Third Reading

Part of Scotland Bill – in the House of Lords at 3:45 pm on 24 April 2012.

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Photo of Lord Kerr of Kinlochard Lord Kerr of Kinlochard Crossbench 3:45, 24 April 2012

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

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

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

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

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

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

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

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