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Baroness Symons of Vernham Dean: My Lords, all five nuclear weapon states are also permanent members of the Security Council. They are committed to nuclear disarmament; to a comprehensive ban on testing; and to combating the proliferation of nuclear weapons. Developments over the past few years have shown us that real progress is more likely to result from detailed negotiations for specific agreements than from work on an all-encompassing plan. We regard negotiations on a fissile material cut-off treaty as the next step in the process. Nationally and on behalf of the European Union, we have formally urged all parties to the non-proliferation treaty to press for the re-establishment in the Conference on Disarmament of an ad hoc committee on the fissile material cut-off treaty.

Lord Carver: My Lords, does the Minister agree that if we and the other declared nuclear weapons states had not only taken seriously the report of the Canberra Commission, which was published nearly two years ago and which made a clear and unequivocal commitment to the eventual total elimination of nuclear weapons, but had also taken the immediate practical steps which the commission recommended to demonstrate that, the unfortunate recent proliferation in the Indian sub-continent might not have occurred?

Baroness Symons of Vernham Dean: My Lords, that is a hypothetical question. The reasons for what happened recently in India and Pakistan are not that straightforward. We have had an opportunity to discuss that in your Lordships' House in the past couple of weeks and many of your Lordships acknowledged that regional matters are among the reasons why those countries felt it necessary, unfortunately and much to our dismay, to take the steps that they did.

Lord Renton of Mount Harry: My Lords, has the Minister seen the report in today's newspapers that China, one of the countries originally possessing nuclear weapons, may be in the process of supplying very sophisticated systems, notably, "telemetry" systems, to both Iran and Libya so that those two countries can develop nuclear weapons? Is it not an underlying fact that, sadly, the proliferation of nuclear weapons throughout the world is relatively likely over the next generation? Should not the Comprehensive Test Ban Treaty or the fissile material treaty be looked at again in order to consider how, in the real world, such proliferation can be avoided?

Baroness Symons of Vernham Dean: My Lords, the noble Lord raises an interesting point. What I have said about the nuclear weapons states' actions and positions on the nuclear test ban treaty covers China also. However, it is not all bad news, as the noble Lord's question seemed to imply. South Africa, the Ukraine, Belorussia and Kazakhstan have all given up their nuclear arsenals, and Argentina and Brazil have shown a far more enlightened approach in this respect. We have to be cautious and extremely vigilant.

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I note what the noble Lord said about China. I have no knowledge of the specific point which the noble Lord raised in respect of a newspaper report today. I have not seen such a report. However, I must point out to the House that it is not all bad news and that some parts of the world are moving voluntarily towards not proceeding with their nuclear weapons development programmes.

Lord Dean of Beswick: My Lords, does the Minister agree that speedy success in the present negotiations would help to discourage others who may now be on the periphery of developing nuclear weapons from doing so?

Baroness Symons of Vernham Dean: My Lords, we do everything that we can. The House knows that this is a central theme of the Government's policy. It was a central theme in our manifesto commitments. Through whatever means we can--through the United Nations, the European Union and G8--the Government are taking what steps they can to urge those who have not signed up to these important treaties to do so.

Lord Archer of Sandwell: My Lords, further to what my noble friend has said, does she agree that the two treaties that she has mentioned are not the ultimate objective, but the next step, because until then there will be individual instances of proliferation? You cannot stop an avalanche one rock at a time.

Baroness Symons of Vernham Dean: My Lords, we must be clear about the ultimate objective, and I hope that I have made it clear. Indeed, I believe that the Government's election manifesto made it clear. I also hope that I have made it clear to the House that the Government have a strategy on this issue, which is not necessarily one of going for an entire comprehensive all-in-one position. The Government are proceeding with consideration of the current discussions in Geneva on fissile material. I hope that I have made it absolutely clear to the House that that is the strategy that we are pursuing.

Lord Dholakia: My Lords, on 1st June, the Minister informed the House that five members of the Security Council were meeting in Geneva that week to discuss the implications of the nuclear testing by India and Pakistan. What was the outcome of that discussion? Perhaps I may remind the Minister that she also mentioned then that the G8 Foreign Ministers were also meeting in London to discuss the dialogue with India and Pakistan. What further developments have there been in that respect?

Baroness Symons of Vernham Dean: My Lords, the United Nations Security Council has encouraged all states to prevent the export of equipment, materials or technology that could assist programmes in India and Pakistan in relation to nuclear weapons or ballistic missiles capable of delivering such weapons. The Group of 8 has condemned the tests and agreed to work for postponement in consideration of loans not needed to meet basic human needs from the World Bank and other international financial institutions. The House may like to know that the General Affairs Council declarations of 25th May and 8th June set out the steps that the EU wishes

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to see India and Pakistan take to halt their arms race and to reduce tension. European member states have agreed to work for a deferral of consideration of loans from international financial institutions.

Lord Judd: My Lords, does my noble friend agree that it is not a matter of whether we are in favour of a comprehensive approach or a pragmatic approach, but that the pragmatic approach, if successful, is the evidence of the commitment to the comprehensive approach? If we are to achieve progress in the world as a whole, there is a credibility problem. Unless the major nuclear powers, including ourselves, can demonstrate all the time that we are, above all, committed to the elimination of nuclear weapons, it will be difficult to gain convincing support across the world because we shall be telling people to do as we say rather than as we do.

Baroness Symons of Vernham Dean: My Lords, I agree that it is important that we demonstrate that we are serious about our aim of nuclear disarmament. I think that we have demonstrated that by decommissioning our free-fall bomb, as we did at the end of March this year. I do not think that there is any doubt in this House or elsewhere about the commitment to nuclear disarmament of Her Majesty's Government. In trying to attain that goal, we must have a strategy. I hope that I have been clear in setting out for the House the Government's steps towards successfully achieving that strategy.


3.6 p.m.

Lord Carter: My Lords, at a convenient moment after 3.30 p.m. today, my noble friend the Leader of the House will, with the leave of the House, repeat a Statement that is to be made in another place on the Cardiff Summit. I should like to take this opportunity to remind the House that the Companion indicates that discussion on a Statement should be confined to brief comments and questions for clarification and that noble Lords who speak at length do so at the expense of others.

Sea Fisheries (Shellfish) (Amendment) Bill [H.L.]

The Earl of Lindsay: My Lords, I understand that no amendments have been set down to this Bill and that no noble Lord has indicated a wish to move a manuscript amendment or to speak in Committee. Therefore, unless any noble Lord objects, I beg to move that the order of commitment be discharged.

Moved, That the order of commitment be discharged.--(The Earl of Lindsay.)

On Question, Motion agreed to.

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Scotland Bill

3.8 p.m.

Lord Carter: My Lords, I have it in command from Her Majesty the Queen to acquaint the House that Her Majesty, having been informed of the purport of the Scotland Bill, has consented to place her prerogative and interests, so far as they are affected by the Bill, at the disposal of Parliament for the purposes of the Bill.

The Parliamentary Under-Secretary of State, Scottish Office (Lord Sewel): My Lords, I beg to move that this Bill be now read a second time.

This Bill, which establishes a Scottish parliament and a Scottish executive, is part of the process of creating a new Union--a union not based on uniformity, but one which recognises and celebrates the diversity of the United Kingdom.

Through this Bill we seek to establish an enduring, fair and stable settlement--one which recognises the essential value of devolution: the ability to provide local solutions to local problems against a framework of locally defined priorities. We are also about building a more decentralised, plural society in which real power is dispersed and the political process becomes more accessible to our citizens and in turn more inclusive.

We are equally determined that these advantages should be obtained while securing and strengthening the Union that is the United Kingdom--a union that is more than the sum of its constituent parts. On 1st May last year the Government were elected on a mandate to enact legislation as soon as possible to allow people in Scotland to vote in a referendum on proposals for a Scottish parliament. We kept that promise. The referendums Bill was published within two weeks, our proposals were set out in the White Paper published on 24th July and the referendum was held on 11th September. Once we had the overwhelming support for our proposals we kept our word and introduced legislation to implement them before the end of 1997. The Bill has now completed its four-month passage through another place which allowed no less than 80 hours of debate on the Floor of the House according to a timetable agreed by all parties. There is no question that the Bill has not received the scrutiny it merits.

We may be at the beginning of our deliberations in this House, but the journey has been a long one with quite a few alarms and diversions on the way. Many have played a part in bringing us to where we are today. It is appropriate to mention the invaluable work done in the period leading up to the last general election by the Scottish Constitutional Convention. The convention brought together different political parties and interests across Scotland and gave us a sure foundation upon which to base our legislative proposals. It is right to pay tribute to two Members of this House who worked long and hard as the joint chairs of the convention: the noble Lord, Lord Steel of Aikwood, and my noble friend Lord Ewing of Kirkford. I am well aware of the extent to which within my own party my noble friend has been the advocate for and guardian of the convention's

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proposals. I trust that both noble Lords are well satisfied that the Bill before us today gives legislative effect to the convention's plans.

I have said that the journey has been a long one, and not all parties in this House have travelled by the same route to reach our common destination. That destination is a parliament that will work, and work well, for the benefit of Scotland, the United Kingdom and the Union.

Perhaps I may say a few words about the Official Opposition. At the time of the referendum the party opposite took a different view from that of the Government. I recognise and applaud the way in which, in a mature and deliberate way, they have accepted the democratically expressed will of the Scottish people and are now committed to securing a parliament that works and is a success. I congratulate them on that. I look forward to that constructive approach continuing through the weeks that lie ahead of us. All parties in this House have the common aim of ensuring the success of the devolution settlement. But there are those who have a vested interest in undermining the settlement and doing what they can to make sure it is not a success. They do so out of a desire to break the Union and set off down the path to separatism. That is not some devolution-plus; it is the very denial and antithesis of devolution which itself values both unity and diversity. We can perhaps show in the way we debate this Bill how the Parliament of the United Kingdom can welcome both the diversity of devolution and the continuing unity and strength of the Union.

In this House in the weeks to come we must not forget what has gone before. This Bill was a central plank of the Government's manifesto encapsulated in the White Paper, endorsed in the referendum and now approved in another place by a majority of Members representing constituencies in all parts of the United Kingdom. The proposals before us thus come with a triple democratic endorsement. Nobody claims that the Bill as it stands is perfectly crafted. It is quite proper--indeed, it is the duty of this House--to scrutinise this Bill. This House can, and I am sure will, make a valuable contribution to improving the Bill. But there is a world of difference between legitimate scrutiny and obstruction. Given the acceptance by all parties of the democratic endorsement that the Bill has already received, I do not expect that there will be obstruction. I stress that the main features of the settlement are simply non-negotiable, but there is nevertheless scope for this House to express its wishes in other areas, and this Government will listen and reflect upon what is said.

We presented the White Paper in this House almost 11 months ago. We said that the devolution scheme laid out in it was right for Scotland and the United Kingdom. The people of Scotland agreed with us. The overwhelming referendum votes in favour of a parliament with law-making and tax-varying powers demonstrated a new confidence. It showed that Scots wanted to live in a country with significant autonomy but that they also wanted to remain with a strong and stable United Kingdom.

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The people put their trust in the Government and we have repaid it. The Scotland Bill gives effect to all the commitments to legislate which we made in the White Paper. The Bill reads rather differently from the White Paper. That is the nature of legislation. However, the guide to the Bill which we have published shows precisely how the proposals in the White Paper have been carried through into legalisation. The key point is that the White Paper is all here in the Bill. We are committed to establishing a substantial and powerful parliament in Scotland. This Bill will deliver that commitment.

I shall now explain the key elements of the Bill. Clause 1 provides that there shall be a Scottish parliament and goes on to provide for how its members are to be elected. We said in the White Paper that the electoral system would enable us to build a parliament based on fairness. That is what we have achieved in Clauses 1 to 17 of the Bill. The principal features of the system will be: the parliamentary term will be fixed at four years, although there is provision for elections before that period in exceptional circumstances; electors will be able to vote twice in the elections to the Scottish parliament, once for a constituency member and once for a regional member; regional members will be drawn from a list submitted by a registered political party or individuals standing in their own right; and regional members will be returned on a corrective basis which reflects the proportion of votes cast for the party or individual while taking account of seats already gained in the constituency ballot. These arrangements will ensure both a strong constituency link and a closer relationship between votes cast and seats won.

I should like to highlight the provision which will allow independent candidates to stand as regional members. This is an advance on the proposals in the White Paper. It reflects our commitment to open the doors of the parliament as wide as possible and allow in new blood, possibly from outwith the so-called political establishment. I hope that many able people will seize the opportunity provided by the Bill.

The provision of separate constituencies for the Shetland and Orkney Islands also reflects our firm commitment to making this a parliament for all of Scotland. We want to ensure that we have an inclusive parliament which represents the diversity of Scotland. There have been suggestions that the parliament will be dominated by the central belt. That is simply not so. The system will ensure that the more remote areas of Scotland will be properly represented in the parliament. In absolute terms there will be about the same number of members from the Highlands and Islands and the South of Scotland as from the Lothians and Glasgow. The electoral system will ensure that all the voices of Scotland will be heard.

We promised that the parliament would have wide-ranging legislative powers. That is what we have delivered. Clause 27 of the Bill gives the Scottish parliament the power to make laws for Scotland while acknowledging the position of the United Kingdom Parliament. Clauses 28, 29 and Schedule 5 effectively

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set out the legislative competence of the Scottish parliament and list the matters which will be reserved to Westminster.

This approach will help to achieve clarity and stability and by allowing for amendment of the list of reserved matters by agreement between Westminster and Edinburgh will provide flexibility for the longer term.

Everything that is not reserved is devolved. This will give the Scottish parliament the power to make laws for the Scottish people over a wide range of matters. These powers will be exercised by members elected by and directly accountable to the people of Scotland.

The Bill also provides for all powers under existing Westminster legislation to be transferred to the Scottish executive where these concern matters which are not reserved; and for certain specified powers in reserved areas also to be devolved to ministers of the Scottish executive by order, a draft of which will be made available shortly.

The Scottish parliament will be specifically entitled to make laws about Scots private law and Scots criminal law, even although they may affect reserved matters. This will allow the parliament to maintain and develop the distinctive traditions of Scots law. The legitimate interests of the United Kingdom in any direct impact of changes in the civil law of Scotland on legislation concerning reserved matters will be protected.

The Bill ensures a fair and open system for resolving any disputes about the vires of the parliament. The Law Officers of either the UK Government or the Scottish executive will be able to refer a Scottish Bill to the Judicial Committee of the Privy Council if they have any doubts about its vires. The Judicial Committee will for these purposes be composed of those who are or have been Lords of Appeal in Ordinary or who otherwise hold or have held high judicial office in the United Kingdom.

This is, I believe, an important advance on the proposal in the White Paper which would have restricted membership to the 12 Lords of Appeal in Ordinary. It will mean that there will be a bigger pool of potential members to draw upon, with judicial experience from throughout the UK.

The Bill will also enable public authorities with a remit which covers devolved and reserved matters to continue to operate broadly as now while giving the Scottish parliament and ministers important rights to be consulted on and to question their activities in relation to devolved matters in Scotland.

I turn now to Part II of the Bill. The Scottish executive will be headed by a first minister appointed by the Queen following nomination by the parliament. It will also consist of Scottish ministers and the Lord Advocate and Solicitor General for Scotland. The first minister will be able to appoint junior Scottish ministers to assist Scottish ministers in their duties.

The executive will be a powerful body able to exercise executive functions in devolved areas. The Government also intend to give it wide-ranging powers to act in reserved areas within Scotland by means of executive devolution under Clause 59.

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The executive will be fully accountable to the parliament. No one will be able to hold office as first minister, a Scottish minister or a junior Scottish minister unless their candidature has been approved by the parliament. They will be required to resign in the event of a vote of no confidence.

The Bill provides that the Lord Advocate and Solicitor-General should be members of the Scottish executive. It also envisages the appointment of a Scottish Law Officer to the UK Government to occupy the new post of Advocate General for Scotland. It also protects the independence of the Lord Advocate in relation to the prosecution of crimes and investigation of deaths, and gives him and the Solicitor-General the right to decline to answer questions in parliament about individual criminal cases in certain circumstances.

Taken together with the electoral arrangements the provisions for the administration pave the way to a new era of partnership between the executive and legislative branches of the state in Scotland. The nature of the arrangements will, we believe, promote consensus and good government. There will need to be more give and take; more listening; and more co-operation. I believe that this new and fresh approach to politics will bring real benefits to the people of Scotland.

And let me mention here another central feature of the constitution--the judiciary. Unlike in the 1970s we believe it is right that responsibility for the judicial and court system should be devolved, and the Bill provides this. At the same time it is important that safeguards to protect the position of the judiciary should be built in. The Bill therefore provides that judges and tribunal members cannot be summoned to give evidence to the parliament.

While Clause 89 confirms that Scotland's two most senior judges will, as now, be recommended for appointment by the Prime Minister but chosen from nominations made by the first minister, the first minister will recommend the appointment of other senior Scottish judges. Dismissal of a judge will be possible if two-thirds of the members of the parliament vote in favour of it, subject to careful safeguards on the exercise of this power.

The Government promised in the White Paper that the Parliament would be established on a sound financial basis. Clauses 61 to 68 fulfil that commitment. They set out the financial arrangements for the parliament and the executive. The centrepiece is the provision for a Scottish Consolidated Fund into which the UK Government will make payments.

The Government have published a paper setting out the principles which will govern determination of the block budgets for the Scottish parliament and the national assembly for Wales. It explained that the tried and tested arrangements associated with the Barnett formula will continue to operate under devolution, with only minor adjustments. Like the Barnett formula itself under successive administrations over the past 20 years, the formula by which the Scottish parliament's budget will be calculated will be an administrative arrangement which does not need to be prescribed in legislation.

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The Bill will transfer to the Scottish parliament the maximum freedom to determine its own expenditure priorities and will ensure that those who make the decisions are accountable to the Scottish people who will be affected by them.

Subject to the outcome of the referendum the Government promised to give the Scottish parliament a limited power to vary the basic rate of UK income tax in Scotland by up to 3p. Clauses 69 to 75 fulfil that commitment.

These clauses and the power itself have been the subject of very considerable debate, and rightly so. The powers, if exercised to the full, would allow the parliament to increase or decrease its income by something over £400 million per annum at today's prices. This is, of course, only about 3 per cent. of the current Scottish block but is nevertheless a substantial sum. In our view, and clearly that of the people of Scotland, too, it represents an important fiscal flexibility which is entirely appropriate for the sort of mature parliament which we are establishing.

As the White Paper foreshadowed, the conduct of relations with the European Union is necessarily reserved to the United Kingdom Government because the United Kingdom is the member state. But the Bill gives the parliament and the Scottish executive the full powers they need to observe and implement European Community obligations in so far as they relate to the devolved areas. The parliament will be able to scrutinise relevant EU proposals and legislate to give effect to Community obligations for Scotland. And Schedule 5 also provides that the Scottish executive will be able to play a role alongside the United Kingdom Government in negotiations. The Bill therefore does everything that is needed to give effect to our proposals on Europe as set out in the White Paper.

Much has been made in another place of the omission from the Bill of a right in law setting out exactly when ministers of the Scottish executive will participate in meetings of the European Council of Ministers and other negotiations. I have explained that the Bill contains enabling provisions to make clear that they may take part in such negotiations. But the UK is the member state; we must have a common UK position and a single UK delegation. The emphasis in negotiations will continue to be on working as a UK team; the delegations will be led by a UK lead minister who will retain overall responsibility for the negotiations, the same as now.

European negotiations are often fast moving and the emphasis must be on flexibility in deciding who best should speak for the UK in councils in the light of the business under discussion.

We envisage that these matters will be covered by concordats between Edinburgh and London, but we are firmly of the view that it would neither be sensible nor appropriate to try to prescribe the detail of who should speak when on the face of the legislation. The Bill contains the necessary provision to enable Scottish ministers to take part in negotiations when relevant, but it must be in the context of arrangements which will provide for sensible co-operation between the UK and Scottish administrations.

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A central theme of the White Paper was that, while the devolved parliament and executive would have a considerable degree of autonomy, Scotland would remain an integral part of the United Kingdom. Indeed, the White Paper made it clear that good communication systems between the UK Government and the Scottish executive will be vital. Without them devolution will be less effective, and both administrations would suffer as a result.

So it is in the interests of both sides that constructive, day-to-day working relationships are established between departments right from the outset at both ministerial and official level. It is also important that the relationships should be flexible and dynamic. We are, after all, in the UK context, entering uncharted territory. The United Kingdom will remain firmly intact, but devolution to Edinburgh, Cardiff and Belfast will change for ever the way in which it operates. It is important that the working relationships between all four capital cities are able to adapt as the new institutions bed down over the next few years.

Inter-departmental concordats, or mutual understandings, will be an important part of this non-statutory machinery of co-operation. They will make it clear that relations between Edinburgh and London will be based on consultation, consent and co-operation within the framework established by the Scotland Bill. Corcordats will be sensible administrative tools on which working relationships will be based. They will not, as was claimed by some in another place, be a backdoor device for either giving more power to Holyrood than is provided for in the Bill, or clawing back powers that will have been devolved. They are quite simply a means of ensuring good, effective, day-to-day working arrangements between the two administrations.

No provision for concordats is required or made in the Scotland Bill. As with negotiations over Europe, legislation in this area could actually hinder relationships which will evolve naturally. It would be counterproductive to give them the degree of inflexibility that inevitably flows from statutory prescription.

The Scotland Bill is a substantial as well as a far-reaching piece of legislation, running to 117 clauses and 8 schedules. In recognition of the complexity of the Bill and its interaction with so many other enactments, I am making additional information available to Members. I have already placed in the Library of the House copies of the guide to the Bill. I shall also place in the Library shortly a compilation of extracts from enactments which the Scotland Bill proposes to amend. Before the beginning of the Committee stage, I shall also be publishing comprehensive notes on clauses.

I commend the Bill to the House. It is a bold, innovative piece of legislation. It is also part of our far-reaching constitutional programme designed to bring the processes of government closer to the people. The elements of this programme are well known. We are establishing a parliament in Edinburgh together with assemblies for Wales and Northern Ireland, an elected assembly and mayor for London, the incorporation of

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the European Convention on Human Rights and a more constructive approach to the European Union. These all demonstrate this Government's commitment to the modernisation of the United Kingdom. Our aim is a more pluralist, outward-looking democracy which is confident in itself and in tune with the modern world. We want to build a system of government which people can access easily, feel part of and take part in. We want a more inclusive politics--to bring a wider range of people into the political process.

In 1999, a Scottish parliament will sit in Edinburgh for the first time in 292 years. Yet this will be a very different body from that which united with the English Parliament in 1707. It will be a thoroughly modern, forward looking parliament. It will be a parliament fashioned in Scotland, for Scotland, and able to build a better Scotland.

We are on the threshold of completing the unfinished business of which John Smith spoke, and of giving effect to the settled will of the Scottish people. Let this project be his lasting political legacy to the United Kingdom and to Scotland.

Moved, That the Bill be now read a second time.--(Lord Sewel.)

3.36 p.m.

Lord Mackay of Ardbrecknish: My Lords, I am sure that the whole House is grateful to the noble Lord, Lord Sewel, for his introduction and arguments in favour of the Bill. I found it interesting that there was no word of explanation as to why your Lordships are being asked to give a second reading to the Bill, which I understand is the flagship of the Government's programme, so late in the Session. At the turn of the year, when I looked at my new diary, I thought that we would start the Bill shortly after Easter and that we would now be in Committee. I cannot yet understand why the Government are taking the Bill at such a leisurely pace. We could have had the Second Reading a fortnight ago and the Commons could certainly have finished its Report stage very much more quickly. One day a week is slow going in the other place.

I must say to the Minister and to his colleagues in Government that I do not want to hear any complaints here or in the press via the usual spin doctors that we are dragging our feet on this Bill. Starting now, there is simply no chance of finishing a Bill of this magnitude by the Summer Recess. It is the Government's business management, in both Houses, which is responsible for that.

We have an important job to do here, both next month in Committee and in the spill-over period on Report and Third Reading, because it is vital we ensure that this Bill delivers a sensible and stable devolution package. It is the delivery of that stable and sensible package which will be our ambition on these Benches as we probe, question and suggest amendments.

It is no secret that I am a reluctant convert to devolution. The reason for my conversion is simple. It is not the argument which I listened to again from the noble Lord, Lord Sewel, but it is that I am a democrat.

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My fellow Scots made it abundantly clear at elections and in the referendum that they want a devolved parliament and government within the United Kingdom.

The debate in Scotland has raged for some time and has ranged over the status quo, devolution and independence. One of the principal arguments used against the status quo by the advocates of devolution--there was a hint of it in the Minister's speech today--has been that if we do not respond to the desire of the Scottish people for some limited change we will drive them into the hands of the Scottish National Party. That view is well illustrated by Mr. George Robertson, now Secretary of State for Defence, who when he was shadow Secretary of State for Scotland, said:

    "Devolution will kill nationalism stone dead".

Perhaps I might repeat that for your Lordships:

    "Devolution will kill nationalism stone dead".

Mr. Donald Dewar, when introducing the White Paper in the other place on 24th July, said in response to SNP leader Alex Salmond:

    "I believe, however, that the reform package that we have announced today, implemented with good will and spirit, will make his [Alex Salmond's] task a bit more difficult".--[Official Report, Commons 24/7/97; col. 1049.]

On the same day, in my response in your Lordships' House to the noble Lord, Lord Sewel, I said that,

    "the Government believe that what they are doing here will strengthen the Union. I earnestly hope that they are right. However, ... 'I hae ma doots'".--[Official Report, 24/7/97; col. 1535.]

I did not think for one moment that those doots would be confirmed quite as speedily. But, in poll after poll, the demand for independence, far from fading away, has grown and grown. In the most recent ICM poll in the Scotsman, 52 per cent. said they wanted independence. In last week's poll in what I still like to think of as the Glasgow Herald, in response to a question as to how people will vote for the Scottish parliament, the SNP lead Labour by a staggering 44 per cent. to 36 per cent. That is some burial; some own goal. The noble Lord, Lord Sewel, and his colleagues must feel as bad as poor Tom Boyd did when he saw the ball fly over his head into the back of the Scottish net. At least he can be forgiven. His was just one of those unfortunate incidents which occur in a fast-moving game in a crowded goal mouth. Not so Labour's own goal.

It is a temptation to say, "I told you so", and I shall not resist it. I did tell the Government so. But we cannot sit back, watch and enjoy Labour being force-fed humble SNP pie. We must try to stop that happening. We must try to keep this Kingdom united, yet at the same time we must deliver what the Scots want--a workable, devolved government. In many ways, we must prove our forebodings wrong.

Against that background, we shall look carefully and critically at all aspects of the Bill. I wish to highlight a few of them this afternoon: the electoral system, the financial arrangements, the legal and constitutional framework, the issues to be devolved and those to be retained here at Westminster, the number and role of Scottish MPs, the so-called West Lothian question.

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I shall start with the easiest matter, at least for me; which is the legal and constitutional issues. It is easy for me because they will be dealt with by my noble and learned friends Lord Mackay of Drumadoon and Lord Fraser of Carmyllie. Therefore, I shall not say any more about them. I should not use the expression because the lawyers will not like it, but why should I have such eminent noble and learned friends and still try to do the barking myself?

As regards the electoral system, I am unashamedly in favour of the first-past-the-post system. Through one-member constituencies, first-past-the-post provides a clear one-to-one relationship between the citizen and his Member of Parliament. It allows the electorate to punish a party which has lost touch with its own supporters. More often than not, it delivers a clear result with one party winning. It makes for stable and directly answerable government.

I know that I shall be told that my party has suffered grievously because of that system and that some form of proportional representation would be to our advantage. I understand that. I see that--if I may use that dreadful expression--at this moment in time, that may be true. But electoral systems should not be chosen for one moment in time. They should stand the test of time. Our system has done that. In comparison with many countries which have chosen one of the many variations of PR, we can boast a long thread of democratic government uninterrupted by many of the horrors visited on our less fortunate friends on the Continent.

That pass may already have been sold as regards the Scottish parliament, but we shall certainly wish to look carefully at the many varieties of fiddled voting systems we are offered here. For example, I am extremely concerned about the power that the closed list system chosen for the second top-up ballot gives to the party political machine--a power taken away from the electorate completely. I shall want to know why the closed list system has been chosen and why we cannot have one of the more open list systems. I hope that, unlike on the Welsh Bill, the Liberal Democrats will get up off their knees, humbly begging for crumbs at the Government's table, and will stand up for the more open system which I thought they believed in.

I am concerned also at the possible manipulation which could occur between the first and second vote. The principle of the second vote and its list is to top up the first-past-the-post seats to bring the seats gained into close proportionality with the votes cast in the second ballot. If a party does extremely well in the first-past-the-post section, it will find that it will have very few of the top-up seats.

One way round that would be for a party which does well in the first-past-the-post seats not to stand in the second vote but to allow an alter ego party to stand, one which does not stand for any of the first-past-the-post seats and thus has no seats. That alter ego party can clean up the second vote and the whole object of proportionality can be defeated.

In case anyone thinks that that is just a product of my fevered mind, I should tell your Lordships that the idea comes from Mr. Michael Dyer of Aberdeen University

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and has been taken up by Mr. Ian Davidson, the Labour MP for Glasgow Pollok, who, interestingly enough, was judged to be of sufficiently high quality to be a Member of the other place but not of sufficiently high quality even to be allowed by the Labour Party to have a possible attempt at the Scottish parliament.

Perhaps I may illustrate my concerns with the City of Glasgow results at the last election. Labour would gain all 10 seats in the first-past-the-post system, as it did. In the seven top-up seats, using the system in the Bill, it would gain only a further two seats. My party would gain one seat, the SNP would gain three and the Liberal Democrats would gain one. If the Labour Party decided not to stand in the second ballot but the co-operative party registered, as indeed it could, to stand in that second ballot, Labour voters in Glasgow would have no difficulty in understanding what was going on. I suspect that they would approve of the ploy. They would vote heavily for the co-operative party in that second ballot. In that event, the top-up seats would fall six to the co-operative party, one to the SNP and none to the Conservatives or Liberal Democrats. Therefore, Labour and its co-operative allies would enter the Scottish parliament with 16 seats from Glasgow, four seats to the good. We shall explore ways of preventing that happening.

I turn now to finance. We shall wish to explore the continuation of the Barnett formula and the impact of the comprehensive spending review on the Scottish block. None of us expects financial distributions to be set in concrete. But there are enormous dangers that the now triennial negotiations between the UK Government and the Scottish government will become a focus for discontent and disruption within the Union.

Interestingly enough, this morning in the Glasgow Herald, there is a report on an academic study in which those problems emerge. It is an academic study by, among others, Professor Colin Munro of Edinburgh University. Many of the study's seven co-authors used their contributions to highlight the growing likelihood that rows over money will regularly put Scotland in conflict with Westminster. Therefore, our duty, consistent with the principal objective that I have set for the Opposition in this Bill, is to find ways to minimise that potential dispute.

We shall want to explore also the question of the extra 3p in the pound. On whom will it be levied? That is an issue which is still fairly uncertain. In the words of the Institute of Chartered Accountants of Scotland, the seven clauses which relate to the tax-raising powers are overly complex, poorly drafted and costly to implement.

How does the 3p in the pound relate to the £450 million which is also pledged? That is a kind of double pledge for the Scottish parliament. What will happen if the 3p does not raise that amount of money? How will the difference be raised? That is not a difficult question but it seems to be impossible for the Government to answer it because they have so far failed to do so. However, I shall try to help them.

The financial relationship between the Scottish parliament and local government finance, council tax, business tax and capping will all need exploration and clarification.

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I turn now to what is to be devolved and what is to be reserved. This Bill tackles that matter in a totally different way from the Welsh Bill. As the Minister said, here we have a list of those issues which are reserved. I believe that that is a neater way in which to approach the matter. However, it does not mean that on each issue the Government have made a clear and unambiguous decision. I have no problem as regards where Scottish law should fall and where health, education and local government should fall. Those matters should be dealt with by the Scottish parliament. Equally, I have no problem about foreign affairs, Europe, defence and trade and industry. Those matters should be reserved. But there are grey areas which we shall wish to explore.

For example--and the Minister failed to convince me again today--before the CAP and the CFP, I should have had no great problem with agriculture and fishing being devolved. But today, with so much of our agriculture and fishing policy determined at a European level--and we had a good illustration of that at Question Time today--I believe that Scottish agriculture and fishing should not be separated from that of the rest of the United Kingdom and should possibly remain the responsibility of the UK Government, who are and will remain the government negotiating at Brussels. Ministers conducting the negotiations should be answerable to Scottish Members of Parliament and, through them, to those involved in those two important industries. If they are devolved the Ministers in this Parliament will not be answerable and yet they will do the negotiating, while the Ministers in the Scottish parliament who will be answerable will not be involved in any of the negotiations because they will not--and I emphasise the word "not"--be able to represent those industries where it matters; namely, at meetings of the Council of Ministers of the member states of the Union.

I have explored this aspect in some detail during the proceedings on the Welsh Bill, but have received no satisfactory answer from Welsh Ministers. I am still waiting for just one example of where a member state of the Community, on an issue encompassing the whole member state, is represented at that negotiating table by a Minister from a provincial parliament--either a German Lander or one of the provinces of Spain. I await that promised letter. As I said, not a single example has been given in all the times that this issue has been raised across this Dispatch Box.

Equally, and still on countryside matters, I am not really convinced that the Forestry Commission, which is a UK body, will gain by being split into three and being answerable to three different masters.

When I look at my old department, the Department of Social Security, I can see why the contributory benefits have to be kept on a UK-wide basis, but I am not so sure about the non-contributory benefits--cold weather allowance, disability living allowance and child benefit. Why should they not be devolved? After all, it was the Labour Party which, winter after winter, made a great song and dance about the fact that we should consider Scotland differently from the rest of the UK because it has a colder and wetter climate. However, judging by this June, I am not entirely convinced that that holds true.

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I have one more example in this category in the moral field; namely, why is abortion not devolved? I can see no good reason why it should not be, especially when I see that euthanasia is devolved. After all, in the words of Donald Dewar, the parliament is to be,

    "a grown-up Parliament with grown-up responsibilities".

My last main point relates to the relationship between Scotland and England after devolution. When the Treaty of Union was negotiated back at the beginning of the 18th century, it was acknowledged that there was a disparity in size between the two partners and that Scotland's representation at Westminster should be greater than proportional. That position has rightly remained and, in some respects, has actually grown. Scotland has 72 Members in the House of Commons, and the average electorate in Scotland is 55,000 as opposed to 69,000 in England.

That disparity will be indefensible after devolution. Scottish MPs will see most of their workload and responsibility shift to that Scottish parliament, and the arguments in favour of roughly equal electoral numbers north and south of the Border will become unanswerable. Some argue that we ought to go further. But I do not, for exactly the same reason as the negotiators concluded 300 years ago.

Not only is this equitable; it will also reduce the chance, although not completely, of the so-called West Lothian question becoming an issue between us. With fewer Scottish MPs it is less likely that the political complexion of the UK and thus of the Government of England--for that is actually what we are talking about--on all these devolved issues would be at variance with the electoral result in England.

As we start these new arrangements, it is my belief that we should also have new, equal electoral quotas and that the number of Scottish Members should be reduced to, say, 58 for the next election. I understand that that view is shared by the Government, but they do not want it to come into effect until after the next election.

Just as that reduction would go some way to solving an English problem, it would, as the Bill is written, create a Scottish problem. As the Bill is framed, the number of seats in the Scottish parliament is determined by the number of seats at Westminster--reduce the one and you reduce the other. I can think of nothing worse than, in the first session of the new Scottish parliament, for Westminster to reduce the number of Scottish MPs and say automatically to the 129 MSPs, "Sorry, 21 of you will need to fall on your swords". I trust that the Government will do something about that during the course of the Bill's passage in this House. If they do not, I hope that we shall.

These five issues, the electoral system, finance and taxation, devolved and reserved powers, the West Lothian question and the legal and constitutional interplay between this Parliament, the Scottish parliament and the judiciary, along with a number of other issues, both large and small, will give us many interesting hours in Committee. Indeed, not only will that process be interesting; it will also, I trust, be productive. I thought I heard the Minister say--at least

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I hope so--that the Government want to be constructive during the Bill's passage through your Lordships' House. Therefore, I hope that the Government will look at our amendments, and indeed those from any other part of the House, with some sympathy and understanding.

The Minister actually said that the Government would,

    "listen and reflect on what is said".

I hope that we have a little more reflection than we have had on the Welsh Bill where the only person who has achieved any success is my noble friend Lord Balfour, who has had the tiniest of amendments accepted by the Government. In every other case, it has been the Welsh equivalent of "No, no, no". I know that my fellow Scotsmen will do a little better than that, but I trust that the Government will be prepared to listen to the arguments and, where necessary, accept them and agree to amendments.

Like the noble Lord, Lord Sewel, I believe that we can all work together during the proceedings on the Bill for what are, despite our disagreements on some issues and despite the fact that we have disagreed on this particular issue in the past, shared aims. I believe that those aims are shared by all parties in this House, and I am quite sure that that also includes those on the Cross Benches; namely, to create a viable, working parliament in Scotland which serves Scotland but, at the same time, very firmly retains her place in the United Kingdom. That will be the objective of Her Majesty's Official Opposition in this House during the weeks ahead.

3.56 p.m.

Lord Steel of Aikwood: My Lords, I seem to be fated to follow my old and noble friend Lord Mackay of Ardbrecknish in these debates. He began by telling the House that he was a convert to the cause of devolution--some convert! I have no doubt that the right reverend Prelate will agree with me that in our experience converts are usually more enthusiastic than those who are original believers. However, I failed to detect any sign of enthusiasm in the speech that we have just heard. I believe that the noble Lord is a convert by the head but not yet by the heart. Let us hope that our deliberations during these debates will bring him to full conversion in the recognition that what we are doing is not only sensible but long overdue.

Indeed, listening to the noble Lord's speech, I could not help but recall the words of Mr. Gladstone that:

    "Liberalism is trust of the people tempered by prudence [while] Conservatism is distrust of the people tempered by fear".

There was a strong element of fear running through much of what the noble Lord said. Having accepted the overwhelming vote of the Scottish people in the referendum last autumn and the May wipe-out of the Conservative Party--nul point, as they would say in the Eurovision Song Contest--as far as concerns the Scottish election results, there is still a reluctance to accept that what we are doing today is fundamentally and absolutely correct and that we must proceed with it with all possible dispatch.

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During the past few weeks we have been commemorating the hundredth anniversary of the death of Mr. Gladstone. Therefore, it is right that I should begin from these Benches with a quote from a speech that he made in 1887 when he said:

    "It is the recognition of the distinctive qualities and the separate parts of great countries and empires which constitutes the true basis of union, and to attempt to centralise them by destroying those local peculiarities is the shallowest philosophy and the worst of all political blunders".

That was the political blunder of the Conservative Party in Scotland over the past few years, for which it paid a very heavy price.

I thank the Minister both for the clarity of his introduction to the Bill and also for the kind words that he said about the work of the Scottish Constitutional Convention. I am sure that the noble Lord, Lord Ewing, will agree with me that both he and I were really just the decorative figures at the head of the convention--well, at least he was--and that the real work was done by the executive and its sub-committees which toiled not over three or four but over five or six years to produce the blueprint upon which the Government are now legislating. I pay tribute to them.

I listened to a great number of the debates in the House of Commons during the passage of the Bill in the other place. Those parts I did not hear myself I read in the Official Report. I must quarrel with the complaint of the noble Lord, Lord Mackay, as regards the business management of this Bill. In the other place both the Government and my party were perfectly agreeable to the proposal that this Bill should be sent upstairs to a committee for detailed, line-by-line analysis. However, at the wish of the Conservative Party, it was discussed on the Floor of the House during tedious days on a voluntary timetable. As a result some parts of the Bill were not examined at all. Therefore I believe that there is at least some obligation on the part of the Official Opposition to recognise that the late arrival of the Bill here is due in part to following their wishes as well as to any slowness on the part of the Government.

Listening to those debates I was struck by one peculiarity; namely, that the Bill was debated in the other place without any representatives of the Official Opposition who came from Scotland. Mr. Michael Ancram at least knew what he was talking about because he had been a Scottish Office Minister even though he now represents an English seat. However, most of the other contributions from the Official Opposition were lamentable. We had Members who assured us they had grannies in Auchtermuchty, or uncles with shooting estates in the Highlands. The more intellectual of them had visited the Edinburgh festival. We were treated to endless speeches of a nonsensical variety.

I wondered at the enthusiasm of some of those Members to participate in debates on a Bill which had little effect on them. However, towards the end of the debates we discovered the secret; namely, they had been promised that if they made good speeches on Opposition amendments they would get a "shot" at moving an amendment at the Dispatch Box. Sweeteners of that kind would not work in this place. One can hardly envisage

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the noble Lord, Lord Campbell of Croy, or the noble Lord, Lord Monro of Langholm, queuing up to stand at the Dispatch Box in this House. We shall have the advantage in this House when we reach the Committee and Report stages of the Bill in having home grown Scottish Peers who know what they are talking about and who will bring constructive criticism to our proceedings. That will be a great advantage.

We have a job to do and that is to examine this Bill. Members of my party will table between half a dozen and a dozen amendments, all of which will have the effect either of improving the Bill in accordance with undertakings given by the Government in the other place or of reducing the list of reserve powers. That is a matter on which I may find myself at last in some agreement with the noble Lord, Lord Mackay of Ardbrecknish.

There is one difference perhaps in vocabulary between my party and the Government, and that is in describing what they call the creation of the Scottish parliament and which I prefer to describe as the restoration of the Scottish parliament. I say "restoration" for a good historical reason, not because I want to restore the kind of parliament that we had before 1707 but to emphasise an important point. The debates that took place in Scotland in the period leading up to the Act of Union were not discussions for and against the principle of the Union--as is widely assumed--but discussions on whether in the course of that Union (which was broadly agreed 100 years after the Union of the Crowns) the Scottish parliament should be retained as the internal legislative body in Scotland. That argument was lost through bribery and persuasion of various kinds.

The SNP as a party is historically incorrect when it tries to present the debates of 1707 as arguments for or against the Union. Fletcher of Saltoun, whom that party often quotes, said wisely,

    "That London should draw the riches and government of the three kingdoms to the south east corner of this island is in some degree as unnatural as for one city to possess the riches and government of the world".

He had never even heard of the Millennium Dome! He was very much ahead of his time. As I argued in the debate on the referendum Bill, the 1707 Act of Union has never been politically accepted in Scotland among the population at large right from the year after it was passed. The noble Lord talked about unfinished business. Many noble Lords are talking about unfinished business from the Parliament Act of 1911 as regards reform of this House. But Mr. Asquith's Government were wholly committed to introduce a Bill to establish a parliament for Scotland. Indeed in 1914 a Liberal Bill passed through the House of Commons. Incidentally that Bill would have given women the right to vote too, so advanced were we in those days north of the Border. However, the outbreak of the First World War put a stop to all of that and my party never regained power. However, since 1914 there have been 19 Scottish parliament Bills. This is the 20th and it is the best. It is time we got on with it.

I believe that, if passed, this Bill will have two important effects. First, I am absolutely convinced that it will improve the economic climate in Scotland. I say

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that because over recent years I have made three or four visits to Catalonia to talk with the Government there. There is every evidence that since the death of Franco and the recreation of the Parliament of Catalonia an economic boom has been experienced there in the wake of gaining political control over their own affairs. However, it is important to note that that has been achieved because that wise old fox, Mr. Jordi Pajol, the premier of Catalonia, has used the phrase over and over again--he did so when he was my guest in Edinburgh at a seminar two years ago--of non-secessionist nationalism. That is an important phrase. I believe that the determination of the SNP to create a separate entity is not only politically damaging but also economically damaging to Scotland. I believe there is a fair comparison with the Parti Quebecois which wins power in the state of Quebec in Canada but which fails all the time to win a majority in favour of separation because people draw back from what is an economic and political nonsense.

I do not rule out the possibility of holding a referendum at some point on independence if there is a demand for it. However, it would be a fundamental mistake for the Scottish parliament to start its life with further constitutional debates and requests to the Scottish people to go to the ballot box yet again. I believe that the economic climate of Scotland will be healthier through having our own political control north of the Border. Secondly, I have absolutely no doubt that it will make government more accountable to the people. It is often not understood by Members south of the Border that the Secretary of State for Scotland at present has ministerial responsibility for the equivalent of nine Whitehall departments. It does not matter whether the Secretary of State is the Archangel Gabriel; no one who is the Minister of Education, the Minister of Agriculture, the Minister of Housing, the Minister responsible for the Police and for other matters can possibly be as on top of his Civil Service as the nine Ministers who share those responsibilities south of the Border. The same is true of the junior Ministers in the Scottish Office. I believe that ministerial control over the policy and administration of departments will be improved in future by having Scottish Ministers who are responsible for individual departments in the Scottish administration.

The same is true as regards the accountability of Ministers to Parliament. Again I find that English Members of the House of Commons often do not understand that while they can table Questions on Monday to the Minister of Housing, on Tuesday to the Minister of Education, on Wednesday to the Minister of Health and so on, the Scottish Members have to wait for our one chance a month to table our one Question on one of these topics to the Minister responsible. Parliamentary accountability of Ministers will be enormously improved as a result of the recreation of the Scottish parliament.

In the other place the Opposition spent an entire day debating the West Lothian question. I fear that that will happen here too. There is no answer to the West Lothian question. So long as we do not have a true federal

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structure, there will be anomalies. The question that must be addressed is: can we ameliorate these anomalies? We could reduce the number of Scottish Members in the other place as is proposed. We could, for example, have an English Grand Committee which deals with Bills relating purely to England, or have English and Welsh Grand Committee Bills to deal with Bills that do not apply to Scotland, and from which the Scottish Members in the other place are excluded. All of those things can be done, but there is no final answer to the West Lothian question.

The real issue we have to face is the following. Are the anomalies which this Bill creates, and which are inherent in it, greater or fewer than the anomalies that exist now? I have no hesitation in making a plea to your Lordships' House. Here we are talking about a future situation where 73 Scottish Members--out of 650 Members--might interfere in matters which do not affect their constituents. But what happened in relation to the poll tax was that 475 non-Scottish Members imposed it on Scotland. When later it came to imposing it on England, some of those same Members rebelled and said it was a nonsense. They were quite happy to shuffle it off on to their non-constituents, but for their own constituents they said no. The anomaly there is far more outrageous than the tiny anomaly that will be left when we pass this legislation.

Finally, I return to the historic basis of the recreation of this Parliament and the issue of Scottish sovereignty, and to the difference between the English and Scottish constitutional view as to where sovereignty lies. In the previous debate on the referendum I believe I quoted Lord President Cooper's 1953 judgment. I shall not do so again, though no doubt it may crop up in later proceedings. I simply remind the House that, whereas we had Mary "Queen of Scots", Elizabeth was "Queen of England". There were kings and queens "of England"; never kings and queens "of the English". There were never kings and queens "of Scotland"; they were always kings and queens "of the Scots". Why? Because in Scotland there was a more limited monarchy of the people. The monarch was not a lord or owner of the land. That is why sovereignty north of the Border has always lain with the people. That was the basis of the Claim of Right which we all signed in the constitutional convention. It is the fundamental basis on which this legislation rests.

I believe that we shall see a new and lively parliament operating in new ways. It will be a fixed-term parliament. It means that governments will not resign if they are defeated. They will have to go back and think again. That is not a bad idea. It will be in a hemicycle, so the adversarial system will go. We might even have electronic voting instead of trooping through Lobbies. We shall have an electoral system which will not lose, as the noble Lord, Lord Mackay, suggested it might, the advantage of the constituency relationship of a Member. The additional members system is copied directly from the system that we inflicted upon Germany after the war and has proved very successful there. There is no reason why it should not prove more successful in Scotland. It will mean a more co-operative style of politics. I very much look forward to a new system of legislation, where

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pre-legislation committees will be more important. That will be an innovation; we do not have it fully in Westminster Parliament.

This is an exciting time. People in Scotland who were excited at the time of the referendum will be excited again when the parliament comes into being. It is our job to get on with the legislation, and so ensure that government--which we have always recognised should be of, by and for the people--is near the people as well.

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