Scotland Bill
Lord Kerr of Kinlochard Excerpts(12 years, 1 month ago)
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Lord Kerr of Kinlochard
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.
Lord Kerr of Kinlochard
My point was not about process—I do not want to get into questions of process—but the distinction is one without a difference. If Scotland had full independence on the prospectus in the Scottish Government’s consultation paper, it would still be using the United Kingdom currency. In my judgment, when the Scots applied for membership, the European Union would not insist that they adopt the euro forthwith, but it would probably ask for some sort of undefined commitment at a future date. Therefore, there would still be the problem of fiscal autonomy alongside continuing monetary integration. That problem would exist in a scenario of either devo-max or independence, so it needs to be addressed.
Lord Wallace of Tankerness
I do not dispute that. It needs to be addressed. It is one of the key issues that those who advocate ultimate fiscal autonomy or independence must address. I do not think that the noble Lord is suggesting that it would be suitable for inclusion in the Bill, but it is an important issue that has to be properly and fully addressed in the debate that we will undoubtedly have on the independence referendum.
Scotland Bill
Lord Kerr of Kinlochard Excerpts(12 years, 2 months ago)
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Lord Forsyth of Drumlean
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.
Lord Kerr of Kinlochard
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.
Lord Wallace of Tankerness
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.
Lord Kerr of Kinlochard
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.
Lord Wallace of Tankerness
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.
Lord Wallace of Tankerness
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.
Lord Kerr of Kinlochard
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.
Lord Wallace of Tankerness
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.
Lord Wallace of Tankerness
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—
Lord Kerr of Kinlochard
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.
Lord Wallace of Tankerness
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.
Scotland Bill
Lord Kerr of Kinlochard Excerpts(12 years, 3 months ago)
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Lord Kerr of Kinlochard
My Lords, I will privately reveal that I have not been briefed by the noble Lord, Lord Browne of Ladyton, on why the amendment goes too far; I worked it out for myself. The idea of seeking consent seems to be a little insulting. Co-ordination is what we are talking about. The idea of writing into law a requirement for co-ordination seems very odd. I admit that the Foreign Office that I worked in completely failed to co-ordinate the travel plans of Ministers of both political persuasions. It is very difficult for the Foreign Office to attempt the task, and it is universally ignored by the rest of Whitehall. The person who can achieve the task is the ambassador who is lucky enough to have a couple of ministerial visitors. If he tells A or A’s office that B will be in the House at a certain time, A will decide that his plans require him to come at another time. In my experience, the collegiate atmosphere of any British Government has meant that it is perfectly easy to separate visits one from another. Therefore, this is unnecessary.
The innuendo was made that the Scottish nationalists are going around arguing with other NATO Governments against NATO. I have not seen any evidence of that. I would be surprised if it were true.
Lord Forsyth of Drumlean
Perhaps the noble Lord would care to read the Scottish nationalists’ manifesto.
Lord Kerr of Kinlochard
Yes, but the innuendo today was that they must not be allowed to talk to foreign Governments because they would try to persuade them in some way to leave NATO. That is a big jump. Of course it is in the Scottish National Party manifesto; we have all read it. However, again in this debate, I have been worried by the splendid attack of the noble Lord, Lord Foulkes. He said that he is up for the fight. It is easy to have this kind of fight when the opponent is not in the ring. We ought to be careful about insulting somebody who is not here. I am happy to be insulted because I am here. However, the fight should be conducted out there on the hustings. Here, we should try to avoid insult and innuendo.
Lord Maxton
To be fair—and not even to be fair—the fact is that the Scottish nationalists are not here through their choice, not through the choice of the House. If they wanted to be here, putting their case, they could be—instead of relying on the one Welsh nationalist in the House.
Lord Kerr of Kinlochard
It may well be true that it is their choice. If so, it is a great mistake. I hope it is the view of all in this House that it would be very good if they were here. While they are not here, we should try to avoid insult. It does not do us any good when our debates are reported in Scotland.
Lord Forsyth of Drumlean
I did not say anything that was insulting, and I do not do innuendo. I am quite direct. I said that the First Minister should not use his position to make the case against Britain being in NATO. There is nothing insulting about that. Nor is it an innuendo. Equally, the First Minister, who is paid from my taxes, should not go around the world arguing against our nuclear deterrent. He should concentrate on his duties as First Minister. There is nothing insulting about that, and there is no innuendo.
Lord Kerr of Kinlochard
I am sorry but I am not aware that the First Minister is going around the world arguing that people should leave NATO or that Britain should leave NATO. I am sure that he is saying that, if elected, he would choose to leave NATO. The innuendo is the implication that he is undercutting the policy of the British Government policy by saying that Britain should leave NATO. I do not think that he is doing that. I do not know what he is doing; he does not have somebody here to tell us, which is a pity.
I intervened on the amendment to ask the Minister whether there has been any proposal from the Scottish National Party for the inclusion in the Scotland Bill at this point—because Clause 27 is where it would fit—of a provision that would clarify or increase the role that it should play in EU negotiations, in the delegation that comes from these islands or in the preparation of the positions that the delegation will advance. I ask that because I do not know the answer. Last summer, as I recall, the Scottish Government indicated that they wanted something of the sort. I do not know what they want. I would like to see the proposal, if it is around. Are the Government sitting on a suggestion from Edinburgh that has not found its place in the Bill because they did not agree with it? If the Scots came forward with something at this stage, would the Government insert a clause in the Bill?
It is worth addressing the question of whether, as you give a bit more devolution, you should give a larger role in the preparation of a position for certain councils. I do not know whether that would extend to the presence of a representative such as a Minister from the Scottish Government in the ministerial team. I remember days when that was the case. When we first joined the EU in the 1970s, we were always represented in the Fisheries Council by a Minister from the Ministry of Agriculture, Fisheries and Food, and by a Minister from the Scottish Office, operating in tandem. I will not comment on whether that was a good arrangement. The noble Lord, Lord Williamson, will have a better memory of it than I.
The German Länder are represented in the back row of many councils that deal with domestic affairs; they do not have a speaking part. I would not recommend that anybody look at Belgium, but if we do, we see that in many councils the Walloon and Flemish Ministers attend alternate meetings. That is ideal for those negotiating from a different point of view from that of the Belgian Government, because it means that the Minister never knows what happened in the previous council and it is possible to score some runs at his expense.
When devolution happened, a concordat was prepared in London and negotiated with Edinburgh that laid down detailed rules on what kind of issues the Scots should be consulted on in full. I do not know how well that has worked; I have been away. If it is not working well, it could be looked at again; there is no issue of principle there. As we devolve a little more, maybe we ought to devolve a slightly bigger role in the preparation of such things.
These are my questions for the Minister. Has anybody asked? Has anybody specified what is wanted? What would the Government’s attitude be?
Lord Maclennan of Rogart
I was a Minister who attended the Agriculture and Fisheries Council in the 1970s, although I did not belong to the Ministry of Agriculture; I was representing the consumer interest. I recall a number of Ministers coming to these councils but they all belonged to the same Government. Prior to our participation in these debates, we had clarified what our objectives were in common and we did not seek to confuse the other members of the council by putting forward entirely different points of view. That is the risk of having people who are seeking to separate one part of the United Kingdom from another.
The noble Lord has inquired of my noble and learned friend as to the Government’s position. It would be very interesting to know what he considers should be the position.
Lord Kerr of Kinlochard
I draw a distinction between the situation with a degree of devolved authority—maybe a little more if this Scotland Bill becomes law—and the position of an independent Scotland. That is a totally different question. I would think it extremely unlikely that a delegation consisting of representatives of the London Government and the Edinburgh Government negotiating in Brussels in a situation of devolution but not independence for Scotland could not work out in advance and in private what was the best line and who would make which point. I do not think it very likely that the representatives from Edinburgh would see it as their task to undercut the United Kingdom interest because that would—while devolution persists—also undercut the Scottish interest.
Lord Sewel
One of the difficulties in relation to Europe and getting a common view—almost parity between UK Ministers and Scottish Ministers—would be around fisheries policy. The position of the SNP Administration in Scotland is that—and God knows how it can be done; I do not think it can—Scotland would leave the common fisheries policy. That creates a totally different negotiating framework in that policy area from a Government who say, “We are staying in but we have to reform and modify the common fisheries policy”.
Lord Steel of Aikwood
I have no idea. The important point is that it should have the power to raise funds as it wishes for all the devolved issues. It is no good going on talking about refining the Barnett formula and changing the grant system. It is up to the Scottish Parliament to devise its own taxation methods and raise the money for its own purposes. That is what I would like to see happen, and this Bill moves us slightly in that direction.
Lord Kerr of Kinlochard
I have a great deal of sympathy with the argument that the noble Lord, Lord Steel, has just expressed. I cannot see the fundamental point of principle that the noble Lord, Lord Sewel, can see. He spoke of this procedure proposed in the Bill as not providing the necessary and appropriate degree of scrutiny. The people who would be taxed are the people of Scotland who elect the Scottish Government. I cannot see any particular point of principle in saying that they may not determine the form of their taxation. States in the United States of America have a considerable degree of freedom. Local taxes are different all over the United States. In many cases, they have a balanced budget requirement. The people of Scotland, speaking through their representatives in Scotland, cannot determine the level of the Scottish deficit.
Lord Sewel
The argument that the Scottish Executive should have control over the level of taxation is one thing, but the creation of new taxes is a totally different thing.
Lord Kerr of Kinlochard
I cannot really see that distinction. I would be more worried about the level if the level affected the balance of the deficit of the United Kingdom. The levels would have to be adjusted so that the tax take in Scotland remained the same proportionate to expenditure in Scotland. But as for the creation of a new tax, going by a different form, if the Scots chose to lower taxes in form A and raise them in form Y, provided that they came to the same amount and had the same effect on the United Kingdom Exchequer, that seems to me entirely up to them. I cannot see a point of principle there.
Lord Sewel
The problem of the deficit is really a red herring, because the deficit would be controlled by borrowing powers.
Lord Kerr of Kinlochard
If the deficit is not important to the argument made by the noble Lord, Lord Sewel, what is the answer to mine? It is perfectly possible for the Scots, and reasonable, to decide the form in which they should be taxed.
Lord Forsyth of Drumlean
Perhaps I could help the noble Lord by asking him a question. If his position is that the Scottish Parliament should be free to invent any tax and raise it at any level as part of the devolved settlement, why do we need to bother with having both Houses of Parliament approving it?
Lord Kerr of Kinlochard
I agree that the Bill proposes a very eccentric procedure. I was going to go on to say that, first, on practical grounds, I would hope that no one would set up differential tax systems inside the United Kingdom. Secondly, I would not disagree with the argument of the noble Lord, Lord Forsyth, against the particular procedure for vestigial approval which is laid down here. My argument is on the point of principle of the noble Lord, Lord Sewel. Those who should be in the lead on the forms of taxation in Scotland should be the Scots; that seems to me to be clear.
I am disappointed with this bit of the Bill—
Lord Sewel
The noble Lord has challenged me on a point of principle. The argument surely must be that macroeconomic policy under the devolution settlement is reserved and, within that, it is absolutely right and proper that the United Kingdom Parliament examines any proposals for new taxation on the basis of how it impinges upon macroeconomic policy, and whether it is fair and would inflict great harm on any part of the economy of the whole United Kingdom.
Lord Kerr of Kinlochard
Yes, that is reasonable. We certainly agree on the macro point. We disagree on whether there is a point of principle about forms of taxation. I would like to pick up on the other point made by the noble Lord, Lord Steel, about the Prime Minister's speech in Edinburgh. Here, I disagree with the noble Lord, who says that we should proceed to have the referendum as soon as possible, which would give us a couple of years to work out what devo-max means. I do not know why we do not put into this Bill what we think devo-max means, with a sunset clause. I follow the argument that the referendum should have only one question but there is a genuine problem in that the Sir Alec point made by the noble Lord, Lord Steel, certainly applies in Scotland. People up there do not really believe that the London Government intend, once one has had the referendum and if its answer is no to independence, to confer a further substantial degree of devolution.
Lord Kerr of Kinlochard
May I finish my argument? That is not widely believed up there. One could set out the definition that this Parliament believes would be right for further devolution. I do not expect the noble Lord, Lord Forsyth, to agree with me because he does not want any more, but the Government indicated that there would be consideration after the referendum of a further degree of devolution—your Prime Minister said it. I understand why that will not happen unless the referendum says no to independence—that is obvious—but I cannot see why one cannot specify that now.
Lord Forsyth of Drumlean
Perhaps the noble Lord can help me. He is quite right: I think this is a dreadful Bill which was introduced for political reasons, and that the best thing we could do with it is bin it—drop the whole thing and get on with the referendum. That is my position. However, it is a minority position, and we have the Bill and we are considering it. We are considering a clause on which the noble Lord, Lord Sewel, who after all was the midwife of the Scotland Act and believes in all this stuff, and I are agreed that it is a huge transfer of power. To me, that is devo-max.
I have no idea what the Prime Minister was thinking of when he said that there would be more devolution after it had been decided that Scotland would remain in the United Kingdom. I cannot think of anything that could be added that is not already in this Bill. This clause which we are considering, for example, provides enormous scope to introduce new taxes, so I would say that this is devo-max. The noble Lord is absolutely right that the people of Scotland do not know about it, because nobody is actually reporting it. We are all debating something that is already here in this Bill, and which was actually delivered by the previous Labour Government—with the support of my party, which I must say was very foolish. Having said that, what does the noble Lord, Lord Kerr, mean when he says that we should have something added? What would he add to this Bill that would be devo-max? Can he tell me?
Lord Kerr of Kinlochard
That is a very fair challenge and I have no complete answer. In respect of taxation, I would argue that devo-max should be precisely what the noble Lord, Lord Sewel, does not want: that the Edinburgh Parliament should be entitled to decide on the forms of taxation. There would need to be the macroeconomic control, which he and I would need to discuss, but the forms of taxation within a given tax take—or rather within a given deficit control, because that is where the control would be—seems to be something which should be devolved in principle. I have made my point and I do not see the point of principle here. I would argue that the difficulty with devo-max is: who is going to specify it? I cannot see Mr Salmond's interest in specifying devo-max, because he wants independence—
Lord Foulkes of Cumnock
I wonder whether, when the dialogue is complete, other people might answer your question.
Lord Steel of Aikwood
If the noble Lord will allow me, surely the point he is making is valid. If the post-referendum decision is not to go independent and we take the Prime Minister at his word that more is on offer, it is possible for all the parties—including the SNP, as the Scottish Government—to join in working out the best form of devolution-plus, as I prefer to call it, which enables the Scottish Parliament to raise the money that it spends.
Lord Kerr of Kinlochard
I entirely agree with the noble Lord. I suppose that my motive, as one who believes in the union and does not wish for Scottish independence, is that it seems that the chances of a vote for Scottish independence would be much reduced if the credibility of the devo-max option had been enhanced by its prior specification. I cannot see who is going to do that and I am rather sorry that we seem to be going to miss the opportunity in this Bill to do it, subject to a sunset clause.
Lord Foulkes of Cumnock
Perhaps I can say a few words on this amendment, as one of the people whom the noble Lord, Lord Kerr, describes as being “up there”. I am living in Edinburgh, I am a resident, and I will be voting in whatever referendum we have. I am looking forward to it. I do not think of it as “up there”; it is where I live and what I am part of. This is the amendment on which the noble Lord, Lord Forsyth, and I are going to disagree—at last—because I agree with the noble Lord, Lord Steel. We need full fiscal responsibility in Scotland, and we need to move towards that. Some people call it full fiscal autonomy; I call it full fiscal responsibility.
Is it devo-max? As other people have said, I do not know what Salmond means by devo-max. If he means other functions such as welfare or pensions being transferred to Scotland, I am totally against that. It would be catastrophic and cause tremendous problems in breaking up the system that has existed for so long in the United Kingdom. However, full fiscal responsibility is different. Having been in the Scottish Parliament, I know that at the moment it has responsibility for spending the money but not for raising the money. That means that you are irresponsible, and that at any time when you do not have any money you blame Westminster and say that the Barnett formula is not giving you enough. This is the problem that the noble Lord, Lord Kerr, referred to: how do you get to full fiscal responsibility?
I agree with the noble Lord, Lord Steel, and we might both get vilified for this, that David Cameron was right. He was right to say that once Scotland rejects separation, and we must reject it, the door will be open for discussions. There will be a dialogue between Westminster and Holyrood about the new form of devolution. The Secretary of State for Scotland is right that we need that yes/no vote as quickly as possible so we can reject separation and move on to discussing what kind of devolution we want. We could have a referendum with devolution options, but it would be far better if the federalist, unionist and devolutionary parties were to work out an agreed formula for the new enhanced devolution and full fiscal responsibility through a convention—
Scotland Bill
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Lord Wigley
Clearly, anyone concerned with the question will take great note of what the Electoral Commission says. I make it clear to the noble Lord that I am not here answering on behalf of Alex Salmond, but I wanted to stand up and say a word on his behalf when I heard certain words being used—we heard the phrase “weasel words” a moment ago—and his good faith being questioned. He has been described as cunning, a gambler, devious and frightened. I put it to noble Lords that if the debate is going to be pursued in that tone, what will be the outcome and the reaction in Scotland? I leave it at that.
Lord Kerr of Kinlochard
My Lords, I am ashamed, as a Scotsman and a Scots unionist, that it took a Welshman to make that point. I agree about the language.
I felt uneasy on 10 January when the noble and learned Lord, Lord Wallace of Tankerness, presented the Government’s consultation paper to us. There was enormous cross-Chamber unanimity that it was a jolly good document, that it was right in law and that it was right on the question and its timing. All the blue bonnets from over the border, the Forsyths, the Foulkeses, the Steels, the Langs—the Scottish political aristocracy of yesteryear—were all strongly in support of what the United Kingdom Government said in their consultation paper. A different view was taken by quite a large proportion of the Scottish people, for whom this all may have seemed a little odd. I do not disagree with the noble Lord on what he said about the law; the paper is mainly about the law and reserved powers and the power in Section 30. However, it is not clear beyond peradventure in Scotland that the terms and the timing of the question need to be settled by us, not by the Scottish Parliament. I am not saying that the people who disagree with that are right but merely that it is a question for debate.
In the debate that I have referred to, the noble Lord, Lord Forsyth, put a number of interesting questions to the Scottish National Party and he has done so again today. He has made an interesting, lively, jocular debating speech, asking questions of the SNP. I feel sorry for the Minister who has to answer the debate; it is not really his job to answer for the SNP. Here is my serious point: why is there not someone in this Chamber who does answer for the Scottish National Party? I know the answer, but it would be highly desirable that all parties that are represented in this Chamber should make informal representations to the missing party. I do not support the amendment of the noble Lord, Lord Forsyth; we should go ahead with the Bill and the Government’s timetabling proposals seem absolutely right to me, but our debates on the Bill would be greatly assisted if we had half a dozen people here who actually believed in the policies of the SNP, perhaps because they were members of it.
Lord Foulkes of Cumnock
I completely agree with the noble Lord, Lord Kerr. He may know the answer to his question but maybe not everyone does. My good friend and SNP MP Pete Wishart has raised regularly at SNP conferences that they should take up the offer to nominate for this place. That has been vetoed again and again by Alex Salmond.
Lord Kerr of Kinlochard
It is a question that could be raised again, given that we have a legislative workload on Scotland and that we would benefit from hearing the views of the Scottish National Party.
I have an additional point, and here I agree very strongly with what the noble Lord, Lord Wigley, said. I do not want to see the balkanisation of Britain. The first casualty, though, could be the language of constitutional debate. We really should not be using language like “rigged” or “fixed”. If there was someone here to answer and hit back at us in this debate, it would be bold and brave to use such language; it is not bold and brave to use it when there is nobody here to speak for the side that one is attacking. To accuse someone who is not represented here of being devious seems very unwise. We have very serious constitutional questions to address. I am a unionist. It is very important for the future and the health of the union that we address these questions in sober, polite and reasonable parliamentary language.
Lord Forsyth of Drumlean
Could I ask the noble Lord about the interesting argument that he is developing about the importance of having people from the Scottish nationalists in this House? Would he apply that to UKIP? When he talks about language, I recall that the noble Lord referred to Members on this side, who are rather more sceptical about Europe than he is, as the Tea Party. Was that an appropriate use of language?
Lord Kerr of Kinlochard
I am delighted that the noble Lord remembers—I thought it was one of my most polished impromptus and that it had fallen by the wayside. I have no views on and nothing to say about UKIP. We are talking about Scotland and the party that won a landslide election victory last year and should be represented in this House.
The Lord Bishop of Chester
My Lords, I hope I can be forgiven, as a Sassenach bishop, for making a brief contribution. When I go to Burns suppers at this time of year, I find myself with rather better Scottish credentials than many of those who present themselves in kilts: I have two degrees from a Scottish university and one wife from Scotland, as well as a home there. I am probably the only bishop who will have a vote in the referendum, if I understand the franchise correctly. I am tempted to take a poll of all my Scottish friends who will be disenfranchised before I decide how to cast my vote.
I have a specific question for the Minister, which has not been raised so far. The Second Reading debate was in September and we are now entering Committee at the end of January. An awful lot has happened in that time. In the mists of history, I was a chemist and one of the few things that I learnt was that, when you have several variables on the go at the same time, it is difficult to know what is really happening. In doing an experiment, you change one variable to see what the result is before you bring another variable into play. The referendum might be held in the midst of the implementation of the significant additional devolution that is enshrined in the Scotland Bill, not least in the area of taxation, which throws down the gauntlet as regards fiscal matters. Have the Government given any thought to the awkwardness of holding the referendum and that discussion while we are further down the line of implementing this Bill? That rather undergirds what the noble Lord, Lord Forsyth, said and the last part of his Motion. If we are to go ahead with this Bill, we have to do so with the full consent of the Scottish Parliament. If we do not, it will be a very awkward and messy discussion. It is already marred by a great deal of awkwardness and messiness for various reasons.
Estates of Deceased Persons (Forfeiture Rule and Law of Succession) Bill
Lord Kerr of Kinlochard Excerpts(12 years, 11 months ago)
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Lord Kerr of Kinlochard
My Lords, I shall be brief because the argument I would have made has just been expressed much more clearly than I could have done, thanks to the legal wisdom of the noble and learned Lord, Lord Mackay of Clashfern. He referred to my concerns and suspicions about the use of the generic term “an Act” rather than a straightforward reference to the 1972 Act. I am concerned that there might be some sort of dog whistle motive here in that there could be an indication, for those who wish to hear it, that we might be able to disapply a particular future Act if we were to choose to dislike it. I am sure that that was not the Government’s motive. I share the scepticism of the noble and learned Lord, Lord Mackay, about whether that could be the motivation, because it would be completely misleading.
Directly applicable EU laws apply in this country for as long as we do not repeal the 1972 Act. The converse is the case, of course, as the noble and learned Lord has explained. It all hangs on the 1972 Act. The present clause even refers to the definitions in the 1972 Act, so if we repealed that Act, all directly applicable laws would cease to have effect in this country and we would be leaving the European Union. Why do we not just say that?
In my heart, I would like to have no Clause 18 because in principle I do not like declaratory clauses. My head tells me that we cannot get rid of it and therefore we have to get it right. That is the case for Amendment 33.
Lord Waddington
There is just one little matter that puzzles me and I would be very grateful for my noble and learned friend’s help on it. If Amendment 32B is read along with Amendment 33, it seems to suggest that Amendment 33 covers all the ground in Clause 18 but merely puts it better. In fact, Amendment 33 does not address one of the matters which Clause 18 seeks to address; that is, the suggestion that EU law may be binding on us quite irrespective of any Act of Parliament. I wonder what my noble and learned friend’s answer is to that, because I do not think that his Amendment 33 covers one of the matters which Clause 18 seeks to address. The argument advanced by counsel in the metric martyrs case suggested that EU law was binding on this country quite apart from any Act of this Parliament.
Lord Kerr of Kinlochard
I remind the Minister of the argument made by my noble friend Lord Pannick. If I introduced him to a lady and said that she was my wife because I married her, would I be required to say, “and because I have not married anybody else”?
Lord Wallace of Tankerness
No, my Lords, but one should consider the context. This new clause was proposed in its original form in the context of trying to lay to rest any contrary suggestion that there are other means—means which I do not think anyone in this debate has accepted; nevertheless, they are out there and are run as arguments—by which European Union law can be imported into the legal systems of the United Kingdom. That is why we use “only”.
“Duration of Part 1 and Schedule 1 (No. 2)
(1) Part 1 and Schedule 1 shall expire on the day on which the Parliament in which this Act is passed dissolves.
(2) In subsequent Parliaments, the Secretary of State may by order provide that Part 1 and Schedule 1 shall be deemed to have been revived from the beginning of the Parliament in which the order is made.
(3) An order under subsection (2) shall provide that Part 1 and Schedule 1 shall expire on the day on which the Parliament in which the order is made dissolves.
(4) An order under subsection (2)—
(a) must be made by statutory instrument, and(b) may not be made unless a draft has been laid before and approved by a resolution of each House of Parliament.”
Lord Kerr of Kinlochard
My Lords, this is the Hemingway amendment—because the sun also rises. This amendment is really rather important. I wish to speak for it on constitutional grounds and on grounds of foreign policy. I shall make an argument about parliamentary sovereignty, and an argument about the national interest.
I begin with the constitutional argument. I see two of them. First, the provisions of this Bill are all otiose in this Parliament. The coalition has made it clear that there will in this Parliament be no treaty changes, no transfers of power and no extensions of qualified majority voting. Therefore, there will be no referenda and none of the matters which have engaged us through all these days and nights are of any relevance to this Parliament; they apply only in the next Parliament. I cannot think of any previous constitutional Bill which has had that effect. I can think of no precedent for a Bill that is designed solely to influence future Parliaments. Of course, the letter of the doctrine that one Parliament cannot bind its successor will remain the case, because a new Government could repeal the Act. In my contention, however, the spirit of the doctrine would be much better honoured if there were a requirement for an affirmative decision as a first act of each new Parliament that the provisions of this Act should continue.
My second constitutional argument concerns the fact that the referenda called for in the Bill would in every case be asking—whatever the substance of the issue —the question, “Do you wish to overrule your Government and your Parliament?”. Before the referendum stage was reached the Government must by definition be in favour of the measure, because they all require unanimity in Brussels and both Houses of Parliament would have voted for the measure before the referendum question. The result of the referendum, if it was no, would be that an Act of Parliament was thereby revoked. I can think of no precedent for that. It has not applied to any past referendum in this country. In my contention, a referendum called for in this Bill is a direct undercutting of parliamentary sovereignty.
I believe it entirely right that each successive Parliament should be asked whether it wished its sovereignty to be undercut in the way provided for in this Bill, and that is why I favour a sunrise clause. This is my second constitutional argument and I have not mentioned Edmund Burke.
On the foreign policy argument, I do not believe that we shall see many referendums. We know that we shall see none in this Parliament as a result of this Bill, and I do not think that we will see many in future Parliaments either. Some of the circumstances listed in the Bill that would trigger a referendum are wildly implausible. There are some which I cannot see many member states supporting, while there are others which I think it inconceivable that any Government would support. For example, there is a reference to the own resources decision. Unanimity on the own resources decision is absolutely crucial, and I cannot think that any British Government would be stupid enough to give it away, so I do not think we will have a referendum on that. There are other items which are minor matters of detail. No Government are going to be politically naive enough to go to the country on an obscure matter of procedural detail lost in the treaties.
However, as we saw in the debate touched off by the noble Lord, Lord Davies of Stamford, on his Amendment 22A the other night, there are some matters where a change would undoubtedly be in the interests of the UK. The clause he referred to is one where British industry would greatly welcome the introduction of qualified majority voting. But there is no question of any British Government agreeing that the country should be asked, “Do you want to overrule Parliament on whether the list of military goods that are exempt from single market disciplines should be changed by qualified majority voting?”. Any Government who put that question to the country would be laughed to scorn, so none of them will. The British negotiator in Brussels will be unable to put forward the proposal or support it if it is made by anyone else because his Government back home will tell him, “Don’t be silly. That would trigger a referendum”.
Ministers have argued that my fears are exaggerated. They have also argued that the price is worth paying and a bit of rigidity is necessary in the interests of restoring confidence in successive Governments’ handling of European affairs and recreating trust. I do not agree, but they may be right and I accept that only time can tell. My fear is that other member states, seeing how much concrete we have poured over our feet, will be tempted or forced to bypass our perceived rigidity by excluding us from the debate and proceeding by what is known as “enhanced co-operation” or acting outside the treaties without us. I think that we may be at a Messina moment. Again, the Government think that I exaggerate, and they may be right because, as I have said, only time will tell. It took a long time for the penny to drop that we had made a terrible mistake in walking out of the Messina conference.
I accept that the Government are certainly right to say that our exclusion is not an imminent threat. So little is going on that there is not much risk of our excluding ourselves by way of institutional or constitutional developments. But as time passes, the risk that our self-exclusion will be damaging increases. In nature, any organism that does not change and renew itself is by definition dead. The Government are making a virtue of rigidity. The case for flexibility will become more evident over time. New challenges will arise. The European Union will want to change itself in some ways—I cannot predict what they will be; none of us can. We should not rule out the possibility that we might want a change and that, as with the Single European Act, we might on occasion want to say yes.
This debate, I accept, is a bit academic now because of the coalition’s decision that nothing which could trigger a referendum will be done in this Parliament. Since the provisions of the Bill that we are passing are otiose until after the next election, it is an academic issue. But it is an issue that we should come back to after the next election; it is an issue where regular reassessments of the costs and benefits of the position that we have put ourselves in would be appropriate.
That is the national interest case for the amendment. It is the softest conceivable sunset clause, because the subsequent sunrise is so simple to effect. It is appropriate because the Bill is constitutionally innovative, affecting the sovereignty of Parliament in at least two rather serious ways. It would permit regular reassessment of whether rigidity is working or whether the national interest would be better served by avoiding self-exclusion from key debates and future developments. I beg to move.
Lord Taverne
My Lords, I want to look, as the noble Lord, Lord Kerr, has done, at the constitutional implications of the Bill, which should concern all Members of the House irrespective of their views on Europe.
The Constitution Committee has recommended a very important principle; namely, that referendums should be confined to changes of fundamental constitutional importance. If that principle is respected and strictly observed, such a referendum may not seriously prejudice parliamentary government as we know it. But this Bill as it stands drives a coach and horses through that principle.
There is no dispute about a referendum on the euro, or on joining a common European army or a common European foreign policy. But how can it be argued that the 56 possible changes that would trigger a referendum under this Bill are fundamentally constitutional? The noble Lord, Lord Howell, has several times argued that these items are all important. Well, they may well be important. Lots of minor changes may be important, but that does not make them fundamental constitutional changes.
If there is a European public prosecutor's office, it will have an important role in dealing with certain kinds of European financial crime. But if we decide to participate in that office, will it fundamentally change the British constitution? Does the noble Lord seriously argue that? Of course it would not. Are changes in the way we vote on the appointment of an Advocate-General or on the protocol on the excessive deficit procedure a fundamental change in the British constitution? Of course they are not.
Lord Kerr of Kinlochard
My Lords, I thank the Minister warmly for responding with his customary courtesy and patrician patience to our obtuseness. I thank all those who have taken part in this little debate. Sometimes it seemed like Second Reading again but it was good to see some new faces not seen in the seven or eight days of Committee. I am always glad to see new people join the debate.
I was particularly grateful for the contribution from the noble Lord, Lord Jopling, who speaks with great authority and who gave the answer to the noble Baroness, Lady Falkner, on how the procedure set out in the amendment could be made to work. I believe that it could be made to work here in this Parliament and I know that it would work perfectly well in Brussels. I have been there during a general election. I recognise that the night, though it could be very short, will not be short enough for the noble Baroness. I accept that.
I agreed very much with what the noble Lord, Lord Waddington, said. There is no doubt that, at least in the first general election, the two parties would make pledges. That is not a bad idea. I agree with the noble Lord, Lord Triesman, and the noble Baroness, Lady Williams, that bringing EU issues into general elections is exactly what we want to happen to deal with the disconnect. It is a far better way of dealing with it than the obscure provisions in this extraordinary Bill.
It makes sense to have a minimum reappraisal of at least once every five years, if we are having fixed-term Parliaments. At the start of each Parliament, it would make sense to ask Parliament whether it agreed that in relation to EU business—though not in relation to any other business—its rights and sovereignty should be subscribed to this extent. It would also make sense to consider who is right about the effects in the outside world, on the developments in Brussels and the British standing there, as well as on the British ability to support and advance the national interest in Brussels. I may be completely wrong, and I accept that, but I think that it makes sense to have a look every now and again and see who is right. Therefore, I would like to test the opinion of the House on this amendment.