducing his amendment to point out that devo-max means creating a federal parliament and an English parliament. He is absolutely right to say that that would need to be subject to approval by the rest of the United Kingdom.

We are concentrating here on how to get the Scottish question resolved one way or the other. Seeing how the noble Lord, Lord Foulkes, has suddenly started speaking to a script, I suspect that there is probably a degree of agreement between the Front Benches on the way forward on this. I hope there is. The noble Lord, Lord Browne, shakes his head, but the noble Lord, Lord Foulkes, was certainly speaking to a script, although after three pages we returned to normal service. I suspect that the three pages may very well reflect the view of the Opposition, but we will hear from the noble Lord, Lord Browne, in due course.

The point is that there is a consensus in this House that we need to have a referendum; it needs to have one question-

Photo of Lord Foulkes of Cumnock Lord Foulkes of Cumnock Labour

I can let the noble Lord, Lord Forsyth, see my script and he will see that it is in my own handwriting and no one else's.

Photo of Lord Forsyth of Drumlean Lord Forsyth of Drumlean Conservative

Yes, I just wondered who dictated it. I am sure it is the noble Lord's own work; it is just that it is such a change of position in such a short time. We have discussed this ad nauseam and it is perfectly clear that there is agreement in this House that there should be one question and that the referendum should be conducted by the Electoral Commission and no one else.

I like the question that is in the amendment moved by the noble Lord, Lord Foulkes, but I am perfectly content for that question to be determined by the Electoral Commission. That is where we may end up. My preference would be for it to be decided by the Government, but I can see how that would create difficulties. The important point is that this whole process needs to be regulated by the Electoral Commission and needs to be conducted under the rules that have been established in statute for the conduct of referenda. I am very happy not to move my amendment and not to spend any more time talking about referenda in the context of this Bill, because this Bill is clearly not going to be used as the vehicle.

My noble and learned friend has been brilliant in his negotiations with Mr Alex Salmond, but I am not absolutely persuaded that Mr Alex Salmond is going to agree to a Section 30 procedure that meets all the criteria. The point that was made by the noble Lord, Lord Williamson, really needs to be taken into account. We do not want any shilly-shallying or giving way on these important points of substance. This is very important.

Mr Salmond does not want to have a referendum on independence because he knows that he will lose, and I am anxious that my noble and learned friend may be optimistic about reaching agreement. However, given his track record, he may well be able to reach agreement: in which case, fine. If he is not able to reach agreement, we will have to have a referendum Bill in the next Session of Parliament that delivers these things. I regret that, because unless there is agreement between the Front Benches to take this through the House reasonably speedily we will have another six or seven months of arguing about process, about the question and about who should run it, whereas I want the debate to be about what happens to Scotland's young people, the jobless, our businesses, our defence, people's pensions, and our country as a United Kingdom.

If we are going to go down this track, I very much hope that the negotiations will not be particularly extended. I believe in competition but, honestly, competition between consultation papers is a bit rich. The Scottish Government's consultation finishes in May. If this is the route that we are going to go down, let us hope that, at a reasonably early stage in the new Session of Parliament, either we will have reached agreement with the Scottish Government on using Section 30 or the Government will have brought forward a Bill that is taken through both Houses speedily and delivers the opportunity for a decision to be made. I would have preferred it if we had used this Bill to achieve that because we could have got on with it, but given the Government's Statement and the fact that we have to deal with all amendments by next Wednesday, it is perfectly apparent that that is not going to happen. I am content not to press my amendment.

Photo of The Earl of Caithness The Earl of Caithness Conservative

My Lords, I have put my name to the amendments tabled by the noble Lord, Lord Foulkes, and my noble friend Lord Forsyth. As my noble friend Lord Forsyth has just said, these amendments went down last year, long before the UK Government sent out their consultation paper, let alone the Scottish Government bothering to send out theirs.

I am not in the least bit fearful of a referendum in Scotland but I am worried about the consequences. The break-up of the United Kingdom at the behest of a minority, which might prejudice the majority, is something of great concern. As the noble Lord, Lord Foulkes, has said, it has huge implications for the rest of the United Kingdom. I am told that when Czechoslovakia divided in 1992, some 30 treaties and 12,000 legal agreements were required. There is going to be a huge amount of work resulting from a decision to have an independent Scotland, if that is the one that is taken.

I hear what noble Lords have been saying about this being a matter for Scotland, and indeed it is, but it is such a big matter that the referendum in Scotland should then be followed by a referendum in the UK. There are huge implications for the rest of the UK; for example, in Brussels, where our ability to get a blocking minority at the Council of Ministers will be altered because the number of votes that we have will be reduced. I spoke about this in an earlier debate. It might very well threaten our permanent seat at the United Nations.

There are a lot of reasons why it is so important that the United Kingdom is kept together, which, if it is broken by a minority, will have huge implications. That is why I have put forward my Amendment 89, which says that the referendum in Scotland should be advisory and could be implemented only if it was agreed in the rest of the United Kingdom. We are sleepwalking into a whole lot of issues that have not been discussed, the implications of which nobody fully understands, and which the vast majority of the United Kingdom will not have a say on.

My Amendment 90 is an amendment to Amendment 88 and says that if the vote in a referendum held in Scotland is for a separate Scotland-I do not say "independent Scotland" because Scotland is about as independent a country as you can get-but that if the people of Orkney and Shetland vote to remain in the United Kingdom, they should be allowed to do so.

The obvious argument in favour of that is the argument that has been expounded about Scotland, which I have just spoken about. Here we have a minority of people in the United Kingdom saying "We want to become separate" or "We could want to become separate". The rest of the United Kingdom has to accept that, as the noble Lord, Lord Reid, thinks is right. I am saying that if Orkney and Shetland decide that they want to stay in the United Kingdom-although that is not the only alternative for them-their wish should be granted.

When this amendment was put down, it raised a lot of concern from the usual rent-a-quote SNP MSPs who jumped up and down and said, "This is Westminster dictating to us in the far north". No it is not; it is merely giving a chance for democracy. There is a fear in the far north of the centralisation that has taken place in Edinburgh.

Let me declare quite an old family interest, which it is important to declare for the record. The family links with Orkney and Shetland start in 1379 when at Marstrand near Tønsberg in Norway, King Haakon VI invested and confirmed my ancestor Henry Sinclair Roslin as Earl of Orkney and Lord of Shetland. He was required to defend Orkney and Shetland and, if required, provide Norway with military support. It is important to remember that Norway controlled Orkney and Shetland. For the next 91 years, we served two monarchs-the kings of Norway and the kings of Scotland. In 1455, William Sinclair, the 3rd Earl of Orkney was also created Earl of Caithness.

After that, things started to change. In 1468, Orkney and Shetland were pledged by King Christian I of Denmark, who was also King of Norway, as the payment of the dowry of his daughter, Princess Margaret, who was to marry King James III of Scotland. As a result of that, we had to forfeit our title of Earl of Orkney. In 1472, there was an Act of Parliament to annex Orkney and Shetland to the Scottish Crown.

Scotland as we know it today did not become Scotland until 1472. Looking at the timeline, one will see that for about 600 years Orkney and Shetland were under Norwegian or Scandinavian rule; for 235 years, they were under Scottish rule; for 292 years, they have been under Westminster rule; and for 13 years, they have been under joint Westminster and Holyrood rule.

Moving forward to the present day, the history that I have just outlined explains why in 1979 the people of Orkney and Shetland voted against a referendum. In 1997, they voted very narrowly in favour but the people of Orkney voted against the tax-raising powers. There is a totally different culture in the Northern Isles, which has been evidenced by DNA tests that show that 60 per cent of the people of the Northern Isles are of Norse descent. That is not just on the male side but also the on female side. Further research in 2005 showed that as many women came over from Scandinavia to populate Orkney and Shetland as men. It was not a takeover bid by males; whole families moved over, and settled and integrated into Orkney.

Recently, there has been a slight change in the SNP position. After six months of castigating me for what my amendment proposed, in the past couple of days I have seen that the SNP has now admitted that Orkney and Shetland might be able to stay out of a separate Scotland should they vote against independence. In a recent interview, the SNP's rural affairs spokesman, Angus MacNeil, admitted that if that was the case, part of the access to the isle, which belonged to the Orkney and Shetland basins, would stay with that country.

Although my amendment proposes that Orkney and Shetland might be able to stay within the United Kingdom should they so wish, there are other options. There is outright Shetland independence and Shetland exceptionalism, which the current Convenor of the Shetland Islands Council has been promulgating. There is of course the opportunity to become a Crown dependency. One further interesting fact is that, in January, the debate at the Althing was on the motion that Shetland's future lies in an independent Scotland. That was defeated. In that debate, the people of Shetland clearly indicated that they did not wish to become part of an independent Scotland.

As this seems to be the only occasion on which we are going to be able to discuss referendums, will my noble and learned friend say what discussions he will have with Orkney and Shetland? Of course, there is no better person in this House in a position to hold those discussions to make certain that their voices are heard, recorded and, if necessary, taken into account in the Section 30 order. That is hugely important because there is, without question, a feeling in the Northern Isles, as there is in the far north of Scotland, that the centralisation that has taken place since devolution has been to the detriment of the north. If one looks at some of the recent articles, until recently, to say that one was more pro-Scottish than pro-British in Shetland led to a lot of condemnation because of its traditions, its culture and the way in which it has felt separate and rather remote from the rest of the United Kingdom.

If we cast our minds back only a year to the Parliamentary Voting System and Constituencies Bill, one will recall the argument forcefully made by my noble friend Lord Fowler to keep the Isle of Wight as one unit. It received a huge amount of support and he won his case. I am merely saying to my noble and learned friend, let Orkney and Shetland decide if they want to do their own thing and how they should be allowed to do it when it comes to the referendum.

My next amendment deals with the island of Rockall, those uninhabited rocks out to the west of the United Kingdom. I appreciate that in 1972 the Island of Rockall Act received its Royal Assent. At that time, it was administratively made part of the isle of Harris, which was then part of Inverness-shire. But I shall go back a little further than that to what happened when people landed on Rockall on 18 September 1955. A plaque was placed on Rockall on that day by people off HMS "Vidal", which read:

"By authority of Her Majesty Queen Elizabeth II, by the Grace of God of the United Kingdom of Great Britain and Northern Ireland and of her other realms and territories Queen, Head of the Commonwealth, Defender of the Faith, and in accordance with Her Majesty's instructions dated the 14th day of September, 1955, a landing was effected this day upon this island of Rockall from HMS Vidal. The Union flag was hoisted and possession of the island was taken in the name of Her Majesty. [Signed] R H Connell, Captain, HMS Vidal".

Photo of Lord O'Neill of Clackmannan Lord O'Neill of Clackmannan Labour 7:30 pm, 21st March 2012

Does the noble Earl anticipate there being a polling station on Rockall and the like? We are dealing with matters of rather greater significance than these flights of geographical fancy.

Photo of The Earl of Caithness The Earl of Caithness Conservative

My Lords, I do not anticipate a police station-

Photo of The Earl of Caithness The Earl of Caithness Conservative

In fact, I do not anticipate people living there. But what is important are the oil exploration rights around Rockall, which have huge implications. What I want to ask my noble and learned friend is what takes preference. Is it Her Majesty's instructions to raise a union flag and it is taken for the union, or is it an Act of Parliament which gives administrative rights so that the island of Rockall is part of Scotland? That ought to be decided. I would say to the noble Lord, Lord O'Neill, that these are the sorts of issues that we need to be clear about when it comes to the referendum. If oil is found within the waters of Rockall, let us have a clear mandate as to who owns it and who is going to have responsibility for those areas, and indeed defend them against attack, perhaps by terrorists, if the oil is developed.

My last amendment in this group is to Amendment 94C, another amendment tabled by the noble Lord, Lord Foulkes of Cumnock. It concerns the second question about the fiscal autonomy of Scotland, for which I know he did not get much support. I want to ask my noble and learned friend what the situation would be should Scotland vote to become a separate country from the United Kingdom. My amendment provides that Scotland should no longer be allowed to use the British pound sterling. I do not see how Scotland could use the same currency as England if it did not have a common Government. That has been the problem with the euro. My noble friend Lord Forsyth has argued strongly that we should not join the euro. Attempts have been made by many politicians, including the present Chief Secretary to the Treasury, to get us to become part of the euro and much more integrated. However, the decision not to become part of the euro has clearly been vindicated. In the event of Scotland becoming a separate country and not having the same Government, it would be quite detrimental both to the remainder of the United Kingdom and to Scotland to have the same currency. It has not worked in the past and it will not work in the future. I would like my noble and learned friend to confirm that Scotland would not be allowed to use the British pound sterling.

That would not be something sensational for Scotland to do because in the days of King David I, somewhere between 1140 and 1150, the weights and measures and the currency of Scotland were based by Act of Parliament in Caithness. It was decreed that there should be a common and even weight for the pondus Cathaniae, so it would be quite simple for Scotland to go back to that.

Photo of The Earl of Mar and Kellie The Earl of Mar and Kellie Liberal Democrat 7:45 pm, 21st March 2012

My Lords, I want to ask my noble and learned friend a question to which I do not know the answer, so maybe he will be able to help me. The noble Lord, Lord Reid of Cardowan, talked about the need for a UK-wide referendum to deal with issues such as devo-max. I could probably go along with him on that, but I recall that Jersey, Guernsey and the Isle of Man have a status which is equivalent to devo-max, and I do not think we had a referendum to let them get to where they are.

Photo of Lord Reid of Cardowan Lord Reid of Cardowan Labour

I did not say that there had to be a referendum but, if there was a discussion about a change in Scotland's place inside the United Kingdom, either that had to be done by agreement between the Parliaments or by a referendum that went wider. In the case of the previous referendums, there was agreement within the UK Parliament and then the referendums were held. The situation has now changed because there is a Parliament in Scotland and Assemblies in Wales and Northern Ireland. One presupposes that a decision will be taken on being inside or outside the union and the result of that decision meaning that Scotland should stay inside the union. I have no principled objections to entering into discussions about changing the nature of the relationship, but that has to be decided either by the peoples of the UK or by their representatives in the Parliaments. That is probably the only legal way to do it, and it is the only fair way. The first question, on whether Scotland wishes to leave or stay, is one for the Scottish people on their own, but the next question is one either for the peoples of the United Kingdom or the various representative bodies of those peoples.

Photo of The Earl of Mar and Kellie The Earl of Mar and Kellie Liberal Democrat

My Lords, I am most grateful for that advice. Does the noble Lord, Lord Reid, believe that Jersey, Guernsey and the Isle of Man have devo-max?

Photo of Lord Reid of Cardowan Lord Reid of Cardowan Labour

I would be able to understand that if I knew what devo-max is. I am presupposing that if there is a subsequent discussion on the decision to stay in the United Kingdom, some of it will be on what the vote is actually about. I hate to add pigs and pokes to porridge-enough euphemisms have been used-but one of the problems with devo-max is that, since it affects the relationship between the peoples of the United Kingdom, it would have to go to the peoples of the United Kingdom or their elected representatives. Also, at this stage no one knows what devo-max, devo-plus or any of these topics other than staying in the UK or leaving the UK actually constitutes. How on earth that is put to a referendum is beyond me, and therefore it reinforces the fact that there should be a clear, fair and legal decision on one issue, after which there may or may not be discussions between the representatives of the various peoples about changing that relationship. At that stage, presumably, devo-max may represent what the islands the noble Earl referred to already have or it might refer to something entirely different. Part of the problem is that at the moment we have no idea of what it refers to.

Photo of Lord Forsyth of Drumlean Lord Forsyth of Drumlean Conservative

My Lords, the difference is that Guernsey, Jersey and the Isle of Man do not send Members of Parliament to the House of Commons.

Photo of The Earl of Mar and Kellie The Earl of Mar and Kellie Liberal Democrat

I suppose I should continue to look for advice: did they? I also note that Jersey, Guernsey and the Isle of Man have almost complete autonomy, including on foreign policy and the Treasury. The only thing they do not provide overall is their own defence.

Photo of Lord Lang of Monkton Lord Lang of Monkton Conservative

My Lords, I intervene briefly in the debate simply because Amendment 88, tabled by my noble friend Lord Forsyth, also bears my name. I begin with an apology because I have been detained away from the House all day and indeed had not expected to be able to get back in time for this debate. Therefore, I speak with some diffidence because I have only heard half of the wind-up made by my noble and learned friend to the last debate.

This amendment was tabled when the United Kingdom Government were taking no clear interest in what was going on in Scotland, when the First Minister was being given a completely free run, and when there was a clear need for the Government to get a grip on this matter and represent the interests of the whole of the United Kingdom. That is what the amendment hopes to stimulate, and certainly there has been a lot of progress since then. I wish that I had heard all that my noble and learned friend was able to say this evening but, from the reaction to it, I understand that quite a lot of useful progress has been made.

What seems absolutely necessary is that whatever manoeuvring takes place involving a Section 30 order or whatever else may come along, we have to have a watertight situation in which the Scottish Executive cannot manoeuvre to break away from the commitment that we all now have to holding a referendum in Scotland, with clear wording that forces the issue on whether or not Scotland should remain part of the United Kingdom. That point has been effectively made by a number of speakers today. I particularly agree with the comments made in the last debate by the noble Lords, Lord Williamson and Lord Reid.

My reason for intervening now is to draw my noble and learned friend's attention to what my noble friend Lord Forsyth said when he indicated that he was willing to withdraw his amendment but sought certain clear and specific assurances and undertakings. He made the case clearly and I shall not attempt to repeat it or improve on the language he used. However, I urge my noble and learned friend to respond directly, clearly and unambiguously to the request that he made.

Photo of Lord Maclennan of Rogart Lord Maclennan of Rogart Liberal Democrat

My Lords, at the conclusion of this long debate, I thank my noble and learned friend for what he has contributed so far.

Events have moved rapidly in the past few days and have made it extraordinarily difficult for the House to keep abreast of what is going on. However, my noble and learned friend has made it clear from the beginning that the referendum which is held will have to be legal, fair and decisive. How does he intend to enable the United Kingdom Parliament to satisfy itself that the process is legal, fair and decisive and that the questions being put to the electorate are legal, fair and decisive?

There are many questions about fairness and decisiveness in particular. My noble and learned friend has gone quite far towards satisfying us that there is now a broad consensus on what is legal but, with a Section 30 order, there is some difficulty in being certain as to how fairness and decisiveness might be achieved. I recall in earlier debates about referenda an issue about the proportion of the electorate that would be required to reach a decisive conclusion. It is a matter on which people will have differences of view and it is therefore important that we know what the Government are proposing. If Scotland was to oscillate in its views, as it might, and if large numbers of people did not vote, that might not contribute to the decisiveness of the outcome. I hope that that will be taken into account.

In earlier debates we also considered who should be the electorate. There is an inherent unfairness in precluding from such a significant referendum Scots people who are working abroad with no real property owned in Scotland. It is a difficult question to resolve but we would like to at least consider that the Government have addressed the issue.

Many of these questions, no doubt, will be referred to the Electoral Commission, as is appropriate, but Parliament's input into this is at least as important. A government agency should not have the final determination on whether or not what is being put forward is acceptable on the grounds of it being fair and decisive. I hope, consequently, that there will be an iterative discussion in Parliament over the next few months about the process and the criteria to which the Minister has attached himself. They have been supported by others but they are not necessarily as clear as they need to be if we are to decide how this process is to be concluded.

Photo of Lord Empey Lord Empey UUP

My Lords, the noble Lord, Lord Williamson of Horton, said that up until his contribution, with the exception of a brief intervention by the noble Lord, Lord Neill of Bladen, no voice other than a Scottish voice had been raised in the debate. I agree entirely with the point made by the noble Lord, Lord Reid of Cardowan, that the Bill and the prospect of independence for Scotland affects substantially everyone in the United Kingdom.

The noble Earl, Lord Caithness, made a point about Rockall which brought a response from the noble Lord, Lord O'Neill, who is not in his place at the moment. I remind the House that in the late 1980s or early 1990s, a would-be politician in the Irish Republic changed his name by deed poll and ended up calling himself Dublin Bay Rockall Loftus. He went to place an Irish flag on Rockall and promised that he would visit the island every year to stake his claim. That gentleman has since passed away but the anecdote illustrates the fact that others claim the island as a base. Of course, the concept of oil and natural gas also arose at that stage. The point is not quite as flippant as some people think; in fact, it could be significant.

The implications for the rest of the United Kingdom are substantial but, sadly, there has been an obsession with the personality of the First Minister in Scotland and we should get away from that. As the hymn writer said:

"Time, like an ever-rolling stream,

Bears all its sons away".

We are thinking here of the long term, of the implications for generations and of the economic implications for the people of Scotland.

However, there are implications for others. For instance, a large part of our energy supply comes through Scotland via pipelines and interconnectors. There is the question, which we discussed last Friday, of access to airports and their status. That is a huge issue for Scotland too, because obviously connectivity is vital to the Scottish economy.

I hope that we can move the debate on to the key issue: that is, what is in the best interests of Scotland? Of course, it is its decision, but let us also take into account that there are implications for the rest of us, some of which have been mentioned. The status of the United Kingdom would be drastically changed in the event of Scotland leaving it. I tabled a Question to the Minister some time ago about what name we would give to Great Britain if Scotland was not part of it. The noble and learned Lord, with his great experience in these matters, answered by saying that he was not expecting such an event to take place. I hope that he is right. Nevertheless, these simple questions are left in the air. We have to go beyond the process and get down to the real issues. What is the economic future for the people of Scotland? What are the implications for the rest of us? I hope the debate can move on to those issues.

I strongly support the point made by the noble Lord, Lord Reid of Cardowan. When we had the referendum in Northern Ireland there was a decision by the United Kingdom to implement the results of the referendum, and that became the Northern Ireland Act 1988. Since then, Parliament has ratified a series of intergovernmental agreements that were politically negotiated. At every stage in that instance, the Irish Government, their Parliament and ours were involved. Every part of the United Kingdom had a say in the arrangements that we were permitted to enter into. That emphasises the point made by the noble Lord, Lord Reid. Yes, a decision on independence is for the people of Scotland. We all have an interest in anything other than that and should have a say in it through our representative Parliament. If that is not possible, there is another route open to us.

The point is well made that if you go beyond the basic, fundamental question of independence, you move into an entirely different area of activities and responsibilities where more than the people of Scotland are affected. As they are our own kith and kin, I sincerely hope that the people of Scotland do not go down that road but we have got to get on to the main issue of the debate-the rights, wrongs and benefits of it. We hope that the people of Scotland, who must be free to make their own decision, reach one that will help strengthen the United Kingdom and not tear it apart. That would weaken all of us. We are stronger together than the sum of the individual parts. Ultimately, I hope that that is the direction that we travel in.

Finally, when the noble Lord, Lord Kerr, was in his place, he pointed out to the Minister that there was an absence of punctuation. I remind the Minister that a speech was made some years ago by the noble Lord, Lord Brooke of Sutton Mandeville-he is not in his place-in which he said that Britain had,

"no selfish strategic or economic interest in Northern Ireland".

The noble Marquess, Lord Lothian, who is also not in his place, proceeded to write a book about that sentence, making the point that we in Northern Ireland took the wrong meaning from it because of the punctuation. That goes to show that when dealing with these matters one has to be extremely careful what one says. The small print and, in this case, the punctuation can be just as important.

Photo of Lord Neill of Bladen Lord Neill of Bladen Crossbench 8:00 pm, 21st March 2012

Is the noble Lord, Lord Empey, contemplating circumstances where there would be referenda in other countries than Scotland? He said Parliaments, their representatives and the people would have to make up their own minds in their own countries. That was English people, the Welsh Assembly and so on. Supposing that these problems arise, did he envisage by the phrase "another route" that there might be a referendum in England, Wales and Northern Ireland?

Photo of Lord Empey Lord Empey UUP

I hope that that would not be necessary. I certainly believe that the best outcome is that Parliament itself, which is a combination of representatives from all parts of the United Kingdom, should be where those decisions are made. The noble Lord, Lord Reid, raised the possibility that, for whatever reason, that might not be possible. I find it hard to envisage circumstances where it would not be, but if Scotland's relationship within the United Kingdom changed, whether as devo-max, devo-plus or whatever, and it was not possible for Parliament to agree on how that could be implemented, then under those circumstances the rest of the United Kingdom should be consulted. Yet I find it hard to envisage circumstances where Parliament cannot resolve that.

Photo of Lord Reid of Cardowan Lord Reid of Cardowan Labour

Perhaps I can help the noble Lord. I, too, have reservations about the fact that, if there was a discussion about some different form of devolution, it would come to the UK Parliament to decide. I have an inkling that if the effect of such discussions at some stage in the future was to effectively constitute a federal Britain, then Parliament might well think that that was a constitutional issue of such magnitude that the people should be consulted. I merely give that as a possibility.

Photo of Lord Neill of Bladen Lord Neill of Bladen Crossbench

An obvious difficulty arises once you get into consulting constituents of other countries-England, Wales and Northern Ireland-which is: in what order do you take the referendum? What effect will it have if, we assume, in Scotland the referendum is passed with acclaim but other countries, such as England and Wales, say, "No, it is very damaging and we are against it"?

Photo of Lord Reid of Cardowan Lord Reid of Cardowan Labour

I hesitate to start discussing another referendum when we have spent so long on this one. To try to take the hypothetical situation, Scotland wishes to stay inside the United Kingdom and the Scottish Parliament or people wish to go on to discuss further powers. The negotiations conclude with what is effectively a federal system in the United Kingdom that affects Wales and Northern Ireland as well as Scotland. Then, one option is for the British Parliament to address that. Another might be, hypothetically, to put it to all the peoples in the UK at the same time as a referendum on the constitutional settlement. The important point is that the first decision has to be a simple one: "Do you want to stay inside the union, or be outside it as a separate nation state?". That is a decision for the Scottish people alone.

Photo of Lord Browne of Ladyton Lord Browne of Ladyton Shadow Spokesperson (Scotland)

My Lords, I hope that noble Lords will forgive me if, in the interests of attempting to be brief-I have tried this before and it has not worked-I do not make reference to their contributions to the debate in any great detail. I shall also resist the temptation to go down many of the hypothetical routes or cul-de-sacs that have opened up in the course of the debate. I will try to concentrate on the nub of the issue.

I do that principally because, as the noble Lord, Lord Forsyth, indicated in his opening remarks, there is now a great degree of unanimity across the House about where we are. It may have taken us much longer than it should to get here, and that may be because, as the noble Lord, Lord Lang, pointed out, for a time it was not clear what lead the Government were to give on these issues. That is now much clearer. It may also be that we had, to a degree, a hangover from the past in the sense of the Scotland Bill, which I think we were committed to seeing through. Managing all these things together was challenging and difficult. I do not envy the noble and learned Lord and his colleagues in the Scotland Office having to work their way through this. I congratulate them on getting us to where we are to date. There are still challenges ahead and some of those have been identified in this debate. Given that there is a significant degree of unity and unanimity across the Committee on how we should approach this and the challenges that face the Government, it does not seem very fruitful to pick through all the possibilities. Apart from anything else, I know that that would just encourage Members of the Committee to have other ideas. They might want to make interventions and develop other lines.

I listened carefully to the Minister's contributions this afternoon. I carefully read the Written Statement which his right honourable friend the Secretary of State for Scotland laid today and which was referred to in this Committee. From the degree to which the consultation has been reported either by the noble and learned Lord or in the Ministerial Statement, or from other pieces of information that are now allowed, we seem to be able to come to some conclusions about where the Government ought to be, and we can encourage them to continue on this path in their ongoing discussions with the Scottish Government.

It appears that the Government have comprehensively won the argument about legality. I do not think there is any question about that. I was privileged to be present when the noble and learned Lord spoke at length on this issue at Glasgow University. He was persuasive then, and the consultation document is persuasive. Since then, the Scottish Government have tried to undermine that advice, but unsuccessfully-so much so that the Deputy First Minister, Nicola Sturgeon, went to the same location, ostensibly to deliver a competing lecture on the issue, and ended up avoiding the question altogether. I understand that during her speech on independence and its virtues, she referred to one text-book supporting the view that she and her fellow Ministers held about legality, and that she was intervened upon or questioned by an undergraduate who pointed out to her that his instructions, when he appeared as a student at the university, were that you should never be in a position where you have to quote a text-book to support a legal proposition as that was just bad law, and she was flummoxed by it. If she was beaten by an undergraduate at Glasgow University, perhaps she should give up trying to make the argument.

The Government appear to have won comprehensively the argument on legality, and they also appear to have done so on the argument that we have to have this referendum as soon as practically possible. That is now being supported by growing evidence from those in business and other walks of economic life in Scotland. They suggest that evidence is now emerging that the uncertainty about Scotland's future is starting to damage investment in Scotland, and consequently jobs and people's incomes.

The Government appear to have comprehensively won the argument about the question. I do not think there is any doubt that everybody is of the view that it is best to have one clear question-so much so that the Scottish Government were forced to concede that point in their own consultation document, at least as a headline, although they did exactly what my noble friend Lord Reid of Cardowan suggests. They created a consultation with an amorphous group of people in Scotland, to whom they said: "If you persuade us that we need to go further and have another question, we will reluctantly concede to that but our position is that there should be one question". I will come back to the issue of the question. I am not in a position to judge between the competing questions that have been proposed in our debate this evening, but there is a mechanism for working out the appropriate, fair question. We should at least begin that process now, so that when proposals are made to the Electoral Commission and to others who have to take responsibility for adjudicating to some degree on questions, they will be in a position to do that.

The Government appear to have comprehensively won the argument that the referendum ought to be run if not by the Electoral Commission then at least according to the rules that it sets and for it to be accountable to the Electoral Commission. I would prefer it to be run by the Electoral Commission. If I have not covered all the bases relating to the issues of contention, then somebody should point that out to me, but I think that is it. It appears that the Government laid out their stall, found support across Scotland and won the argument comprehensively, and now are able to say, "Not only do we know that we have won the argument but here is the evidence in the response to the consultation showing we have won it". That puts the Government in a strong position, but in negotiating terms it puts them in a difficult position because it does not leave them very much room for manoeuvre, but they should not have very much of that on these issues.

I am inclining to the position that I have always been in about legislative consent Motions regarding the Bill. It is that the Scottish Government, inevitably and for political reasons, will have to come to that position too. As they have gone out and tried to sustain arguments in other areas, they have found that increasingly difficult, and their credibility is being undermined. I suspect that in the negotiations, which I hope will not take too long, the Scottish Government will be brought to that position.

Listening even more carefully to the noble and learned Lord, it now appears that we will not be using this Bill as a vehicle for legislating for a referendum in Scotland, and I agree with that. This Bill is about devolution, and it should remain about devolution. We should not muddy its waters by using it for another purpose. Apart from that, a Section 30 order is the right way to go because it is an established mechanism for transferring the power to the Scottish Government. It is tried and tested, and it involves a level of buy-in by the Scottish Government that should prevent them complaining in future about what they have agreed to. It may not, but at least it provides a political framework where they can be held to account for the consequences of the agreement and we can avoid all these arguments about imposition. If we have a process that they have to buy into to create this opportunity, which we all now want to see, we can stop all this nonsense talk about diktats from London and imposition by Westminster. They will have to buy into it.

Photo of Lord Foulkes of Cumnock Lord Foulkes of Cumnock Labour 8:15 pm, 21st March 2012

I can understand why my noble friend says that using this Bill to discuss or legislate for a referendum might not have seemed appropriate. However, if the amendments had not been put down all those months ago by the noble Lord, Lord Forsyth, and myself, and if the pressure had not been put on the Government, does my noble friend think that we would have had two consultative documents? Does he think that we would have achieved what we have achieved today? Is there not extra advantage in putting down amendments, even though at the end of the day they may have to be withdrawn? Does it not achieve something in the end, and has something not been achieved in relation to this?

Photo of Lord Browne of Ladyton Lord Browne of Ladyton Shadow Spokesperson (Scotland)

I thank my noble friend for his intervention, although I have no idea what the answer is to the question that he asks. We get many amendments that allow us to explore issues that are of less relevance and importance to the people of Scotland, but I certainly welcome amendments that allow us to explore issues that are important. Through their amendments, my noble friend and the noble Lord, Lord Forsyth, have been utterly diligent on this Bill. They deserve a great degree of credit for the amount of work that they have put into preparing amendments, by which they have created opportunities for some very good debates in Committee. They will be a quarry for the future for many good arguments that can be put forward about the positive nature of the United Kingdom.

To go back to my point, the noble and learned Lord says, "Not this Bill", and I agree. He says that the preferred option is a Section 30 Order in Council, and I agree. The consultation reveals some very good and compelling arguments in some of the responses about why that is the right way to go. I have adopted some of them. The noble Lord, Lord Forsyth, asked the Minister, "What if there is no Section 30? Where does that leave you?". The noble and learned Lord answered, "If agreement cannot be reached, we need to consider other options". I understand why that form of words is the most that he can give your Lordships.

Photo of Lord Browne of Ladyton Lord Browne of Ladyton Shadow Spokesperson (Scotland)

The noble Lord, Lord Forsyth, asks me why. The simple answer is: because he is a government Minister. The noble Lord should know that, and I am sure that he was adept at giving those sorts of answers himself when he was at the Dispatch Box.

Photo of Lord Forsyth of Drumlean Lord Forsyth of Drumlean Conservative

I never really felt much constrained by collective responsibility, as the noble Lord will recall. My noble friend Lord Deben is indicating that he agrees, which is a bit alarming. I thought that the noble Lord was going to say that the Minister could not say this because he did not want to put a gun to the Scottish Government's head, but it is quite important that it is clearly understood that we are determined to resolve this question and that we have the lines that we have discussed. It is also clearly understood-and I understand where the noble Lord is coming from-that we would much prefer to do this on an agreed basis and for the Scottish Parliament to legislate, but at the end of the day this is going to be done.

Photo of Lord Browne of Ladyton Lord Browne of Ladyton Shadow Spokesperson (Scotland)

I am sure that, from the point of view of the record and those who read it, it is probably better that the noble Lord says this and is not contradicted from the Dispatch Box, rather than that those words be put into the mouth of a Minister. I do not want to go too far down this road.

My point is that there are precious few options anyway. Without persuading, badgering or compelling the noble and learned Lord to go any further than the words that he wants to use, it is clear to me and, I think, to everyone who has heard this debate that the options are limited. Whatever option the Government choose in future if that set of circumstances arises, there will be an opportunity for your Lordships' House to have a detailed debate on the way in which the referendum is conducted.

That leaves us with the challenge of how we achieve that debate if it is a Section 30 Order in Council. We have been teasing out from the Government some concessions regarding that with proposals that have been made-one from my noble friend Lord Sewel and some from others-about iterations. However, it would be helpful if the noble and learned Lord indicated, perhaps even repeating what he said before, that something will be done to structure a process that allows the content of the order to be debated at some length here and in the other place before it gets to the point where it is set in stone and has to be either accepted or rejected and cannot be amended. I have so much faith in the noble and learned Lord, from the years that I have known him, because of his reputation before I knew him and from my dealings with him, that I know he will do his best to deliver that. If he gives the House an undertaking that some process will be found, I will accept that and play my part in that process.

Photo of Lord Forsyth of Drumlean Lord Forsyth of Drumlean Conservative

This is all very sensible and I have no problem with any of it, but will the noble Lord say a bit about the timetable? How long will this process run for? I would be horrified if we found ourselves coming back here at the end of the year with this matter still not resolved. Does he think that this needs to be done by the Summer Recess? He said earlier that it should not take too long. How long is took long?

Photo of Lord Browne of Ladyton Lord Browne of Ladyton Shadow Spokesperson (Scotland)

Clearly it could be done by the Summer Recess, and that would be my preference. It would be contradictory to issue a consultation document and argue for the resolution of this issue as soon as reasonably practicable and then put practical blocks on that being done because we cannot get through the process here. We in this Parliament have all had experience of dealing with things in an emergency. In the context of Northern Ireland, for example, in order to maintain momentum in the peace process or to respond to circumstances, we have taken legislation through each House in one day. So if there is a will there is a way, and there ought to be a will because this is the most important question that the people of Scotland have ever been asked-or at least since 1707-and, as we have heard repeatedly from noble Lords, it has serious implications for other parts of the United Kingdom. People have lots of investment in this. The Government should treat this as a priority and find a way forward. We have stuck to a timetable that is associated with the consultation that the Scottish Government have issued, and to respect them we must observe that timetable. Beyond that, though, we need to move as quickly as possible.

With regard to the noble Earl's three or four amendments, I think we were all interested in the history lesson that we had about the islands of Orkney and Shetland, the observations about Rockall and indeed the argument about a complementary referendum for the United Kingdom after the Scottish people have had their say, if they determine to leave the United Kingdom. Like other attempts to amend the Bill, the complementary referendum falls down on the next question, which is: if the Scottish people decide to leave and the rest of the United Kingdom wants to keep them, how do you keep them in the United Kingdom? Unless you were going to ask that question, why would you hold the complementary referendum? I listened to my noble friend Lord Reid explaining the necessity for dealing with these issues in series. Many of us who have been in this debate consistently had got to that point a while ago. I read in some of the responses to the consultation attempts to explain this by analogy, but the best analogy that I have heard for this is that if you are a member of a club and you choose to leave, that is a decision for you, but if you are a member of a club and you want to change the rules, that is a decision for all the members of the club. That seems to be common sense. The analogy belongs to Sir Malcolm Rifkind, by the way; maybe he got it from someone else, but he said it to me and I thought, "That's exactly the position".

Consulting all the other members of the club about changing the rules, if that is what we choose to do in future, will be a complicated and difficult process because there is a lot to be done if we enact the Bill. First of all, we have to work out the exact implications of what we have already devolved to the Scottish Parliament. We have learnt a lot in this Committee about Clause 28, which is quite substantial devolution. We have to persuade those people who are good at making up phrases to describe what they want and what it means-they had their opportunity with Calman to come forward and explain what all that meant, and precious few of them appeared-and then find some mechanism beyond the separate party mechanisms of finding an inclusive, all-party process of measuring whether all this is in the best interests of Scotland and the rest of the United Kingdom. Then perhaps we can decide how we are going to ask for approval from the people of the country for that deal if we come to some recommendation. That, however, is a process for another day; it cannot be done in the context of this Bill.

I shall deal with the noble Earl's other two amendments about the islands. My suspicion was that what lay behind those amendments was oil, which was perhaps doing a disservice to the noble Earl as I listened to him explaining the history of the islands and his knowledge of the island of Rockall and how it was claimed for the United Kingdom. He was quite candid about the issue towards the end of his remarks. I say to him that if that is the intention of any person in relation the Bill, that is not a game that people on these Benches will play. The challenge that we face is to persuade the people of Scotland to stay in the United Kingdom for good, positive future reasons. If we cannot meet that challenge, I will be no part of telling the voters of Scotland that if they vote for independence the UK will take away their oil. Starting down that line would be utterly counterproductive.

I must caution the noble Earl. Whatever the underlying motivation may be for these amendments-respecting the wishes of the people of the high north with regard to the United Kingdom, or the history of the island of Rockall, which is much more chequered and less specific than it first appeared-now that he has linked this issue to oil, I ask him please not to repeat these arguments in Scotland, as they will damage our ability to keep the union together.

Photo of The Earl of Caithness The Earl of Caithness Conservative

That was not my argument. I was responding to an intervention by the noble Lord, Lord O'Neill. I did not bring up oil. That was not my intention at all, particularly with regard to the Orkney and Shetland amendments. As for Rockall, I just wanted to know what the legal position is.

Photo of Lord Browne of Ladyton Lord Browne of Ladyton Shadow Spokesperson (Scotland) 8:30 pm, 21st March 2012

I am glad to hear from the noble Earl that that is the case. The legal position is that the island of Rockall would not be part of the United Kingdom if it were not so close to Scotland. If we break the relationship between Rockall and Scotland, we will lose our basis in international law for claiming it in the first place. We should be very careful about that.

Photo of Lord Wallace of Tankerness Lord Wallace of Tankerness Lords Spokesperson (Attorney General's Office), Lords Spokesperson (Wales Office), The Advocate-General for Scotland, Lords Spokesperson (Scotland Office)

My Lords, I thank all noble Lords who have taken part in this very useful and informative debate. There are clearly issues that go to the core of the referendum issue and what shape a Section 30 order might take. Before I address those points, it might be helpful if I pick up some of the more specific points that were raised, not least in the amendments spoken to by my noble friend Lord Caithness.

In many respects, his amendments proceed on the proposition that in the event of Scotland voting for independence there should be a subsequent referendum of the whole United Kingdom to ratify it. I certainly take the view, which was expressed by the noble Lords, Lord Browne and Lord Reid, that, to use the words of Sir Malcolm Rifkind-if it was he who coined them-"If you want to leave the club, the other members shouldn't really stop you". Therefore, it is not a tenable position to suggest that if Scotland were to vote for independence, there should be a subsequent vote in the United Kingdom as a whole. In that sense, the subsequent vote of the people of Orkney and Shetland and the position of Rockall would not arise.

That said, my noble friend has raised an important issue. He gave us the history of Orkney and Shetland's association as part of Scotland and, subsequently, the United Kingdom, having previously belonged to the Danish kingdom. The Government fully acknowledge the distinct community view of the people in the northern isles. This has been an important feature of previous debates on the Scottish constitutional position. The famous Grimond amendment on the position of the isles was taken through by my predecessor as MP for Orkney and Shetland, Jo Grimond. It led indirectly to the establishment of the Montgomery committee by the late George Younger when he was Secretary of State to look at the position of the islands' communities. In the debates on the 1997 referendum, distinct issues were raised on the position of Orkney and Shetland. When the Scottish Parliament was established, I was able to ensure through its Standing Orders that a policy memorandum should address the implications of policy for Scotland's island communities. I also recall that, in the 1987 general election, the Scottish National Party stood down in favour of a candidate from the Orkney and Shetland Movement, who stood on a platform of self-determination.

Since this issue clearly attracts attention, consideration and debate in the islands, we take as our starting point that we very much hope and believe that Scotland would not vote for independence and, therefore, that the position would not arise. For those eligible to vote in Scottish Parliament elections in Orkney and Scotland, our preference would be that that should be the franchise for the referendum. They will have the opportunity to express their views in the same way as those eligible to vote elsewhere in Scotland. As such, we do not see the need at present to treat residents of any particular part of Scotland differently from those elsewhere in the country when it comes to the consequences of the referendum result.

I can assure my noble friend and the Committee that I always listen carefully to the views of the people of Orkney and Shetland. I am in regular dialogue with those who represent them in both this Parliament and the Scottish Parliament. If they choose to make a case for formal constitutional recognition of their social, cultural and economic distinctiveness, I will certainly listen with care and respect. The coalition Government have a very soft spot for and pay great attention to the people of the northern isles.

Rockall is administered by the Western Isles Council under the jurisdiction of Scots law. The amendment, which seeks to change the original Island of Rockall Act 1972, could sow confusion. We do not believe that any of the issues raised by the various approaches to the United Nations about the continental shelf in any way change the United Kingdom's ownership of Rockall. However, we would possibly be in an anomalous position if there was independence and the amendment went through, since the Act would assert that Rockall was no longer part of Scotland but it would be administered by a Scottish local authority. I am sure that is not what my noble friend intended but he has raised an important issue. The United Kingdom Government are clear that Scotland is stronger in the United Kingdom and that the United Kingdom is stronger with Scotland in it. Although there is no one on Rockall to vote, we are sure that it, too, will remain part of the United Kingdom.

I say to my noble friend Lord Mar and Kellie that Jersey, Guernsey and the Isle of Man have a completely different constitutional history and relationship from that of Orkney and Shetland and, indeed, Scotland. The noble Lord, Lord Reid, pointed out that Jersey, Guernsey and the Isle of Man have never sent Members of Parliament to Westminster. Therefore, their constitutional position is somewhat different.

I have listened carefully to the points made in the wider and more general debate. I certainly found it valuable to hear the different views expressed, although there was considerable consensus among them. As I have set out, the Government believe that it is right that there should be a single-question referendum to address Scotland's place in the United Kingdom. We have set this out in our consultation paper and have sought views on it. The responses that we have received roundly support this position. Over the coming days and weeks, we will continue to assess in full the detailed arguments made in response to that consultation.

The amendment of my noble friend Lord Forsyth seeks to provide a referendum on independence, to be run by Westminster. It was supported by my noble friends Lord Lang and Lord Caithness. I made it clear that we would not look to use the Bill to deal with a referendum. As we made clear on page 19 of our consultation document, the future of devolution and independence are two entirely separate constitutional issues. The Bill is concerned with the former-the future of devolution-not the latter. It would not be in anyone's interests to confuse the two issues. Amending the Bill to deal with independence would risk that confusion.

As I have indicated, and as has been widely recognised, our clear preference is that a Section 30 order, agreed between Governments and approved by both Parliaments, should be used to give the Scottish Parliament competence to hold a referendum on independence. As I stated in my opening speech, that position is supported not simply by the volume of responses to our consultation but by a number of experts and key commentators, several of whom have already made their comments public. Professor Adam Tomkins of the University of Glasgow said:

"The section 30 solution is both the neatest and the most compelling solution available, not least because it offers to the Scottish Parliament the fullest possible say in the process".

The Law Society of Scotland has said:

"The Society is of the view that the making of such an Order should remove doubt as to the question of legislative competence and for that reason it may be desirable that an Order be made".

The response of CBI Scotland also makes that point. The Scottish Government themselves have accepted that a Section 30 order is the best way to remove what they acknowledge are doubts about the competence of the Scottish Parliament to legislate for a referendum on independence. With that weight of academic and legal support, support that goes much wider than that and the support expressed in your Lordships' House, we are confident that we will reach an agreement with the Scottish Government on a Section 30 order.

I shall pick up some of the points that were made in dealing with this issue. The noble Lord, Lord Neill of Bladen, asked how we would determine a referendum on federalism across the United Kingdom if different parts produced different outcomes. The noble Lord, Lord Reid, answered that point very effectively. The debate demonstrates why we need a clear referendum on a single question about independence. There should be one question in a legal, fair and decisive referendum to settle this matter before we turn to consideration of any further changes to devolution across the United Kingdom.

My noble friend Lord Maclennan raised the question of the referendum, the importance of the question that is asked and the use of the Electoral Commission. As set out in this Government's consultation paper, our view is that any referendum held in the United Kingdom would be subject to normal rules on referendums as set out in the Political Parties, Elections and Referendums Act 2000. The commission would have responsibility for overseeing the conduct and regulation of the referendum independently of the Government. Since the Electoral Commission was created, it has overseen three referendums, which have followed the framework of the 2000 Act, and no minimum turnout or threshold has been raised. My noble friend referred to the question to be asked and the noble Lord, Lord Foulkes, suggested that it might be loaded. On the wording of the question, again it is our view that any question for a referendum on independence should be subject to the same rigour and the same rules as a question in any other referendum. It is the Government's view that the Electoral Commission should fulfil the same role in reviewing the question as set out in Section 104 of the Political Parties, Elections and Referendums Act.

My noble friend Lord Maclennan also asked-I think that the noble Lord, Lord Browne, reiterated this but we are all interested in this-how this Parliament can continue to play a role in ensuring the content of any Section 30 order before it is formally put, and in ensuring that any question is fair, legal and decisive. We have made clear our view that a Section 30 order agreed between Governments and Parliaments is the best way to deliver a fair, legal and decisive referendum. Today's debate is an important part of seeking views from this Chamber, just as the consultation paper allowed a wider input. It has been suggested that a draft should be made available before debates in this Chamber on any Section 30 order. As I indicated earlier, these are important and interesting suggestions that we will certainly consider further. I know that the noble Lord, Lord Browne, understands that I cannot make any commitment on what will happen. However, I am sympathetic to the concept of identifying a means by which there can be further consideration, and indeed further accountability, on the part of Ministers who are negotiating these matters. We all have an interest in these matters and a part to play. It might be useful to engage with others in opposition and our colleagues in government to try to identify how best we might achieve that.

Photo of Lord Deben Lord Deben Conservative

I thank my noble and learned friend for giving way but does he accept that this is also very important for those of us who are not Scottish, and for the nation as a whole? We must feel that this decision, which will be made by the Scottish Parliament, is fair. I am not saying that we should have a say in it but we should understand the system. I hope he will ensure that the English, Welsh and Northern Irish are fully informed of the care with which this measure is being taken forward because there is a distinction between this decision and any decision that may be made subsequently on further devolution. The comments of the noble Lord, Lord Reid, on that are very important. However, we must make sure that the whole of the United Kingdom recognises that this process is fair, not just to the Scottish people but to the whole of the United Kingdom.

Photo of Lord Wallace of Tankerness Lord Wallace of Tankerness Lords Spokesperson (Attorney General's Office), Lords Spokesperson (Wales Office), The Advocate-General for Scotland, Lords Spokesperson (Scotland Office)

I have considerable sympathy and support for what my noble friend says. I think that the noble Lord, Lord Williamson, was the first Peer to express a view on this matter who did not speak with a Scottish accent, and the noble Lord, Lord Empey, also contributed to the debate. I am certainly acutely conscious-the Government are also acutely conscious of this fact-that although a referendum on independence is a matter for the people of Scotland to decide, nevertheless that process impacts on other parts of the United Kingdom. I believe that this is a two-way process. I believe that Scotland is better off as part of the United Kingdom. I also believe that the United Kingdom is better off with Scotland being part of it. Therefore, other parts of the United Kingdom have a legitimate interest in this matter. A Section 30 order would have to come before your Lordships' House, and indeed the House of Commons, for approval by the Parliament of the United Kingdom.

Photo of Lord Maclennan of Rogart Lord Maclennan of Rogart Liberal Democrat

I am most grateful to my noble and learned friend for giving way. However, it would not be attractive if the Section 30 order, as a result of a process of negotiation with the Scottish Government, had been decided and then presented to Parliament. This is not a treaty for which we are seeking ratification; it is a legislative process. Although I entirely accept all the arguments that have been forward in favour of the Section 30 process, I think this United Kingdom Parliament will feel that it is representative of the country as a whole and would want to feed into the process of getting the thing right so that it is not seen as a divisive issue which we have to pull down after the event.

Photo of Lord Wallace of Tankerness Lord Wallace of Tankerness Lords Spokesperson (Attorney General's Office), Lords Spokesperson (Wales Office), The Advocate-General for Scotland, Lords Spokesperson (Scotland Office) 8:45 pm, 21st March 2012

I hear what my noble friend says and the force with which he says it. I suggested that we might try to identify a way in which we can engage without finding ourselves in a position where a negotiation takes place in public. As regards the point made by the noble Lord, Lord Sutherland, I do not think he would expect hands to be declared in any negotiations. Nevertheless, I do not want to be party to any mushy outcome, as I think was suggested by the noble Lord, Lord Williamson. We have been given a very clear steer by your Lordships' House, not least by the noble Lord, Lord Williamson, as regards what things are important.

Photo of Lord Wallace of Tankerness Lord Wallace of Tankerness Lords Spokesperson (Attorney General's Office), Lords Spokesperson (Wales Office), The Advocate-General for Scotland, Lords Spokesperson (Scotland Office)

I hope that I may finish this point and then I will certainly give way. The noble Lord, Lord Williamson, said that there should be a clear question on independence. I hope that I have made that clear. He indicated that each House of Parliament should be involved in that, and a Section 30 order certainly delivers that. He talked about the timing. We may come back to that when we discuss the next group of amendments but the Government have certainly made it clear that they would prefer a referendum to take place sooner rather than later. These are important points which strengthen our position in any negotiation as they are genuinely supported across parties and those attached to no parties in your Lordships' House.

Photo of Lord Forsyth of Drumlean Lord Forsyth of Drumlean Conservative

I am finding it difficult to understand what there is to negotiate about if we are to have one question and the Electoral Commission is going to run the process. I can see that there might be flexibility on timing, which I do not regard as very important. However, I share the anxiety expressed by my noble friend Lord Maclennan, that you cannot negotiate on these central principles. The worry is that we shall end up with a fudge which we will not be able to amend because of the process. If my noble friend is saying, "Look, we've got the message; we are committed to"-the point was made to my noble friend Lord Lang-"a single question: the role of the Electoral Commission; and we are not going to move on that, and it will be part of the Section 30 order", all of us will be a bit less nervous.

Photo of Lord Wallace of Tankerness Lord Wallace of Tankerness Lords Spokesperson (Attorney General's Office), Lords Spokesperson (Wales Office), The Advocate-General for Scotland, Lords Spokesperson (Scotland Office)

I tried to note down a phrase that my noble friend used: "We are determined to resolve this question". We are determined to resolve this question. The noble Lord, Lord Browne, said that there was little room for manoeuvre. The Scottish Government have tried to describe the issues that we have set out to ensure a legal, fair and decisive referendum as having strings attached. We are not attaching strings. We are seeking provisions, such as in any other referendum, that ensures that it is delivered successfully, and where all sides agree that it has been a success and a decisive referendum. The manifesto commitment of the Scottish National Party was to have a referendum on independence, not devo-max. Therefore, if we say that we support a single question, we are actually seeking to give legal substance, a legal basis, for something that that party put in its manifesto. That is why our position is very strong as we go forward in seeking to achieve a Section 30 order.

Photo of Lord Forsyth of Drumlean Lord Forsyth of Drumlean Conservative

I do not want to prolong this. My question was: is the Minister saying to us, in pursuing his Section 30 route, that his position will remain the same-that there is no flexibility on these central issues of a single question and the role of the Electoral Commission?

Photo of Lord Wallace of Tankerness Lord Wallace of Tankerness Lords Spokesperson (Attorney General's Office), Lords Spokesperson (Wales Office), The Advocate-General for Scotland, Lords Spokesperson (Scotland Office)

There has been considerable agreement between the two Governments on the role of the Electoral Commission, which is vital. I do not believe that we would get a fair, legal and decisive referendum if we did not involve the Electoral Commission. A signal as to why I believe that we can reach an agreement is that already, since I made a Statement on 10 January, the Scottish Government have come a long way and acknowledged the position of the Electoral Commission.

I hope that I have tried to express clearly what the Government believe are the key issues on this matter, without saying-

Photo of Lord Maclennan of Rogart Lord Maclennan of Rogart Liberal Democrat

I am grateful to my noble and learned friend. Will he leave it to the Electoral Commission to decide, in pursuance of this goal of decisiveness, that a majority of one vote would be decisive, or does he accept, particularly as regards the Cunningham amendment in the past, that Parliament ought to discuss that issue before it is put to the Electoral Commission?

Photo of Lord Wallace of Tankerness Lord Wallace of Tankerness Lords Spokesperson (Attorney General's Office), Lords Spokesperson (Wales Office), The Advocate-General for Scotland, Lords Spokesperson (Scotland Office)

I indicated that we are not generally disposed to supporting the idea of a threshold. My noble friend mentioned the Cunningham amendment, which related to a classic example of a referendum that many of us did not consider, at the end of the day, to be fair. Heaven forbid that we should ever find ourselves in a position whereby, after a referendum on independence, 30 years later one side or the other cries "foul"-with some justification. That is why the oversight of the Electoral Commission is very important.

The noble Lord, Lord Browne, and my noble friend Lord Forsyth raised a point about timing to which I should like to respond. I was asked what the timetable would be. We should press on with this matter very early indeed. We should be pressing for early engagement with the Scottish Government immediately after the close of their consultation. There have already been preliminary discussions between my right honourable friend the Secretary of State and the First Minister-indeed, the Prime Minister met the First Minister. I am sure that they will receive representations. If the Scottish Ministers think that independence is such a wonderful thing, why do they want a delay in getting it? This is a matter on which we should seek to make substantive and early progress to allow their referendum to conclude.

I will take one further intervention before I make my final point in response to the noble Lord, Lord Empey, and my noble friend Lord Forsyth.

Photo of Lord McConnell of Glenscorrodale Lord McConnell of Glenscorrodale Labour

I thank the Minister for giving way. On the specific of timing, in response to the comment of the noble Lord, Lord Forsyth, that the timing perhaps does not matter as much as the issue of the Electoral Commission and the other issues we have been discussing, we should be cautious. It seems to me, with the Scottish unemployment rate now higher than in the rest of the United Kingdom and Scottish growth now below that of the rest of the United Kingdom, there is a degree of urgency about resolving this uncertainty. I hope that the Government will not de-prioritise the timing of the referendum in order to secure agreement on the other issues. Timing the referendum in advance of some date nearly three years away is vital if Scotland is going to get the growth and jobs that it badly needs.

Photo of Lord Wallace of Tankerness Lord Wallace of Tankerness Lords Spokesperson (Attorney General's Office), Lords Spokesperson (Wales Office), The Advocate-General for Scotland, Lords Spokesperson (Scotland Office)

The noble Lord makes an important point, which was reflected in some of the responses to the consultation, not least from SSE. My noble friend Lord Forsyth and the noble Lord, Lord Empey, made the point that we want the debate to move on to the substance of independence, a point also made by my noble friend Lord Caithness when he raised the question of the currency. Those are questions that the Scottish Government ought to be addressing. I entirely agree. It is important that we get the process resolved, and resolved swiftly, but it is equally important that we get on to the substantive debate about the benefits to Scotland from remaining part of the United Kingdom, part of the most successful union of nations, certainly in modern times, and possibly for even longer.

As noble Lords will be aware, my right honourable friend the Secretary of State has raised six questions with the Scottish Government to which we still await answers. Many others, including Members of your Lordships' House, have raised other questions. I am confident that when we get to the substance of the referendum debate, we can expose the weaknesses in the independence argument and do so on a positive footing by showing what is really positive about Scotland remaining part of the United Kingdom. On that basis, I invite the noble Lord to withdraw his amendment.

Photo of Lord Foulkes of Cumnock Lord Foulkes of Cumnock Labour

My Lords, we have an excellent debate. We have had a very helpful reply from the Minister. We have another debate looming. I therefore immediately beg leave to withdraw my amendment.

Amendment 87 withdrawn.

Sitting suspended.

Amendment 87A not moved.

Clause 43 agreed.

Clause 44 agreed.

Amendments 88 to 90 not moved.

Amendment 90A (In substitution for Amendment 25)

Tabled by Lord Foulkes of Cumnock

90A: Before Clause 10, insert the following new Clause-

"Taxes and excise duties

(1) In Part 2 of Schedule 5 to the 1998 Act, in section A1 (fiscal, economic and monetary policy) omit "taxes and excise duties".

(2) The Scottish Government shall pay funds to the Government to cover a proportion of the costs incurred as a result of policies made under reserved matters.

(3) This section shall only come into effect if it is approved by a majority of people voting in a referendum on the provisions held in accordance with Schedule (Referendums under this Act)."

Photo of Lord Foulkes of Cumnock Lord Foulkes of Cumnock Labour 9:10 pm, 21st March 2012

My Lords, in view of the excellent progress we are making not only in these proceedings but behind the scenes, and also the work that has been done by the Minister, I shall not move this amendment.

Amendment 90A not moved.

Amendment 91

Moved by Lord Foulkes of Cumnock

91: Before Clause 10, insert the following new Clause-

"Referendum about Scottish independence

(1) Her Majesty may by Order in Council, on the advice of the Prime Minister, cause a referendum to be held throughout Scotland about whether Scotland should become independent of the rest of the United Kingdom.

(2) Such a referendum can only be held within 24 months of the day on which this Act is passed.

(3) The question that is to appear on the ballot paper is-

Do you want Scotland to remain part of the United Kingdom?

(4) For further provision about a referendum held by virtue of subsection (1), Schedule (Referendums under this Act) applies.

(5) An Order in Council under this section may not be made unless a draft of the statutory instrument containing the Order has been laid before, and approved by a resolution of, each House of Parliament."

Photo of Lord Foulkes of Cumnock Lord Foulkes of Cumnock Labour

My Lords, we have had a good debate on the whole issue of a referendum. However, there are one or two important amendments in this grouping that I think we should deal with very briefly.

The first is in relation to the Electoral Commission, which we dealt with earlier on. The noble Lord, Lord Steel, who explained to me that he was not going to be able to be here, has raised this issue as well. It is very important that the Electoral Commission determines this, and not the body that has been set up by the Scottish Government. The Electoral Commission has the experience, it has the authority and the respect. Questions in relation to the actual wording of the question on the ballot paper, the amount of finance and the control of financial expenditure and the conduct of the referendum should be left to the Electoral Commission.

The second point relates to the franchise. As I said in the earlier debate, it would be entirely wrong to change the franchise for this one referendum, just because the First Minister of Scotland thinks it would help him to get the right result. So we should stick to the arrangement that it is people over the age of 18 who are able to vote.

There is an interesting amendment by my noble friend Lady Taylor of Bolton which, if I understand fully, suggests that Scots who are now resident in England but who were born in Scotland and still have an interest should also have the vote. She is one of those concerned and one of the more famous Scots residing in England, a supporter of Motherwell Football club no less. There is a very credible argument for that point of view. I am not sure I agree with it exactly, but we certainly deserve to hear it.

There is also an amendment in relation to Scottish nationality in the name of the noble Lord, Lord Selsdon, who does not appear to be in this place at moment. If he were, I am sure he would make a very entertaining and interesting contribution to that amendment. I want to raise the West Lothian question with the Minister. The noble Lord, Lord Selsdon, has arrived so we look forward to hearing him in relation to his amendment. On the West Lothian question, a committee has been set up by the Government to look at whether MPs from Scotland, Wales and Northern Ireland should vote on purely English matters in the House of Commons. I contacted the committee to seek to give evidence and I was told that it is not taking evidence. That seems very strange, given that it is an integral part of the whole constitutional debate that is currently taking place and given that it has some knock-on relevance to the point that we are dealing with. Perhaps the Minister could persuade the committee that it would be wise to consider evidence.

Photo of Lord Watson of Invergowrie Lord Watson of Invergowrie Labour 9:15 pm, 21st March 2012

Before my noble friend moves his amendment, I wonder whether he would comment on the very interesting proposal made by the noble Lord, Lord McConnell, earlier this evening when he suggested that two questions be posed, so avoiding a yes or no answer on the ballot paper. I recall that in the 1997 referendum the words were "I agree that there should be a Scottish Parliament" or "I do not agree that there should be a Scottish Parliament", and that there was the same in respect of the tax-varying powers. Would my noble friend like to comment on that as a possible wording, which we all accept is very important, as it would avoid a straight yes or no answer to a question?

Photo of Lord Foulkes of Cumnock Lord Foulkes of Cumnock Labour

My noble friend is a former Member of the Scottish Parliament, as I am, and I thought it was very interesting that the suggestion came from the noble Lord, Lord McConnell, himself a former First Minister of Scotland, as he has a great deal of knowledge about this. I think that is a very interesting suggestion, which I hope the Minister will feed into the discussions that are taking place. If the Scottish Parliament or Scottish Executive suggests one question and we are sticking to another one, perhaps there could be agreement on two counterbalancing questions-questions that have different outcomes-for which people could vote positively. In other words, no one would vote negatively; everyone would vote positively for their option. I think that is a very good suggestion.

The fact that these things have been suggested shows, as I hope my noble friend agrees, the value of these debates, the value of Committee stage and the value of the House of Lords. Earlier we were talking about tweets, and I have been getting tweets asking what right I have, as someone who is not elected, to make any comments on this. I can understand the politer ones that raise that question, notwithstanding the fact that I was an elected representative for many years. One of the answers is that debates in this place, as we have had today and previously, can come up with very useful suggestions which can move things forward in a very positive way. I beg to move.

Amendment 92 had been withdrawn from the Marshalled List.

Amendment 93(to Amendment 91)

Moved by Lord Steel of Aikwood

93: Before Clause 10, line 14, at end insert "and the Scottish Parliament.

( ) Such a referendum must be administered by the Electoral Commission."

Photo of Lord Steel of Aikwood Lord Steel of Aikwood Liberal Democrat

My Lords, I think this amendment has been overtaken by events. The Minister has made it clear that the referendum will be administered by the Electoral Commission and, therefore, there is no need for me to labour the point. That is very important. The First Minister of Scotland still has to recognise one thing: as he has a particular objective in mind in holding the referendum, he is not the right person to declare what the question should be. Any member of the public would accept that that proposition is correct. You cannot say, "The people must determine this, but I will tell them how to determine it". In my Amendment 93 to the noble Lord's Amendment 91, I have suggested that it should be by agreement and that the Scottish Parliament should be consulted and be party to how the question is drafted.

Equally, I disagree with the noble Lord-although I think a moment ago he almost resiled from certain wording-that we should lay down the question. I missed the earlier debate for which I apologise, but the noble Lord, Lord St John, and I had a longstanding appointment with the Prime Minister of Zimbabwe, Mr Morgan Tsvangirai. If you think we have problems in our coalition, you should hear his. I missed the substantive debate on the referendum earlier.

I think it is also important that the people of Scotland are beginning to get scunnered-if I may use a good Scottish word-by the endless argument from politicians, academics and economists about the process and what might or might not happen if Scotland became independent. This cannot go on for another three years. It is ridiculous.

Therefore the part of the amendment that I support is the suggestion that the time should be now. If not immediately, then certainly as soon as possible, we should get this issue out of the way. As soon as we get clear of the independence referendum, we can start, as the Prime Minister has said, serious discussion about how we can add to the devolution package, and that is very sensible.

We have got the Electoral Commission in the frame, so there is no need to press that. Choosing the question should also be a matter for the Electoral Commission, and I agree with the noble Lord, Lord McConnell, who has made this point before, that rather than having a yes or no and putting some people in a negative position, there should be two propositions from which people choose either to remain in the United Kingdom or to go independent.

If that is done, and done quickly, then we can get this issue out of the way and the Scottish Government should concentrate on what they were elected to do, which is to deal with the issues affecting Scotland at the moment: bad housing, unemployment, and the need for more investment in industry. These are the things people want. They do not want three years of argument about a referendum. They want to see a Government tackling the issues, both in Scotland by the Scottish Government, and in the United Kingdom by the UK Government. The sooner we get back to that realistic level of politics, the better.

Photo of The Earl of Caithness The Earl of Caithness Conservative

My Lords, my Amendment 94E takes what my noble friend Lord Steel said a little bit further, and asks that the Electoral Commission set the question. It is quite clear that nothing the UK Government propose is going to be accepted by the Scottish Government, and nothing that the Scottish Government propose will be accepted by the UK Government.

Why not cut the politicians out? Let us ask the Electoral Commission not only to set the questions but to arrange all the counting, transferring the number of votes into a proper result that is based, exactly the same way the referendums were in 1979 and 1997, on each local authority area, rather than just Scotland. We would know that there would be a clear question-or questions, if we go down the route proposed by the noble Lord, Lord McConnell-but also that each area voted and how they voted, and that it was a fair process.

Taken out of the hands of politicians, it will not only be more acceptable to the people of Scotland, but in view of our earlier discussions, I think it would be more acceptable to the rest of the UK, who would feel that an independent authority is doing this rather than politicians.

Photo of Lord Selsdon Lord Selsdon Conservative

My Lords, I will speak to Amendment 96, if I am in order. I feel that because of my voice, I should give a brief introduction. My name is Malcolm McEacharn Mitchell-Thomson, and I carry the burden of being Lord Selsdon, which is actually registered in Scotland. I am also a Scottish Baronet. But on the business of one's past and the Scottish relationship, I ask: who is a Scot, and where or what is a Scot?

As noble Lords know, 5 million Scots live in Scotland, 400,000 or more live in England, and 40 million around the world. If we are to move towards having a referendum, I for one would like to be able to vote for the first time in my life-because by accident of birth, I have never had a vote-in a referendum. I have reason to believe there are many others in the world who will claim they are Scots who would like to be consulted in one form or another. This is why I tabled my amendment on Burns Night, and it was well received by many of the Burns associations.

It is a very difficult matter. If we do not consult, many people who are not in Scotland will feel that they have been ignored. My amendment draws attention to us. In this House, by accident or by recent legislation, we are deemed to be resident, ordinarily resident and domiciled in the United Kingdom. What happens to us if the referendum goes through and there is devolution? Are we still domiciled in the United Kingdom? Domiciled is an interesting concept. As an ex-banker, I know that there is no way I can be anything other than domiciled in Scotland. The reason is that, as your Lordships know, you take the domicile of your father at birth, which is your domicile of origin. Unless you physically and emotionally make a move to change that domicile to a domicile of choice, your domicile remains your domicile of origin. It passes through the male line if you do not change it. Therefore, there could be more people outside Scotland who have the right to vote than there are in Scotland.

I personally am hooked there-line and sinker. I have not got rid of any property in Scotland. You have to cut off all your links and sell your properties and perhaps resign from your clubs. I have the advantage or disadvantage of having a lair. When you reach the age of 50, you receive from some smart Writer to the Signet a brown envelope containing your lair certificate. I did not know that a lair was a plot. I did not know also that as my family is international-my great grandfather was Provost of Edinburgh and my great-great-grandfather was the first Lord Mayor of Melbourne; my family fled Scotland to earn some money and were the biggest coal people in Canada, so I am spread and twisted across the world-I have two lairs, although there is only one of me. Furthermore, the McEacharn family has a mausoleum in Galloway. When I visited it, I was asked to make a contribution, although the stipend was originally drawn up at the turn of the century. The agreement was that we would effectively allow them to keep the motor mower and gardening equipment in there because there was plenty of room and we no longer had the same number of children as we had had in the past.

My point is simple. However the referendum is constructed, there should be some consultation among the Scottish community around the world to see what their views are. I believe that they are unionist at heart. It is not difficult to identify them because through the Burns society you can identify any Scot in the world, including those who like to pretend that they are Scots. One of the greatest benefits of Scotland is that relationship: the power and influence of Scots throughout the world. It is a Foreign Office that costs them money. It is also a relationship that brings interchanges, and one is pleased at the moment that there are more students coming to Scotland than there were. The dogs have not yet arrived, but more people wish to come there. So Scotland can prosper. It is not a question of coastline or anything like that; it is a question of attitude. Will the Government find some consultation formula that will allow us to consult Scots worldwide?

Photo of Baroness Taylor of Bolton Baroness Taylor of Bolton Labour

My Lords, unlike the noble Lord, Lord Selsdon, I do not have a lair. However, I was born to a Scottish father in Motherwell, Scotland. My grandfather was the chairman of Motherwell Labour Party, which may or may not be a recommendation. However, I have a Lancashire mother. After several years in Scotland, my mother won the battle and we moved to Lancashire. Many families share that kind of situation. Many Scots have moved away for work, education, sporting or other reasons. I tabled my amendment because I was concerned that, as the noble Lord, Lord Selsdon, suggested, a lot of people will feel that they are missing out on what they believe is their right to have a say in their heritage.

When I tabled this amendment, my noble friend Lord Foulkes was indiscreet enough to mention it to a member of the press, and therefore there was a little publicity. I am not sure that I was grateful for that because it resulted in the usual barrage of e-mails and letters, but it threw up some very interesting situations. I shall quote just one: "I am a 30 year-old Scot born, raised, university-educated in Scotland and currently living in London. I would like to return in future. I have a large network of young professional Scots both in England and around the world. Those are people who have a significant vested interest in the future of Scotland and their decisions about their future lives may well be affected by the outcome of that referendum".

The amendment that I have tabled, which I do not claim to be perfect, would not give either of us a vote, because I have suggested that we use parliamentary election registers. There are many options. When I looked at the Hansards for the debate on similar issues in 1979 and 1997, it was intriguing to see the variations in voting procedures. We can use the local election register, which incidentally would allow noble Lords to vote. We have EU citizens, Irish citizens living in Scotland, and an overseas register, but you have to have lived in Scotland in the past 20 years to be on it. We have people who have property in Scotland, but it is not their first home. We have English people who have a second home in Scotland. It is a very complicated area. We could do with some clarity on this. My noble friend Lord Browne, who was Secretary of State for Defence when I was a Minister in that department, will well remember our difficulties in trying to get service personnel on to any electoral register. Many Scottish service men and women serving in the British Armed Forces may be resident for several years in England, yet, I suggest, have a very significant interest in this.

In the 1979 and 1997 elections, significant polls suggested that we should keep the register as simple as possible. I have looked up how I voted and, to my great relief, they were two of the rare occasions when as Leader of the House of Commons I did not vote. Whether that was subconsciously or consciously, I have no recollection, although I have been thinking about it. A referendum on independence is different from the referendums that we had on devolution all those years ago. This is a much more fundamental step. Listening to the whole of the debate today, that is one thing that everyone in this House agrees on. It is a far more fundamental step than the referendums in 1979 and 1997.

I hope that we are not going to be told that because of time or difficulties, this cannot be done. I would not suggest that we go as far as saying that anyone whose father was born in Scotland should be eligible. I would just go for people who were born in Scotland and are already on a parliamentary register somewhere in Britain. That would be feasible and would catch a group of people who have made a great contribution to Scottish life as well as to British life and people who might well feel excluded.

In the debates on the two previous devolution referendums, there were, as my noble friend indicated, many references to football, which seems to come up in all these debates. It was very interesting that in 1979, it seemed to be the Kenny Dalglish question: would he be allowed a vote? In 1997, it was whether Gary McAllister would be allowed one. Today, Scottish players are no longer predominant in English football, so we have to rely on asking whether certain managers could have a vote. My choice would be the manager of my English football team, Bolton Wanderers, namely Owen Coyle, who has distinguished himself in recent days following the frightening collapse of Fabrice Muamba at White Hart Lane on Saturday. That is a really good example of a Scotsman who has done everyone proud, and I am sure that we all send Fabrice Muamba every good wish for his recovery.

As far as the referendum is concerned, someone who plays football for Scotland but has a career in England or somewhere else would not be allowed to vote about the future of that country. Many other issues will come down the line-dual nationality, passports and security, as my noble friend mentioned earlier-but the simple point that I put to the Minister is that surely there is some way of finding a system whereby those who were born in Scotland can have a say on the future of the country of their birth.

Photo of Lord Selkirk of Douglas Lord Selkirk of Douglas Conservative 9:30 pm, 21st March 2012

My Lords, the noble Baroness has, as usual, made a very persuasive speech, and I look forward to the Minister's reply to the points that she has raised.

Amendments 93 and 98, in the names of the noble Lords, Lord Steel of Aikwood and Lord Foulkes of Cumnock, and the noble Earl, Lord Caithness, call for a much greater involvement of the Electoral Commission, which I strongly support, on account of two incidents.

The first incident involved the noble Lord, Lord Steel of Aikwood. In the first election to the Scottish Parliament he and I were two of the last three to be elected in Scotland. The counters went on strike at 4.30 am because of the complexities of the proportional representational vote. As a result, we came back the next day and we were elected two out of the last three; the third was Robin Harper, the first Green candidate to become a parliamentarian. However, we did not know that 2,000 votes had not been counted.

When this became clear, with great alarm I wrote to the Secretary of State for Scotland, now the noble Lord, Lord Reid. He replied that he did not have the powers to do anything about it, but that we could take legal action if we so wished. Happily, the chief executive had thoroughly studied the matter, and whichever way the votes were counted all three of us would have been elected. As soon as we knew that, we had no desire to take the matter any further. I think that the votes have now been destroyed and it is impossible to rectify the matter. However, that incident should never have occurred and if the Electoral Commission had been involved, I believe it would not have done.

The other incident occurred during the devolution referendum in 1979. I remember vividly the late Robin Cook being very much involved because 2,000 electors had written "No" opposite the word "No" on the ballot paper, and the counting officer said that writing "No" opposite "No" meant "Yes". I actually believe that they meant "No". We asked to speak to the chief voting officer in Scotland but he would not come to the phone. There were murmurings of calls on television for resignations if the matter was to be swept under the carpet. He did come to the phone. He was not very good tempered but he said he would look into it. Within two hours, they had rectified the matter and the votes were counted as no votes. This was important in that referendum because it was on a knife-edge; the results were very close and regarded as somewhat inconclusive at the time.

I mention these two episodes to emphasise how very warmly I welcome the Minister's statement that he wishes to involve the Electoral Commission in an overseeing role. If you have a Government at Westminster who take one view and a Government in Edinburgh who take a different view, it is very important to have an impartial body that has both objectivity and expertise.

Photo of Lord Watson of Invergowrie Lord Watson of Invergowrie Labour

I wish to make some comments in relation to the amendments spoken to by my noble friend Lady Taylor of Bolton and the noble Lord, Lord Selsdon, in respect of who should have the opportunity to vote in a referendum on Scottish independence. Much as I respect my noble friend, I cannot agree with her premise that those who were born in Scotland and move to other parts of the United Kingdom or even further afield should have the opportunity to vote in the referendum.

At the time of the referendum, whenever it is-like many other noble Lords I hope that it is as soon as possible-it has to be a vote for people who are at that time living in Scotland. I am aware that that will involve a number of people, not least a considerable number that is reckoned to be about half a million people, who would describe themselves as English domiciled in Scotland, as well as people of various other nationalities who happen to be living and working in Scotland. If they are on the electoral register as EU citizens, I believe that they should have a vote.

The question of Scots who have moved-of course, the Scottish diaspora is considerable-beyond the confines of Scotland is a difficult issue in this situation. To some extent, I have some connection because my son has a Scottish father and an English mother but he was born in England. He is well short of voting age but the point is that many people in that situation would have an interest. In the future, he may choose to live in Scotland.

After leaving university, I went to live in England. I was living and working in England at the time of the 1979 referendum. I was not on the electoral register in Scotland, although I travelled home in the weeks immediately prior to the referendum every weekend to campaign vigorously for a yes vote. Even though I did not have a vote myself, it did not occur to me that there was anything wrong with that. I had chosen for whatever reason to leave Scotland.

It may well be that there are many thousands of people who, like my noble friend Lady Taylor, were perhaps very young when their parents left and they more or less had to go with them. I accept that they may not have made that decision but none the less on becoming an adult they would have the option to go back to live in Scotland if that is their choice. They are more than welcome to do so. For people who have left Scotland-I left, went back and left again-the situation is simple. You have to be domiciled in Scotland to have a vote on something as important as this. Just to say, "I am Scottish in my blood; I feel a Scot; and I do not feel any other kind of allegiance" is not enough.

A very interesting example was raised by my noble friend when she talked of the very impressive Bolton Wanderers manager, Owen Coyle, who I know. When I was a Member in another place, Owen and two of his brothers who were also professional footballers at the time were members of the Labour Party in that constituency. Whether he holds membership now, I do not know. I have not spoken to him for some years. But the interesting thing is that Owen Coyle, born and bred in Glasgow, played for the Republic of Ireland. He is an international but he played for the Republic of Ireland. It is not just as simple as saying, "He is a Scot, living in England and therefore he should have a vote". He has played for the country of his parents because they were Irish. Various issues muddy the water here.

The noble Lord, Lord Selsdon, introduced the concept of Scottish nationality, which is difficult to define in itself. He says that a person shall be considered to be of Scottish nationality if they are ordinarily resident or resident in Scotland, wherever they come from, however long they have been there and having made their home in Scotland. I would say that someone in that situation should be entitled to a vote in the independence referendum but to say that they have Scottish nationality is stretching it a bit. I do not think that that is the way to define it. I understand the point that he is making and, to some extent, I agree with that part of his amendment but not with the bit that follows.

To conclude, this is a matter of great importance to Scots wherever they live and they are of course spread throughout the world. At the time of the independence referendum, it cannot be justified to say that those people who, for whatever reason of many reasons, have left Scotland and have gone to live somewhere else should have a vote. The people of Scotland-but not just Scots of course-at the time of the referendum, I believe, should be those who make the crucial decision when the independence referendum comes along.

Photo of Lord Maclennan of Rogart Lord Maclennan of Rogart Liberal Democrat 9:45 pm, 21st March 2012

My Lords, I would like to say how much I sympathise and agree with the speech of the noble Baroness, Lady Taylor. In the world in which we live, where there is great mobility, residence is not a true test of connection. It is much the easiest way to determine the outcome of a referendum but it is not necessarily going to reflect the views of those who care for Scotland and sense that they belong to it. In my former constituency, Caithness and Sutherland, because there is not a substantial amount of employment in the area, many local people go all over the world to use the skills that they cannot exercise in Scotland. But there is no doubt that they go back when they have completed their jobs, and if they have earned a lot of money, they go back earlier. That is a quite a common occurrence.

I could also talk about my siblings, all of whom feel very strongly that they are Scottish, but for various reasons work in different places. My younger brother works in Glasgow and clearly would be entitled to a vote. My middle brother works all around Britain but returns to Scotland whenever he is free to take a holiday. My sister has worked in Scotland, but she is widowed and now spends part of the time on her own in Greece. However, she still identifies herself strongly with Scotland.

What we are looking for is a referendum that actually reflects the views of those who consider themselves to be Scottish, but it is a difficult issue. I do not think we want just to snap up the easiest decision. I commend the suggestions made by the noble Baroness, Lady Taylor, and my noble friend Lord Selsdon for some clever consideration. If this is left to the Electoral Commission, I hope that it will not simply take the easy way out.

Photo of Lord Browne of Ladyton Lord Browne of Ladyton Shadow Spokesperson (Scotland)

My Lords, I have already had my say on the issue of different referendums quite extensively and there are only two aspects of our debate on these amendments that I have not expressed a view on, so I shall concentrate my remarks on them. First, I turn to the role of the Electoral Commission. A number of possible roles for the Electoral Commission are reflected in the amendments that have been proposed by noble Lords. It seems to me that the role of the Electoral Commission in relation to referendums is now settled. We had two referendums in 2011 and the Electoral Commission played a role in respect of them both which your Lordships' House seemed well satisfied with. I have heard no criticism of its role in terms of supervision.

It played a specific role in testing what has become known as the intelligibility of any proposed referendum question in relation to both of the 2011 referendums. I understand that the commission indicated in its response to the Government's consultation that it does not have the legal power to play that role in relation to the proposed referendum on Scottish independence and it has asked the Government to consider, as indeed have other consultees, using this Bill to give it that power so that it can get on with testing the intelligibility of the proposed questions. Of course, it could take all the questions that have been proposed in amendments and test their intelligibility on Scottish voters, focus groups and others. The commission is willing to do that job and I think that the Government should consider amending the Bill on Report to give it that power.

Otherwise, much as the proposals in the amendments before us are attractive and beguiling, I think that we should ask the Electoral Commission to play exactly the same role it has played in previous referendums, particularly the two which were conducted under legislation passed in this House and in the other place for the referendums held in 2011. There was endless debate about its role and agreement was reached before it set off on its work.

I say this for a very good reason: if we want the process that determines how the referendum will be conducted to be seen as legal, fair and decisive-and we expect now that that will be either in the context of a Section 30 order and the preparation for it, or some other option should the Section 30 order not be consented to-we have to avoid creating special processes or, dare I say, a special franchise for the election. The arguments of those who construct emotional, historical or family reasons for everyone who has an interest in the future of Scotland to be included in a franchise are very interesting. If we were to be all-inclusive we could find a way of doing so, but that would leave us open to the accusation that we are creating a special franchise in order to influence the outcome.

If the referendum is to be seen as legal, fair and decisive we should look to a pre-existing franchise, which is what the consultation did. It referred to the two pre-existing franchises in Scotland-the one for the United Kingdom Parliament and the other for the Scottish Parliament and for Scottish local government-and asked for opinions on which of the two those who responded to the consultation preferred. I am content with either of them but I veer towards the one for the Scottish Parliament. However, we can have that debate in the future when we come to look at the matter in the context of a decision, rather than in the context of a proposal, which is where we are at present.

With all due respect to my noble friend Lady Taylor, I know of the difficulties we had not only in persuading members of the Armed Forces to register but in facilitating that registration so that they could vote. I have great sympathy for people, particularly those in the Armed Forces, who are ordered to be somewhere rather than making the choice and thus being denied the franchise. We ought to look more generally at that issue to see whether we can resolve it and make it easier for members of our Armed Forces to exercise their vote. However, I resist the temptation to do that for this particular exercise for the reason I have articulated.

Photo of Lord Wallace of Tankerness Lord Wallace of Tankerness Lords Spokesperson (Attorney General's Office), Lords Spokesperson (Wales Office), The Advocate-General for Scotland, Lords Spokesperson (Scotland Office)

My Lords, this group of amendments has allowed us to look at a number of the practical, important issues which arise in the context of a referendum. As I indicated earlier, it is an opportunity for your Lordships to express views on this. Although we found consensus on a number of issues in the earlier debate, clearly on the issue of franchise there have been different views, to which I shall try to respond.

On a preliminary matter which I am not quite sure related to the independence referendum, the noble Lord, Lord Foulkes, raised a question on the so-called West Lothian commission, which is to look at the implications for the House of Commons of devolution. Its formal remit is to consider how the House of Commons might deal with legislation which affects only part of the United Kingdom following the devolution of certain legislative powers to the Scottish Parliament, the Northern Ireland Assembly and the National Assembly for Wales. The noble Lord asked about submitting evidence. I was not aware that it was not receiving evidence-I am not sure whether the noble Lord meant oral evidence or written evidence-but the commission that has been established is independent of government and I would be wary of trying to intervene. The commission should be free to undertake such work as it deems necessary to consider proposals for handling the parliamentary consequences of devolution.

A number of noble Lords-my noble friend Lord Steel and the noble Lords, Lord Watson and Lord Foulkes-raised the question of timing. The United Kingdom Government's firm view is that the question of Scotland's constitutional status should be resolved sooner rather than later. The continuing uncertainty about Scotland's future is damaging to Scotland and until the issue is resolved that uncertainty will remain and, I suspect, grow. In our consultation paper we asked for views on the timing of the referendum and the majority of responses were in favour of holding it sooner than the Scottish Government's proposal to hold it in the autumn of 2014. Recently, my right honourable friend the Secretary of State set out a timetable for a referendum to be held in September 2013. We believe that that is a practicable timetable and see no need to delay. That view has been expressed by others. CBI Scotland said:

"The timetable should certainly provide for sufficient facts and analysis to be made available to business and the wider public and for the issues involved to be fully considered but, on balance, we believe that the referendum can and should be held sooner than currently planned".

By "currently planned", I think it means the preferred date of the Scottish Government. There seems to be a general consensus in your Lordships' House on this.

The amendment of my noble friend Lord Steel would ensure that any referendum on Scottish independence was administered by the Electoral Commission. A number of colleagues and noble Lords expressed their support for this and, again, I think there was widespread support for it. My noble friend Lord Selkirk of Douglas gave some practical examples of when he believed that the Electoral Commission would have been of considerable benefit. I am sure we are not calling now for a recount of the Lothian regional vote in 1999. History might have been different in so many ways if there had been a different outcome there.

The Government's view is that it is right that the Electoral Commission should oversee the referendum. It is a well-established body, known to be credible, independent and politically impartial. As the noble Lord, Lord Browne, pointed out, two referendums in 2011 were overseen by the Electoral Commission without criticism. It has the experience and expertise required to oversee this referendum and can play a key role in ensuring that the referendum and its results are seen to be fair and decisive.

Previously, the Scottish Government suggested that they would create what they called a Scottish referendum commission to oversee the referendum, answerable only to the Scottish Parliament. As my noble friend Lord Steel indicated, it is not a particularly satisfactory position when one of the players nominates the referee. The United Kingdom Government believe it is unnecessary to create a new commission-undoubtedly, that would be done at additional cost-when the Electoral Commission is already in place and has demonstrated its capability. We are pleased that the Scottish Government now agree that the Electoral Commission should lead on the oversight arrangements for the referendum and we will continue to engage with the Scottish Government on this. Again, a number of responses to the consultation concurred with that.

Photo of Lord Forsyth of Drumlean Lord Forsyth of Drumlean Conservative

While my noble and learned friend has a drink, is this phrase of allowing the Electoral Commission to have "oversight" not weasel wording? Surely the Electoral Commission should be responsible for the overall conduct of the referendum campaign.

Photo of Lord Forsyth of Drumlean Lord Forsyth of Drumlean Conservative

Yes, including the question. I notice that in the Scottish Government's consultation paper, which was then spun as involving the Electoral Commission, it was invited in as a kind of veneer of respectability. The Electoral Commission has to be the regulator. Is that use of "oversight" by my noble and learned friend weasel wording or does it mean what we all want it to mean?

Photo of Lord Wallace of Tankerness Lord Wallace of Tankerness Lords Spokesperson (Attorney General's Office), Lords Spokesperson (Wales Office), The Advocate-General for Scotland, Lords Spokesperson (Scotland Office)

My Lords, in our earlier debate on referendums, in response to an issue raised by the noble Lord, Lord Foulkes, I said that it is the Government's view that the Electoral Commission should fulfil the same role as it has in relation to UK Parliament referendums, as set out in the Political Parties, Elections and Referendums Act 2000. Its role would be the same in reviewing the question. My noble friend Lord Caithness raised this. The Electoral Commission's role is to advise and to oversee referendums. It is not appropriate for it to set the question and current legislation does not provide for it to do that. It is my understanding that the Electoral Commission would itself have concerns about doing that. The PPER Act 2000 sets out a clear role for the Electoral Commission that we believe should be respected for a referendum on independence: to review and report on the question. We believe that that is the right approach.

The noble Lord, Lord Browne, asked about a possible amendment on Report to provide for the Electoral Commission to have a role now in relation to the question. We should recognise that the Electoral Commission already has the power to,

"provide advice and assistance to", certain bodies under Section 10 of the 2000 Act. However, we share the noble Lord's view that the Electoral Commission should have full powers to review and report on any question, and we have set this view out in the consultation paper. I hope that makes it clear. It might be worth exploring-I can go no further than this-whether that Section 10 power to offer advice would allow a preliminary review. Without further research and a legal consideration of that, I would not want to express an opinion on whether Section 10 is wide enough to allow that, but it certainly gives the Electoral Commission power to,

"provide advice and assistance to", certain bodies. I will certainly look at whether that offers an opportunity for the Electoral Commission to become engaged, because clearly until a Section 30 order is in place it would not have the power in relation to a Scottish referendum.

The area where we have had some difference of view relates to the franchise. I thank my noble friend Lord Selsdon-when he gave us his full name, I do not think that anyone would doubt his Scottishness-and the noble Baroness, Lady Taylor. I have learnt some things about her this evening which I had not previously appreciated: about her support for Motherwell Football Club and her own Scottish roots. It is the Government's view that the devolved legislature and local government franchise is the most suitable to use in the referendum. I do not doubt for one minute, and not just from the contributions we have heard this evening, that many Scots in the Scots diaspora wish to become involved. One can readily understand that.

I am sure that as a Leader of the House of Commons, the noble Baroness would not have been a rebel. However, as I think she said, the reason set out in the 1997 referendum for that franchise, which we seek to replicate, was its relative simplicity compared to the more complex ones to which she refers. Her amendment would provide that a franchise for an independence referendum would be for those who are eligible to vote in the Scottish Parliament elections, and for UK Parliament elections, if their birth was registered in Scotland. As I have indicated, we believe that it should be those who are on the register for local government and Scottish parliamentary elections.

My noble friend Lord Selsdon gave an interesting definition. No doubt that very fact would set up a lot of dispute and debate as to what constitutes Scottish nationality. There would be administrative difficulties; let us not pretend that it would not be otherwise. Importantly, we do not consider it appropriate to make changes to the franchise specifically for a one-off referendum, however important it would be-and there is no getting away from that. Changing the franchise may make some people feel that it has been changed to favour one outcome over another and, as I have said on several occasions in the debate, at the end of the day we want an outcome where, whichever way it falls, no one can cry foul. I obviously hope that it falls for Scotland to remain part of the United Kingdom. Those who would be complaining would say that the franchise had been manipulated but, if there was some suggestion that it had been changed in some way that was not consistent with a franchise that we already had, the losing side might well feel that there had been some attempt made to get one outcome rather than another. That would not be the basis for a decisive referendum.

Photo of Baroness Taylor of Bolton Baroness Taylor of Bolton Labour 10:00 pm, 21st March 2012

I understand many of the difficulties that the Minister is describing, especially if the referendum is to be held earlier rather than later. However, will he take away the thought that perhaps we need to do more for the service men and women who are Scottish in origin and who are serving the whole of Britain, and who have no choice in where they are deployed? Maybe we need to do something more to make sure that they are registered properly, and then able to vote in such an important decision.

Noble Lords:

Hear, hear.

Photo of Lord Wallace of Tankerness Lord Wallace of Tankerness Lords Spokesperson (Attorney General's Office), Lords Spokesperson (Wales Office), The Advocate-General for Scotland, Lords Spokesperson (Scotland Office)

From the reaction that the noble Baroness has had to that comment, it is clearly one that resonates across the House. I do not pretend that I have an answer to it, but she asked me to reflect on it and we certainly shall. I am not sure if it is practical but she makes an important point well, and it strikes a chord in the House.

I was going to make the point that I in no way underestimate the importance of the franchise, but it does not disqualify people from participation in the debate or the referendum. When the real debate comes, I sincerely hope that we will get contributions from other parts of the UK that have a view to express about how much they value our United Kingdom. I very much hope that Scots from the diaspora will express their views-maybe some that I do not agree with, but I am sure there will be many that I do-about how valuable over many years they and their families have found Scotland being part of the UK.

We believe that we should try to ensure consistency and transparency, which is why we have indicated our preference for a franchise based on the present one for the Scottish Parliament and local government. We will continue to seek agreement on that basis. With those assurances, I invite the noble Lord to withdraw his amendment.

Photo of The Earl of Caithness The Earl of Caithness Conservative

My Lords, I am grateful for what the Minister said in reply to my amendment, which a number of noble Lords supported. I just wonder whether his mind is totally closed on the issue of allowing the Electoral Commission to set the question. A lot of us are still quite concerned about a Section 30 fudge on which we will have no say except a possible debate. A question could be negotiated behind closed doors in order to satisfy the Scottish Government, rather like the agreement over the past few days to which we were not party. We would have the same situation with a Section 30 order, and we would then have a question that we were not totally content with. Perhaps to avoid that situation, the Electoral Commission might be allowed to set the question. I know that the Minister had reservations about that but I hope that his mind is still open to being persuaded at a future time.

Photo of Lord Wallace of Tankerness Lord Wallace of Tankerness Lords Spokesperson (Attorney General's Office), Lords Spokesperson (Wales Office), The Advocate-General for Scotland, Lords Spokesperson (Scotland Office)

I hear what my noble friend says, but I ask him to reflect him on two points. First, it is my understanding that the Electoral Commission would not necessarily welcome that. Secondly, with regard to the point I was making about the franchise: if one seeks to do something different, what are the rules regarding the relationship between the Electoral Commission and the question under the Political Parties, Elections and Referendums Act 2000? If you try to do something different for a Scottish independence referendum, you could immediately open yourself up to a charge of trying to rig or manipulate it. The advantages of consistency in this area are important.

I am told that the Electoral Commission has not, and does not wish to, set a question as its role is properly to review the question and publish that review, which is important. I do not countenance any situation where the commission would not be engaged, nor where its view on a question would not be made public.

Photo of Lord Steel of Aikwood Lord Steel of Aikwood Liberal Democrat

My Lords, I beg leave to withdraw Amendment 93.

Amendment 93 (to Amendment 91) withdrawn.

Photo of Lord Foulkes of Cumnock Lord Foulkes of Cumnock Labour

My Lords, we have had a fascinating debate ranging from the vicissitudes of the Lothian list elections, which I know only too well, to the lairs-both of them-of the noble Lord, Lord Selsdon. The importance that I attach to these debates is indicated by the fact that I have been here all evening rather than at St Mirren Park where I would have seen Hearts beat St Mirren by two goals to nil. Fortunately, the semi-final when, as my noble friend Lord Browne will know, Hearts will face Celtic is on a Sunday, so I will not have the problem that I have had tonight and I will be able to be there. Having said that, I beg leave to withdraw the amendment.

Amendment 91 withdrawn.

Amendments 94 to 94C not moved.

Amendment 94CA (to Amendment 94C) not moved.

Amendments 94D and 94E not moved.

Clause 10 disagreed.

Amendment 95

Moved by Lord Wallace of Tankerness

95: After Clause 10, insert the following new Clause-

"Continued effect of provisions ceasing to be within legislative competence

(1) In section 30 of the 1998 Act (legislative competence: supplementary) after subsection (4) insert-

"(5) Subsection (6) applies where any alteration is made-

(a) to the matters which are reserved matters, or

(b) to Schedule 4,

(whether by virtue of the making, revocation or expiry of an Order in Council under this section or otherwise).

(6) Where the effect of the alteration is that a provision of an Act of the Scottish Parliament ceases to be within the legislative competence of the Parliament, the provision does not for that reason cease to have effect (unless an enactment provides otherwise)."

(2) After section 29(4) of that Act (legislative competence) insert-

"(5) Subsection (1) is subject to section 30(6)."

(3) In section 92 of that Act (Queen's Printer for Scotland), after subsection (4A) (inserted by section 16) insert-

"(4B) If, following an alteration such as is mentioned in section 30(5)-

(a) subordinate legislation is made, confirmed or approved under a provision which continues to have effect by virtue of section 30(6), and

(b) the making, confirmation or approval would be within devolved competence but for the alteration, the subordinate legislation is to be regarded for the purposes of this section as being made, confirmed or approved within devolved competence.""

Photo of Lord Wallace of Tankerness Lord Wallace of Tankerness Lords Spokesperson (Attorney General's Office), Lords Spokesperson (Wales Office), The Advocate-General for Scotland, Lords Spokesperson (Scotland Office)

My Lords, the reason for disagreeing Clause 10 is that this proposed new clause will replace it. The amendment will widen the scope of the provision contained in Close 10 so that the savings provision does not apply solely in situations where legislative competence has been transferred to the Scottish Parliament only temporarily under a Section 30 order. It will ensure that the savings provision will operate where any alterations are made to reserved matters or to Schedule 4 to the Scotland Act 1998, whether by the making, revocation or expiry of a Section 30 order or otherwise-for example, by amendment in primary legislation.

There is widespread recognition that clarity is required regarding the status of Acts of the Scottish Parliament in the event that legislative competence is reduced. The amendment has been tabled following comments from the previous Scotland Bill Committee and the Law Society of Scotland. It will ensure that Acts of the Scottish Parliament that have been validly made within the legislative competence that existed at the time do not cease to have effect purely because of changes to the boundaries of reserved and devolved matters. Such provisions would cease to have effect only if this was provided for in an enactment.

The amendment clarifies that provisions contained in an Act of the Scottish Parliament that are no longer within the legislative competence of the Scottish Parliament will not automatically fall following that alteration of competence. Therefore, no gaps in the law will be created as a result. This means that a positive decision will need to be made to repeal provisions in an Act of the Scottish Parliament. This could be done in the legislation providing for the re-reservation or in separate legislation passed by the UK Parliament. As a result of this amendment, a provision in an Act of the Scottish Parliament that was once within legislative competence, prior to an alteration in that competence, will not for that reason alone cease to have effect. It will cease to have effect only if an enactment provides otherwise.

The wording of the amendment is intended to clarify two things. First, the previous operation of that ASP and anything done under it, up to point of the alteration in legislative competence, is not affected. Secondly, any alteration in legislative competence does not affect the continued future operation of the ASP, including any powers exercisable under it. For example, it would ensure that any powers of Scottish Ministers under an Act of the Scottish Parliament to make subordinate legislation would continue to be exercisable by them notwithstanding the alteration of legislative competence.

Proposed new subsection (3) of the new provision makes a technical amendment to Section 92 of the Scotland Act 1998, "Queen's Printer for Scotland", in consequence of the addition of the provision in proposed new Section 30(6) of the Act. I hope that the Committee will agree that this is a sensible amendment, which will strengthen the provision that was originally contained in Clause 10. I beg to move.

Photo of Lord Forsyth of Drumlean Lord Forsyth of Drumlean Conservative

I do not want to detain the Committee, but what problem does the amendment seeks to remedy? Has something arisen? Secondly, if we proceed with a Section 30 order on the referendum, would this enable the power to hold future referendums to be retained by the Scottish Parliament?

Photo of Lord Wallace of Tankerness Lord Wallace of Tankerness Lords Spokesperson (Attorney General's Office), Lords Spokesperson (Wales Office), The Advocate-General for Scotland, Lords Spokesperson (Scotland Office)

My Lords, on the second point, a noble Lord asked me earlier-it may have been my noble friend the Duke of Montrose-whether it would be possible to have a Section 30 order that applied to just one referendum. The answer is that that is precisely what we plan in our draft.

The issue that the amendment seeks to address is that for some powers it may be thought expedient or wise to give the Scottish Parliament a temporary extension of power. I think I am right in saying that such a power was granted under a Section 30 order following the case of Somerville. We seek to make it very clear that if the Scottish Parliament passes legislation-as indeed it did under that power-under a temporary transfer from reserved to devolved power, it does not automatically repeal any legislation that has been properly and competently enacted when the temporary transfer of power ends.

Photo of Lord Boyd of Duncansby Lord Boyd of Duncansby Labour

My Lords, my noble friend has suggested that as I have sat here all night, I should at least say something. It seems to me that the amendment puts the issue of competence beyond doubt. However, I am not wholly convinced that this is necessary because it seems to me that once you confer competence, the legislative provision that flows from it will always flow from it even if you subsequently take back the competence, as it is the point at which the competence is exercised which is important, not what happens subsequently. Nevertheless, I note what the Minister says. For our part, we are content that he has put the matter beyond doubt.

Amendment 95 agreed.

Amendment 96 not moved.

Schedules 1 to 3 agreed.

Amendments 97 and 98 not moved.

Amendment 99 (to Amendment 98) not moved.

Amendments 100 to 102 had been withdrawn from the Marshalled List.

Schedules 4 and 5 agreed.

House resumed.

Bill reported with amendments.