My Lords, I am most grateful for this opportunity to discuss the White Paper that was published by the Scottish Government on the advantages of an independent Scotland. It runs to 650 pages, and I believe that an anagram of the title,
, is “fraudulent costs”, which would certainly do a great deal to explain the content. It has all the deliverability and realism of a letter to Santa Claus. Such is its credibility that if it were put forward on “Dragons’ Den” as a business plan for an independent Scotland for the next 300 years, it would not even get up the stairs to be filmed before them.
We were told that it would answer all the central questions about Scottish independence. In fact, it ignores all the questions by simply asserting the answers that the Scottish Government would like. On EU membership, therefore, Scotland will able to join the EU. The Spanish Prime Minister says, “Not on your life”—but, of course, Alex Salmond knows better than the Spanish Prime Minister, the European Commission and others.
Yes, there will be free tuition fees, but our deal with Europe will mean that we can maintain this outrageous discrimination against students from England. The proposal in this White Paper, believe it or not, is that an independent Scotland will allow French, Italian and German students to come and get free university tuition fees, but England, Wales and Northern Ireland will still be discriminated against. This is from people who have the nerve to use the rhetoric of us all being a family together.
Similarly, an independent Scotland will not have to join the euro, even though the treaty requires it. It will have the pound, but without accepting any of the obligations that would come from the Bank of England in a monetary union when it comes to determining their interest rates, borrowing and the rest. It will be able to avoid Schengen as well—all because Alex says that this has got to be the case. On NATO, it can join a nuclear alliance while engaging in rhetoric about how offensive nuclear weapons are. The Scottish Government can put at risk tens of thousands of jobs on the Clyde by insisting on our nuclear deterrent being moved, without any suggestions as to where it might be moved, who would bear the cost of the tens of billions of pounds involved, or what the consequences for NATO would be of Britain consequently having to abandon its nuclear deterrent.
The Scottish Government fail to make the case in this White Paper for what amounts to the Balkanisation of Britain. To be fair, they do answer some questions. For noble Lords who have not had the opportunity, as I had last weekend, of wading through this document, I can announce that Scotland will be able to put forward its own entry for the Eurovision Song Contest.
I say to my noble friend on the Front Bench that it is a bit off that we should be debating a document as important as this on a Back-Bench Motion late on a Thursday afternoon. We really ought to have seen a debate in the House of Commons and one in this House on such an important document. I suggest to my noble friend that he might consider persuading his colleagues to set up a Joint Committee, perhaps chaired by someone of impeccable credentials such as a former Law Lord, to go through this White Paper—it will not take them long, although it might take a long time to read it—and set out what the consequences should be for both sides of the border. This is not a Scottish issue. It is an issue for every part of the United Kingdom, with huge implications for Northern Ireland, Wales and England.
I have another request for my noble friend. I do not know if he has had a chance to read the White Paper, but you only have to get to pages xii and xiii to see set out a whole load of things, where on one side it says:
“Gains from independence—whichever party is elected”,
and on the opposite page it says:
“Gains from independence—if we are the first government of an independent Scotland”.
It sets out SNP party policy, including the renationalisation of the Royal Mail, which is not within the competences of the Scottish Parliament. What on earth are civil servants doing writing this stuff, with the Government of Scotland putting the bill for an SNP manifesto on to taxpayers?
I draw my noble friend’s attention to paragraph 14 of the Civil Service Code, which says:
“You must: serve the Government, whatever its political persuasion, to the best of your ability in a way which maintains political impartiality and is in line with the requirements of this Code”.
Section 15 says:
“You must not: act in a way that is determined by party political considerations”.
The Cabinet Secretary ought to have a look at this. If he concludes that it is party political and contrary to the code, the bill for this whole exercise should be sent to the SNP, which should pay it. I do not see why my taxes should pay for this sort of nonsense.
The subject of my Motion was the declaration in this document that if Scotland votes for independence,
The other day, I pointed out to the leader of the SNP in the other place that if independence day was going to be
That is SNP policy, and it is one of the more credible notions that it puts forward.
Of course, to be fair, I shall always be grateful to the SNP. Had it not brought down the Labour Government, we would never have had the late Baroness Thatcher as Prime Minister for three successive Parliaments. Now, of course, it is arguing that we should extend the life of the coalition Government by a further year. It is indeed a fair-weather friend. Of course, if there were no Scottish MPs in the House of Commons, we would have a Conservative Government with a majority of 10. Let no one say that the Tory Party does not stand up for the United Kingdom, even when it is against its own short-term political interests.
Where did this idea of independence day come from? The Battle of Bannockburn was on
What are we to say to those members of the Armed Forces serving in the British Army in Afghanistan who, according to this White Paper, will be asked to choose whether they want to be in the Scots army, which will be like “Dad’s Army”, or remain in the British Army and, in so doing—as most of them will so decide—become mercenaries as part of the British Army, having proudly fought under the union flag? It is a nonsense which, according to this White Paper, will make our families on both sides of the border choose their nationality—choose the country of which they are to be citizens or subjects—and will make families and neighbours foreigners in their own countries. And for what? What are the benefits?
The benefits seem unclear. We are to rely on the wishful thinking of Mr Salmond, Ms Sturgeon and Mr Swinney. It reminds me of lines from The Jungle Book, which I remember from childhood. In the “Road-Song of the Bandar-Log”, three monkeys chant:
“Here we sit in a branchy row,
Thinking of beautiful things we know;Dreaming of deeds that we mean to do,All complete, in a minute or two—Something noble and grand and good,Won by merely wishing we could”.
My Lords, I am grateful to the noble Lord, Lord Forsyth, for providing the opportunity to speak on this matter, and for giving such a witty and eloquent introduction. I am only sorry that more of my Scottish Labour colleagues are not down to speak today. I hope earnestly that they are not feeling intimidated by Alex Salmond and his cybernat cronies who constantly attack Members of this House because we are not elected. I have in fact been elected to two councils and to two Parliaments over more than 40 years, as have some other Members who are participating in this debate. Whether they like it or not, this House is part of the UK legislature. We have a continuing responsibility, because what Alex Salmond and his party are proposing affects the whole of the United Kingdom.
White Paper, is not so. He does not have the power to implement the proposals that he is putting forward. Voting yes in the referendum is not an endorsement of all the proposals in the White Paper, and he cannot say that it is.
When he declares independence day unilaterally, as he has done, he ignores the fact that when two parties must make an agreement, the timetable cannot be determined by one side—by one of the parties. When he declares, as the noble Lord, Lord Forsyth said, that a separate Scotland would automatically be in the European Union, NATO and the Commonwealth, he flies in the face of logic and geopolitics, as we have heard recently from Belgium and Spain.
Mr Salmond has declared that a separate Scotland would keep the pound, ignoring that this would need the consent of the rest of the United Kingdom. When he pledges that no controls would be needed at the border between Scotland and England, but promises an open door to immigrants—which would be a different case from the rest of the United Kingdom—he also flies in the face of logic. There are many similar unilateral pronouncements throughout Scotland’s Future, which is 650 pages of continuous fiction. I agree with the noble Lord, Lord Forsyth, that we should have a full day’s debate in this House and in the other House. I have raised that with my party group.
I will quote Voltaire rather than The Jungle Book. He wrote:
“The human brain is a complex organ with the wonderful power of enabling man to find reasons for continuing to believe whatever it is that he wants to believe”.
Alex Salmond is living proof that Voltaire was right.
My Lords, I am not sure that I shall join in the thanks to my noble friend Lord Forsyth for arranging that we would have three minutes to speak on this subject, but I agree with the noble Lord, Lord, Foulkes, that he was right to press for a proper debate on it.
The so-called White Paper is full of wishful thinking. It spells out what the SNP would like to happen, not what will happen. There is a fundamental difference between the two. Some of what it would like to happen, I would like as well. For example, it mentions currency union. We have that already. It is a funny kind of independence in which the Bank of England will call the shots in future. On defence, it wants a separate Scotland to stay in NATO, keep all Scotland’s defence establishments and get rid of Trident. It just wishes that that would happen. It wants a separate Scotland to be an “active participant” in the European Union. Not only the Prime Minister of Spain but many others will have views on that matter. There are pages and pages of wishful thinking.
My greatest fear, which is what I want to express today, is that the danger of a vote for independence is that Scotland would become ingrown. That is against the whole of our history. After all, the contribution that Scotland made to the building of empire and Commonwealth was far greater than our population would suggest. The contribution that we made in the
First and Second World Wars to the defence of Britain was far greater than our population would suggest. I take pride in that. I want to live in a country that continues that history of a major contribution to the well-being and success of the United Kingdom. I do not wish to live in a country that has its own wee broadcasting corporation feeding us on a continuous diet of “cauld kail het agin”, which I fear is what would happen. That is why I believe that the people of Scotland will vote decisively against this bogus prospectus of a bogus independence.
My Lords, I add my thanks to the noble Lord, Lord Forsyth, for securing this debate and support his call for a Joint Committee.
I offer a few thoughts on the possible percussive effects of the Scottish question. Horizon scanning is a perilous trade, but those of us who live on our islands and care deeply about them need to be ready for several stretching, vexing and interlocking contingencies. I have two swift scenarios. The first one has already been alluded to by the noble Lord, Lord Forsyth.
In September 2014, the Scottish people vote to separate from the UK and negotiations begin. I have my doubts that the all-encompassing statute ending the old sovereignties will be in place by spring 2016, but it would be so well before 2020. In May 2015, at the general election, Scotland returns 59 MPs to the House of Commons. Last time 40 were Labour Members. Should Labour win the 2015 election, even with a relatively comfortable overall majority, the loss of around 40 MPs when Scotland goes would plunge it into a minority Government. Does it soldier on to May 2020, or would such a Government try to engineer a losing confidence vote to stop the clock ticking, in accordance with Fixed-term Parliaments Act, knowing that what Whitehall inelegantly calls the “remainder of the UK”, or “RUK”, is unlikely to return another majority Labour Government in the foreseeable future?
In scenario two, in September 2014 Scotland votes to stay a part of the UK. Opinion surveys show that economic worries were among the trumping factors in determining the outcome. In June 2017, the UK electorate votes in a referendum to leave the European Union. Scottish voters, especially if the bulk of the Scottish electorate favoured staying in the EU in 2017, would say that the September 2014 deal is off. They voted then to remain part of a country with full EU membership and unfettered access to its single market. Could a UK Government deny Scotland another Edinburgh agreement and another referendum in, say, 2020? Alongside the upheaval and uncertainty of hauling ourselves out of the EU in the vain hope of becoming a kind of Singapore in the cold northern seas, the prospect of living inside a shrivelled RUK would loom once more. There is more uncertainty imperilling our islands in peacetime than in anyone’s living memory—and far more than our people realise.
I have a final optimistic thought. When the time comes, I want to draw my last breath as a Brit, not a RUK. I am fairly confident that I shall.
My Lords, I thank my noble friend Lord Forsyth for giving us an opportunity to make brief comments on this vital issue.
I will go back a little while. It looks as if the First Earl of Seafield was not quite correct when he described the Act of Union in 1707, which brought an end the Scottish independent Parliament, as the “end of an auld sang”—even if it was in one sense. It was also the end of another “auld sang”, which was the efforts of the Crown and the Scottish Parliament to bring to an end what had been more than 100 years of negotiation for a settlement between the two countries. One of my ancestors, in appointing the members for the first commission for the union in 1604, expressed the aim as being to achieve,
“the often wished but hardly expected conjunction of the two so ancient and long discordant kingdoms”.
It was that discordance that once again drove through the union in 1707. We are not given to being agreeable neighbours at the best of times.
It appears now that we are thinking of taking up that “sang” again. In 10 months we will see whether it is a number that gets to the top of the charts. Unfortunately, discordance, or its modern equivalent, is still something that could undermine the outcome, whatever it is. The current mood in Scotland thrives on the emphasis of discordance. This is very unfortunate. Breaking is always easier than building, but the Scottish Government paper’s 18 months to achieve a settlement, as most other Peers have mentioned, looks a particularly unrealistic proposal. However, it is only one of the many areas that might produce argument. We have now got ourselves into a position with devolution that is not wholly satisfactory from anyone’s point of view. Changes are due under the recent Scotland Act, and it may be that things should be looked at again further.
A current issue, in which I must declare an interest, is that Scottish farmers are much disturbed because they are switching on to an area-based, single farm payment, and there is great uncertainly about the size of the gains or losses that will affect each business. They have concluded that Whitehall is not sufficiently alive to their problem. Therefore, there are areas for argument.
Then again, there is an argument, much favoured by the Scottish First Minister, that an end to the Act of Union would create two new countries, and that each would have to re-establish itself by new treaties and arrangements. What steps is the Minister taking to guard against this outcome?
My Lords, I, too, thank the noble Lord, Lord Forsyth, for initiating this debate. This debate can highlight many of the issues that ought to be considered and deliberated on by the people of Scotland. None the less, the document that has been produced by the Government of Scotland is so transparently thin, and contains so much wishful thinking, that it ought to be considered, not just in a one-hour debate, but by a joint committee of the two Houses of Parliament. I support what the noble Lord,
Lord Forsyth, said on that. I also take the view that we need, at this time, to agree to a further constitutional convention.
If the Scots are presented in 10 months’ time with a referendum, as they will be, the present choice appears to be between the status quo and independence. Frankly, that is not enough. We have seen many changes take place in our constitution over the past decade and a half—almost two decades. It was perfectly appropriate for them to consider some by themselves: for example, enactment of the European Human Rights Act and of the Freedom of Information Act, and the separation of the judiciary from this legislative House. However, if we are to see changes—and all the political parties are suggesting changes that might come further down the line—we want the people of Britain, not just the people of Scotland, to have some input in deciding what the structure of our Government should be.
I noticed that the committee chaired by Graham Allen in the House of Commons recommended such a convention. It would help if the Government and all political parties agreed that that should be set up—and that it should be announced that it is being set up—before the referendum takes place.
My Lords, I do not accept the premise that
The disaggregation required to set up a new Scottish defence force would be an enormous upheaval and would take time. It would also be both costly and disruptive, and economies of scale would no longer apply. Speaking in Glasgow recently, former commander of the Black Watch Lieutenant-General Sir Alastair Irwin warned that extracting men and women from the Army, the Navy and the Royal Air Force would deal,
“a very significant blow to the defence capability of the rest of the UK”.
He said that separation would lead to,
“a British Isles collectively less well defended”.
Sir Alastair also warned of the difficulties of recruitment, saying:
“It would be a big assumption to make that every single member of each of the units allocated to the Scottish forces would elect to transfer from the British Army that they had joined, not least because many of them are not themselves Scots”.
I remember when a Labour Government cut three-quarters of the Territorial Army in the mid-1960s. I was taking degree exams and was not one of the chosen few who remained. However, when the TA was expanded in the 1970s, I rejoined a newly formed battalion and I recall quite clearly all the difficulties we faced in having to start from scratch, as much that we had taken for granted before was just not there.
Other major issues must be resolved such as defence procurement and the future of shipbuilding jobs on the Clyde. I note that the Ministry of Defence said that the Scottish Government’s proposal for some form of joint procurement is a non-starter.
What, therefore, are the advantages and disadvantages of breaking up our 300 year-old partnership? It seems that when it comes to defence, the weight of argument lies with maintaining our highly efficient integrated armed services, which are among the best in the world.
Why do we have to go through the controversial and painful process of disaggregation with regard to our fighting forces, not to mention putting at risk thousands of jobs? The answer, of course, is that we do not have to do so if a majority of those resident in Scotland vote no in the referendum next September. I am very pleased to say that on this occasion Peers of the realm who live in Scotland will have a vote.
This document is 650 pages long and I congratulate the noble Lord, Lord Forsyth, on reading them all. It is, however, rather longer on assertion than on argument. I will just touch on the EU angle.
The aim as set out is to achieve by March 2016 a seamless transition into membership. The SNP says that the treaty base appropriate to the exercise is Article 48 of the treaty. That is not the view of the EU institutions or that of any of the member states that have so far spoken. I doubt if it is the view of HMG, although I will be interested to hear what the Minister has to say. Most people seem to believe that Article 49 would be the treaty base for the negotiation. They are clearly “all out of step but oor Wullie”. However, wishing it so cannot make it so. There will be a genuine negotiation to be had under Article 49. That cannot formally start until Scotland is an independent sovereign state. It could possibly be pre-negotiated; that would be possible if all member states were to agree that there could be pre-negotiation both of the substance of the deal and of transitional arrangements, which would follow during the inevitable hiatus after Scotland, as a sovereign state, could sign the treaty—some date after March 2016—and during the process, which might be many months, possibly more than a year, of ratification by all the other member states, because it is their treaty, too. It is possible that you could pre-negotiate both the substance and the transition. However, that would not be easy, and would require every member state to agree that they were prepared to do it. Judging by some statements that have been made, some member states might not want to.
The negotiations on substance would be serious. The text says that Scotland does not wish to apply to join Schengen. However, the treaty says that all applicants must undertake that they will join Schengen. It is perfectly possible to envisage a derogation for Scotland; no one would want a real physical frontier on the Tweed. However, that derogation would have to be negotiated. You cannot just assert that “We will not apply, therefore it will not apply to us”. The same applies to the euro. I do not believe that if Scotland had opted—and the remainder of the United Kingdom had agreed—to continue to use sterling, Scotland would be obliged to join the euro. In any case, Scotland would not be eligible, such would be its inherited debt and deficit. However, the treaty says that you take a commitment to join when you are eligible, and getting a derogation on that would have to be negotiated.
Most delightfully of all, the big book says that the budget rebate would continue. It also says that Scotland would be one of the richest countries in the world. The continuation of the rebate would play extremely well in Lesmahagow or in Linlithgow, but not necessarily as well in less rich Latvia or Lithuania, and it would be up to the Latvians and the Lithuanians to decide. I am not clear about a lot of things in the big book but it seems certain that if and when an independent Scotland achieved membership of the European Union—and I believe that it would—all Scots would be paying more into the EU budget per capita than would all English, Welsh or Northern Irish. It also seems absolutely clear that you cannot achieve, by March 2016, the seamless transition which is so boldly asserted in this book.
My Lords, I am grateful to my noble friend Lord Forsyth of Drumlean for initiating this debate. My own family represents an intermingling of English, Welsh, Scottish and Irish blood that is by no means uncommon. In the 1820s, my wife’s Scottish forebears established a Far East trading company of the kind to which the noble Lord, Lord Steel of Aikwood, was referring. It prospered for 150 years. Scots have frequently lived, worked and produced their offspring far from home. Today, a great many of them live and work away from Scotland; they will have no vote in the referendum that will decide the future of their country.
The Scottish Government propose an 18-month timetable from the referendum, if it is won, to independence. Between the two events, negotiations of immense complexity would have to take place and, in May 2015, a general election will be held. I do not think for one moment that it would be postponed for Mr Salmond.
Last Thursday, my noble friend Lord Forsyth asked a crucial question. At what point will those Scottish MPs, elected to the House of Commons, be asked to leave? My noble and learned friend Lord Wallace of Tankerness responded:
“Those who have been elected to this Parliament in the other place have received their Writ of Summons. I do not think they have any clause in it that tells them to go”.—[Hansard, 28/11/13; col. 1514.]
The implication seemed to be that, once elected, MPs from Scotland might stay for a full five years, despite that, in less than a year, they would be foreigners. I do not for one moment believe that that would be allowed to happen. There would have to be speedy legislation to tell the Scottish MPs that they would have to go at the moment of independence. That could result in a change of government at Westminster, less than a year after the start of a five-year Parliament. As the first non-Scot to speak in this debate, I emphasise, as did my noble friend, that all these events are as important for the rest of the United Kingdom as they are for Scotland.
The Scottish Government are frank about the deep integration that exists between Scotland and the rest of the UK, but fail to acknowledge the many consequences of break-up. Among these are the costs of dissolving institutions and of merging others, which would be not be light, and would be a burden that could severely impact both economies for many years.
Interdependence takes so many forms. Mr Salmond’s bid to remain with the sterling area and to have the Bank of England as lender of last resort, while making a rapid and pain-free entry into the EU, has already sparked hostile reactions which have introduced an element of reality into this debate. It is clear that he and his supporters want to eat their cake and have it too. I support my noble friend Lord Maclennan of Rogart’s proposal that there should be a Joint Committee of both Houses to make recommendations about the way forward, and about how much cake there is available for eating.
My Lords, many noble Lords have reflected upon Scotland’s historic contribution to the Union. That is entirely understandable, and I share it. A girl born in my former Scottish Parliament constituency on
I do not need to look at a hypothetical way forward over the next 18 months towards—as some noble Lords have said—a fanciful independence day. For five years, I was on the Finance Committee of the Scottish Parliament, and I know that it is not sustainable. I know that a parliament in these nations cannot be sustained almost exclusively on handouts when it does not have revenue powers that are commensurate with its legislative powers, otherwise we will have a permanent parliament in these nations where the electorate will reward rhetoric rather than results. It also means that the case against independence is not so much that it cannot work; rather that being part of the United Kingdom—a refreshed United Kingdom—is far better for the people of Scotland than is independence.
Finally, if this United Kingdom is not successful for that girl born on independence day, she will continue to have some of the unequal life opportunities that currently exist. In my former constituency, the girl would have a life expectancy of 82 years. Just an hour and a half over the hills to Glasgow, her life expectancy would be 14 years less. Her chances of dying of alcohol morbidity would be immeasurably higher, and her life opportunities would be fewer because of unemployment and a poorer education.
I believe that the choice is not one of independence versus the status quo, and I endorse my noble friend Lord Maclennan of Rogart’s contribution. The choice is either that March 2016 could be seen as state building, or that we in this House and in another place carry through progressive reforms to make the United Kingdom better, and Scotland within that a more prosperous and forward-looking country. That, I hope, is the best that we can provide the girl born on referendum day.
My Lords, I congratulate my noble friend Lord Forsyth, and I want to endorse two of the suggestions he made. First, there should be a proper debate in this House and, by a proper debate, I mean a debate that can—as with the debate on the future of this House—extend over two days. There is no more important constitutional issue before us at present than the one we are all too briefly discussing today. I also endorse what noble Lords on both sides of the House have said about a Joint Committee of both Houses to examine in full the implications of independence for the whole of the United Kingdom.
I have often said in this House that Mr Salmond is an extremely wily politician; he is. I do not think that he is a statesman, but he is a very skilful politician. He is a sort of Tartan Boris, but whereas Boris is a big Londoner, Mr Salmond is a little Scotlander. That is because if his wishes come to pass, Scotland will be diminished. The United Kingdom is much more than the sum of its individual parts, and Scotland’s punching power in the world is far greater as an integral part of the United Kingdom and a separate nation within it—because it has proper nationhood—than it would ever have as a small, independent European nation. Notwithstanding all the points made by the noble Lord, Lord Kerr, I am not certain that Scotland would go automatically into the European Union, but that is another point entirely.
What I want to say today is that Scotland means a great deal to all of us who are in the other parts of the United Kingdom. My noble friend Lord Crickhowell talked about his own mixed ancestry and that of his wife. I have a son who lives in Scotland and is married to a Scottish girl, and I have two granddaughters at a school in Edinburgh. They consider themselves to be Scottish and British. My forebears all came from Scotland, but I consider myself British. I have streaks of Englishness and Scottishness within my make-up and I want to keep it that way for all of us. There are very few Members present in the Chamber who cannot say that they do not have family connections with Scotland, Wales and Northern Ireland. The United Kingdom is the most amazing constitutional achievement of the last three centuries.
When it comes to referendum day next year, I hope sincerely that all our friends and fellow citizens in Scotland will realise what it is that we have to lose as well as what they have to lose, and what we and they have to gain if we can build on the integrity of a very great nation. Let old acquaintance never be forgot.
My Lords, it is a privilege to reply to this debate from the Opposition Front Bench, and I congratulate the noble Lord, Lord Forsyth, on introducing it, as my noble friend Lord Foulkes said, in a witty and elegant way. I also appreciate the contributions made by all Members today. Their range and profound quality has been impressive, and the points made regarding a Joint Committee are very important; it is something that we need to take up.
The White Paper is almost 700 pages long. I am always suspicious when I am given a long document. Why is it so long? It is to allow the SNP to duck the questions, not to answer them, so we must see the paper as an elaborate ruse to duck them. When President Barroso and Mariano Rajoy, in responding to the Economic Affairs Committee of which I am a member, state that Scotland must reapply for EU membership, which will need the unanimous approval of the 28 member states, what that indicates is not that Scotland will not get into the EU some day but that the negotiations ahead may be protracted.
The ground chosen by the First Minister is the economic one. He has said clearly that the Scots will be better off if they are not part of the union, so the most important economic decision of the referendum is the currency one. Jim Sillars, the former deputy leader of the SNP, has talked about,
“the mistaken policy of using sterling in a currency union”. with the rest of the UK. He went on:
“That will require a treaty between two countries, ours and theirs, and just as it takes two to tango, so it takes two to make a treaty. If SNP policy is seen as damaging to”,
the rest of the United Kingdom’s,
“state interests, and that of its allies, why should they sign a treaty giving us seats on their central bank, and a say in monetary policy? Alex Salmond says Osborne cannot stop us using sterling. True, but there is a world of difference between using it as one’s currency, and being in a currency union”.
On Mr Sillars’s point there I say: precisely.
We could have dollarisation along the same lines as Montenegro without RUK consent, but that would not be a viable option because we have large Scottish financial services firms that rely on access to UK central bank services. The Economic Affairs Committee took evidence from Standard Life, which told us that 94% of its products are sold on the other side of the border and 6% to Scotland. What will it do if there is an independent Scotland and it wants recourse to a central bank? It is obvious: Standard Life will move its headquarters. John Swinney said in his evidence to the committee that he wanted a,
“formal monetary union … with the Bank of England operating as the central bank for sterling”.
But we cannot have a monetary union if we do not have a fiscal union, and therefore the implications for tax and spending policies are enormous. As Gavin McCrone, the former respected chief economist at the Scottish Office, said, monetary union will only work if there are broadly similar inflation rates. If the SNP persists with the sterling option, it will require Bank of England approval.
I suggest that it would be foolish for a central bank, after the RBS and HBOS debacles, to extend central bank services or be the lender of last resort to a foreign country over which it does not have any control or exert any real influence on tax and spending policies. On the proposal to exert influence over the Bank of England, let alone the rest of the UK Exchequer, the EAC said clearly in its report that that is devoid of precedent and entirely fanciful. Nowhere in the White Paper are these difficulties and uncertainties addressed.
Whether we are talking about the EU, NATO, pensions and benefits or the future of the Scottish financial industry, they all have to be examined very carefully. We also need to examine whether independence will deprive Scots of the benefits of pooling resources and bringing down real costs. John Kay, an eminent economist at the Financial Times and an adviser to Alex Salmond, has said:
“For the degree of economic independence a small European country can enjoy in a global marketplace is inevitably limited. Nothing that happens in Scotland in September 2014 will change that reality”.
Let us make a decision on independence only after a proper debate. The 670 pages of the SNP’s White Paper is its very own brand of poetry. It has taken 19 months for Scotland to reorganise the Scottish police forces into one force, but the White Paper envisages an independent Scotland being up and running in less time than it took to reorganise the police. What a fantasy that is. It illustrates the fanciful nature of the proposition. It is an insult to the seriousness of the Scottish question which people will have to address in September 2014. It is a wish list with no price list, and this House needs to examine it further and forensically. We need a Joint Committee and further debate because if we do not do so, all of us—the rest of the United Kingdom and Scotland itself—will be losers, and we cannot afford that.
My Lords, I start by echoing what many of your Lordships have said, by thanking my noble friend Lord Forsyth for securing this debate and introducing it—and, indeed, for the animated and spirited way in which he made his case. He covered, in a very short time, most of the salient points that were made in the debate. I acknowledge that he was not alone in asking for a much longer debate; indeed, I think most other contributors to the debate said the same. I have noted that request, and will ensure that it is conveyed back to the business managers. Even I am constrained in replying to all the points that have been made in this debate, and would perhaps like longer to do so. That is an important point.
Numerous noble Lords have asked for a Joint Committee. Clearly, that is a matter that could be established only with agreement across both Houses. As ever, I shall ensure that the usual channels consider the request. It is also important to put it on record that committees and their members in both Houses are already undertaking much work on the implications of independence in a whole range of different areas; they are making the case for the union and exposing the gaps in the case for independence. I pay tribute to the work done by a number of Select Committees, both in your Lordships’ House and in the other place.
I thought that the Leader of the House of Commons was part of the usual channels. This would have to be done with the collaboration of both Houses, but I am saying that we will reflect on the matter. I cannot go further in making any commitment today, other than what I have already said.
My noble friend chose a debate specifically on the date, because I think he had to put his application into a ballot before the White Paper had been published. It may be worth reflecting on the fact that the date may be about the only thing in the White Paper that had not previously been in the public domain—and even that was leaked about two days before publication. We had already been told that the date would be in March 2016, so I suspect the only new information was the specific date of
I take the point that even if Scotland were—heaven forbid—to vote yes, actually naming your cut-off point does not seem the best way to go about negotiations. One of the things that has been evident from this debate, if not necessarily from the White Paper, is that a considerable amount of negotiation will have to take place. That point was made by the noble Lord, Lord Foulkes.
Sometimes we have heard people in the Scottish Government compare this White Paper to the 1997 White Paper produced by the Labour Government, which paved the way to the referendum on devolution. However, there is a world of difference between a White Paper produced by a Government, which reflected a constitutional convention that had met in public over many years and had achieved a consensus, and a White Paper that is the product of a single party behind closed doors, and is dependent not just on the Government of the rest of the United Kingdom, but on other member states of the European Union, members of NATO and numerous other countries. It is important to make the point that this White Paper has no guarantee of delivery. It is, as the noble Lord, Lord Kerr, said, strong on assertion but perhaps not so strong on argument.
My noble friend the Duke of Montrose asked about the fact that it is sometimes said by some Scottish National Party people that there would be two new countries, and the rest of the United Kingdom would have to negotiate lots of other treaties. However, the first Scotland analysis paper, which the Government produced in February, examined the constitutional position. We did so on the basis of advice from Professor James Crawford of Cambridge University and Professor Boyle of Edinburgh University—two outstanding experts in the field. Their analysis—one which represents the view of the United Kingdom Government—is that the rest of the United Kingdom would be a continuing state, with all the rights and responsibilities such as permanent membership of the Security Council of the United Nations and membership of the European Union on the terms that have been negotiated, and Scotland would be a new state.
It sometimes seems rather odd to me that a party that aspires to independence finds it awkward to admit that it wants to be a new state. I thought that was the whole purpose. Scotland would be a new state, and it would have to enter into a whole series of different negotiations, including seeking membership of NATO and the European Union. If I may pick up another point, it was certainly rather a novel approach—perhaps this is one of the other things in the White Paper that we had not quite anticipated—to refer to Article 48 of the TFEU. The view of the United Kingdom Government—again, this was set out in the first paper of the Scotland analysis series—is that Article 49 would represent the appropriate way forward. We can have a debate as to whether Scotland would have to come out to go back in, or whether there would be a possibility, following a yes vote, of negotiations taking place during that period. However, the important point, which was reflected in the speeches by my noble friend Lord Forsyth and the noble Lord, Lord Kerr, is that there would have to be negotiations—and we cannot predict with any certainty what would be in those negotiations. The only thing that is certain is the uncertainty.
Arguments have been made about Schengen, about membership of the euro and about the rebate. Approaching this from the perspective of Croatia or Bulgaria, we would be talking about giving a rebate to a country that the First Minister has said would be the eighth wealthiest in the world. I also think that there is a misunderstanding on the part of the Scottish Government as to the nature of the rebate. They have said, “As the budget has been set for the European Union for 2014-20, we will decide between Scotland and the rest of the United Kingdom how the rebate is split up”. I know that there are people in this House who are much more knowledgeable about this matter than me but my understanding is that it is not a constant, annual lump sum that can be divvied up or shared; it is a function of the United Kingdom’s respective shares in the EU economy and receipts. Any change in the size of the United Kingdom, for example as a result of independence, would automatically be reflected in the rebate calculation. Therefore, there would not be a Scottish share of the UK rebate to be handed over. There seems to be a fundamental misunderstanding on the part of the Scottish Government in their White Paper as to what they are talking about.
As regards currency, my right honourable friend the Chancellor of the Exchequer has said that it is highly unlikely that there would be a currency union. That was reflected by other former Chancellors, including
Alistair Darling, and the former Chancellor and Prime Minister, Gordon Brown. I think it also has been said by the Shadow Chancellor. Therefore, while we get an answer to whether Scotland could take part in the Eurovision Song Contest, we do not get an answer as to what the currency position would be if a monetary union was not agreed with the rest of the United Kingdom. Because questions such as that are ducked, the Scottish people will not be given, as a result of this White Paper or from the Scottish Government, the proper information with which they can make up their minds—our minds—when voting on
My noble friend Lord Selkirk talked about defence and the primary importance of the security of the realm. We believe that the whole of Scotland and the United Kingdom benefits from a full range of UK defence capabilities and activities. Scotland has greater security and influence with the United Kingdom’s geopolitical influence, which few states of similar size to Scotland can match. In addition, there is the important defence industry in Scotland. On the idea of joint procurement, as far as I am aware, since the Second World War, no complex naval vessels have been built outside the United Kingdom. If the rest of the United Kingdom should start building these vessels outside the UK, that could not automatically go to Scotland. There would have to be open competition, even in these circumstances. My noble friend is absolutely right to stress the defence implications of independence, but there are defence benefits from Scotland being part of the United Kingdom.
The 2015 election was mentioned by my noble friend Lord Crickhowell and the noble Lord, Lord Hennessy. In answer to my noble friend Lord Crickhowell, last Thursday, I had a question from my noble friend Lord Forsyth on what would happen after the vote on independence in September 2014 and whether Scottish MPs would have to leave at that point. I think that that is when I said that they would not need to do so. Obviously, it would be a matter for Parliament to address what would happen in 2016, although I cannot honestly see how people could represent constituencies or a country that no longer belongs to the rest of the United Kingdom. I do not see how that could happen, or how Parliament would deal with that or with the intervening period between the elections in 2015 and 2016. Should that ever happen, I think it would be a matter for both Houses.
I certainly picked up the point made by my noble friend about the idea that we should somehow postpone the United Kingdom general election. Given that the Fixed-term Parliaments Act was on the statute book before the date of the referendum was announced, the Scottish Government had full notice of it. I find it somewhat preposterous that for some reason people in the rest of the United Kingdom should be denied their democratic opportunity to select their Members of Parliament to facilitate a negotiation.
My noble friend raised an important point on paragraph 14 of the Civil Service Code. When a similar issue was raised during the Scotland Bill debate, I said that, when questions are asked about breaches of the code, there is a process for dealing with that. I do not think that it is appropriate for a Minister at the Dispatch Box to pass judgment on that when there are proper processes. I note what my noble friend says and I am sure that it will be noted by those to whom these matters might properly be addressed. I think my noble friend reflected on the positive things about the union. It was also said by my noble friend Lord Steel.
My noble friend Lord Maclennan talked about a United Kingdom convention and my noble friend Lord Purvis talked about policies of how we might look to the future in our constitutional arrangements. It is important that we look to the future. We should do so and record the strengths of our United Kingdom; namely, those of family and kinship, which were mentioned by my noble friends Lord Cormack and Lord Crickhowell. We should also look at what has been achieved over many years.
Just before I came into the Chamber, my attention was drawn to the second leader in today’s Times. It states:
“Whatever Scotland’s future, it should be a source of pride to everyone in the United Kingdom that for centuries we have made a state of many nations work so well. We have lived together in peace and harmony, never losing our distinct identity yet also forging one together. And we have been strong together, through centuries of continental and global conflict. None of this should be pushed to one side in favour of an argument dominated by oil revenues”.
That is profound advice. I believe that when it comes to it, people will recognise that Scotland is stronger as part of the United Kingdom and the United Kingdom is stronger with Scotland as part of it. I sincerely hope that the noble Lord, Lord Hennessy, will die British rather than as RUK.