Scotland Bill - Report (2nd Day)

Part of the debate – in the House of Lords at 6:30 pm on 29th February 2016.

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Photo of Lord Forsyth of Drumlean Lord Forsyth of Drumlean Conservative 6:30 pm, 29th February 2016

I tend to agree. I want to know how this will be calculated, how it will be enforced and what are the powers to do so.

Then the agreement goes on to make a change from the Smith proposals. Paragraph 46 states:

“These financial consequences of policy decisions have been termed policy spillover effects”.

“No detriment” has now become “policy spillover effects”. Paragraph 47 states:

“The main categories of these can be divided into … Direct effects—these are the financial effects that will directly and mechanically exist as a result of the policy change (before any associated change in behaviours); and … Behavioural effects—these are the financial effects that result from people changing behaviour following a policy change”.

I asked the Chief Secretary to the Treasury about this today. The example the noble and learned Lord, Lord Wallace of Tankerness, has used and I have used is from when I was in government. We decided in Scotland not to privatise water, but in England it was privatised and we lost the Barnett consequences of that. Does that mean that under the new arrangement of no detriment, where the Government south of the border decided to have a policy of funding water privately, not through the taxpayer, as a result, a cheque would have to be sent north of the border to compensate them for this policy under the no detriment or policy spillover effect that arose? “Spillover” is actually quite good in the context of water privatisation. Does it mean that? The Chief Secretary looked slightly puzzled and said, “No, of course it doesn’t”. Why does it not? Where does it say that? How is this defined? Nowhere is it defined.

Here we are, at the 11th hour, discussing the fiscal framework. Everyone is rather confused about how it is going to operate. Everyone is wondering how on earth the veto which has been given to the Scottish Government will operate. As I am sure at least one party will come to its senses at some stage and decide that we need a fair system for funding the United Kingdom, what happens if a party is elected on a manifesto which provides for replacing the Barnett formula with one based on needs or some other system and the Scottish Government say, “Hang on a second. We have an agreement that you cannot change it without our consent”? Then where are we? I have no doubt that the Minister will say that he believes that people will be guided by the results of an independent review. If he says that, I will say to him that he has not seen how the Scottish Government operate or how the Scottish nationalists operate. That is not their way of doing things, as I am sure many Members of this House would agree.

My simple request to the Minister is that he accepts the sunrise amendment which gives an undertaking that this House and, more importantly, the elected House—the House of Commons—have an opportunity to discuss this fiscal framework and to consider the impact on Northern Ireland, Wales, the north of England and elsewhere. It is far reaching and fundamental, and it is not acceptable that this should be agreed in secret and given out in dribs and drabs with little time for the House to consider it or for people outside to consider it and advise Members of both Houses on the way forward. I beg to move.