Scotland Bill

HC Deb 12 January 1998 vol 304 cc19-117

Order for Second Reading read.—[Queen's consent, on behalf of the Crown, signified.]

Madam Speaker

Before I call the Minister, I should let the House know that I have selected the amendment in the name of the Leader of the Opposition.

3.32 pm

The Secretary of State for Scotland (Mr. Donald Dewar)

I beg to move, That the Bill be now read a Second time.

On 1 May, the Government were elected with a mandate to deliver a Scottish Parliament. We have kept that promise, and have done so in a remarkably tight time scale. The pace—I do not think that anyone would accuse me of exaggeration—has been brisk. The referendums Bill was published after only two weeks; the White Paper appeared in 12 weeks; the referendum was fought and won in 16 weeks; and the legislation was introduced before 1997 had died away—seven months all in. I pay tribute to the commitment of political colleagues and, above all, to the remarkable patience, tenacity and skill of the civil service team and those who drafted the Bill.

Of course, there has been much doubt, doom and gloom. Indeed, many hon. Members present are privately fearful; others are openly dismissive. I would contend that the sceptics have been confounded. The Bill will be welcomed by democrats everywhere. It is not simply about Scotland. Nor is it in any sense routine reform, tinkering with the detail of our political system. It goes to the heart of our democracy, and offers hope for the democratic process itself. It is part of the most far-reaching programme of constitutional reform that the country has seen for well over a century. In years to come, people will look back on it as a decisive step in the fight to modernise our constitution. The intention, the objective, is a new covenant with the people.

The prescription is not one for Scotland's needs alone. The programme includes the Welsh Assembly, London government, a new voting system for European elections, the commission on voting reform, regional development agencies in England, reform of the House of Lords, and measures to buttress individual liberties, such as incorporation of the European convention on human rights and freedom of information. It is a formidable programme—one of which this country can be proud.

Madam Speaker, British public life has been scarred by cynicism.

Mr. Richard Shepherd (Aldridge-Brownhills)

I cannot let the democratic argument pass. After the Bill is enacted, we within the United Kingdom will not be equal citizens in respect of the functions of this Parliament—the Parliament of this island. In breaking the first democratic principle, how can the Secretary of State say that the Bill advances the cause of democracy?

Mr. Dewar

I recognise the genuineness with which the hon. Gentleman holds that view, and I suspect that this will not be the last time we disagree on this matter. However, I have some confidence in this House, even if he does not. I take the view that if, in its wisdom, the House of Commons decides to trust people in Scotland to take decisions about Scotland's domestic affairs, and to take charge of a package of legislation that is distinctly Scottish and separate from the other business of this House, it is entitled to do so. Exercising its democratic prerogative in this way is not in any sense offensive to democracy.

Mr. Douglas Hogg (Sleaford and North Hykeham)

If that is true, would it not be desirable also for this House to decide that English business should not be addressed, spoken to or voted on by hon. Members who represent Scottish constituencies?

Mr. Dewar

The right hon. and learned Gentleman is entitled to that view. If he were to advocate a federal system, he would have some allies; perhaps not ones he likes or expects, but, in pursuit of what he sees as truth, he cannot be particular about the company he keeps. In any event, it is a matter for this House. If he wishes to come to what will be, no doubt, the extensive debates later and argue that case, we will listen to him with respect, as we always do—however eccentric or wrong we may think his ideas to be.

Mr. Shepherd

The right hon. Gentleman did not address my point—that, in the purpose of our votes across this Union, we will not have equal status. That is the essential principle behind the argument. We will not be equal citizens within the Union. By referring to the disposition of parliamentary power, the right hon. Gentleman did not answer that point.

Mr. Dewar

The hon. Gentleman is wrong. He above all argues for the sovereignty of Parliament. If Parliament uses its power and sovereignty to dispose of business in the way in which we are suggesting—[Interruption.] The hon. Gentleman is denying the simple fact that this House makes these arrangements. He may not like the outcome; I understand that, of course. I have not liked the outcome of the business of this House for many years. I have tholed my assize bravely and waited my chance, and I hope that he will not deny me a little pleasure that it has at last come.

Mr. Dominic Grieve (Beaconsfield)

In light of the comments of the Secretary of State, why is the Prime Minister not introducing this Bill, which is of constitutional importance? It must be the first time that a Prime Minister has not introduced such legislation.

Mr. Dewar

Perhaps there is one distinction between the Prime Minister and the hon. Gentleman—the Prime Minister trusts Scots to do this. It would seem odd in a devolution measure if that were not so.

To be fair, I recommend that the hon. Gentleman does his homework. I think he will find that the previous incumbent at No. 10 did not introduce all constitutional measures during his time. I am absolutely sure that he did not, although I have not checked what is a rather obscure point. Madam Speaker, I know that you would disapprove totally of bets exchanged across the House, but perhaps I can make a two-to-one bet—a very nice afternoon tea for me if I win or for the hon. Gentleman if he wins, with the loser paying for you, Madam Speaker, as well. I do not know whether that is proper within the rules of the House.

Mr. Grieve

The one thing I do accept is that it is more pleasant to hear the Secretary of State introducing the Bill than the Prime Minister.

Mr. Dewar

Maintaining the simile of afternoon tea, it sounds as though the hon. Gentleman is trying to have his cake and eat it. On this occasion, that is not a laudable activity.

To return to my theme, British public life has been scarred by cynicism, sometimes amounting to contempt in public places for parliamentary democracy. My genuine hope for the new Scottish Parliament is that it can earn the trust of Scotland's peoples, and it is the people who have played the key role in making change possible.

The referendum was much criticised, and the subject of much hostility and doubt, even in my party, but it gave the country its chance to speak, and it was an example of trusting the people, of an exercise in direct democracy and of an occasion on which politicians practised what they preached. The people gave us a handsome majority, not in a blaze of razzmatazz but with a quiet determination that left no room for doubt that this is the settled will of the people.

The nationalists—I understand this—spent years claiming that Labour could not win, and that anything we did deliver would be a watered-down scheme, motivated by partisan advantage—no more than a betrayal. I like to think that they may have rethought that position. The Tories claimed that devolution would lead inexorably to the break-up of Britain, and argued that the British constitution was so perfect in every respect that it was incapable of improvement.

However, the world has moved on, and, at least in Scotland, the Tories know it. It will be fascinating to see the contest develop between the diehards and the last ditchers on the Opposition Benches and those back home who think that they know on which side the party's bread is buttered.

There can be no doubt about the change back in Scotland. Sir Malcolm Rifkind, writing, perhaps typically, in the Daily Mail on 2 December last year, after referring delicately to our election wipe out in May", went on: it is good that Scottish Tories accept the new Scottish Parliament and will work for its success. The Union continues but it will be a new United Kingdom with many of the characteristics of a federal system. We must become its champions. Some may say simply that Sir Malcolm was reverting to type—recognising many previous convictions on the issue in his earlier years—but those who do so might try this for size: we are genuinely enthusiastic about engaging in the process of this major change to our constitution and our candidates will fight the forthcoming election in order to win and participate. Those words must have been as fire in the mouth of the hon. Member for North Essex (Mr. Jenkin), but, for all that, I still welcome his views. At this rate, the right hon. Member for Bromley and Chislehurst (Mr. Forth)—I do not know whether he is here, but I will be disappointed if he has fled the field on this occasion—will be left lonely and alone, the last darling of the blue-rinse brigade, still sheltering in the inner recesses of Newton Mearns and Morningside.

The Bill is a catalyst for change. We want literally to create a new politics in Scotland, bringing back popular legitimacy, while creating the basis to reinvigorate Scottish life. My party has had the courage to lead that change—not to play for narrow party interest, but to work in the national interest, even at the price of short-term electoral interest.

We can all remember the locust years, when energy and talent were frustrated, and precious resources needlessly squandered. We all remember that embittered disaster of the poll tax and the investment in the private Health Care International hospital in Clydebank rather than in the national health service. We all remember that, while parents wanted investment in their children's education, energy and resources were devoted to encouraging schools to opt out, and almost none of them did.

This Bill is the means of ensuring that such madness—it was madness, with each and every one of those measures standing as an affront to the democratic wishes of the communities that the Administration responsible purported to represent—can certainly never happen again. We have won a popular mandate in the referendum, and we are now creating an institution that can speak for the people of Scotland, is closer to their needs and concerns, and is ultimately accountable to them.

Mr. Andrew Rowe (Faversham and Mid-Kent)

Does the right hon. Gentleman agree that this madness, as he calls it, was almost a direct consequence of the fact that English Members were voting on Scottish matters? Is there not a severe danger that, if he allows Scottish Members to vote on English matters, a similar madness will ensue?

Mr. Dewar

I am afraid that the historical record is rather against that. The essential cause of the bitterness and frustration to which I refer is the fact that we put the control of the legislative programme in the hands of a group of politicians who did not command significant support in Scotland; that was one of the problems, and it is at the heart of the devolution argument.

The arrival of the Bill on the Floor of the House is a milestone. It is easy to undervalue, because of the extensive debate and publicity over many months, and there is an almost routine atmosphere about its appearance, but that was not always so. It is difficult to overestimate the sweep of legislative power that will be transferred. No longer will apologetic Scottish provisions be unhappily tacked on to basically English legislation; no longer will there be the agonised debate about which of the pressing options should have a place in the Westminster legislative queue.

I look forward to a Parliament that will consider radical reforming legislation with the opportunity, time and energy to abolish the feudal system; tackle the lack of integration in our urban transport system; revive local democracy; and deal with the problems of health, education and housing. Those are the issues that matter to the people of Scotland, and those will be the daily responsibility of the new Scottish Parliament.

Mrs. Margaret Ewing (Moray)

In the context of the reform of the feudal system, will the Secretary of State advise us about who will be the immediate lawful superior of the site and the building of the Scottish Parliament?

Mr. Dewar

The Scottish Office will certainly be the owner of the site. If the hon. Lady is asking a very technical question about feudal superiority, she will not be surprised to hear that I have not yet personally inspected the title deeds. I can promise her that, if she is interested, I will pass them to her; I have no doubt that she will have an absolutely smashing afternoon—or week, or fortnight—trying to decipher them. She has given me a perfect link to my next paragraph, which is extremely good of her.

Much else, of course, is happening: last week, I was able to announce that the Parliament building would be on a cleared new-build site in the historic heart of Edinburgh, next to the palace of Holyroodhouse, and with the superb backdrop of the Royal park, Salisbury crags and Arthur's seat. It will be an architectural opportunity of the first order: a chance to prove that this generation can literally build for the future with imagination and flair.

There will be much discussion, and no doubt perfectly legitimate dispute, about financial arrangements and the Parliament's European role and relations with Westminster. Those are, indeed, important issues, but the main case, the drive and thrust, is the democratic case for change and for trusting the people to take decisions that affect their lives: the attempt to reconnect the individual citizen to the political process.

Today is about acknowledging the fundamental nature of the reform that this country is about to embark on; it is not about the detail, which the House will debate over the coming weeks. It is my duty to highlight some of the key principles.

Mr. Michael Ancram (Devizes)

Before he moves on, will the Secretary of State give the House his latest estimate of the cost of the new building?

Mr. Dewar

I am sure that the right hon. Gentleman will have read the reports of the press conference, where I outlined several factors, including the size of the building, that have led us to revise our estimate. For good commercial and practical reasons, I cannot go beyond what I said then: we think that the cost will be in the region of £50 million. As further firm information emerges, we will try to keep the House in touch with developments, as the right hon. Gentleman will recognise we have done all along.

The Bill delivers the commitments that we gave in the White Paper. Indeed, the vision that stirred so much interest and excitement last July is here in the fine print of the clauses and schedules. The message is that we remain committed to establishing a substantial and powerful Parliament in Scotland.

I now give way with pleasure to the hon. Member for Stone (Mr. Cash), who is part of my past.

Mr. William Cash (Stone)

The Secretary of State says that the Bill implements the White Paper. He will recall that the White Paper specifically stated that the Secretary of State's role would not be that of a governor general, but that, if legislation was submitted by the Scottish Parliament, it would automatically be endorsed; but clause 33 makes it clear that that position has been reversed, and that the Secretary of State would have power by order to prohibit the Presiding Officer from submitting a Bill for Royal Assent. Is that not wholly undemocratic, and completely at variance with what he has just said?

Mr. Dewar

I think that the hon. Gentleman—I say this with some sympathy—has misunderstood the situation. It is perfectly true that there is permission to proceed in clause 33. In fact, the clause goes beyond what was suggested in the White Paper.

The White Paper originally set out that, in the areas of devolved power, the Scottish Parliament could operate on its own behalf but could not impact—perhaps "trespass" is a better word—on reserved areas. That seemed to us to be too restrictive. I am glad that the hon. Gentleman has drawn the House's attention to the fact that there is machinery that allows legislation to go ahead even if it trespasses on a reserved power, but in those circumstances, obviously, there has to be agreement. It is an important extension of power that gives flexibility and sensible provision. No doubt it will be used properly in the time ahead.

Mr. Grieve

I am much obliged to the Secretary of State. I may have appeared churlish earlier, but I was a little tongue-tied and surprised that his invitation to me to intervene had been accorded. I now take up his invitation with pleasure.

There is a most surprising provision in clause 54, by which the Secretary of State may compel the Scottish Executive to introduce a Bill into the Scottish Parliament if he so orders. Would he care to explain how that is supposed to work? What will happen if Parliament decides that it is not prepared to accede to and pass that measure?

Mr. Dewar

In that case, the Secretary of State referred to will be the Secretary of State for Foreign and Commonwealth Affairs. There is always a balance in the interests of good government. Subsection (1) of section 54—I should say clause 54(1), as it is not yet on the statute book, so I must not get ahead of myself—says:

If the Secretary of State has reasonable grounds to believe that any action proposed to be taken by a member of the Scottish Executive would be incompatible with any international obligations, he may by order direct that the proposed action shall not be taken. Is the hon. Gentleman saying that he would rather have a situation in which a member of the Scottish Executive could act in a way that was clearly incompatible with the international obligations of the United Kingdom, and that there should be no provision to cover that very unlikely event? Unlikely events have to be covered, just in case they become reality. I thought that he would have greeted the clause with some interest, perhaps, but also approval.

I repeat that these are safety devices to deal with situations which I hope will be rare. They may never occur, but they have to be anticipated.

The hon. Member for Stone raised the matter of an extension of power for the Scottish Parliament that is important and sensible.

Mr. Alex Salmond (Banff and Buchan)

The Secretary of State will not get any quarrel from me on his £50 million price tag for a Scottish Parliament. Relative to the £150 million or £200 million for office blocks across the road, sanctioned by the previous Administration, it seems like good value.

On a substantive matter, there has been worrying speculation in the press over the past two days that forestry, which is a devolved function, may be at risk of privatisation or sell-off. Five million of the 8 million hectares of forestry land lie in Scotland. Can the Secretary of State give the House a guarantee that that land will not be substantially sold off or privatised before the Scottish Parliament comes into being, and to protect that land for the people of Scotland?

Mr. Dewar

The hon. Gentleman just about got into order at the end. I read with interest the front-page story in The Observer yesterday, which included, for example, the information—which came as a complete surprise to me—that we had decided to sell standing timber to meet the very substantial—admittedly—gap in the financial affairs of the Forestry Commission that were bequeathed to us by the previous Administration. There was a gap of £10 million last year. There will be a gap of £25 million next year, and £40 million for the year after that.

We have not been selling land other than that which was contracted and legally obliged—in other words, in process. I do not anticipate having to do that, certainly not in the next year. Obviously, we have to look carefully at this and find ways to deal with a very genuine difficulty. I say that in a spirit of frankness. I would not pretend that there is not a problem. It is an inherited problem, but it is one that we hope to meet.

Let me describe the structure of the Bill. Part I, clauses 1 to 40, provides for the establishment of the Parliament and for elections to it. It also defines its wide-ranging legislative powers. Part II, clauses 41 to 60, establishes the Scottish Administration, which will effectively be the Government in Scotland in respect of devolved matters. Part III, clauses 61 to 68, provides for the financial arrangements for the Parliament and the Executive, and for the accounting and auditing of the funds made available to them. Part IV, clauses 69 to 75, gives the Scottish Parliament the power to vary the basic rate of income tax for Scottish taxpayers by up to 3p. Part V, clauses 76 to 99, and part VI, clauses 100 to 116, deal with miscellaneous, general and supplementary matters, which will be looked at in detail in Committee.

As my Scottish colleagues well know, clause 1 provides that there shall be a Scottish Parliament. It goes on to provide for how Members of that Parliament will be elected. It is a succinct, straightforward statement of intent.

The White Paper said that the electoral system will enable us to build a Parliament based on fairness, which is what we have achieved in clauses 1 to 17. The principal features of the system are: there will be a fixed four-year parliamentary term with provision for elections within that period in exceptional circumstances; and electors will be asked to vote twice in the elections to the Scottish Parliament—once for a constituency member and once for regional members drawn from lists submitted by registered political parties or individuals standing in their own right.

Mr. Archy Kirkwood (Roxburgh and Berwickshire)

The Secretary of State deserves credit for introducing the Bill in such a short time. It is not perfect, but there is no such thing as a perfect Bill.

Notwithstanding the fact that the electoral process was part of an admittedly agreed system under the constitutional convention, what is the Secretary of State's view about the possibility of opening the regional lists to get rid of their party political aspect? Would he consider allowing a free vote—at least within the ranks of the payroll vote, if not for the whole House—on an amendment to open those lists and get rid of the party political aspect, so as to enable voters to select candidates themselves?

Mr. Dewar

The hon. Gentleman always puts his points so reasonably that I am temporarily beguiled. I cannot give him the undertaking that he wants, although I am prepared to discuss with him the practicalities of that issue, and to explain why it would not be a practical solution.

That is partly because of the number of candidates likely to be involved and the complexities of working such a system, and partly because, unlike the European elections, in this vote a preference could be expressed for a candidate for the constituency seat in which the individual elector lives. That makes it a different situation, and leads me to believe that our proposal, which the hon. Gentleman fairly agrees was discussed extensively in Scotland, is sensible.

Mr. Dennis Canavan (Falkirk, West)

I agree in principle with proportional representation for elections to the Scottish Parliament, but why are the proposed regions based on the European Parliamentary Constituencies (Scotland) Order 1996? The European parliamentary constituencies proposed under that order will never have effect for their primary purpose—elections to the European Parliament—because of legislation currently before the House on the new form of elections to the European Parliament.

If the Secretary of State is intent on using European constituencies as the basis for the regional structure, would it not be better to base it on existing rather than amended European constituencies? In my area, people at least have an established affinity with their existing European constituencies, whereas they do not have the same established affinity with the proposed ones.

Mr. Dewar

We can discuss this matter. There was an agreement after detailed discussion at the Scottish Constitutional Convention at which the Labour party was a full partner, and the current European seats seem still to be as convenient a grouping as we have. If my hon. Friend argues that there should be one Scottish constituency, the list of candidates would be enormous; but if he suggests that it would be better to move away from the present familiar groupings within the European constituencies, that would be a matter for the boundary commissioner when the matter is reviewed. We can return to this matter in Committee, but my proposal is sensible.

Dr. Liam Fox (Woodspring)

Will the Secretary of State give an assurance that there will be no interference from London in the selection of candidates to appear on the Labour party's list for the regions?

Mr. Dewar

Oh, dear me! Given its source, I am not terribly impressed by that question. We shall produce very Scottish candidates. In the past, the Conservative party has had an enormously interesting travelling army, sometimes with famous names, but it has been unable to attract many votes. If the hon. Gentleman is worried about selection systems and strength of candidates, he would be well advised to take lessons from us.

Regional Members will be returned on a corrective basis, which will reflect the proportion of votes cast for the party or individual, while taking account of seats already gained in the constituency ballot. I apologise if that explanation did not run smoothly because I took too many interventions on points of information. I should perhaps learn a lesson from that in the next few minutes. Those arrangements will ensure a strong constituency link, and a closer correlation between votes cast and seats won.

This uncomplicated statement reflects my party's major principled stand, and points to very significant changes in political practice in Scotland. In a four-party system, it is not easy to achieve a simple majority. The Labour party has long been the beneficiary of the weighted results that come with the first-past-the-post system. The decision to move to a more proportional system is an unusual example of principle triumphing over narrow political interests. Our vote was for a Parliament in which every significant strand of Scottish opinion will be fairly represented. That will be achieved: no longer will it be possible for 20 per cent. of the votes to bring no reasonable return of seats.

There will also be a weighting in favour of rural areas, given the population distribution and the regional list system. That commitment is reinforced by the proposal to have separate constituencies for Orkney and for Shetland.

Even a politician with half a wit can see the implications. The arrangements will herald a new flexibility, new thinking and perhaps new forms of co-operation. We have introduced this far-reaching reform because we firmly believe that it is right, and that we can make better democratic progress on that basis.

I should like to highlight the provision that will allow independent candidates to stand as regional Members. That is another advance on the proposals in the White Paper, so it is important that I draw it to the House's attention. It reflects our commitment to open the doors of the Parliament as wide as possible, and to encourage new talent, possibly from outwith the political establishment. All that could add up to a rough ride for the established political parties. If it does, so be it.

Much has been made of our determination to develop a new type of Parliament fit for the purpose, equipped for the future, modern, efficient and accessible. The key decisions about how the Parliament will work will be taken by the Parliament itself. If we were to lay down in tablets of stone how a Parliament with such wide-ranging legislative powers should organise its own affairs, we would be contradicting the principle of devolution at the heart of the Bill.

We shall put in place a framework that the Parliament can develop and build upon. The Bill will ensure, for example, that Members of the Scottish Parliament have rights of parliamentary privilege in relation to the law of defamation similar to those of Westminster Members, and that they declare any relevant interest before taking part in parliamentary proceedings. We shall legislate to give the Parliament substantial powers to order documents to be produced, and to summon witnesses to give evidence on matters within its remit.

Mr. Cash

rose—

Mr. Grieve

rose—

Mr. Dewar

I am sorry. I must make progress, or hon. Members will rightly complain about the length of my speech. I know that it is a two-day debate, but nevertheless I cannot give way.

We have established a cross-party working group, under the chairmanship of my hon. Friend the Minister for Home Affairs and Devolution, to draw up proposals on how the Parliament could operate. Our aim is to achieve consensus on best practice by drawing on experience both in this House and in other parliamentary bodies. The results of the group's deliberations will be presented to the new Parliament once it is elected. I stress again that it will be for the Parliament ultimately to decide how to conduct its business, but those proposals should provide a useful starting point.

We promised that the Parliament would have wide-ranging legislative powers, and that we have delivered. Clause 27 of the Bill gives the Scottish Parliament the power to make laws for Scotland. Clauses 28 and 29 and schedule 5 together define those powers in detail by stating what is outside the Parliament's powers. This approach will help to achieve clarity and stability, and by allowing for amendment of the list of reserved matters, it will provide flexibility for the longer term. The procedure for amendment depends on the consent of both Edinburgh and London.

The Bill also provides for all powers under existing Westminster legislation to be transferred to the Scottish Executive where they concern subjects that are not reserved; and for certain specified powers in reserved areas to be devolved to Ministers of the Scottish Executive by order under clause 59, a draft of which will be made available in time for the relevant part of the Committee stage.

Beyond the devolved matters, the Scottish Parliament will be specifically entitled to make laws that trespass on reserved matters, in order to maintain a consistent and coherent body of Scots law. That will allow the Parliament to maintain and develop the distinctive traditions of Scots private and criminal law, while protecting the legitimate interests of the United Kingdom Government.

Mr. Norman A. Godman (Greenock and Inverclyde)

With reference to clause 32, am I right in thinking that the members of the Judicial Committee of the Privy Council will be the final arbiters when questions of the legislative competence of a Bill arise?

Mr. Dewar

Yes, my hon. Friend is right about that, and I shall say a brief word about it shortly.

Mr. Cash

The right hon. Gentleman has just said that proper measures are being taken to ensure the integrity of the United Kingdom Government. What about the United Kingdom Parliament? At no point in his speech has he referred to the so-called West Lothian question. When Members of this Parliament at Westminster have important functions that coincide with functions that would be transferred to the Scottish Parliament, surely they should be allowed to speak but not to vote. Amending our Standing Orders would seem to be the best way of doing that.

Mr. Dewar

No one has argued that proposition to me, and in any case it is not one that I would favour. I have no doubt that the hon. Gentleman will find other occasions to put his point of view across—but he must not see the Scotland Bill as a substitute for European legislation. I for one do not want to fall victim to his relentless energy during the passage of the Bill. He is certainly entitled to put any point of view that he believes in: I know that he will before we are done.

A central theme of the White Paper was that, while the devolved Parliament and Executive will have considerable autonomy, Scotland will remain an integral part of the United Kingdom. I hope that that is of some satisfaction to the hon. Member for Stone. Relations between Edinburgh and London will be based on consultation, consent and co-operation at official and ministerial level, buttressed when necessary by non-statutory agreements between Departments. No provision is required or made in the Scotland Bill, because relations will evolve and build on the present good working relationship between Whitehall and the Scottish Office.

Our aim is always to minimise friction, via a settlement which achieves that. The Bill includes a fair and open system for resolving disputes over vires. The Law Officers either of the UK Government or of the Scottish Executive will be able to refer a Scottish Bill to the Judicial Committee of the Privy Council if they have doubts about its competence. The Judicial Committee, for these purposes, will be composed of people who are or have been Lords of Appeal in Ordinary, or who otherwise hold or have held high judicial office. That is an important advance on the proposal in the White Paper to restrict membership to the 12 Lords of Appeal in Ordinary. It will mean a bigger pool of available candidates, north and south of the border.

The second part of the Bill deals with the Scottish Administration. That will in effect be the Scottish Government in relation to devolved matters. The Scottish Executive will, as we promised, be headed by a First Minister appointed by the Queen. It will consist also of Scottish Ministers, and the Lord Advocate and the Solicitor-General.

Mr. James Gray (North Wiltshire)

Will the right hon. Gentleman give way?

Mr. Dewar

No, I want to make progress. I have been talking for almost 35 minutes, and I must hurry on.

The Executive will be fully accountable to the Parliament. Ministers must be approved by the Parliament. No Executive will be able to survive a vote of no confidence.

The Bill provides that the Lord Advocate and the Solicitor-General must be members of the Scottish Executive. There will be a Scottish Law Officer in the UK Government—the new post of Advocate General for Scotland. The Bill will protect the independence of the Lord Advocate in relation to the prosecution of crimes and investigation of deaths, and it gives him the right to decline to answer questions in Parliament about individual criminal cases.

We are looking for a new balanced partnership between the executive and legislative branches of the state in Scotland. This will promote consensus and good government. There will need to be more give and take; more listening; more co-operation. Those will bring real benefits to the people of Scotland.

The other central feature of the constitution is the judiciary. It is right that responsibility for the judicial and court system should be devolved, and the Bill so provides. That was not the case in the Scotland Act 1978, but the judiciary is at the centre of the legal system, and the legal system is at the heart of the Scottish difference that justifies devolution.

Safeguards to protect the position of the judiciary have been built in. For example, dismissal of a judge will be possible on the recommendation of the First Minister if two thirds of the Members of the Parliament vote in favour of it. That is an important safeguard to ensure that no judge can simply go on—[Laughter]—can simply go on the say-so of a simple majority vote. I rather liked that. It was a rather pleasing mangling of the English language. I must practise.

The Government promised in the White Paper that the Parliament would be established on a sound financial basis, and clauses 61 to 68 fulfil that commitment. They set out the financial arrangements for the Parliament and the Executive, including the accounting for funds that are made available to them.

The Government published last month a paper setting out the principles that will govern determination of the block budgets for the Scottish Parliament and the Welsh Assembly. The Barnett formula will continue to operate under devolution, subject to minor adjustments to take account of population changes. Following the precedent set over many years in the case of the Scottish Office budget, the formula will remain an administrative arrangement.

I am grateful to the hon. Member for North Essex for his recent assurance in The Scotsman that the Tories stand by the existing public expenditure settlement for Scotland because it reflects the country's need. That is an important and significant statement. The Bill will transfer to the Scottish Parliament the fundamental power to determine its own expenditure priorities, and to answer to the Scottish people who will be affected by them. That is the essence of democracy.

Part IV deals with the tax-varying power. 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.

The decisive vote on the second question in the referendum surprised many people—including some of the most enthusiastic supporters of devolution. Faint hearts there were in plenty, and I understand why, in a political world that is too often dominated by the gloomy theories laid out in the culture of contentment, that should be so. Scots challenged that orthodoxy. Scotland wanted the power to vary revenue—the discipline and the responsibility. The Bill reflects that will.

The clauses and the power itself have been the subject of considerable debate. The power could add or subtract in any one year more than £400 million at today's prices to or from a block of £14 billion. In my view—and, plainly, in the view of the people of Scotland—it represents an important fiscal flexibility that is appropriate for a grown-up Parliament with grown-up powers.

I recognise that some are disappointed, and that they see the proposal as timid and cautious. I noticed that, in The Sunday Times a few days ago, Mr. Brian Monteith, that leading statesman of the "Think Twice" anti-devolution campaign, was reported as stating: there is considerable growth of support for this Parliament to have greater taxation powers and fiscal independence. We need to scrap any idea of a 3p variation in income tax and allow Scottish Chancellors to set their own budgets. To be fair, Mr. Monteith and his ilk do not necessarily represent the Conservative party.

I turn now to European affairs. As the White Paper made clear, relations with the European Union are necessarily reserved to the United Kingdom Government, because the United Kingdom is the member state. However, the Bill gives the Scottish Parliament and the Scottish Executive the full powers they need to honour and implement European Community obligations as they relate to the devolved areas.

The Parliament will be able to scrutinise relevant European Union proposals, and legislate to give effect to Community obligations in Scotland. Crucially, schedule 5, which sets out the reserved powers, provides an exception that paves the way for the Scottish Executive to play a full part in negotiations alongside the United Kingdom Government.

Mr. Oliver Heald (North-East Hertfordshire)

Will the right hon. Gentleman give way?

Mr. Dewar

May I finish just the European section? Then I will, of course, give way to the hon. Gentleman.

Much has been made of the omission from the Bill of a specific right in law for the Scottish Executive to be involved alongside the UK Government in negotiations, but this Government remain fully committed to the undertaking that we gave in the White Paper. Ministers of the Scottish Executive will be as directly and fully involved as possible in Government decision making on EU matters, and will have a role to play in relevant Council meetings and other negotiation with EU partners.

Indeed, it may be of interest that the Minister with responsibility for local government and housing in my team is absent from the Bench today because he is in Stockholm discussing European spatial development on behalf of the UK with his Swedish counterpart, in preparation for the important discussions at the informal ministerial meeting in Glasgow later this year. The UK is the member state. We must have a common UK position and a single UK delegation. We are not proposing independence.

Mr. Ancram

This is an area of concern. The right hon. Gentleman has made the point that his colleague is today acting as a United Kingdom Minister. Does the right hon. Gentleman agree that that is because he is a United Kingdom Minister and is able so to act, representing the United Kingdom within the Councils of Europe in whatever respect, and that, once there is a Scottish Parliament and a Scottish Executive, a Minister from that Scottish Executive will be able to participate under schedule 5 only at the invitation and the whim of the Westminster Government, and not as a right?

Mr. Dewar

That is a decision for the United Kingdom delegation. The right hon. Gentleman will know, because he was in the Scottish Office at one point in his career, that that is always a matter for agreement. I would be sorry if he were to suggest that the decision of the United Kingdom Parliament to devolve power to a Scottish Parliament would somehow throw Scotland into utter darkness in relation to the EU. That is not the intention, and it is not going to happen.

Mr. Heald

rose—

Mr. Salmond

Legislation would not have to be very good to improve on the position in the past five years, because, from 1992, Scottish Ministers were represented at less than 10 per cent. of European Council meetings, but it was not just the supporters of independence who argued for this right to be put in statute. Does the Secretary of State remember that, a year ago, at the Scottish Grand Committee in Edinburgh, the then shadow Foreign Secretary, now the Foreign Secretary, argued for the power and right of observer status, implying that that would be written into the Bill?

Mr. Dewar

As the present arrangement has been negotiated with the Foreign Office—discussed and agreed with the Foreign Office is perhaps a better way of putting it—under present management, the hon. Gentleman's fears are misplaced. It is the end product that is important. It is making the system work that is important. The concordat and the arrangements that we have put in place are adequate—I am very confident about that.

Of course it is right that the precise arrangements for involving Scottish Ministers will need to be flexible and capable of evolving over time. I agree that flexibility is essential, and it must be in the context of these arrangements, which provide for sensible co-operation between the UK and Scottish Administrations.

Major advantages for Scotland will come with the new arrangements. Devolution will give a constitutional basis, which in turn will give Scotland a higher profile and the ability to relate as an equal with the German lander, the Spanish provinces and the other forms of devolved government that are the mark of so many successful European states. It is at that level that much business is done in Brussels—alliances struck, tactics evolved, pressure applied. It is a new dimension that will be reinforced by a Scottish representative office in Brussels, briefing Edinburgh and supporting Scotland's efforts in Europe.

Mr. Salmond

rose—

Mr. Heald

rose—

Mr. Dewar

The hon. Member for North-East Hertfordshire (Mr. Heald) has been trying to intervene for a long time, so I give way to him.

Mr. Heald

Will a Scottish Executive Minister ever be able to represent and to speak for the United Kingdom in European Council meetings?

Mr. Dewar

Who leads and who contributes has always been a matter for the delegation. To a large extent, it depends on the subject. As the right hon. Member for Devizes (Mr. Ancram) knows, Scottish Office Ministers have had a particular interest in certain areas, and I would expect that they would take an active role in those areas.

Sometimes, the interest in the devolved areas may be less direct, and that might lead to a variation in practice, but if the hon. Gentleman imagines that there is some sort of barrier or prevention clause, the answer is no, not at all. If he considers the totality of the deal, and the new areas into which Scotland can now break and in which it can operate, I think that he will realise that there are substantial advantages in the machinery that is being set up.

Mr. Salmond

rose—

Mr. Dewar

The hon. Gentleman—I come to the point, because I can almost read his mind—is going to suggest that the German lander have a statutory right to representation in the German delegation, and that the Scottish Executive should have such a right, too. I suppose that that is an argument, but I might advance other examples, such as Catalonia or the Basque territory, which do not have such a statutory right, and he would not subscribe to the view that Catalonia, for example, had been ineffective in making its presence felt in Europe.

Again, this is a matter on which the hon. Gentleman and I will no doubt cross swords on many occasions at later stages in the Bill, but I hope that that will at least keep him in his seat, even if only momentarily. If it does not, Madam Speaker, I will have to invoke your authority, as I want to hurry on and finish my speech.

Mr. Salmond

Will the right hon. Gentleman give way?

Mr. Dewar

Oh well, I give way.

Mr. Salmond

The right hon. Gentleman read half my mind, which is obviously a large concept in itself. I have now found the reference to the Foreign Secretary when he was shadow Foreign Secretary. When the example of the German lander was raised in the Scottish Grand Committee a year ago, he made exactly the point that I mentioned. At what stage over the past year did the Secretary of State's view that there was not a statutory right of representation or observer status prevail, thereby overturning the Foreign Secretary's statement to the Scottish Grand Committee?

Mr. Dewar

My right hon. Friend the Foreign Secretary and I are as one. The system that we have put in place commands support not only in the Government, but in many other quarters. It is sensible, but flexible. It recognises Scotland's position within the United Kingdom and its duty to be part of the delegation, to progress the UK point of view and to influence the formulation of policy. It gives it new areas of operation in Europe that will be enormously important.

If the hon. Gentleman wants to carp and say that that is not a satisfactory situation, he is entitled to do so—he is practised at it. He and I have done that together over many years, and I fear that, if our personal plans come to fruition, we may go on doing so for a very long time.

The Scotland Bill is a substantial as well as a far-reaching piece of legislation, running to 116 clauses and eight schedules. It must be scrutinised properly over the coming months in this House and in another place.

In recognition of the complexity of the Bill and its interaction with so many other enactments, I am making additional information available to hon. Members. Copies of the guide to the Bill and a list of all the enactments referred to in the Bill are already available in the Library. I shall also place there shortly a compilation of extracts from enactments which the Scotland Bill would amend. Before the beginning of the Committee stage, I shall publish comprehensive notes on clauses, which I hope will be of some help to those who try to follow the debates.

I commend the Bill to the House. It represents an irreversible watershed with the past. Some may think that claim a little over-bold, so it is obviously a quotation that is intended to embarrass the Opposition. Indeed, it comes from Sir Malcolm Rifkind, who, given his extensive travelling, must surely know an irreversible watershed when he sees it.

The Bill is bold, innovative legislation. It is a radical constitutional measure, designed to bring the processes of government closer to the people. Our aim is a more pluralist, outward-looking democracy that is in tune with the modern world. We want to build a system of government that people can access easily, feel part of, and take part in.

In the referendum campaign, political parties came together to co-operate in a common cause, and I pay tribute to that spirit. To do so is not to ignore the fundamental differences that exist and the tough talking that lies ahead. However, there is a willingness to accept the decision of the people, and a determination to make the Parliament that is to come a constructive force earning the respect of the country.

I detect—but I say it in no sniping tone—that that is increasingly the mood of the Conservative party, illustrated in recent moves in Scotland and in the measure of agreement reached over future progress on the Bill. I welcome that. It must be right that all of us work within the democratic framework, according to conscience and in the interests of the people.

The Scottish Parliament will have the power to make the law of the land on a wide sweep of matters central to quality of life, such as education, health and housing. It will be the guardian of traditions built by Scots over the centuries. It deserves to be taken seriously. Endorsed by the people, it is a trust passed by the people to its elected Members—a trust that must not be betrayed.

In 1999, a Scottish Parliament will sit in Edinburgh for the first time in almost 300 years. It is not the reincarnation of the nation state which, in 1707, entered a partnership which became the United Kingdom; it is unashamedly a settlement within the United Kingdom—unashamedly, because the majority of Scots are determined to maintain the bonds of friendship, trust and common interest built over time. It has been and always will be the views of the people of Scotland that will alone decide their future.

However, this is a radical change, providing democratic opportunity and a stronger voice for Scotland in the UK. By establishing that our constitution can adapt to meet the needs of the time, it strengthens the Union and enriches the country as a whole. It will be a Parliament fashioned in Scotland, for Scotland, and with the ability to build a better Scotland.

4.24 pm

Mr. Michael Ancram (Devizes)

I beg to move, To leave out from "That" to the end of the Question, and to add instead thereof:

this House, while accepting and respecting the clear decision of the Scottish people in favour of a devolved Scottish Parliament with limited income tax-varying powers, nevertheless believes that the Scotland Bill is not an acceptable measure because it fails to create a constitutional settlement which is stable and enduring within the United Kingdom; because it undermines Scotland's role both in Europe and within the Government and Parliament of the United Kingdom; and because its lack of clarity on taxes and resources threatens the interests of Scottish business, Scottish people and Scottish jobs. The Secretary of State referred on a number of occasions to my friend and his friend, Sir Malcolm Rifkind. Sir Malcolm said that he did not believe that a measure such as the Scotland Bill would necessarily lead to the break-up of the United Kingdom, but predicted that it would lead to a generation of constitutional turmoil. It is perhaps worth recalling that prediction when we examine the Bill's details.

Our amendment makes it clear that we do not seek to oppose the principle of the proposals, but we oppose the manner in which the Bill attempts to establish them. On 11 September 1997, the Scottish people endorsed the concept of a Scottish Parliament with tax-varying powers, and I respect that democratically expressed view. We have always said that if that were the clear verdict of the Scottish people, as Conservatives and Unionists, we would try to make it work, not only to Scotland's benefit but in the way least likely to damage the United Kingdom.

Scottish Conservatives will stand for and participate in a Scottish Parliament, and we will ensure that the voice of Scottish conservatism is heard loud and clear within that new democratic institution. As Unionists, we will continue to attempt to thwart the nationalists' ambitions for separation, which lay at the heart of their support this summer for the Government's devolution proposals.

We shall approach the Bill also in a constructive manner. Ideally, we would not have started from the same basis. We maintain our view that the Bill contains within it the seeds that will loosen the bonds that hold together the United Kingdom and could well lead to its break-up. We have no regrets that we placed those fears firmly before the people of Scotland in the referendum, even if they ultimately chose to take the risk, because that is what democracy is about. We can take pride in having had the courage, against the odds, to stand up for our principles and to have spoken the truth as we saw it.

The political reality is now clear: there will be a Scottish Parliament. The irony is that we are considering a Bill that is so badly drafted, that so comprehensively fails to face up to the need to avoid creating conflict between Scotland and England and that reduces Scotland's influence within both Europe and the United Kingdom that it is for us as Conservatives—the one party that stood against devolution—to try now, for the sake of the United Kingdom, to make the proposals work.

The nationalists long for the proposals to fail. They know, as we do, that failure will be the quickest road to separation. The Liberal Democrats are so immersed in a romantic haze of Gladstonian home rule euphoria that they can no longer see the wood for the trees. So far, they have had very little constructive comment to offer to the debate. Both the nationalists' and the Liberal Democrats' attitudes are dangerous because, whatever we may think of the proposals and the dangers inherent within them, no one can gainsay that the proposals are fundamental and historic, and that they will change the very nature of our constitution.

I am glad that—apparently, from reports before Christmas—our arguments have been listened to and that the entire Bill will be considered on the Floor of the House. A constitutional measure of this significance and magnitude should not be spirited away to a Committee Room. Moreover, it is an insult to Wales and to the Government of Wales Bill that that Bill, at the insistence of the Secretary of State for Wales, will be humiliated by not being considered in a similar manner. The Secretary of State for Scotland obviously has a much greater awareness of the far-reaching constitutional character of his legislation than his Welsh colleague has of his.

We shall treat the Scotland Bill with all the seriousness that a major constitutional measure merits. The Bill's seriousness has been acknowledged by the fact that all its stages will be taken on the Floor of the House. It will be our purpose not to delay or to destroy, but to try to redeem this unsatisfactory constitutional hotchpotch. We do not fear reform of the constitution, as long as it is demonstrably beneficial and intrinsically stable. After all, over the years it has been Conservative Governments who have developed the system of government in Scotland and, in particular, the devolution of administration.

Our positive aims, which we shall bring to our consideration of the Bill, are the improvement of Scottish government and the strengthening, rather than the weakening, of the United Kingdom. I hope that the Government will respond to our arguments—[Interruption.] If they care to listen, I hope that the Government will respond to our arguments in the same positive way that we make them.

Mr. Michael Connarty (Falkirk, East)

I wonder whether I heard the right hon. Gentleman correctly. Did he say that his party would not seek to delay the Bill at all? Is he also making that commitment for the House of Lords?

Mr. Ancram

I am saying that we are seeking not to delay or destroy the Bill, but to make it workable in a way that I believe it is not at the moment. They are our positive aims which we shall bring to the legislation.

I harbour no great hopes that we shall get a hearing from the Government. The haphazard and curiously arrogant way in which they have approached the legislation has at times bordered on the irresponsible. The path to this legislation has been strewn with delay and incompetence—[Interruption.] Labour Members laugh, but why, given the mad rush of the summer when we were told that there was such urgency for devolution that there was no time for proper debate before the referendum, are we only now, four months after the referendum, starting on this legislation? [Interruption.] The Secretary of State for Defence says, "Five years," but his party has had 18 years to prepare the legislation, and it is quite amazing that it has taken so long.

What sort of incompetence ensures that as we begin considering the legislation, we are only now told that there will be no proper home for the Scottish Parliament when it is first elected, nor, indeed, for many months after that? Perhaps the Minister will tell us when the recently announced Holyrood Parliament building will be ready. What will be the true cost? We have heard another estimate today—it is just one of many, and each is higher than the last. What will be the cost of housing the Parliament in temporary accommodation in the interim, and where will that money come from? No one seems to know, but the Government have had all of 18 years to think it through.

Mr. Salmond

The Secretary of State and I have a reasonably well-publicised disagreement about what the best location for the Parliament would have been, but I am rather confused by the Opposition spokesman's remarks. Is he saying that he would have started to build or renovate the Parliament building earlier? If so, at what stage—before the election, or before the referendum? At what stage would he have prepared the Parliament so that we could have walked into it?

Mr. Ancram

I would not have prepared the Parliament because we did not propose such a Parliament. However, the Labour party has been proposing this Parliament for 18 years, since it was last in office. It is extraordinary that the first victim of homelessness of this Government appears to be the Scottish Parliament, once it has been elected. If any business proceeded with its basic structural planning in that way, it would be lucky to survive. The Government should have the grace to be ashamed.

Let us face it—the newly proposed building at Holyrood will cost considerably more than the people of Scotland were told by the Secretary of State during the referendum campaign. He must admit that all this expenditure will come from moneys that would otherwise have been available for Scotland's schools, hospitals, roads and housing. Scotland, we are told, deserves a Parliament building commensurate with its status, and we do not begrudge some extra cost to achieve that. Of course, none of us wants a Scottish Parliament to be inadequately housed, but why were we not told about the costs during the referendum campaign, when those of us who predicted that the cost projections would prove woefully underestimated were accused of cynical scaremongering? Let the Government tell that now to parents looking for extra resources for their children's schools or to patients waiting for operations.

Did the Secretary of State—I will give way to him so that he can answer the question—know that his White Paper figures were inaccurate? If he did, why did he not come clean during the referendum campaign? Alternatively, was he so badly advised that what was clear to the rest of us was kept from him by his advisers? In that case, must he not accept that he and his office have been grossly incompetent? It must be one of those answers. Perhaps the Secretary of State would like to respond. The sad thing is that it is the people of Scotland and not the Secretary of State who will have to pay the price for that incompetence.

Mrs. Maria Fyfe (Glasgow, Maryhill)

Would the right hon. Gentleman care to remind the House how many millions of pounds went down the plughole with the poll tax?

Mr. Ancram

The hon. Lady will remember that because of the response to the poll tax, it was removed and the policy was changed. I suspect that she is not saying that if the Scottish Parliament turns out not to work, she will call for its abolition in five years' time.

Mr. Shepherd

I am slightly puzzled. Does my right hon. Friend genuinely believe that the point about the Parliament building would have made a difference to the outcome of the referendum?

Mr. Ancram

It would not have made a difference in itself, but if my hon. Friend allows me to develop my remarks, he will find that the Parliament building is the first of a number of issues on which points that we made during the referendum campaign, when we were accused of scaremongering, are now turning out to be the truth.

I offer the Secretary of State my best wishes on his decision to leave Westminster and to commit himself by standing for the Scottish Parliament. I presume that he will stand down as Secretary of State. If, perchance, he attained the rank of First Minister—that must be up to the Scottish electorate—and was bound by the collective responsibility of a Westminster Cabinet job, he would hardly be able to deliver devolution, because his first responsibility would be to a United Kingdom Cabinet. I take it that if the right hon. Gentleman was First Minister, he would stand down as Secretary of State for Scotland.

Mr. Gray

Am I right to understand that if there was a Conservative majority in the Scottish Parliament and if, as a result, my right hon. Friend had the good fortune to be appointed First Minister, he would give up his job here as Secretary of State and would resign his seat in this House?

Mr. Ancram

That hypothesis is unlikely to arise. The principle, however, behind what my hon. Friend has suggested is logical and one that I would expect the Secretary of State to follow.

Rather charmingly, the Secretary of State has told us on many occasions that he and the Scottish Parliament will have to learn what he calls new tricks, a somewhat strange and circus-like description of how he sees the Scottish Parliament operating. It appears that he will also have to make new friends.

The great new political adventure for Scotland does not, apparently, hold similar attractions for the vast majority of the right hon. Gentleman's Scottish colleagues here. The Foreign Secretary seems to want to stick with international affairs or whatever here in London although, to be fair to him, he was never a great enthusiast for a Scottish Parliament. The Chancellor of the Exchequer, who most certainly was an enthusiast, suddenly finds his recently rehatched plot to become the real tied occupant of his flat in No. 10 Downing street infinitely more attractive.

The Secretary of State for Defence—I am sorry that he has left his place on the Front Bench—who once publicly and passionately committed himself to standing for the Scottish Parliament, apparently now sees himself as God's gift to our armed forces and as indispensable. Is it not wonderful how a few months at the Cabinet table quench a Scottish Labour Front Bencher's enthusiasm for the building of the brave new Scotland?

What of the rest of the Scottish Labour Members? We learned before Christmas that only a mere handful of them share the Secretary of State's enthusiasm for this historic adventure. Most, apparently, feel historically adventurous enough here at Westminster. Most Labour Back Benchers appear quite happy to abandon their responsibilities for the education, health, housing and local problems of their constituents and to become, effectively, part-time Members of Parliament here. So much for bravehearts. [HON. MEMBERS: "Oh."] Labour Members may jeer. How many of the current Scottish Labour Members of Parliament will stand for the Scottish Parliament? Will it be five, 10 or 12? Hands up those who will stand for the Scottish Parliament. Not a single hand has risen on this occasion.

Mr. Hogg

Is not the point being made by my right hon. Friend all the more remarkable when one reflects that the work load of Labour Members representing Scottish constituencies will be infinitely less after devolution? Is it not truly remarkable that they are not anxious to sit in the Scottish Parliament, where the real work will be done?

Mr. Ancram

My right hon. and learned Friend makes an important point, to which I shall refer in a moment.

Mr. Martin O'Neill (Ochil)

Will the right hon. Gentleman tell the House on how many occasions he turned his back on constituencies in Scotland when they rejected him for the inadequacy of his performance in the House? As far as I know, they were East Lothian and Edinburgh, South. No other constituency in Scotland was prepared to select him, let alone let him stand.

Mr. Ancram

The hon. Gentleman totally misses the point. The Secretary of State is telling us that this is an historic political adventure. Why do not his Back Benchers agree with him? Why are they voting with their backsides and remaining here?

Mr. John Home Robertson (East Lothian)

Will the right hon. Gentleman give way?

Mr. Ancram

I must make some progress.

The Bill sets up a Scottish Parliament. It provides for income tax-varying powers. It seeks to identify the powers that will be held by a Scottish Parliament by defining those that are reserved to the Westminster Parliament. As a lawyer, I have to say that it is a mixed bag. There are areas that are ambiguous, areas that are somewhat frightening in their draconian effects on individual rights and a few areas that are incomprehensible, but they are essentially matters for the Committee stage.

What worries me most today and is at the heart of our amendment is the general underlying thesis in the Government's approach that, whatever the concerns about the viability of the proposals, it will be all right on the day, because everybody will want it to be and will want to make it work. New Labour, new politics, new consensus, new tricks and no problems may sound fine, but to rely on that as the basis for long-term constitutional reform is to fly in the face of history and the natural forces of politics. Historically, those who do that tend to court disaster.

Mr. Canavan

Will the right hon. Gentleman give way?

Mr. Ancram

First, I will make some progress.

We know, because they have told us, that members of the Scottish National party will try to undermine and destroy any comfortable consensus between Edinburgh and Westminster. We also know that there are Labour Members in England who are concerned by what they see as Scotland having its cake and eating it and England paying. We know that there are potential rivalries of great magnitude within a devolved United Kingdom, not least when the slumbering English giant begins to stir. To build a constitutional reform of such magnitude on the shifting sands of a romantic dream of brotherly love and eternal co-operation is, quite bluntly, unrealistic.

Constitutional reform should never be undertaken on the basis of things as we would wish them to be—on the fair-weather or best-case scenario. It should be tested against the likelihood of the storm, against the worst-case scenario—the times when consensus and co-operation are at a premium, if they exist at all. Little in the Bill passes that test, and that failure bodes ill for Scotland and the United Kingdom.

Mr. Canavan

The proposals are based not on shifting sands, but on the expressed wish of the people of Scotland. There seems to be an inherent contradiction in the Opposition amendment, which while accepting and respecting the clear decision of the Scottish people", goes on to declare that the Scotland Bill is not … acceptable". The Scotland Bill was based on the White Paper and the proposals in the White Paper were acceptable to the people of Scotland, as expressed in the referendum. Therefore, the Opposition are saying that the acceptable has become unacceptable. It is a clear contradiction in terms.

Mr. Ancram

The hon. Gentleman, who failed to get an answer from the Secretary of State, who misunderstood his original question, might do me the honour of listening to my argument. We accept that the vote in the referendum was for a Scottish Parliament with tax-varying powers. That question was put to the people of Scotland. We are asking whether the Bill will provide that in a way that is stable and will work to the benefit of the people of Scotland. I shall continue to argue that the Bill has a number of glaring omissions and contains provisions that will increase the instability of the constitution of the United Kingdom and ultimately make the proposals unworkable. That is why we shall seek constructively to analyse the omissions and weaknesses in the Bill, in order to correct them.

Mr. Cash

Will my right hon. Friend give way?

Mr. Ancram

Perhaps my hon. Friend will allow me to make a little more progress, as I am conscious of time.

The central need is to eliminate the areas of potential conflict between Edinburgh and Westminster and between Scotland and England more generally, with which the Bill is littered. The greatest danger to the United Kingdom lies within those areas. As Unionists, we must seek to eradicate the potential flashpoints.

The most glaring areas of potential conflict are those outlined in our amendment. The failure to resolve the fundamental problems of the imbalance between Scotland and England that the proposals in the Bill make inevitable will eventually and inevitably lead to English resentment. The undermining and marginalising of Scotland's position in the United Kingdom and within the Councils of the European Union will inevitably lead to Scottish resentment. Other factors include the creation of constitutional flashpoints by the inclusion of half-baked and ill-thought-out provisions relating to the increase of powers, the exercise of vetoes and the creation of unworkable constitutional anomalies. Last but certainly not least is the failure to provide any assurance or definition on the face of the Bill on the future financial relationship between Scotland and the rest of the United Kingdom.

Mr. Cash

Does my right hon. Friend have an answer to the so-called West Lothian question, and is it part of the policy of the official Opposition to deal with that question when we consider the Bill in Committee?

Mr. Ancram

If my hon. Friend will allow me, I am coming to an important point to which I have already referred.

Each of the areas that I have set out provides the rocks on which the United Kingdom could ultimately founder, yet the Government—and we have heard it again today—sweep our concerns aside with bland assurances of consensus, concordats and good will.

Let me say in all seriousness to the Secretary of State that consensus is not a natural political state, concordats rarely survive political change and good will can never be the cornerstone of the realist, yet that is all we are offered in response to our concerns. For those reasons, we believe that, in its present form, the Bill fails the worst-case scenario test in each of the categories that I mentioned, and that, unless the deficiencies are rectified during the legislative process, our dire predictions during the referendum might well come to pass.

We need to look more closely at the areas that I have set out. The question of the post-devolutionary balance of the United Kingdom is central. It is most clearly seen in the consequences of devolution on the United Kingdom Parliament at Westminster. For all the Prime Minister's protestations last year about sovereignty remaining with him as an English MP at Westminster and a somewhat half-hearted reassertion in the Bill at clause 27(7) of the power of the Parliament of the United Kingdom to legislate for Scotland, the long-term position of the Westminster Parliament and its Members is far from clear. It should be robustly clarified by a firm statutory affirmation that, notwithstanding the establishment of the Scottish Parliament or anything in the Bill, the supreme authority of the United Kingdom will remain unaffected and undiminished over all persons, matters and things in Scotland.

As I understand it, that is the position of the Government in practice. I believe that they should have the courage to put it on the face of the Bill, so that there can be no room for doubt by anyone outside. To do so would underwrite the political imperative of the Union and provide reassurance that the Bill is not the beginning of a slippery slope to separation.

Mr. Dewar

Has not the right hon. Gentleman looked at clause 27(7)?

Mr. Ancram

Had the Secretary of State been listening, he would have heard me describe it as a half-hearted reassertion. I am asking for a full reassertion of the supremacy of the Westminster Parliament.

Another area of instability has been referred to by a number of my hon. Friends. It is known as the West Lothian question, but might more accurately be described as the English dimension. Surely it is quite clear that within the Union we cannot have a Parliament where some Members can vote on matters affecting the constituents of others, but where they can no longer vote on them on behalf of their own constituents. I can envisage English resentment arising if a group of Scottish Members with much reduced work loads in relation to their own constituencies were able to influence decisions on matters that had nothing to do with them. That situation has all the makings of a classic constitutional grievance, which could quickly become a flashpoint—in this case, in the most sensitive area of future Anglo-Scottish relations. An answer must be found to that.

Mr. James Wallace (Orkney and Shetland)

The right hon. Gentleman has pinpointed what he believes to be an area of instability. What instabilities were there with the United Kingdom Parliament before 1972, when hon. Members from Northern Ireland could vote on matters relating to Scotland, but not on matters relating to their own constituencies?

Mr. Ancram

I am coming to one of the corollaries of the Northern Ireland situation. There were far fewer hon. Members from Northern Ireland relative to the representation of the rest of the United Kingdom.

There are no easy answers, only less than satisfactory options, such as the designation of Bills as English Bills open only to English Members, an all-powerful English Grand Committee sitting at Westminster on certain days, or the more extreme idea of a separate English Parliament. All those proposals contain serious constitutional flaws or dangers to the Union. They all flirt with English nationalism, which is every bit as dangerous to the Union as Scottish, Welsh and Irish nationalism. We shall need to explore and debate all those options in the coming months. The private Member's Bill of my hon. Friend the Member for Billericay (Mrs. Gorman), to be debated this Friday, will provide a useful opportunity to begin that process.

The Bill provides for the boundary commission to create parity of representation in terms of electoral quota between England and Scotland. In due course, that will reduce Scotland's over-representation at Westminster, but the proposal has some weaknesses. It will create parity of electoral quota where there will be no parity of responsibility or quality of constituency representation. Scottish Members of Parliament at Westminster will have considerably less to do than their English counterparts. The electoral quota cannot measure work load in their case. There is a strong argument for more stringent criteria, which would result in even fewer Scottish Members at Westminster, reflecting the fact that Scotland will have its own Parliament and the ability to legislate and govern for itself.

The next weakness is the time scale. The Bill envisages the boundary commission operating to its normal timetable, with the next report due only after the next election. Apart from squandering good will in England, it cannot be good for Scotland to find that, within a year or two of the Scottish Parliament getting going, its numbers are cut to reflect the changes in the number of Scottish Members at Westminster. It makes little sense to set up a Parliament, ask it to bed down and then make fundamental changes to its size and composition.

We want the boundary commission to do its work before the next election—ideally in time for its findings to be taken into account in the elections for the Scottish Parliament, as well as for the next Westminster elections. If it starts now, there is no reason why that cannot be achieved. It would be a way to calm one area of potential resentment.

As great a matter for concern is the focus for resentment that could arise from perceived broken promises and dashed expectations. Much was made during the referendum campaign of devolution strengthening Scotland's position in Europe and in the United Kingdom. Some of us questioned that at the time and were roundly abused for doing so, but it appears that we were right. The Bill is ominously silent on those issues, particularly on Europe. Schedule 5(6), to which the Secretary of State referred, merely allows the Scottish Parliament to assist Ministers on Europe. There is no statutory protection of Scotland's current direct access to the Council of Ministers. There is not even a statutory formulation of the lesser promise in the White Paper of access by invitation of the Westminster Government. No attempt has been made to implement the brave words in the White Paper about giving Scotland a presence in Brussels. It is all left to agreements and concordats, which will be transient and non-binding.

At a time when critical matters affecting the future livelihood of Scots in agriculture, fishing and development funding need to be dealt with, Scotland's input is apparently to be dependent on a passing political agreement that can be neither guaranteed nor enforced. If ever there was a subject for what the Secretary of State has described as making "provision against every eventuality", it must be in this crucial area, but the Bill fails dismally and damagingly to do so.

Mr. Hogg

Is there not a further difficulty with the presence of representatives from the Scottish Parliament in European Councils? Ministers from the Scottish Office are listened to in the Council of Ministers because they are Ministers of the United Kingdom Parliament. That will not apply to Members of the Scottish Parliament. They will not be listened to by the Council of Ministers, because they will not be United Kingdom Ministers.

Mr. Ancram

My right hon. and learned Friend is right, but the problem goes further than that. I suspect that the reason for the lack of provision in the Bill is that, although the White Paper outlined the possibility of a Scottish Executive Minister leading for the United Kingdom in the Council of Ministers, no answer was given on how he would answer to the United Kingdom Parliament for the leadership that he gave. There would be a serious question mark about accountability if that situation were allowed for.

In the light of the assurances given on Scotland's voice in Europe, the realisation that access to European Councils for Members of the Scottish Parliament will be guaranteed only by the good will and the whim of future Westminster Governments will create great resentment in Scotland. It will be a gift to the forces of nationalism and those who seek separation. I seriously suggest to the Government that they need to do something about that during the passage of the Bill.

It is not good enough for the Secretary of State to say that the situation will remain as it is now. It plainly will not. At the moment, we have one Government speaking with one voice. In future, there will be two Governments who will not necessarily agree.

We must also question the marginalisation of Scottish Members at Westminster and the concomitant diminution of the influence of Scotland at the centre. The history of Ulster Members at Westminster in the 50 years between the setting up and the suspending of Stormont is salutary. The once powerful and influential voice of Ulster at the centre of United Kingdom affairs quietened quickly after devolution and then grew even quieter. I do not want Scotland to follow that precedent, which would be the antithesis of the stronger voice in the Union that was promised to Scots by the Government during the referendum campaign.

The stark truth is that after devolution, Scottish Members will be comparatively part-time. They will have very little conventional constituency work to pursue. However the West Lothian question is resolved, they will surely feel diffident about becoming involved in affairs that have nothing to do with them. They will be seen as different in the House. Gradually, they will be treated as different as well.

Nothing in the Bill will prevent the same fate befalling Scottish Members as befell Ulster Members in the past. The leading Westminster Scot, the Secretary of State, will have a diminished role—if the post survives at all. The Bill does not statutorily entrench his position. The few powers left to him could be exercised by any Secretary of State in the Westminster Government. The traditional protector of Scottish interests and the fount of Scottish influence in the United Kingdom Cabinet will at best become an empty vessel and at worst be abolished, leaving even less focus for Scottish Members at Westminster. With the Scottish Law Officers being withdrawn from the Westminster Government, that focus and influence will be weakened further, along with the influence that Scottish law has been able to bring to United Kingdom affairs. Scotland will risk becoming increasingly marginalised. That will be a matter for substantial and justified grievance.

However, the biggest potential flashpoint and the greatest focus for resentment could arise from the Bill's failings on the financial relationship between Scotland and the rest of the United Kingdom. Even before the Bill was published, there were stirrings in north-eastern Labour doocots about the sharing of resources in the United Kingdom, particularly Scotland's share. The Labour-dominated Treasury Select Committee investigated the Barnett formula. Its findings were not particularly helpful to Scotland.

Those of us who predicted such stirrings during the referendum campaign were accused of being alarmist. I presumed—perhaps naively—that those accusations of alarmism would be matched by some statutory provisions, giving Scots an assurance that their needs would be recognised in the Bill. There is no mention in the Bill of formulas or needs. It says only, in clause 61, that The Secretary of State"— it does not even say which one—

shall from time to time make payments … out of money provided by Parliament of such amounts as he may determine. Under the test of the worst-case scenario, that does not even pass first base. It is certainly not the type of offer to pay, on which I would be prepared to sign away my prospects in life or business. It is not even a wing and a prayer. It simply will not do to say that there will be a written understanding.

I remember that the late Lord Home of Hirsel used to say: If a man tells you that his word is as good as his bond, always take his bond. In this case, there is not even a bond to take. Indeed, there is no long-term word that can be relied on. There are only bland assurances that cannot hide the truth. That truth is that the clause is an ultimate Treasury victory, allowing the Treasury to make the rules as it goes along. To Scottish people, it is a pig in a poke. After all the wild promises made to Scotland about what devolution would give the Scots, when one considers the leverage that could be given to the Treasury and the Westminster Government, the potential for resentment and a genuine feeling of betrayal in Scotland is enormous. Once again, the only winner would be nationalism.

Mr. Dewar

I am genuinely listening with care. I have grasped the fact that the right hon. Gentleman believes that there should be a Scottish Parliament. I am now trying to understand from his speech what that animal should look like. What financial situation is he advocating?

Mr. Ancram

I shall obviously table amendments in Committee. I should like a reference in the Bill to the needs of Scotland in relation to the finances that will be available. Those who say that I do not know what I intend to do might care to look at amendments to the Government of Wales Bill, in which a similar problem arises. They will see that I am making some moves in that direction.

Mr. Dewar

As the right hon. Gentleman will remember, I quoted the hon. Member for North Essex (Mr. Jenkin) defending the present financial arrangements on the ground that they were based on the needs of Scotland. Is that the Conservative Opposition's position?

Mr. Ancram

My hon. Friend the Member for North Essex (Mr. Jenkin) speaks for the Conservative Opposition. I am saying that such a fundamental constitutional reform will have to stand the test of time. In order that it does, one must test it not against the good times, when everybody agrees, but against the bad times, when people will not agree. There is nothing in the Bill in relation to the financing of the Scottish Parliament and the needs of the Scottish people that gives any assurance in that direction. The Secretary of State knows that no concordat has been devised, no consensus has ever been arrived at, which, at the end of the day, can give a binding assurance of the kind for which the people of Scotland are looking.

Given the Government's wild and ill-considered drive to fragment England into regions, the danger zone will not get any easier. Indeed, it will worsen as the competition for limited resources becomes more regionally focused. It is not good enough to rely on the status quo and pretend that nothing will have changed. A great deal will have changed—much of it because of the Bill.

It is clear that, in the area of finance, taxation and overall control of Scottish spending, the Bill creates a minefield, which could be the biggest flashpoint of resentment. It is in that area that the principle of devolution will really be tested. There is little or nothing in the Bill that creates any confidence that the exercise will not end in tears. Such main areas of potential conflict must be addressed if the proposals are not to undermine the Union. There are many other such areas which, because of the amount of time that I have now, I shall examine in Committee.

Mr. John Swinney (North Tayside)

The right hon. Gentleman advances a curious argument about needs assessment. If a needs assessment were carried out in different parts of the United Kingdom, does not he recognise that some of the unidentified aspects of public expenditure that seem to find their way into spending in the south-east of England would also be exposed in the analysis? Over the decades of a Conservative Administration, the Treasury confirmed that Scotland was a net contributor to the United Kingdom to the tune of £27 billion—[Interruption.] The figures are given in Treasury written answers. Hon. Members can look at them in Hansard. In that context, the right hon. Gentleman's rather peripheral arguments do not make any sense.

Mr. Ancram

On the last point, I think that we are all used to the Scottish nationalists' ability in creative accounting; we know all about that. However, the hon. Gentleman makes an important point. The moment one begins to open the can of worms of regional needs—it is opened even further when England is fragmented into regions—the more one sees the type of competition between regions to which he referred. Yes, I suspect that the south-east would not come off too well—but nor would Scotland. I am arguing not for a needs assessment but for a reference to need—more than that in the Bill at the moment, which leaves the decision on financing merely to the whim of an undetermined Secretary of State from time to time. I do not believe that that is good enough for the Scottish people.

Mr. Dewar

Although I do not want to have a debate, which we shall clearly have at a later stage, is the right hon. Gentleman saying, in effect, that he supports the Barnett formula?

Mr. Ancram

I have said throughout the debate and the referendum campaign that we believe that the Barnett formula has reflected need. In the longer term, need must be the measure of finance. The right hon. Gentleman is failing to face up to the point that there is no assurance, no guarantee in his Bill, that need will even be one of the criteria considered. The people of Scotland have a right to be concerned about that.

The Bill purports to create a Scottish Parliament within a strengthened United Kingdom. We accept that purpose, but the Bill patently fails to achieve it. Its failure to eradicate areas of potential cross-border conflict—indeed, its almost uncanny ability to create them—makes it dangerous to Scotland and the United Kingdom as a whole. For those reasons, the Opposition find the Bill unacceptable in its present form.

One option—I must say this, I suppose, with my tongue in my cheek—would be for the Government to withdraw the Bill and start again, on the basis that it is better for Scotland and the United Kingdom to take a little more time and get the matter right than to muddle on and get it wrong. If, as I suspect, they will not do that, I only hope that they will consider carefully the changes that we shall propose if the Bill secures its Second Reading.

As Unionists who opposed devolution from the start, it would be tempting for us to stand back from the legislation, let it pass, watch it fail and then say, "We told you so." But we know, as Unionists, that if the Bill and the devolution that it proposes fail, it will drive a further dagger into the heart of the Union and strengthen the hand of those who wish its end. The Bill creates a road junction—one which, constitutionally, we would rather not have reached. The junction has two exits: one marked "independence", and the other "an intact United Kingdom". We must fix our direction firmly towards the second.

We respect the decision of the Scottish people to create a Scottish Parliament. We want one that will give the Scots the esteem that they seek, while sustaining the United Kingdom with all the benefits that the historic and unique Union can still bring to the people of these islands. We believe that that can, with difficulty and imagination, be achieved. We are equally convinced that the Bill fails to achieve it. The Government must be persuaded to take a fresh look at the proposals. I call on all those who believe in Scotland's historic role in the Union to demonstrate the depth and sincerity of their concern, and to support us and our amendment in the Lobby tomorrow.

5.6 pm

Mr. James Wallace (Orkney and Shetland)

I listened with interest to the right hon. Member for Devizes (Mr. Ancram). I look forward with considerable interest to the amendments that he will table—not least those with regard to securing finances for the Scottish Parliament. He may indeed persuade the Secretary of State for Scotland to agree to them.

It is a great privilege to be the first hon. Member from the Liberal Democrat Benches to be called to speak—in support of the Bill. The Bill will give Scotland its own Parliament for the first time for nearly 300 years. It embodies in legislative form the agreement of the Scottish Constitutional Convention. I shall not disappoint the right hon. Member for Devizes; I shall quote Gladstone later. The right hon. Gentleman said that Liberal Democrats have got lost in a mist of home rule Gladstonism, but he should look at the record.

The Liberal Democrats entered the Scottish Constitutional Convention with the Labour party and many others from many walks of civic life in Scotland when the Conservative party rejected the opportunity to do so—as, indeed, did the Scottish National party. We rolled up our sleeves and did the hard work. Anybody who attended meetings of the constitutional convention knows that there was no misty-eyedness in trying to agree workable proposals.

The Bill is the legislative form of the proposals that were overwhelmingly endorsed by the Scottish people on 11 September. They showed beyond any shadow of doubt that home rule is the settled will of the Scottish people. The Bill goes a long way towards fulfilling a policy goal for which—I do not think that anybody quibbles with this—my party and its predecessor parties have campaigned for longer than any other party. When I quote some of my Liberal predecessors, I do so not so much to prove consistency as to illustrate the years of misgovernment to which Scotland has been subjected and the patience and persistence that we have had to show before reaching this historic Second Reading debate.

As the right hon. Member for Devizes would expect, I wish to refer to Mr. Gladstone, who said in his second Midlothian speech on 26 November 1879: if we can make arrangements under which Ireland, Scotland, Wales, portions of England, can deal with questions of local and special interest to themselves more efficiently than Parliament now can, that, I will say, will be the attainment of a great national good. The Scotch members … always show in the transaction of Scotch business remarkable shrewdness and efficiency, yet all find cause to complain, and complain seriously and gravely, that they cannot get the Scotch business properly transacted. The Parliament is overweighted. The Parliament is almost overwhelmed.

Mr. Rowe

I have great respect for Scots, wherever they may be in the United Kingdom. Does the hon. and learned Gentleman agree that the government of Glasgow during the past 40 or 50 years—when it has been entirely in the hands of Scots—has hardly given cause for great congratulation?

Mr. Wallace

To be fair, Glasgow is miles better than it was 40 years ago. Glasgow has suffered, as have many parts of Britain, from an electoral system that gives overwhelming power to one party, sometimes with a minority vote—although that has not always been the case in Glasgow. The Bill does not propose that, and the Parliament will fairly reflect the different political strands that exist in Scotland.

Mr. Godman

As the husband of a Glasgow city councillor and former Strathclyde regional councillor, may I ask whether the hon. and learned Gentleman agrees that many poor people in Glasgow benefited considerably from Strathclyde regional council and Glasgow city council, despite the activities of a small number of councillors in recent times?

Mr. Wallace

My hon. Friend the Member for Argyll and Bute (Mrs. Michie) would probably confirm that, in many respects, Strathclyde region's provision of roads and education was better than that of the old Argyll county council. I did not agree with everything Strathclyde region did, but it was not the monster that the previous Prime Minister made it out to be.

During the Second Reading debate of the Government of Scotland Bill on 30 May 1913, the then Member for Aberdeenshire, East, Mr. Cowan, showed that plus ca change, plus c'est la même chose. The burning issue of that day was temperance reform but, allowing for a change of issue, these words could have been used during the recent referendum campaign. He said: To my knowledge, there has been a Scottish majority in this House in favour of Scottish temperance reform since 1885—a majority which, being a minority of the House, has always been voted down by the English Members. So the Scottish Members have found it impossible to make effective the mandate that they have been given. Mr. Cowan went on in a way that reflects the experience of many of us who have had to listen to Conservative contributions to Scottish debates. He said that English Conservative Members with shootings, fishings, or deer forests in Scotland, imagine themselves experts on Scottish affairs and insist on wasting our time and their own by intervening in Scottish Debates."—[Official Report, 30 May 1913; Vol. 53, c. 476–79.] He went on to say that Parliament was "breaking down" under the system that existed in 1913. And so say all of us.

In our day, we have experienced a lack of time for Scottish affairs. We have fewer opportunities to question Ministers than our English counterparts. There were only 13 hours on the Floor of the House in the last Session of the previous Parliament to debate Scottish education, and a little over three hours to debate Scottish housing. Changes to our law are sometimes tagged on to substantially English Bills.

Those of us who remember the measure that introduced aggravated trespass will have noted that, in Committee, the issue was barely addressed. There were only one or two Scottish Members on the Committee. When the hon. Member for Dumbarton (Mr. McFall) moved an amendment on Report, a debate that went on for well over two hours was replied to by the then Minister of State—the former Member, I am happy to say, for Edinburgh, West—who put his head down and read his briefing note in a matter of two minutes and did not address any of the issues that had been raised in a serious debate. The law of Scotland was changed fundamentally without adequate debate on the Floor of the House.

The poll tax was a classic example of an issue in respect of which Scottish Members, to use the words of the former Member for Aberdeenshire, East in 1913, found it impossible to make effective the mandate they had been given.

Palliatives have been tried, including the Scottish Grand Committee. As a result of measures taken by the former right hon. Member for Stirling, it was an itinerant Scottish Grand Committee. Who will forget the occasion during Question Time in the last Parliament when the former Minister of State—the former Member for Edinburgh, West—was asked what the Scottish Grand Committee had done? He took a deep breath and said, "It has met." That was probably one of the most accurate answers he gave, as that was all the Committee had done—it was all that it was allowed to do. The government of Scotland suffered and there was inadequate time for important issues to be addressed.

Home rule allows us an opportunity to right the wrongs of Scottish misgovernment and to renew and replenish Scottish democracy. In doing that, we will help English Members of Parliament, as the business of this Parliament will not be taken up with Scottish affairs. More time will be released for effective scrutiny of English legislation.

Mr. Grieve

I take it from what he says that the hon. and learned Gentleman accepts that, after enactment of the Bill, Scottish Members in this House should not have the right to vote on matters of purely English concern. Using the logic that he deploys—which I accept and understand—that must be his position.

Mr. Wallace

That federalist solution has been the policy of the Liberal party and the Liberal Democrats for the greater part of this century. [Interruption.] Indeed, as my hon. Friend the Member for Roxburgh and Berwickshire (Mr. Kirkwood) says from a sedentary position, it has been our policy for 100 years.

We are doing more than correcting wrongs; this is a rare event. One tries to think of an example in history of a new Parliament being established in a nation that has enjoyed a long democratic tradition. It allows us a tremendous opportunity to break away from hidebound traditions and inflexible practices. We can give real substance to the idea of open, accountable and inclusive democracy—and much of that can be reflected in the Standing Orders.

I look forward to serving on the committee to be chaired by the Minister for Home Affairs and Devolution, in which I hope we will have innovative ideas. We must try to find ways to make the Parliament responsive and willing to take on board the views of our constituents.

Whatever disappointments may have been expressed in some quarters that the Calton hill site was not chosen for the Parliament, I believe that a new building at Holyrood offers us an opportunity to equip the Parliament with the best in new technology and telecommunications and to allow electronic access to people from all parts of Scotland. Clearly, that goes beyond the scope of the Bill.

I wish to add my congratulations to the Secretary of State and his officials on the first-class job they have done in drafting the Bill. There can be no doubt as to the task set for them and I believe that they have responded to it promptly and admirably. I found parts of the Bill almost pleasurable reading—if one can find any pleasure in reading such material.

Those of us who favour a much wider programme of constitutional reform found some of the things for which we have argued are now in legislative form, including the provision of fixed-term Parliaments, a provision to secure the confirmation of a First Minister and ways of getting rid of a Government in a statutory form. Clause 22 sets out a statutory code for dealing with Members' interests and creates criminal offences in cases where it is abused.

I wish to identify three elements in the Bill that we particularly welcome and which make a difference between the Bill and the legislation passed in the late 1970s. First, I refer to the electoral system. I and my hon. Friend the Member for Gordon (Mr. Bruce) negotiated hard to get the principle of proportional representation accepted. We believed that that was important if we were to ensure that the Parliament was acceptable to all areas of Scotland. It is to the credit of the Labour party that, having achieved a majority on a minority of votes under the first-past-the-post system, it has willingly conceded—indeed, warmly embraced—the additional member system that is now in a statutory form.

I welcome the fact that there are separate seats for Orkney and Shetland—something for which I have argued. I have had a personal difficulty in determining whether to stand for the Parliament as I have a choice of constituency, but I shall take my chance and seek the nomination for Orkney.

As the Secretary of State knows, the Scottish Constitutional Convention considered the question of the islands. As he said, that also must be a matter for the Parliament, but having a new Parliament will give us the opportunity to take account of the fact that well-intentioned legislation, which can work well in other parts of the country, often does not apply to or rest easily when applied to an island. We will want to explore ways in which the Parliament can tackle that better than this place has been able to do.

The second part of the Bill that we welcome—and is different from the 1978 legislation—is that which contains tax-varying powers. Giving a legislature such powers is what makes it accountable to its electorate. Indeed, in another place during the passage of the previous Bill, the Earl of Home suggested that it would be asking for trouble if he did not give the Parliament tax powers. It is an issue of democracy as to whether the powers are used. During the referendum campaign, we said, "Trust the people." If the people elect to the Scottish Parliament Members who want to exercise those powers and who have put before the electorate a programme based on exercising them, that would be an exercise of democracy.

The amendment moved by the right hon. Member for Devizes talks of the Bill doing damage to Scottish business interests. None of those who want a Scottish Parliament wants to do down Scotland or Scottish business and enterprise. Members of the Scottish Parliament will think carefully before they make decisions on taxation; there will be many ways in which they can assist business and stimulate a culture of enterprise in our country by using such powers.

The third aspect of the Bill that is particularly pleasing is the fact that it uses a formula of reserved powers rather than devolved powers. If we were going to start with a clean sheet, as a Liberal Democrat I would say that all power rests with the community and we surrender up the powers that we believe can be exercised better at a higher level. That is not where we are starting, but the fact that we are using the principle of reserved powers and leaving everything else to the Scottish Parliament is important. It is a principled way to go about the creation of a Scottish Parliament.

Although we substantially support the Bill, we will nevertheless scrutinise it in Committee. At the very least, we will want to ask the Government to justify why some powers are to be reserved. For example, why do we need a United Kingdom Parliament to give directions on the classification of films or the regulation of the professions? In some cases, we hope to change the Government's mind—for example, on abortion. It is arguable that that is both a health and a criminal legal matter. As both health and the criminal law of Scotland are devolved matters, surely it makes sense that abortion should also be a devolved matter.

The law in Northern Ireland is different. I asked my noble Friend Lord Steel of Aikwood, whose Abortion Act 1967 changed matters, why Northern Ireland was not included. The answer was, of course, that it was a devolved function for Stormont. I shall not enter into the merits of how the Scottish Parliament should exercise that power. Also, it would make sense to trust it to exercise power sensibly over broadcasting.

On the appointment of senior judges, I cannot see any reason why we must continue with the formula of the Prime Minister nominating the Lord President and Lord Justice-Clerk. If he can do so only on a nomination from the First Minister of the Scottish Parliament, why cannot the latter do it himself? I note too the provision for judicial salaries to be a reserved power—it seems that some judicial trade unionism may have been exercised. Those salaries will come out of the Scottish Parliament's fund. We may not necessarily want to do the judiciary down, but we challenge the Government to tell us why they believe that should be a reserved power.

On the conduct of elections for membership, the timing of the minimum period from a dissolution to polling day will be a matter for the Secretary of State to determine by order. Is it intended that that order shall apply for all time, or will it apply only for each election? I welcome the provision for independents to stand for the regional elections, but what sort of deposit is intended? Will a sum of money be required or, perhaps, a certain number of signatures to back up a nomination? I welcome plurality, but as we have seen, matters can sometimes get out of hand when people who have no real contribution to make to the democratic process spot a chance of getting loads of publicity.

The hon. Member for Stone (Mr. Cash) referred to clause 33. I accept that it is an effort to extend the powers of the Parliament into reserved matters, but if the Secretary of State's power to intervene is based on the ground that he has good reason to believe that a Bill contains various provisions and if it can be challenged in this House only under the negative procedure, could it also be challenged by the Lord Advocate if he felt that the Secretary of State did not have reasonable grounds? The words "reasonable grounds" could be open to misinterpretation or abuse by a future Secretary of State if there were a conflict between the two Parliaments.

I must point out the absence of any provision that would free the political parties from legal challenge if they adopted means that promoted the selection and subsequent election of women candidates. We take seriously the agreement that we entered with the Labour party and have devised a means by which we can deliver, as best we can, particularly through the list system, a 50:50 Scottish Liberal Democrat membership in a Scottish Parliament—but we do not want to find ourselves in the law courts because we have done so. That matter goes beyond this Bill and affects also the European Parliamentary Elections Bill among others.

Mrs. Fyfe

The hon. and learned Gentleman will recall that for many years when we were involved in the work of the Scottish Constitutional Convention some Labour Members promoted the idea of a legislative framework to ensure equality of representation. At the time, all the Liberal Democrat members of the convention were utterly opposed to doing so because they said that it was totally against their Lib-Dem principles. I find it irritating that he should be talking of such a clause at this stage. If he had done so all those years ago, we might have been able to work our way forward successfully in Europe, rather than facing the difficulty that now confronts us all. I totally support equal representation, but it is difficult in the circumstances.

Mr. Wallace

I hear what the hon. Lady says. There has been no change in our position. The state should not legislate on how political parties select their candidates. We are saying that political parties should not be open to a challenge in the courts because they have tried to achieve some sort of gender balance. It is perverse for the Sex Discrimination Act 1975 to be used to challenge those—including the political parties—who are trying to do something to change gender balance. We are looking not for legislation that would oblige parties to do so, but for legislation that would give them legal immunity if they did—and we fully intend to do so.

Much as been said, particularly by the right hon. Member for Devizes, about relationships with the rest of the United Kingdom. My colleagues and I make no secret of, or apology for, the fact that we are a federalist party. We believe that the Bill is consistent with Britain ultimately evolving into a federal United Kingdom. We believe that there would be advantages in federalism, not least in dealing with the English dimension and, perhaps, in allowing greater transparency in the funding arrangements in the different constituent parts of the Union. I do not believe that we are in any way embarking on the so-called slippery slope. What has been proposed today will strengthen the Union.

While making a programme for the Scottish Television "Platform" series in 1996, Ms Wendy Alexander, who is no doubt well known to the Secretary of State as one of his advisers, visited Catalonia and found that, while there was a sense of nationalism there, no one wanted independence.

In an article in The Scotsman, Ms Alexander wrote: the Catalan minister of industry … says: 'Why should we walk out of Spain when we have the chance to shape its future? Working for Catalonian prosperity is not a zero sum game, improving Spain's position will benefit us all.' She went on to say:

The overwhelming consensus is that secession would mark an abject failure of the autonomy process. For a Scot, weaned on SNP and Tory politicians alike, constantly reasserting the inevitability of a slippery slope to independence, the fascinating discovery is that in Spain it simply does not exist. That certainly reflects my experience and that of my hon. Friends the Members for Gordon and for Argyll and Bute, who also went to Catalonia five or six years ago. We found that the autonomous powers given to Catalonia were working well and that people saw no advantage whatever in splitting away from Spain. We are embarking on something similar here.

There was not a triumphalist response to the referendum outcome. It was, rather, the vote of a confident nation that believes that it can trust itself to take power and responsibility for our distinctive education system; for our health service; for the crying needs of Scottish housing; for meeting the challenge of a transport network in both rural and urban areas; for renewing our local democracy; for providing for the first time in almost 300 years our own legislature to amend and modernise our distinctive legal system; and for being a catalyst for Scottish enterprise and culture.

The Parliament will not be an easy palliative for all Scotland's wrongs; it will take time and perseverance, but we now have the opportunity to take decisions for ourselves. I believe that the Bill provides for a modern, democratic Parliament for a modern, democratic nation, and it will enjoy my party's support.

5.30 pm

Mr. Martin O'Neill (Ochil)

I do not intend to go down the historical route of the hon. and learned Member for Orkney and Shetland (Mr. Wallace), because the history of the Labour party in relation to home rule is somewhat mixed.

Until the summer of 1974, I had not really come round to taking seriously the case for constitutional reform: in my previous 10 or 12 years as a member of the Labour party I had always felt that there were other ways of addressing constitutional problems and matters such as the improvement of local government. In 1974, it became clear—not only because of the votes gained by the Scottish National party, as we had seen its fortunes rise and fall before—that there was a deep-seated concern about the way in which the whole of the United Kingdom was being governed.

Others may wish to go back to Keir Hardie and recite the mantra; that is fair enough, but I would remind hon. Members that the three main points of his election programme in the early days were always Scottish home rule, universal suffrage and—dare I say it?—prohibition. I do not think that, with my constituency and with my habits, it would be consistent for me to advocate that last policy.

We must support the Bill, and not on the grudging basis on which we sometimes support legislation, as the best that is available. It is a first-class piece of work. It is a tribute to all my Front-Bench colleagues and to the Scottish Office. Everything has been done on time and has, as far as possible, been consistent with the work of the convention.

I may not share the enthusiasm of the hon. and learned Member for Orkney and Shetland for the literary merit of the Bill. Reading legislation may be a cure for insomnia but it is not especially exciting—I do not have the vested interest of a member of the legal profession. However, I was happy to support the strategy adopted by my Front-Bench colleagues, of having a referendum and then moving swiftly on to the introduction of legislation.

My right hon. Friend the Secretary of State and I listened, as one had to do, when the former Member for Glasgow, Govan, Bruce Millan, spoke about all the bitter experience that he had in the 1970s in trying to steer devolution through the House and to convince the people. He said that a pre-legislative referendum was the surest guarantee of a decent and fair hearing in the House. I am fairly confident that that will happen to the Bill, despite the at times unhelpful remarks—that is the Opposition's function—of the right hon. Member for Devizes (Mr. Ancram).

The legislation will pass the test of the majority—it has already done so in many respects because of the referendum and the parliamentary arithmetic—partly as a consequence of the rigour that is the hallmark of my right hon. Friend's approach to everything that he does. The Bill may be capable of improvement in some respects, but it will certainly go through without substantial amendment. If there is to be change, it will be because of the pragmatism that is the hallmark of the present St. Andrew's house team.

Pragmatism has already been displayed in the choice of site for the Parliament. I live in Edinburgh, and I must be careful—living in Leith does not necessarily make a person a Leither, and I do not want to have my visa withdrawn at Pilrig—but Leith would not have been the idea] site, because the convenience of the few civil servants with direct relation to the Parliament would not, frankly, have been an issue; it would have been too far from the city centre. The Haymarket site had obvious problems as well.

The 1970s ideas of what the Parliament would do in 1979 are entirely different from what we expect, and will be expected as parliamentarians to provide, today. The facilities at the Calton hill site would not have measured up and would have needed extremely expensive alterations.

People talk of Calton hill's associations, but we should recognise that most Scots before 1978–79 associated it with the parsimony, the lack of public-spiritedness and the civic duty of a certain section of the Scottish people. I was brought up as a youngster in Edinburgh to believe that it was Scotland's disgrace, not a place of national celebration. A few pillars on the hill are a tribute to the, perhaps misguided, efforts of those Scottish people who participated in the Napoleonic wars. That is not a historic precedent that we especially want to build on.

Mr. Rowe

Given the hon. Gentleman's frankness about his unwillingness to sponsor temperance, should he not draw considerable encouragement from what is usually organised in the confines of a brewery?

Mr. O'Neill

In fact, the building in question is the offices of a brewery and I do not know whether the site was ever used for the production of beer. I worked for the firm when I was a student, and the brewery was across the road.

The brewers, like the bankers, very rarely lose, and this is a classic case. Scottish Courage is a singularly inappropriate name, given the political thinking of that organisation, which was the most intransigent and intractable opponent of devolution and would push even Portillo and the Royal Bank of Scotland into second place. At least, in the end, one group of Scots, and some English people, have already benefited from devolution, and we wish them well.

The site will provide all the opportunities for the creation of a modern, democratic assembly. I am glad that some of my colleagues intend to go to that Parliament. There has been much sniping and many cheap cracks about those Scottish Labour Members who do not intend to put their names forward for consideration for selection and then, perhaps, for election.

I have been a Member of Parliament for nearly 20 years and I am one of those old dogs who would probably not learn many new tricks and, as my speech tonight has demonstrated, would probably bore the backsides off most of the new Members there. One of the exciting things about the new Parliament is that many new Members will participate and there will be plenty of fresh thinking. The tired old Lobby fodder from Westminster should have the chance to watch that process from the galleries.

Mr. Hogg

The hon. Gentleman is explaining why he does not want to sit in the Scottish Parliament—I entirely understand that, and I am not here to push him to do so—but will he accept that, after devolution, his role as a Scottish Member of Parliament will be enormously reduced and that he will lose many of the functions that he now possesses as regards his existing constituency? How will he face that prospect?

Mr. O'Neill

If I thought that my time down here would be spent on the Floor of the House on Scottish business for many hours and days of the year, I might be concerned about it. I do not wish to bang a drum, but for a number of years I served on the Opposition Front Bench, dealing with Scottish affairs. I had to do a fair amount of work, but I was very conscious that it was shared between a number of colleagues. We were not overstretched, apart from when we had to go through the night. However, what did frustrate me when I was underemployed, and apparently ineffective, was that, throughout the 18 years of Tory rule, I was a member of a party with a majority in Scotland, yet was unable to change the legislation that the Government were putting through.

The House has heard examples of the lack of work. Some of us have, for a number of years, played a comparatively small part in Scottish affairs, mainly because we knew that many of our colleagues also wished to play a part. I have been involved in security, foreign affairs and trade and industry matters. As Chairman of the Trade and Industry Select Committee, there is still quite a lot of work that I can legitimately do, and, given the reserved powers, will be able to do after an election.

The proposal to reduce the number of seats will be dealt with in due process, and not in the hurried way suggested by the right hon. Member for Devizes. Many of us participated in the boundary redrawing procedures, which are time consuming. The idea that it is somehow possible to redraw the boundaries in time for 2002 is naive in the extreme.

Equally, some of us—I mean this with the greatest respect to existing Members from Northern Ireland—take rather ill the suggestion that Scottish political representation in future Parliaments in this House will in any way be comparable to the band who have come from the north of Ireland in the past, not least when there was a Parliament in Stormont, because their politics were very different from the rest of the House. In many instances, a subscription to Unionism was seen to be a prejudice against Catholics. Circumstances have changed and the politics in that country are now endowed with at least a scintilla of optimism. We may well see a Parliament coming there.

What is exciting about the Scottish Parliament—perhaps more so than the Welsh Assembly—is that we have had the long, grinding debates. We have had the period of cross-party discussion. We have had the setting aside of some of the old shibboleths. There is a possibility for new systems of government to emerge. We take it as an encouraging sign that it will not stop at Edinburgh or Cardiff—or wherever it will be in Wales—or Belfast if there is to be an assembly there. All of us want peace and we recognise that that might be one of the paving stones to a settlement.

Mr. Godman

As a regular visitor to Northern Ireland, I know that there is very keen interest in both communities concerning the Bill and the creation of a Parliament in Scotland. Despite some serious reservations that some constitutional nationalists have concerning the creation of an assembly in Northern Ireland, there is a growing willingness to examine the possibility of setting up such an assembly in Belfast.

Mr. O'Neill

One can only hope that my hon. Friend's considerable knowledge and the information that he gives us will bear fruit, and that we shall see that. I should like to think that not only will it be taken up by the people of the north of Ireland but that it will be considered by the rest of England, and that we might well see a demand for assemblies across the United Kingdom. Travelling in Europe shows the suffocating character of constitutional and business life in the United Kingdom, where everything emanates from London, and London dominates.

One does not get that feeling when travelling to Germany or to Italy—as I know you often do, Mr. Deputy Speaker—and certainly not in Spain. I am sure that my hon. Friend will be more than happy to make available his itinerary, but I know that he is a good friend of the people of Italy. He knows only too well that, in Italy—perhaps more so in Spain, which has the example of Catalonia—there are different systems of regional government, which were developed to take account of the needs of a specific area. It is the pragmatism for which the British are supposed to be politically famed. We do not always get our constitutional arrangements correct, but when we do we can make them a great success.

Initially, I was not very enthusiastic about the abandonment of first past the post, but I recognise that we shall carry all the people of Scotland with us, and avoid the sense of alienation that seemed, understandably, to be the preoccupation of the right hon. Member for Devizes, only if there is a Parliament in which everyone feels that there is place for them, in which they can do a job for Scotland. That example will be taken not only to Northern Ireland, as was suggested by my hon. Friend the Member for Greenock and Inverclyde (Mr. Godman), but across England as well.

The sense of isolation that one comes across in, for example, Exeter and Plymouth, has found expression in the anxieties expressed by the people in the north of England over the alleged advantage that Wales and Scotland have, and the attraction of industry to the regions of England. Those concerns should be capable of being exposed, debated and discussed in the areas where the greatest impact is felt.

The Bill is an opportunity not only for Scotland to breathe more freely once again but for the rest of the United Kingdom to have a chance to have a proper, open, accountable and modern democracy. I commend it to the House.

5.47 pm

Mr. Alex Salmond (Banff and Buchan)

I intend to be supportive and helpful to the proposed legislation. I shall not go so far as climaxing my speech, as the hon. and learned Member for Orkney and Shetland (Mr. Wallace) did, by quoting in support of my argument the Secretary of State's own political adviser, which was taking co-operation a bit far, but none the less I intend to be supportive of the Second Reading tonight.

The Scottish National party will certainly vote against the Conservative party's amendment, for three reasons. First, we regard this Bill as a step in the right direction. It is good for Scotland. Secondly, the Scottish Parliament has been validated by the people of Scotland—the ultimate sovereignty—in a referendum campaign. Thirdly—the Secretary of State and I have agreed for some time on this point—the issue of independence will be determined by that ultimate constitutional authority, the people of Scotland, at the ballot box. That is clear.

The Secretary of State once argued for this policy and described it as "independence within the United Kingdom", although he stopped doing that when one of his fellow shadow Cabinet Ministers denounced it during a by-election, not realising that it was a Labour party policy. Perhaps the Secretary of State will return to the term and describe this as independence within the United Kingdom. Such is the enthusiasm of the SNP for the new Parliament that all six SNP Members intend to seek election to that body.

I cannot go back as far as Gladstone to quote historical precedent, but I can go back to 1945, when the first SNP Member of Parliament, Dr. Robert McIntyre, who was briefly the Member for Motherwell, made his maiden speech on the Education (Scotland) Bill. He said: We come with the intention of returning as soon as possible to our own country, where we may, under democratic government, achieve the long-needed reconstruction of Scotland."—[Official Report, 1 May 1945; Vol. 410, c. 1299.] Admittedly, the time scale that has transpired was not quite what Dr. McIntyre had in mind at the time. As he is now in his mid-80s and newly elected honorary president of the SNP parliamentary group, I am sure that the House would like to wish him well. It is appropriate to quote his words in the Chamber this evening.

The SNP argues enthusiastically for returning power to Scotland, and will seek to take its place in a Scottish Parliament.

Mr. Gray

Will the hon. Gentleman give way?

Mr. Salmond

I shall give way in a few minutes. The hon. Gentleman might want to intervene when he hears what I have to say about the Tories in a few seconds.

I looked at the Conservative amendment with puzzlement this evening. Like the hon. Member for Falkirk, West (Mr. Canavan), I found it difficult to understand how one could claim to accept the will of the people in a referendum and then argue for voting against it. It reminded me of a conversation that I had over the new year with a prominent Scottish Conservative whom I met during celebrations in Edinburgh. Perhaps I should not call him a prominent Scottish Conservative, as that narrows the field and might reveal his identity.

That Scottish Conservative told me that the major difficulty with the revival—he should have said the resuscitation—of the Scottish Conservative party is the English Conservative party, and added that, every time he heard and saw comments about the constitutional process in this House, he grimaced as he realised the electoral damage being done by his English colleagues to the Conservative party's prospects in the new Parliament. He had in mind episodes like that reported in The Herald on 13 December 1997. Headlined "U-turn on Home Rule from Tory", it began:

A Tory image-change promising a new, positive attitude to a Scottish parliament went spectacularly off-message yesterday when constitutional affairs spokesman Bernard Jenkin surprised an Edinburgh conference with a lengthy harangue against Home Rule. It was a surprise because, the previous day, it had been leaked to The Scotsman that there was to be a damascene conversion in which the Tory Front-Bench spokesman would announce a conversion to home rule. He then arrived at the conference and ended up denouncing it. It is, admittedly, one way to get two headlines in different newspapers on consecutive days, but it is the sort of thing that made the prominent Scottish Conservative "grimace" as he realised the damage being done, even now, to Conservative prospects in Scotland.

With great respect to the right hon. Member for Devizes (Mr. Ancram), elements of his speech this afternoon reflected the fact that the Conservative party has by no means adjusted to the reality of the new Scottish dimension to politics, and I am certain that his speech will have done even more damage to his party.

I shall restrict myself this evening to making three general points about the nature of the Bill, and to signalling three specific areas where the SNP believes that it can be improved. We shall table amendments to try to achieve that noble purpose.

First, on matters of principle, one issue that was spectacularly wrong in the speech of the right hon. Member for Devizes was his description of clause 27(7) as a meek and modest affirmation of Westminster's supremacy. The clause, which is about reserved powers, reads: This section does not affect the power of the Parliament of the United Kingdom to make laws for Scotland. That means that, despite the fact that everything beyond that clause has been devolved to the Scottish Parliament, the UK Parliament retains the right—indeed, according to the clause, it is not affected in terms of its right—to undo what the Scottish Parliament has decided to do or enact.

Far from being a timid clause, it is a sweeping affirmation. It is the legislative form of the oft-quoted phrase, "Sovereignty resides with me as an English MP, and that's the way it will stay." It is extraordinary, in a Bill on devolution, to have a clause that argues that the UK Parliament's power over devolved matters is not affected by the legislation. If we added the words "not affected on reserved matters", the formulation would be more acceptable for people in Scotland, even though the right hon. Member for Devizes may find it alarming. Far from being a devolution clause, it strikes against the principle of trusting a Parliament to enact legislation wisely.

Secondly, I am concerned about the principle of concordats and agreements that are sprouting forth. The Secretary of State described them as non-statutory agreements. There will certainly have to be agreements between the Scottish and Westminster Parliaments—between the Scottish Executive and Westminster Ministers—on the conduct of business and shared concerns. What concerns me is whether it is competent and proper for those understandings and concordats to be put in place before one of the parties to them has come into existence.

The Secretary of State is wise, and he is no doubt doing his best in the interests of the new Scottish Parliament. However, will he confirm that it will be for the Scottish Parliament to decide whether the concordats that he is drawing up on a range of matters with his United Kingdom colleagues are acceptable to the Scottish Executive and Parliament?

One indication that we should be suspicious of the process comes in a leaked letter dated 18 December from one of the Secretary of State's own civil servants, which describes the concordat on agriculture and fisheries. It says: From the MAFF perspective the concordat is a chance to emphasise their lead UK role and to keep tabs on action by the Scottish Executive. That civil service memorandum advising the Secretary of State tells us that, while the Secretary of State is batting for Scotland and his civil servants are trying to get the best out of the concordats and agreements that are being drawn up, United Kingdom Departments may have a different aim in mind, and may be trying to "keep tabs" on any putative Scottish Executive.

Mr. Hogg

I reinforce the point that the hon. Gentleman makes—[Interruption.] He seems alarmed by that prospect. I none the less put it to him that the concordat is in any event only good for the existing regime. Any subsequent change in the character of the Government or the Scottish Parliament would require a change in the concordat, which is good only for the four or five years in which both parties overlap.

Mr. Salmond

I feel like someone in a battle sending out the message, "Reinforcements arrived and weakened our position." However, that is only guilt by association.

The right hon. and learned Gentleman is correct: a concordat is only good while the parties overlap. However, once a concordat is signed, it can be changed only by agreement of both parties. That seems to be a common feature, so it is of less concern to me than the fact that, if an agreement is reached before one party to it has even come into existence, the agreement cannot by definition be a concordat—it is more like a diktat.

Will the Secretary of State assure me that the concordats will be binding on the Scottish Executive and the Scottish Parliament only if they choose to endorse them when they come into being? I do not mind the preparatory work being done, but the Government should not presume too much about the agreement of the Scottish Executive.

Mr. Godman

I would regard it as a great honour to be given executive responsibility in a Scottish Parliament for the Scottish fishing industry, but I hope that the person who is given that role will participate in meetings of the Fisheries Council in Brussels. I believe that it is up to the United Kingdom delegation to decide who participates in Council meetings. On the basis of the hon. Gentleman's comments about a concordat, I would expect there to be tough-minded negotiations about such participation, but I would want the person responsible to take part in such meetings in Brussels.

Mr. Salmond

My difficulty is with what is honourably and honestly in the civil service memorandum. The civil servant makes it clear that, from the perspective of the Ministry of Agriculture, Fisheries and Food, the Department should maintain its lead role in European negotiations. The hon. Member for Greenock and Inverclyde (Mr. Godman) is absolutely correct. It is important to define the Scottish Parliament's European role. It should not be subject to the whim of future Governments who may sometimes be hostile.

My final general point is about the schedules. I accept the Secretary of State's wisdom in choosing to define reserved matters and to leave all other matters to the competence of the Scottish Parliament. That is different from the 1970s legislation, and is an improvement and enhancement: it is a far better process. None the less, schedule 5 contains a very lengthy list of reserved matters. It does not deal, as was suggested by the Scottish Constitutional Convention, only with the towering heights of defence matters, foreign affairs or even social security.

The list of reserved powers in the section headed "Entertainment" includes the Hypnotism Act 1952, the Theatres Act 1968, the Cinemas Act 1985 and the Video Recordings Act 1984. The schedule contains far too many reserved powers. Would the central integrity of the United Kingdom have been damaged if the Scottish Parliament had been given competence to license cinemas and theatres, and had been trusted with earth-shattering matters such as the Hypnotism Act 1952 and its regulation? We shall consider this issue as the Bill goes through the House.

Those were my three general points, and I now want to consider ways of beefing up this proposal. It could be argued that more has been promised in the past than is being offered in this legislation. In the run-up to the 1997 election, much of the political debate in Scotland was dominated by the term "tartan tax", which was used by the previous Secretary of State for Scotland. I was asked why that had emerged as such a major issue, at least in the minds of the Secretary of State and the Scottish press, given that it had not been mentioned to anything like the same extent in the 1992 election, when the current Secretary of State for Scotland was the shadow Secretary of State. There were a number of reasons, the most important of which was that the financial powers proposed in 1992 were stronger than those suggested in the 1997 devolution proposal.

In 1992, the Secretary of State argued for assigned revenues in additional to the tax-varying power. It was suggested that there should be a broader base of taxation on which the Scottish Parliament could draw. [Interruption.] The Secretary of State shakes his head, but I am merely referring to the arguments that he used back in 1992. There is no doubt that he argued for assigned revenues in addition to a tax-varying power. Liberal Democrat Members are nodding their agreement: they remember that, even if the Secretary of State does not. I think that that was a stronger proposal.

The position that we have been left in now is that if the tax-varying power—the tartan tax—is used to its fullest extent, the Scottish Parliament will have control over about 3 per cent. of its total revenue capability, and 97 per cent. will come from the Westminster Exchequer. Devolved Parliaments around the world have more: for instance, the Basque Parliament or the Canadian provinces have about 40 per cent. control of their revenues.

The Secretary of State says that the Barnett formula is secure: he tried to entice the right hon. Member for Devizes (Mr. Ancram) to agree with him, and he received a less than full response. But that is not the position. We have just had a report of the Treasury Select Committee. The hon. Member for Gordon (Mr. Bruce) was alone in opposing a frontal attack on the Barnett formula, which was supported by both Labour and Conservative Back-Bench Members. Does the Secretary of State propose a stronger, enlarged fiscal base for a Scottish Parliament? The Secretary of State has defended the fiscal arrangement, but it is under attack from Labour and Conservative Members. We will be looking for proposals to strengthen the fiscal position as the Bill goes through the House.

The issue of broadcasting will be raised by my hon. Friend the Member for Perth (Ms Cunningham), if she is fortunate enough to catch your eye, Mr. Deputy Speaker. The White Paper referred to broadcasting organisations as an example of cross-border public bodies that could give evidence to a Scottish Parliament, which would have a role in providing public accountability. It is not about control of broadcasting, but about whether there will be any democratic accountability to a Scottish Parliament for broadcasting in Scotland. Paragraph 2.11 of the White Paper suggested clearly that there could be such accountability. The Bill makes no mention of a broadcasting organisation as a cross-border body.

Incredible as it may seem, it is not beyond the bounds of possibility that the British Broadcasting Corporation may, at some time in the future, decide to broadcast in Scotland an interview with the United Kingdom Prime Minister in the middle of a Scottish election campaign. Political parties in Scotland may want to take legal action to prevent that broadcast. A Scottish Parliament may want to summon the director general of the BBC to give evidence to an appropriate Committee, and may want to ask relevant questions in the Scottish public interest.

Mr. Connarty

As the hon. Gentleman knows, I have taken part in debates in public and on television with George Kerevan of the Scottish National party. It was clearly stated that that could happen, and that was accepted by his party's spokesman. Is he a vice-chairman on broadcasting? Everyone in his party is a vice-chairman, because it is so small. He accepted that the BBC could be called to a Committee of a Scottish Parliament and questioned on its proposals.

Mr. Salmond

I am delighted to have such assurances from the hon. Member for Falkirk, East (Mr. Connarty). The Secretary of State has hurriedly consulted his civil servants, and I am sure we will be told that the White Paper specifies broadcasting organisations as an example of cross-border bodies that could give evidence to the Scottish Parliament. However, that has been omitted from the relevant sections of the Bill.

I will be delighted if that omission is shown to be merely an oversight. There has been some dispute in Scotland about whether the Secretary of State for Culture, Media and Sport or the Minister of State at the Scottish Office is the key figure opposed to any democratic accountability to a Scottish Parliament for broadcasting. If this is an oversight, no doubt any reasonable amendments that we may table will be treated sympathetically by the Secretary of State for Scotland. He shakes his head, thus removing that possibility. This is an important issue, and it is valid to ask why broadcasting, which appeared in the White Paper, is not specified in the Bill.

Mr. Dewar

I am sorry to interrupt, and I do not want to have a long discussion on this matter, because we shall return to it. The position is exactly as is stated in the White Paper.

Mr. Salmond

If the Secretary of State is saying that the Bill, from which broadcasting is omitted, is the same as the White Paper, which lists broadcasting, I take it that at some point he will accept an amendment to include broadcasting. It is in the White Paper, but not in the Bill. We may reach agreement in Committee, but that is to anticipate the Bill being passed on Second Reading.

Mr. Tam Dalyell (Linlithgow)

Perhaps the hon. Gentleman would like a little support from me. The precedent of the 1979 case of Wilson, Dalyell and Birt v. the Independent Broadcasting Authority before Lord Ross shows that the hon. Gentleman is right. The "Wilson" was my hon. Friend the Member for Cunninghame, North (Mr. Wilson).

Mr. Salmond

The hon. Gentleman rightly reminds the House of the long track record in these matters of the Minister for Education and Industry, the hon. Member for Cunninghame, North (Mr. Wilson). As I remember it, that legal action prohibited party political broadcasting during the devolution referendum campaign. I read in today's newspapers that the BBC and the Independent Television Commission want to do away with party political broadcasts altogether—perhaps that will be the subject of some discussion later on.

There is, in any case, a clear difference between what was in the White Paper and what is in the Bill. [Interruption.] It is no use the Secretary of State waving the White Paper at me; there is no disagreement about what it contains. I repeat: such a provision is not in the Bill, although perhaps it should be.

Finally, I want to deal with Europe. There is a strong case for enshrining the Scottish Parliament's rights of access to European decision making in the Bill. The Conservative party is in no position to argue that the measure will weaken Scotland's position, given the miserable attendance rate of Scottish Office Ministers at European Council meetings over the past five years. When we last debated this subject, I asked a Conservative party spokesperson what the record was. He did not know or could not remember, so I shall read the figures to the House.

In 1992, out of 125 meetings of the Council of Ministers, Scottish Office Ministers attended eight. In 1993, the figure was eight out of 125. In 1994, things got worse: six out of 125. In 1995, they attended seven out of 83 meetings. In 1996, when there was a plethora of meetings to do with Bovine spongiform encephalopathy and fisheries issues, they increased their attendance to 15 out of 84 Council meetings. Overall, Scottish Office Ministers went to fewer than 10 per cent. of Council of Ministers meetings.

It would be extremely helpful if Scotland's rights of access to these meetings were consolidated in the Bill—

Mr. Heald

The hon. Gentleman criticises the number of attendances, but on those occasions Scottish Office Ministers attended as of right. Under these proposals, Scottish Executive Ministers will have no rights at all.

Mr. Salmond

Scottish Office Ministers attended by permission of their Cabinet colleagues. I remember one celebrated occasion when the former Secretary of State for Scotland announced in the press that he was going to Brussels to battle for Scotland's fishing industry. I later found out from officials that he had not opened his mouth during the entire meeting, because the then Minister of Agriculture was leading for the UK on that occasion.

I happen to believe that Scotland's position cannot get worse than it was over the past five years. I nevertheless urge the Secretary of State to recall that we were promised during the preliminary arguments that Scotland would lead the United Kingdom's delegations at the Council of Ministers on various matters—one of which might be fishing. On any measurement—value of catches, tonnes of fish landed, numbers of boats—Scotland's fishing industry is bigger than that of the rest of the UK put together. The Scottish Office already has the lead responsibility for forestry, since most forestry acreage is in Scotland. Perhaps forestry, too, should be an area of lead responsibility for Scotland.

Would it not be better to attempt to consolidate our European position on the face of the Bill, in line with what the Foreign Secretary told the Scottish Grand Committee on 13 January last year? Labour, he said, would confer on Scottish Ministers the same observer status as that of the German Lander at appropriate meetings".—[Official Report, Scottish Grand Committee, 13 January 1997; c. 29.] It may be true that the current group of Ministers can reach amicable arrangements to allow Scottish interests to be represented at Council of Ministers meetings, but the Secretary of State cannot commit his colleagues for the future; and he certainly cannot commit any future Government unless something is written into this statute to guarantee Scotland's position in European matters. Without it, that position stands in some jeopardy—hence the need for improvement by amendment as the Bill goes through Parliament.

As I said at the outset, we intend to give the legislation a friendly response. We shall be positive and constructive as it moves through the House. We believe that on balance it is good for Scotland. A Scottish Parliament after an interval of 300 years was resoundingly voted for in the referendum.

We regard this not as an event—a once-and-for-all transfer—but as part of a process of democratic awakening in the nation of Scotland. The end result of that process will be determined by the people of our nation.

6.14 pm

Mr. Brian H. Donohoe (Cunninghame, South)

I congratulate the Secretary of State, other Ministers and all involved on their speed in bringing the Bill to Second Reading. It is important to look at it in detail, and I intend to concentrate on two areas that I see as important: first, the creation of jobs, especially in the public sector; and secondly, transport issues.

The county of Ayrshire has been somewhat forgotten during the past few years. Just before the new year, the BBC, in its round-up of Scottish affairs, mentioned virtually every town and city in Scotland but not a single town in Ayrshire. That is indicative of Scottish politics at the moment, a clear sign of the need for more devolution in Scotland.

We are told that the Scottish Parliament must generate new ideas and must be seen to be different. The Government say in their White Paper that it is right to decentralise power. That is why consideration must be given to decentralising civil servants, of whom there are about 12,000 mainly based in Edinburgh. They must be encouraged to resettle across Scotland.

Ayrshire has been sadly lacking in public sector jobs. Indeed, the most recent report on Ayrshire's economy, instigated by the Ayrshire economic forum, speaks of the possible loss of 9,000 jobs in the area in coming years. That clearly shows the need to decentralise civil servants' jobs to places such as Ayrshire. Other parts of the west of Scotland, and indeed the rest of Scotland, would also benefit from such decentralisation. Over the years, many Governments have tried to make moves in that direction, but as yet very few Scottish Office civil servants have relocated around Scotland. The Bill represents an opportunity that we must not fail to take.

As the hon. Member for Banff and Buchan (Mr. Salmond) pointed out, schedule 5 gives rise to some reservations. He mentioned the Hypnotism Act 1952. I note also that schedule 5 states that money laundering is not to be considered by the Scottish Parliament; nor is intellectual property, whatever that is. It will be reserved to Westminster. Piracy cannot be discussed by the Scottish Parliament either; nor can the date of Easter. The regulation of activities in outer space is to be reserved to Westminster—although perhaps that is just as well.

The White Paper promised for the Scottish Executive an oversight role in respect of all Scottish rail passenger services. In terms of transport, that was a good start to the legislation. However, the Bill reserves most matters in relation to the provision and regulation of railway services to the Westminster Parliament. I am interested in transport matters, and that is of some concern.

The definition of railway services that is used in the Bill is based on section 82 of the Railways Act 1993. I am a member of the Select Committee on the Environment, Transport and Regional Affairs, and we spent a great deal of time examining the clause which later became that section. These matters extend to the provision of important facilities such as stations and network services and the carriage of passengers and freight.

The Scottish Parliament and the Executive will oversee road and ferry transport in Scotland and many aspects of internal air transport, all of which we welcome. However, they will have no control over air traffic control, which is causing deep concern in Ayrshire. Rail services are to be excluded from the Scottish Parliament's competence, and that strikes at the concept of an integrated transport policy for Scotland. By contrast, the provision of railway services in Northern Ireland remains administratively devolved, in common with other aspects of transport provision there. As more than 90 per cent. of ScotRail's journeys are internal and the Scottish and English rail networks connect only at Berwick and Gretna, it is important to consider the whole question of an integrated transport network in Scotland.

Strathclyde passenger transport authority's responsibilities for rail services are to be granted under transport and railways Acts and will relate to reserved matters. All other such responsibilities will fall on the Scottish Parliament. Local integration may become more difficult because of the need to deal with two policy-making bodies. The passenger transport authority will be a creature of the Scottish Parliament, and its railway responsibilities, which now account for more than 87 per cent. of its net expenditure, will relate to reserved matters. Presumably, it will ultimately draw that part of its funding from the new Department of the Environment, Transport and the Regions rather than from the Scottish Office as at present. That is a recipe for financial and administrative tension. If the Scottish Parliament is precluded from dealing with matters relating to the rail network and stations, it will, of course, be unable to legislate on those matters. The promotion of private legislation in Scotland to permit the building of new lines will remain a Westminster matter, and that is quite unsatisfactory.

Mr. Gray

Does the hon. Gentleman agree that he is merely arguing that certain matters are reserved to this Parliament and that it will be consistently argued that that is bad? Does he further agree that this is the first shot in an argument that will last while the Scottish Parliament exists and that ever more potent arguments will be advanced in this House or in Scotland that these matters must be debated in Edinburgh? In that lies the root of the disaster that will befall this nation of ours.

Mr. Donohoe

I do not accept that. I am trying to identify a possible problem, so that the Bill can be amended. An integrated transport policy is at the centre of the Government's thinking, and we can look at the issue and address it before the Bill becomes an Act.

Mr. Connarty

Does my hon. Friend agree that on reserved matters such as the one he illustrates that are alien to one side, in co-operation with the Scottish Parliament, Ministers with responsibility for the reserved matters would, on invitation, willingly discuss them with a Committee of the Scottish Parliament? That would obviate the need to move away from reserved powers. Surely there can be co-operation between the Scottish and Westminster Parliaments. There is no need to reduce the list of reservations and anticipate problems: we should think of a way to discuss matters positively, in co-operation and not in conflict.

Mr. Donohoe

My hon. Friend is right, and he has partly addressed the matters that were mentioned by the hon. Member for North Wiltshire (Mr. Gray).

Much work has been done at a rate of knots, and we have an opportunity to look at the legislation in greater detail. I have a passionate interest in transport, and such examination could greatly improve transport policy throughout Scotland and the United Kingdom. I hope that the matters that I mentioned will be dealt with in Committee and that the Bill will be enhanced, to enable the working of an integrated transport policy throughout the United Kingdom.

6.25 pm

Mr. David Davis (Haltemprice and Howden)

It is clear that the Bill's passage is guaranteed. That means that it is incumbent on us to do what we can to ensure that it is as well formed as possible. Those hon. Members who do not want the Bill to be the first step towards the dissolution of the United Kingdom, but who want the Union to be strengthened, will want to ensure that the Bill delivers the best possible government for Scotland, while maintaining the most harmonious and effective relationship—I think that the Secretary of State said "friction-free" relationship—between the Parliament of Scotland and that of the United Kingdom. With that in mind, I should like to raise an issue of constitutional significance, albeit in the Bill it is buried in technicalities. The hon. and learned Member for Orkney and Shetland (Mr. Wallace) has my entire admiration for finding a reading of the legislation entertaining. I am sure that reading it will remain a minority sport.

I should like to deal with the oversight and scrutiny of Scotland's financial affairs and those of the United Kingdom after the Bill becomes law. The control of the nation's finances has featured as a central part of constitutional debates and disputes, from Magna Carta to the Parliament Act 1911, and it should not be a surprise that the issue is the central feature of the Bill.

Clause 61(2) specifies that the United Kingdom Parliament will provide a grant to be paid into the Scottish Consolidated Fund. It does not require the Scottish Parliament or the Executive to submit to the United Kingdom Parliament any information about the intended use of that money or about the eventual outturn. The information and detailed analysis of plans and expenditure that are currently available to the House will no longer be guaranteed by statute. Neither is there a requirement for the designation of individual accounting officers who would be held responsible for the expenditure. The arrangements for audit and scrutiny that are specified in clause 66 are extremely loose and depend entirely upon the Scottish Parliament both wanting and achieving as rigorous an oversight as that of the United Kingdom Parliament. Unfortunately, the UK Parliament will not be able to assess whether the Scottish Parliament's arrangements are effective. Parliament's ability to do that has been specifically disabled by the Bill.

Mr. Salmond

Is the right hon. Gentleman saying that unless there is some sort of financial oversight, the Scottish Parliament might do something insane and ludicrous such as spending almost £1,000 million on some sort of millennium dome on the River Forth? Is that the sort of ridiculous act that a Scottish Parliament might commit if it were not subject to the great scrutiny of the Westminster Parliament?

Mr. Davis

It is always possible that not just Scottish Labour Members will go to the Scottish Parliament. However, I do not propose to judge that.

The point that I want to make is that, on page 85, schedule 7 says: Sections 6 and 7 of the National Audit Act 1983 (value for money studies) shall not apply in relation to— (a) the Scottish Administration or any part of it". The schedule removes powers from the UK auditor, the Comptroller and Auditor General. Specifically, it denies him access to papers and information about the expenditure of some £14 billion, on the estimate of the Secretary of State for Scotland, of UK taxpayers' money. In conjunction with clauses 61 to 68, that will severely undermine the ability of this UK Parliament to scrutinise and to control public expenditure as it applies to Scotland.

That amounts to an extraordinary, possibly accidental, constitutional innovation. It removes the rights of detailed scrutiny from where they properly belong—with those who raise the taxes—and transfers them to those who spend the money. That would be appropriate if the Scottish Parliament set and raised its own taxes. Clearly, that is not the case, although I know that the Scottish National party proposes it. The Scottish Parliament's tax-varying powers amount to less than £500 million, a small fraction of the total spend.

The Bill's approach might be just tolerable if Scottish taxes were hypothecated for use in Scotland and English and Welsh taxes were hypothecated for use in England and Wales, but that is clearly not the case. At today's spending levels, the grant that the UK Parliament will allocate to the Scottish Consolidated Fund will be some £14 billion. That grant is UK taxpayers' money, for which we are properly accountable to the UK taxpayer.

The UK taxpayer spends in Scotland significantly more than is raised from Scotland in taxes. The exact size of the net subvention from the rest of the UK to Scotland is a matter of dispute, but it is not small. The House of Commons Library assessed it at £6 billion in 1994–95 and some £4.85 billion in 1995–96. That is after allowing for all North sea oil revenues. The lowest plausible figure that I can find—and it is not the Scottish National party figure—is £2 billion per annum. In other words, the subsidy to Scotland amounts to between £400 and £1,200 per person per year.

Mr. Swinney

I think that the right hon. Gentleman will find that the figures that he quoted from the House of Commons Library do not assume any share of UK debt, which would be carried by Scottish taxpayers for any particular year, so to quote a figure such as £6 billion and not to add that substantial caveat—bearing it in mind that, in certain years, the public sector debt has been as high as £48 billion under Conservative Governments—is not exactly the whole story.

Mr. Davis

After the Scottish National party's budget was trashed wholesale by the Fraser of Allander Institute in Scotland, I am surprised that the hon. Gentleman even dared to ask the question, but that is precisely why I gave the range from £6 billion to £2 billion. Of course, different issues should be considered. One is the amount of North sea oil revenue that goes in. His party would claim that virtually all of it—well, 90 per cent.—goes in. Others would say that the figure is two thirds. Of course, there is the issue of the level of debt that is allocated, but what is clear is that spending in Scotland is significantly higher than the amount that is raised in taxes, and that will not change materially in the next few years.

Mr. Swinney

rose—

Mr. Davis

I shall press on, because I have other points to make.

For the time being, the amount payable to the Scottish Parliament is subject to the Barnett formula, and that may be appropriate. That will be for the House and the Government of the day to decide. What is clear, however, is that the Scottish Parliament and Scottish Administration will spend UK taxpayers' money, and without the stronger controls and guidelines that the Bill requires, the UK Parliament will make the decision blind.

Ironically, the weakness of the Bill's financial controls is demonstrated by one clause in particular. On page 41, clause 90 says: The Treasury may require the Scottish Ministers to provide, within such period as the Treasury may reasonably specify, such information, in such form and prepared in such manner, as the Treasury may reasonably specify. In English, that means that the Treasury does not think that enough financial information is guaranteed in the Bill. In effect, the clause states explicitly that the necessary information will be made available to the Executive of the UK, but not to Parliament. If the Treasury needs the information, so does Parliament.

The UK taxpayer has a right to expect his representatives—the House of Commons—to be able properly to scrutinise that expenditure before approving the grant to the Scottish Consolidated Fund. Proper scrutiny is possible only if we have the ability to make judgments about the value obtained for taxpayers' money. Proper scrutiny is possible only if we are able to be sure that taxpayers' money is properly spent—on domes or other things. Proper scrutiny is possible only if we maintain the rights that the Bill seeks to remove.

Mr. Wallace

I am following with interest what the right hon. Gentleman says. I agree that the Scottish Parliament must have the equivalent of the National Audit Office, the Comptroller and Auditor General and indeed a Public Accounts Committee, which will be matters for the Scottish Parliament, but what is the right hon. Gentleman driving at? Is he saying that Westminster should have oversight of the Scottish Parliament's expenditure, possibly through the Committee that he chairs? How would that lead, in practice, to the smooth relationship that one would expect? Does he not think that that would add to the friction, against which the right hon. Member for Devizes (Mr. Ancram) warned?

Mr. Davis

Two arguments apply. One is that the £14 billion is raised as UK taxpayers' money, and the House must be able to convince itself and its voters that it has spent that money properly. Later in my speech, I shall explain precisely how I think that can happen and how it would tie together with what the Scottish Parliament wants to do.

The Bill speaks of the appointment of independent auditors for the Scottish Parliament. The definition is extremely weak. Independence is extraordinarily difficult to deliver, as the hon. and learned Member for Orkney and Shetland will know. He knows how Executives use every influence available to them. That is so important that, in the UK, we underpin that independence—in relation to the provision of audit, for example—with statutory provisions covering independent appointment, operational independence, security of tenure of the auditor, availability of resources, which are guaranteed, independent access and independent reporting.

None of that is specified in the Bill for the Scottish Parliament. Therefore, the Bill is full of hazards. From the UK Parliament's perspective, it will engender frustration and distrust, but from the perspective even of a Scottish Parliament, it is unsatisfactory.

Let me give the hon. and learned Member for Orkney and Shetland what I stress is a hypothetical example. Imagine that the current level of financial settlements continues, but under the new proposals. Scotland continues to prosper, perhaps more so than other parts of the UK. Suppose that we then have a rash of press stories about waste or corruption in the Scottish Administration. That fires up new demands from other parts of the UK to reduce the grant to the Scottish Consolidated Fund.

The position of the Scottish Parliament then becomes extremely invidious. It either turns a blind eye to issues of corruption, which I am sure it will not want to do, or it investigates them and creates ammunition for those who would reduce Scotland's grant. Throughout all that, we in this House, who are responsible for the £14 billion grant, would be precluded from investigating the matter.

There are other circumstances in which such confusion of purpose can arise, but I shall raise those matters in Committee. The point of principle is paramount. A total of £14 billion, the Secretary of State's figure, of UK taxpayers' money should be subject to full and proper scrutiny by this House, and proper scrutiny demands access by the House's auditor. I reiterate: those who raise the taxes should have the right of scrutiny. Those who spend the money have a real but different interest. I know that local authorities are constitutionally different, but they are in a similar financial position. We do not allow the councils in Doncaster, Hull, Paisley or, indeed, Westminster to pick an example that will appeal to the Government, to set their own audit arrangements.

What makes the proposed arrangement astounding is the fact that, although the UK Parliament's auditor cannot follow UK taxpayers' money when that is spent by the Scottish Administration, the European Union's auditor can follow European money. Bluntly, it is an outrageous and extraordinary concept that the European Union should have better scrutiny rights inside the United Kingdom than the UK Parliament has.

I understand and accept—and this point was specifically raised by the hon. and learned Member for Orkney and Shetland—that the Scottish Parliament will want its own scrutiny arrangements. I also understand and accept that it would be clumsy and expensive to duplicate those arrangements. However, UK taxpayers have their rights, so the Government should introduce six amendments to the Bill that would enhance, rather than curtail, the powers of the Scottish Parliament, while allowing this House to represent the interests of UK taxpayers with confidence.

First, the Bill should require the Scottish Parliament or Executive to submit detailed expenditure plans to the Secretary of State, which he should lay before this Parliament before the debate and vote on the Scottish Consolidated Fund grant. That would be a straightforward point of information. Such a provision is not in the Bill, but it is in the Government of Wales Bill. Secondly, the Bill should specify the meaning of "proper accounts", which the Scottish Executive is expected to prepare, probably by requiring the Treasury to continue to direct the form of accounts and underpin accounting rules. That provision is also contained in the Welsh Bill.

Thirdly, the Bill should require the Scottish Executive to designate accounting officers with responsibilities to the Scottish Parliament similar to those of UK accounting officers to this Parliament's Public Accounts Committee. Fourthly, the Bill should specify the details guaranteeing the independence from the Executive of the audit and scrutiny arrangements in the Scottish Parliament, similar to those that apply in this Parliament.

Fifthly, the Bill should preserve the Comptroller and Auditor General's access rights to report to the House of Commons on the adequacy of arrangements for managing and auditing the Scottish Consolidated Fund and on the value for money achieved, and allow him access to the Scottish Parliament's auditors, as happens with the Audit Commission with universities and many other independent structures.

Mr. Dalyell

Will the right hon. Gentleman give way?

Mr. Davis

No, I am coming to the end of my speech.

Finally, the Bill should require the Secretary of State to be satisfied that the Scottish Parliament has satisfactory scrutiny and audit arrangements in place. It should give him the right to withhold payments if he does not believe specifically that those proper scrutiny and audit arrangements are in place.

Mr. Dalyell

rose—

Mr. Davis

No, I am coming to my last few words.

I have raised a number of issues in a constructive manner and I have made a number of constructive proposals, which I want the Minister to think about and then give his response. None of what I have proposed will constrain the Scottish Parliament in its proper duties. Much of it will reinforce it and increase its standing in the eyes of both the Scottish taxpayer and the United Kingdom taxpayer.

6.42 pm

Mr. Ian Davidson (Glasgow, Pollok)

This is an excellent Bill and all those who have laboured hard and long to produce it are to be congratulated. It translates the will of the Scottish people into legislative form in an excellent and constructive way. It will be thoroughly supported by the vast majority of people in my country of Scotland.

My right hon. Friend the Secretary of State should speedily claim some of the credit for the Bill before history is rewritten and it is all attributed to some at present anonymous spin doctor. Otherwise, in years to come we might be told that those who are presenting the Bill today had nothing to do with it. If my right hon. Friend successfully pilots the Bill through Parliament, he should go down in history as one of the great Scots of our time. I can imagine a time, in years to come, when children will learn about the great men of the past—Robert the Bruce, Mel Gibson and Donald Dewar. They will be the Lenin, Stalin and Trotsky of Scotland.

Mr. John McAllion (Dundee, East)

Donald Trotsky?

Mr. Davidson

Thinking of my right hon. Friend as the Trotsky of our time stretches the imagination perhaps, but I believe that he will hold the same place in history.

Mr. McAllion

Robert the Bruce or Trotsky?

Mr. Davidson

Well, Bruce did smash a few bosses' systems in his time. [Interruption.] I say to fellow members of the DD fan club that that is enough obsequiousness; I want to make some constructive criticism.

The chosen location for the Scottish Parliament is wrong—it should not be in Edinburgh. It is a triumph for the Edinburgh and Scottish establishment that we will come to regret. However, the decision has been made. It would be appropriate for the leadership of Scotland's Government to make an early commitment to avoid centralisation in Edinburgh of all the Parliament's functions. A policy of dispersal would be more appropriate, otherwise Edinburgh will be seen to have gained a fur coat and, at the same time, a complete set of warm underclothing.

Over the years, there have been constant calls from the Liberal Democrats and others for a fair voting system. I agree that we should have a fairer voting system than that proposed in the Bill. There should be equal votes of equal value. It will be a test of other parties, especially the Liberal Democrats, to see whether they have been driven by the principle of fairness or by self-interest.

How can it be fair for Orkney, with an electorate of 15,500, to have one Member of the Scottish Parliament and for Shetland, with 17,500, to have one Member, when other, much larger, constituencies will also have only one Member? Perhaps it is a scheme to preserve the hon. and learned Member for Orkney and Shetland (Mr. Wallace) for the nation. I understand that some people might consider that a desirable objective—[Interruption.] Opinion is divided. Whatever its merits, the system cannot be said to be fair. If we add to Orkney and Shetland the Western Isles, those three constituencies have some 55,000 voters—about the same number as many individual constituencies.

I recognise that there are difficulties for Members in servicing far-flung and rural constituencies, but that could be overcome by additional staff. It does not necessarily follow that just because a population is dispersed it should have a disproportionately large say at the centre.

If Orkney and Shetland are to be split, why not Airdrie and Shotts; Argyl and Bute; Banff and Buchan; Clydebank and Milngavie; Coatbridge and Chryston; Cumbernauld and Kilsyth; east Edinburgh and Musselburgh; north Edinburgh and Leith; Galloway and upper Nithsdale; Greenock and Inverclyde; north Hamilton and Bellshill; Kilmarnock and Loudoun; Motherwell and Wishaw; Roxburgh and Berwickshire; Strathkelvin and Bearsden; and west Aberdeenshire and Kincardine? In fact, it would be possible to divide into three Tweeddale, Ettrick and Lauderdale; Ross, Skye and Inverness; east Inverness, Nairn and Lochaber; and Caithness, Sutherland and Easter Ross. What about Carrick, Cumnock and Doon Valley? The interesting point is that there will be more than four times as many voters in that constituency as there will in Orkney, yet they will be equally represented with one MSP.

Whatever the merits of the system, we cannot pretend that it is fair. It could be said that one George Foulkes is equivalent to four Jim Wallaces—and some people might want to make that point. "There is only one George Foulkes," as they often sing at Tynecastle. "Amen to that," we all say here.

Whatever else can be said about the proposed system, it is not fair. There is no reason why my constituency also should not be divided into three, giving us the "Po", the "Lo" and the "Ok"—a much better system than that which is being proposed.

The voting system that has been selected will provide two types of Member: those who will be elected on a first-past-the-post basis and who will be elected first—for ease of reference, let us call them the first-class Members; and the others on the regional list, who will be elected second, whom we shall call the second-class Members.

Second-class Members will have no identifiable constituents—a status which possibly possesses the merit of resulting in no housing cases. Those Members will either feel that they have a specific constituency burden or simply intervene as and when they see fit wherever they like, across an entire European constituency.

The proposals clearly will give regional list Members an opportunity to freeload on the back of the constituency work done by individual constituency Members. I am not clear whether, because of their lesser responsibilities, regional list members will be paid less, but that matter will have to be examined.

Mr. Godman

Is my hon. Friend advocating the first-past-the-post system for the proposed Parliament? If he is, will he concede that his view is very much a minority one within the parliamentary Labour party?

Mr. Davidson

I have not yet reached the point of saying what I am in favour of, although I shall shortly. Currently, I am offering constructive criticism; we have not yet reached the very constructive bit.

There will be an opportunity for freeloading among the free-floating Members, who will be able to intervene mischievously in any other Member's constituency, without any responsibility. We can imagine what will happen over a matter such as a school closure, for example, when a local Member is wrestling with the potential difficulties. An outside Member with no real responsibility in the area could be as mischievous and partisan as he or she liked and then walk away; the constituency Member would be left to pick up the pieces.

I am not clear whether there are proposals for protocols, as we have in the House, governing the way in which hon. Members intervene in one another's constituency, or whether the matter will be developed further. As the proposals contain a recipe for conflict, the matter will have to be dealt with during the Bill's passage.

I might be wrong. Constituency MSPs may become bogged down in constituency matters and in individual cases; regional Members would then reign supreme in policy and become the first-class Members, relegating the others to second-class status. We can estimate the probable relative status of the Members by considering the announced plans of the leaders of the political parties. Both the Liberal Democrats and the Scottish National party plan for their current Members of Parliament to stand for Scottish Parliament first-past-the-post constituencies, clearly indicating where they believe real power and influence lies. Those plans indicate also the way in which a system comprising first and second-class Members will emerge.

I am concerned about the operation of a second ballot, because it seems that, ultimately, many votes will be wasted. If a party polls sufficient votes in the first ballot to win all the first-past-the-post seats, it may find that it wins no seats in the second ballot. The document produced by the Library shows that in the West of Scotland European constituency, for example, Labour would win nine seats on a first-past-the-post basis and consequently win none on a second ballot. Therefore, the votes of everyone who votes Labour in the second ballot—the largest single electoral bloc—will be entirely wasted. That would not be a fair system. If we must have some proportionality, it would be much more reasonable for the second ballot to be self-contained and not to be dependent on or judged by the results of the first ballot.

A third aspect of inequality in the system is the way in which seats will be distributed between European constituencies in the second ballot. In the second ballot, each constituency will receive seven seats. However, is it fair that the highlands and islands—with 327,000 electors, based on the Library's figures—should receive the same number of seats as central Scotland, which will have 552,000 electors?

There are substantial arguments in favour of the proposals. However, the proposals are not fair or reasonable and they contain a clear bias against my part of the country specifically and against the central belt of Scotland generally.

The difficulty of having two types of Member is primarily one of accountability. First-class Members will be accountable for their selection and election to real people, whereas there is some doubt about exactly to whom second-class Members will be accountable. Second-class Members' fate will not be in their own hands.

Mr. Hogg

The hon. Gentleman is describing a situation that he regards as unfair—too many Members in Scotland. Is not that unfairness demonstrated by the figures from his own constituency? He represents 49,284 electors, whereas the average number of electors per constituency in the United Kingdom is about 66,000. Does he think that it is acceptable that there should be so many hon. Members representing Scottish constituencies and that Scottish constituencies are so small?

Mr. Davidson

The current system is entirely acceptable because it is the product of a long historical process of negotiation and of coming together: a balance has been struck over time. Conversely, in Scotland, we are currently starting afresh on a clean sheet of paper. Were we starting afresh in the United Kingdom, we might not come to where we are now, but that is not the position. We are where we are in Britain, and we are moving forward to a new system in Scotland.

Mr. Salmond

There has just been a boundary revision. As the hon. Gentleman may know, in population terms, my constituency is much bigger than his. I do not remember the hon. Gentleman appearing before the boundary commission at the previous revision and saying, "It is very unfair that Banff and Buchan has such a large electorate and that my constituency in Glasgow has such a small one." Is the matter something that he has thought of only recently and did not want to think of previously?

Mr. Davidson

The hon. Gentleman's recollection is entirely correct. I did not appear in front of the boundary commission complaining about the balance between his constituency and mine because I realised that factors other than numerical equality should be taken into consideration. I would not argue for exact geographical and numerical equality.

Let us not pretend, however, that our proposed system is fair. There are some aspects of inequality in the Bill that are not justifiable by any stretch of the imagination. I cannot understand how it can possibly be fair and reasonable for the Member of the Scottish Parliament for Orkney to represent only a quarter of the number of voters represented by the MSP for Carrick, Cumnock and Doon Valley. Even allowing for rurality or deprivation, I cannot understand how such differentiation can be fair and reasonable.

To return to my point, the system whereby second-class Members are selected by party lists is capable of abuse by the central authorities of political parties. The first test of that will come at the European elections. I shall be interested to see whether the Conservative party remains a pluralist party or whether the majority tendency within that party decides to remove everyone who is not a fanatical Europhobe. One of the first tests will be whether the Conservative party remains a pluralist party.

Of course, the same applies—although to a lesser extent—to my party. I joined it as a pluralist party and I am convinced that it will remain so. If there are any doubts about that, the leadership of the party needs only to consider what happened at the Uxbridge by-election and to learn some lessons from it.

I hope that no foreign money will be involved in the Scottish parliamentary elections. [HON. MEMBERS: "What about English money?"' I hope that no money from outwith the United Kingdom will be involved. I also hope that donors who live abroad but who are United Kingdom citizens and want to participate in our elections will, by donating money or getting involved in the election, be deemed to have asked to be treated as UK citizens for tax purposes. It is only fair that people who have over the years told us long and often that they are prepared to do anything for Scotland except live here, who are prepared to do anything for Scotland except pay taxes or provide money for our services, should be told either to put up or shut up. We do not need people who live in various parts of Spain to lecture us on how we should be conducting affairs in our country when they avoid paying taxes here.

Over the years, the debates have had their lighter side. I understand that the Scottish National party has recently suggested that Members of the Scottish Parliament should be called commissars. That is an interesting proposal in itself and ties in very well with the earlier mention of Comrade Trotsky, although it is a proposal that I did not necessarily expect to hear from that party.

I understand that the SNP will abolish the antiquated form of language known as a point of order. Henceforth, "Jings! Crivens! Help ma Bob!" will be shouted to the Presiding Officer who will, as I understand it, be seated on an upturned bucket. That is an extremely uncomfortable place to sit. [Laughter.] Translations will be provided later. In addition, we will no longer have a registrar of Members' interests. Instead, we shall have a "Hon" man who will serve the same purpose and to whom submissions will have to be made in due course. [Laughter.] I shall explain later.

I shall deal, finally, with the funding system and the nature of the relationship between the Scottish and UK Parliaments.

Mrs. Ewing

Perhaps I can assist the hon. Gentleman by pointing out that there is a difference between a commissar and a commissioner. However, will the hon. Gentleman tell us whether he intends to stand for the Scottish Parliament?

Mr. Davidson

Yes, I intend to put my name forward for the Co-operative party's panel for the Scottish Parliament. I am interested to hear that the SNP wishes to call Members of the Scottish Parliament not commissars but, if I heard correctly, commissionaires, which perhaps indicates that members of that party have spent too long in the company of film stars and their ilk. If that is how the SNP views the Scottish Parliament, as well as commissionaires we will presumably have ushers, which I remember from my younger days as a rotten pint. Presumably the SNP will be judged on that basis, too.

I was about to mention the relationship between the Scottish Parliament and the UK Parliament. I am not sure that we can assume that the Barnett formula will run for ever—a point that has already been made. We cannot always assume that there will be good will between the two Parliaments. I am not quite sure how the mechanism is expected to operate under a Portillo Government, if I dare mention that as an outside option—an extreme outside option, please God.

In such circumstances, will the centre have the freedom to amend the formula as it sees fit? There must be an independent assessment of how needs are to be measured. That assessment must be open and conducted in the full glare of public debate. If it is not, there is a danger that the Scottish Parliament will constantly complain of fouls, about its not being treated properly and about the outcome of a formula that is ill understood and, perhaps, far too easily manipulated. We have to set up at this stage a structure that can make such an assessment objectively and which will be responsible for examining how changes are to be made. Otherwise, we shall have a clear recipe for conflict.

Some people—understandably, in view of their objectives—have a vested interest in conflict, but the vast majority of hon. Members want to make the system work. The funding system must be open from the very beginning. If there is a major flaw in the Bill it is that it does not clarify how central funding is to be determined and amended. I hope that the Bill will be amended as I have suggested, and that it will then make speedy progress through the House and be translated into operation on the ground.

7.6 pm

Mr. Douglas Hogg (Sleaford and North Hykeham)

The Scotland Bill must be among the most important that the House has discussed since the end of the second world war because it will profoundly change the way in which the country is governed. That being so, I very much hope—indeed, I think it has been the case—that right hon. and hon. Members who have spoken have done so with an open mind and an open spirit. I am referring to the hon. Member for Glasgow, Pollok (Mr. Davidson). I also hope that Labour Front Benchers will be as responsive as possible to the criticisms that have been made of the Bill and that they will give ample time and opportunity for consideration of the detail. I greatly welcome what I understand to be a commitment that the Committee stage will be taken on the Floor of the House.

I shall focus on two matters—the principle of devolution and its implications for England. I have never been opposed to the principle of devolution. Many arguments have been advanced against it, very often from those on the Conservative Benches, and there is no doubt that there are serious risks implied by a policy of devolution. My right hon. Friend the Member for Devizes (Mr. Ancram) outlined several of them. It is fairly certain that there will be tensions between the two Houses in the United Kingdom, which could put the integrity of the United Kingdom under strain.

It is also likely that Scotland will find that, under devolution, it has less influence than now on the wider policies of the United Kingdom which impact on Scotland. Contrary to what I think is believed by the Scottish National party, under devolution Scotland will have less influence within the European Union than now and less influence on European policy that impacts on Scotland. I am fairly confident—I will come to this in more detail in a moment—that, under devolution, Scotland will pay rather more of the expenditure incurred in Scotland than it does now and that taxes will consequently go up.

All those are substantial arguments against devolution, but standing back from all that I conclude that if the people of Scotland want devolution, whatever the disadvantages, they must have devolution. It is and always has been nonsense for us to stand in the way of that demand because the risks to the integrity of the United Kingdom flowing from denying devolution are very much greater than the risks associated with granting it. I hope that if anyone had doubts about that, last year's referendum dispelled them. There is to be devolution and there should be devolution. I support the principle of devolution and I have done so, if not publicly, for many years.

All of us need, however, to ask ourselves another question. If there is to be devolution, should we not come together to try to make it as durable as possible? In all conscience, there is no point in putting in place a constitutional settlement that is not durable. Scottish National party Members may take a slightly different view because they regard devolution as but the first step, but I regard it as a settlement for a long time, so it needs to be durable. If it is to be durable, it must be fair to all the participants; for these purposes, I consider England to be an important participant, and I put it no higher than that. The point that I make to the House and especially to Ministers is that the proposals are not fair to England, and because they are not fair to England, the settlement will not prove durable. The Bill is not the last word.

I want to identify three respects in which the settlement is unfair to England. None is novel, but we need to keep them firmly in our minds. The first is the point to which the hon. Member for Linlithgow (Mr. Dalyell) has often drawn attention—what is generally known as the West Lothian question. It is absolute nonsense that Scottish Members, under the devolution proposals, will be able to express a view and vote, perhaps decisively, on the domestic policies of England whereas I shall have no say about what happens in Scotland.

It is a little more bizarre that the hon. Member for Linlithgow will be able to express a view on what happens in Lincolnshire, but will have no say on the domestic policies that affect his constituents. That is a constitutional affront and because it is also unfair to England, the settlement will not last.

That point is aggravated by the second point to which I wish to draw the attention of the House—the over-representation of Scotland. We can argue about the figures as long as we like, and the hon. Member for Pollok made some extremely entertaining remarks on this point. I pointed out to him that he represents a constituency of 49,284, whereas most Conservative Members represent constituencies of about 66,000. Depending on how we calculate it—we need not fall out over the detail—Scotland is over-represented by 13 to 15 Members. If it is an affront that Scottish Members can vote on English business whereas we cannot vote on Scottish business, surely the affront is aggravated by the fact that they can do so in disproportionate numbers.

I have three observations to make to the hon. and learned Member for Orkney and Shetland (Mr. Wallace), who raised the question of Northern Ireland. First, when the Irish Members were in a similar position, they were under-represented. Under the old Stormont regime, Northern Ireland had 13 Members, which was about two thirds of its entitlement. Secondly, the absolute number of Northern Irish Members was low; that is not true of Scottish Members. Thirdly—I have not checked this point, but I suspect that it is true—the Ulster Members, for the most part, did not attend English business. To give credit to Scottish Members, they frequently do so.

My third main point concerns the financial settlement. I can do little but echo the remarkable speech made by my right hon. Friend the Member for Haltemprice and Howden (Mr. Davis), the Chairman of the Public Accounts Committee. He focused, absolutely correctly, on supervision and control. I can only echo, reinforce and applaud what he said. I make just one additional point.

The Barnett formula is a distortion of spending. The House is asked to allocate for Scotland on a per capita basis sums of 20 per cent. to 23 per cent. in excess of what is spent in England. In addition—this is really the point that my right hon. Friend made—we cannot question or call to account those who are responsible for that expenditure. That is a constitutional affront and for that reason the system is not durable.

I want to suggest a way forward and 1 am anxious that we should create a constitutional settlement that is durable. I regret that we have not set this debate in the broader context of Scotland and constitutional arrangements for the United Kingdom generally. We should have had a royal commission or a Speaker's Conference. There also should have been a general national debate about how to balance the new powers of a Scottish Parliament.

I have two proposals. They are not set in concrete; there may be variations. I personally believe in the federal approach. [HON. MEMBERS: "Hear, hear."] I am sorry that Liberal Democrat Members support that idea because I do not often agree with them and I am not reassured when I do. If, however, I ask myself how best to solve the West Lothian question, the honest answer comes to this: we need a federal constitution with four national Parliaments and a federal Parliament. There may have to be a diminution in the number and tiers of local government. I have no time for regions. I think that the idea is nonsense because, with a few exceptions, there are no definable regions in England. My conclusion is that we need a federal structure with national Parliaments and a federal Parliament. That is some way off and I suspect that the appetite for that development is not yet sharpened.

The minimum that we need to do now is as follows: first, we must make it absolutely clear that Scotland should not be over-represented in this place; secondly, we must make it absolutely plain that Scottish Members cannot vote on the domestic affairs of England; thirdly, we must make it absolutely plain that the moneys that are allocated by this House to Scotland are moneys that can be justified by a proper needs assessment. The moneys need to be subject to proper control and supervision. That needs to be transparent and a process to which the House has access.

I am the friend of the principle of devolution. My concern—I think that this is the concern of the whole House—is to make it work. To work, it must be durable; to be durable, it must be fair; and to be fair, it must address the specific interests of England to which I have drawn attention.

7.18 pm

Mr. Tam Dalyell (Linlithgow)

Perhaps the best compliment I can pay to the right hon. and learned Member for Sleaford and North Hykeham (Mr. Hogg) is to say that, in my considered opinion, members of the Cabinet should have been here to hear his speech.

I hope that I shall be excused just one reminiscence of 1977. There are a dwindling number of us who went through the discussions on the subject in 1977, 1978 and 1979. On that occasion in 1977, the argument was put by Michael Foot, then Leader of the House, but almost throughout the debate there was the looming presence of James Callaghan, then Prime Minister. At least they gave the appearance of listening to the House of Commons. I should like to register that, on the Government Front Bench at the moment, there is only the Under-Secretary of State for Scotland, my hon. Friend the Member for Strathkelvin and Bearsden (Mr. Galbraith). He has many talents and is an expert on health, but even he would agree that he has no specific responsibilities in the Scottish Office for the constitution.

So it really does come down to the devaluation of the Chamber of the House of Commons and that leads to certain dangers. One danger in particular is that the English dimension has been almost neglected. Unlike what happened in 1977, when John Smith operated out of the Cabinet Office, the Bill we are considering today is the concoction of the Scottish Office. When have Scottish Office Ministers ever been tested on the anvil of the argument that it takes two to make a settlement? It is not just the Scots who are involved; it is the English too if it is to last and endure. If it is not to endure in the form or something like the form in which it is put forward, we are in danger of bordering on the fraudulent.

Mr. Salmond

There may be some justification for what the hon. Gentleman is saying, but should we not rely on the judgment of English Members? The English Tory Members in the Chamber are barely in double figures and I can see no Labour or Liberal Democrat Members representing English constituencies. If hon. Members representing English constituencies choose not to listen to the hon. Gentleman, are they not registering their level of interest in the debate and, as they represent English constituencies, does that not tell the hon. Gentleman something about the feelings of their constituents?

Mr. Dalyell

It is my personal opinion that, rather than having four Scottish Ministers opening the debate and replying to it, there certainly ought to have been a contribution from the Home Secretary, the Leader of the House or both. The fact that the Bill has been drafted and devised by the Scottish Office raises the following question: are we sure that the English are really party to what is hoped to be a long-term settlement?

Mr. O'Neill

My hon. Friend is being rather disingenuous. He was the parliamentary private secretary to the Leader of the House in the 1960s. There is a web of Cabinet Committees. If we are to believe even a small amount of what is reported in The Scotsman—most of it has to be taken with a rather large pinch of salt—most, if not all, the issues have been through the bowels of the Cabinet Committee system for weeks, if not months. It is completely misleading the House to suggest that the legislation has been somehow concocted out of the air of St. Andrew's house or Victoria quay. There have been far more people involved than just Scottish Ministers who have responsibility for carrying through the legislation because the Government are united and have confidence in them to do the job.

Mr. Dalyell

I hope to heaven that my hon. Friend is right about all the thought that has been put into the Bill. It is our duty to scrutinise what is put before us.

The enterprise remains one of peculiar and perhaps unique difficulty. It is hard to find any significant established example of a successful semi-federal state—one in which a substantial proportion of the population is governed through a division of law making and comparable powers between a higher and a lower legislature, while the rest is governed by the higher alone. Instances such as the Isle of Man and the Channel Islands, or even pre-1972 Northern Ireland, have been tolerable as de minimis. Scotland, with approaching 10 per cent. of the UK's population and well over 10 per cent. of its Members of Parliament, cannot be regarded in that way. Even uneven federalism can be problematical, as Quebec illustrates.

In my view, the political difficulties have been accentuated by the apparently low level of understanding in Scotland, despite the referendum, of those difficulties and of how genuinely awkward the semi-federal system is. There is also a lack of understanding of how significant are the special advantages that Scotland has enjoyed within the United Kingdom under the existing dispensation—the extra Members of Parliament, the extra financial allocation and the powerful position of the Secretary of State for Scotland.

One also asks whether there is an understanding in Scotland of how inescapable it is that the continuance of those advantages should come into question when any new, lasting dispensation is negotiated with other parts of the United Kingdom. If it is not lasting, it will go sour and there will be all sorts of difficulties.

Can any Minister explain to the House how Members representing English constituencies will be persuaded for the foreseeable future—not just the particular circumstances of a Parliament in which Labour has a majority of 180—to continue to vote at least 24 per cent. more cash per capita to Scotland than to their own constituents? That is asking rather a lot of human nature.

At the same time, they will have no control over how that extra money will be spent. How can such a position endure in the real world? That is one problem that we shall have to examine in depth in Committee.

One thing is for sure: if the English see Scotland giving better care to lone parents or funding the disabled more advantageously or avoiding tuition fees, they will no longer acquiesce in favourable funding, the Barnett formula or anything else. Yet, woe betide Members of the Scottish Parliament were they not to take immediate action on lone parents, the disabled or tuition fees because expectations have been raised.

So herein is a real dilemma that we had better discuss very frankly, as none of the three political parties to which the majority of Scottish voters were most disposed to listen seems to have put the matter to them squarely or candidly. However, that is water under the bridge.

The central challenge is, amid inevitable anomaly, to devise a scheme offering a good prospect of adequately contented constitutional stability. That is why we have an obligation to explore the Bill properly.

The main destabilising risks to be managed are in shorthand that one side of the border may consider that the settlement gives Scotland too little and the other that it gives Scotland too much. The temptations on those lines to populist political campaigning—perhaps especially in Scotland—will, over time, become considerable.

There are various criteria to consider. The deal must not be seen by the English majority—at the outset or as experience builds up—as giving Scotland unacceptable one-sided privileges and advantages. If that happens, the settlement cannot endure.

The deal must give Scotland enough to be regarded as worth having and must be worth the additional government costs. The Under-Secretary on the Front Bench has responsibility for health—a subject on which he is an expert. He must be aware that there are worries about the costs of devolution. Throughout the referendum campaign, some of us asked disbelievingly about the £40 million limit. Up it goes. When The Scotsman reports on its front page about the idea of sandwiches for lunch in hospitals, comparisons are made. The expense of the process is of increasing concern. That is a matter of unpalatable fact.

The deal must be robust against the risk of demands, developing in the light of experience and given vigorous voice by the Scottish Assembly, that perceived Scottish ills be remedied by the devolution of ever more powers. We had a taste of that when the hon. Member for North Wiltshire (Mr. Gray) interrupted my hon. Friend the Member for Cunninghame, South (Mr. Donohoe), who is a member of the Select Committee on the Environment, Transport and the Regional Affairs—alas, he is not here at the moment—to ask him about discontent about the railways. My hon. Friend said that more power must go to the Scottish Parliament and that it was absurd if it did not. The hon. Member for North Wiltshire suggested that that was a taste of things to come. We must look at that closely in Committee.

The deal must be reasonably free of built-in sources of recurrent friction, such as arguments about the allocation of United Kingdom public revenue to Scotland and about the dividing line between devolved and non-devolved functions. It must also avoid cross-border differences of law or practice too severe to be tolerable in a single state on difficult issues such as abortion law and drugs.

Policy scrutiny of the deal must be ready to test all its features against a scenario in which the Westminster Parliament and the Scottish Assembly are of markedly different party composition, yielding Governments out of sympathy with one another—perhaps sharply so. That would probably have been the situation between 1979 and May 1997.

Mr. Hogg

The hon. Gentleman has made an important point. Will not the problem be at its most acute over Europe? The Government have said that they want to allow members of the Scottish Executive to speak to the Council of Ministers.' That can happen only when the same party is in control of the Scottish Parliament and the Government. Otherwise, there is little prospect of them having the same policy and therefore little prospect of the Westminster Government being willing to allow members of the Scottish Executive to express a collective view.

Mr. Dalyell

May I respond to that by offering the House a small and entirely true tale? In 1977–78, I was a member of Socialist International. At a meeting at Elsinore, I had the opportunity to put the Scottish problem to Helmut Schmidt—I am not name-dropping. It was late at night. He listened with extreme politeness for 10 minutes and then said gently, "I have 17 million Bavarians and Franz Josef Strauss." That is part of the problem. The Europeans had better be consulted about any solution that involves the powers or activity of a subordinate Parliament—that is what it will be—in the European Community. A proper answer to the right hon. and learned Gentleman would need a treatise rather than a few sentences in the House.

The White Paper "Scotland's Parliament" postulates collaborative amity at various points, including paragraph 4.15. That is plainly desirable, but it cannot be relied on over the long haul. The problem will arise not only between parties of sharply different political outlook. There are situations in which people of the same party have different policies in Edinburgh from in London.

Mr. McAllion

Absolutely.

Mr. Dalyell

My hon. Friend knows exactly what the position is from a different point of view.

Mr. McAllion

My hon. Friend referred earlier to the danger that may arise from what he described as constant sources of recurrent friction. Does it ever cross his mind that he may be a constant source of recurrent friction in relations between the Scottish and British Parliaments?

Mr. Dalyell

My hon. Friend, whom I wish well, intends to stand for the Parliament. The House will not be astonished to hear that I do not—not that anyone would have me.

In the rest of my speech, I shall survey a few of the main constitutional issues that are likely to be contentious in Committee. They are representation in the House of Commons, the scope of the powers devolved, the future of the Secretary of State, how the devolved powers are delineated and how the delineation is policed.

Scotland has 72 Members of Parliament. If constituency electorate sizes were adjusted to match those of England, it would have about 58. The discrepancy does not reflect any deep or deliberate constitutional bargain. It does not go back to the 1707 Act of Union, or even embody a conscious and thought-out choice. It seems to have developed from Scotland and England having separate boundary commissions, with no overall mechanism for adjusting the Scottish allocation of seats to reflect the gradual decline in the relative size of the Scottish population.

That anomaly, which is open to objection even now, will become plainly unconscionable on the establishment of a Scottish Assembly with substantial law-making powers handed over by Westminster. On any reasonable view, the Scottish number must come down. The Bill warily opens the door to that, but not before 2010.

The Scottish Grand Committee had a debate in Dumfries about Scotland in the Union during which the Secretary of State for Defence, who was then just the hon. Member for Hamilton—said: Devolution lie No. 5 is that we must reduce the number of Scottish Members of Parliament if we have a devolved legislature in Scotland. During the devolution debate in the 1970s, the right hon. and learned Member for Edinburgh, Pentlands (Mr. Rifkind) said that he would strongly oppose any suggestion of bargaining Scottish representation at Westminster in order to obtain parliamentary approval of a devolution Bill. He also said that the maintenance of the present number of Scottish MPs should be a prime objective. That point is as valid and true today as it was when the right hon. and learned Gentleman made it."—[Official Report, Scottish Grand Committee, 5 July 1996; c. 13.] If it was true in January last year, it must be explained why it is not true in January this year. There are difficulties, and at least some explanation is required.

The so-called West Lothian question—it was not dubbed the West Lothian question by me, incidentally—still arises. It is not seriously addressed in either the White Paper or the Bill. How can it be tolerable for Scottish Members of Parliament to continue to vote at Westminster on legislation governing England on matters on which, since they are devolved matters in Scotland, they themselves—let alone their English counterparts—have no say and no responsibility in Scotland?

Frankly, after 1999, I do not think that I shall be able in conscience to vote on purely English affairs. There is a problem. I am not going to offer any great threat to the Whips—that is not my style—but I warn them straight away that there will be a great deal of discussion on the matter.

As the right hon. Member for Haltemprice and Howden (Mr. Davis) said, there is something improper in the new arrangement if the hon. Member for Linlithgow may vote on matters in relation to Lincolnshire but, in relation to Linlithgow, he cannot. How long can that go on? I say to any of my hon. Friends that that cannot endure—yet we are talking about a proposal that is to last for a very long time. Such a problem will have to be hammered out.

The problem could go much deeper than just from-time-to-time votes on legislation, since Scotland's Members of Parliament may—as, indeed, we were for much of the 1960s and 1970s—be the "swing" factor in the political orientation of the entire United Kingdom Government and therefore in determining policies and running administration for the devolved subjects, such as health or education in England, over an English majority of a quite different party with quite different policy preferences. Are Ministers suggesting—I wish that they were here to say so—that such a situation can last in perpetuity? There is no stability about it whatever.

Solutions of an in-and-out character—envisaging that, either by rule or convention, Scottish Members of Parliament should abstain in respect of Scotland-devolved matters—cannot be workable in the long run. No UK Government could function properly, coherently or effectively in a situation such as that during substantial periods of the two Wilson premierships and throughout the Callaghan premiership, where, without Scottish votes, the Opposition had a majority on large subjects such as health, education and transport.

Moreover, there would be a constant scope for argument about whether Scotland was unaffected by the policies—and their costs—adopted in respect of England, which has 85 per cent. of the UK population. The Barnett formula means that changes in policies for England may ultimately, at least at the margin, affect the size of the block allocation to Scotland. There might be recurrent distorting temptations for a Government in a Wilson or Callaghan situation artificially to frame primarily English legislation in ways that contained just enough Scotland-affecting content to admit the votes of Scottish Members of Parliament. Any serious consideration of the Bill had better look at that problem.

Another approach might in theory be for any Government in the Wilson or Callaghan situation to observe a constitutional convention that they would, in Scotland-devolved matters, simply refrain from English legislation which they could not carry without Scottish Members of Parliament. That would be an impossibly sweeping, self-denying ordinance for a Government who were elected, for example, on a manifesto of radical educational or national health service reform. The truth is that, at bottom, there can be no perfect answer to the so-called West Lothian question. The difficulty is inherent in any semi-federal or unevenly federal structure. The only way out is some kind of compromised bargain, which could win general recognition as having enough swings and roundabouts for rough justice.

The main working precedent is that provided for half a century at Stormont, where entitlement of 17 Westminster seats was judgmentally reduced to 12. On that precedent, the Scottish number would be reduced to—wait for it—about 41. Whether the reduction need logically to go precisely that far depends on the extent of the functions formally devolved to Scotland. Albeit in significantly different political circumstances, Stormont was given a notably wide range. There was a deep propensity among the Unionists not to diverge from Great Britain practice. It is hard to see how logic could yield any figure above, say, the 40 to 50 bracket.

The Times leader of 21 February 1997 said of the then Leader of the Opposition: But, despite promising to answer the West Lothian Question, he never did. This was a glaring hole in the centre of his speech. I am afraid that that glaring hole is still in the Bill, and we must talk about it frankly in Committee.

Occasionally, someone has made the objection that devolution is not federalism—power devolved is ultimately power retained. That is of course formally true, and, indeed, inescapable in any sovereign Parliament system that lacks an entrenched written constitution, overseen by a supreme court and not amendable by simple parliamentary majority. The practical and political reality is different. The present Government cannot seriously intend—and certainly cannot say to Scotland—that the devolution settlement is to be other than a full-hearted and lasting release of power to Scotland. They cannot seriously intend that Westminster should be seen as constantly looming over Edinburgh, ready and willing to take it back.

That is where we come to clause 27(7), which the Secretary of State raised. I asked whether subsection (7) should not be self-standing and renamed "the Westminster Parliament's preservation of sovereignty" subsection, or the "appeasement of the Home Office" subsection. Is the subsection not a preservation of Westminster's legislative competence in all matters? The Secretary of State very sharply commented on the matter.

I happen to welcome the subsection, but, much more interestingly, do my hon. Friends the Members for Dundee, East (Mr. McAllion) and for Falkirk, West (Mr. Canavan) welcome it? Many of those most ardently in favour of devolution have interpreted that subsection rather differently. So, our discussions on clause 27 will be extremely interesting—as will our discussions on clause 29.

Clause 29 will allow the United Kingdom Parliament to add to or subtract from the list of reserved powers in schedule 5 by statutory instrument. That is a quick and easy method, but there will be no opportunity for amendment. The matter will be debated in Committee and not on the Floor of the House. Is that appropriate, given that schedule 5 is central to devolution and the work of the UK Parliament? Surely changes to schedule 5 must be made by primary legislation only.

Mr. Salmond

I am becoming genuinely puzzled by the hon. Gentleman's speech, because he is known for his consistency in these matters. I have listened carefully to his arguments on the constitution over the years, most recently during the referendum campaign. One of his principal arguments has always been that if there were devolution on the model proposed by some, independence was inevitable. He made that argument during the referendum campaign and in a debate with myself and the Secretary of State during the campaign. His speech this evening seems to have departed from that view, and he now seems to be looking at the Bill to find things in it to strengthen his position. At what stage did he stop believing that independence was inevitable and start believing that this Bill could be salvaged if only the Secretary of State listened to his advice?

Mr. Dalyell

I began my speech by saying that the Bill should properly be called the paving Bill for the dissolution of the United Kingdom. That, take it or leave it, is my considered view. However, I think it is an obligation on Members of the House of Commons to study the Bill extremely seriously and to give it our full attention and scrutiny. That is what I am making, I hope, an honourable attempt to do.

One other attempted line of debating escape might be that the so-called West Lothian problem is no more than a temporary anomaly pending the development of companion plans for devolution in England. This really would be threadbare. There is neither even the briefest sketch of any credible blueprint nor any sign of desire among the English public for legislative devolution—they may want different councils or councils of the north but we are talking about legislative devolution, which is the prime problem—on anything like the depth and scale in contemplation for Scotland.

I come briefly to the scope of powers devolved. There is a natural and proper desire to devolve as wide as possible a range of subjects to the Scottish Parliament. The exceptions to be made presumably rest on one or other of two criteria.

The first is that the subjects are of a kind—for example, defence or foreign affairs—inherently requiring to be exercised at the sovereign state level.

The second is that the subjects are of a kind such that either significant anomaly between one part and another of the United Kingdom would be unacceptable, or actions taken by Scotland would have on other parts major repercussions of which the Parliament cannot reasonably be left the arbiter. On 19 December 1997, The Scotsman suggested that this could be another source of conflict—that is the danger of those criteria.

In the 1974–77 episode, considerable effort was mounted—alongside the judgments made about what subjects could be devolved, and in the light of a sense that the aggregate of those might be found disappointing in Scotland—to partner the package by as much as possible in the line of further decentralisation to the Scottish Office.

The subjects so decentralised were essentially of a "category B" character and the basis for them was a belief that, although the framework of Westminster legislation and the safeguard of UK Cabinet oversight needed to remain, local administration and discretion within those limits would be acceptable. In the event, the devolution enterprise failed, but those additional decentralisations went ahead.

In the years of opposition, Labour leaders said that all functions currently exercised by the Scottish Office would be devolved to the Scottish Parliament, and the White Paper appears to reflect this. The implication is that the 1974–77 "decentralised but not devolved" judgments—both about subjects then already decentralised and about those that were added—were, without exception, mistakenly cautious; that significant anomaly and repercussion in any of the matters concerned either would not arise or would not matter. It is, to say the least, far from clear that that sweeping conclusion has yet been thoroughly tested and publicly justified. I put down the marker that that matter must be considered in Committee, because the reverse of what was done in the 1970s may create as many problems as we faced at that time, and there will be rows about resources.

I come to the future of the Secretary of State. One of the major perceived advantages given to Scotland by the current system is the presence in the Cabinet of a senior Minister directly concerned to defend Scotland's interests. The Secretary of State's practical authority among his Cabinet colleagues has derived essentially from the executive responsibilities he shoulders as heading the Scottish Office.

The more those responsibilities are reduced by the devolution settlement, the less standing the Secretary of State can have as anything other than a strictly irresponsible "more or better for Scotland" campaigner. If the Scottish Office has no executive responsibilities—as the White Paper implies—he or she is nothing but such a campaigner and a repository-megaphone-whipping boy for the Scottish Parliament's grumbles against Westminster and Whitehall. That cannot, in the long run, be sensible or acceptable to non-Scottish viewpoints as the basis for a seat in the Cabinet.

Nor can a substantial role sensibly be created, as paragraph 4.14 of the White Paper implies, by designating such a Secretary of State and a small supporting staff as the prime channel—perhaps a bottleneck—of communication on substantive issues between London and Edinburgh. The London interlocutor must surely be whichever is the Department responsible for the particular subject. One must ask how reducing Scotland's voice at Westminster, where Scotland's funding will be determined, will benefit Scotland.

I come to the delineation of devolved functions, which is a challenging task. There are many existing federations which, by definition, have delineations in place. However, the majority of those—at least in developed states with a political and public culture broadly comparable with ours—have been federations for a century or more. Their basic delineations were accordingly established at times when governmental functions were mostly much less dense, extensive and interactive than they are now. The dividing lines as they now exist have mostly been able to evolve gradually and pragmatically within a culture of familiarity with, and acceptance of, the federal concept.

Leading instances such as Australia, Canada and the United States stretch across very large territories, so that cheek-by-jowl comparison is less intense. The drawing of an entirely new legislative boundary through a highly complex governmental scene within a relatively small, densely populated island with a powerful culture—fostered by an unusually strong nationwide media structure—of expecting consistent treatment right across the UK is without parallel anywhere else.

The approach to delineation must consider two basic questions. Should the line be drawn by describing what is devolved or what is not? The 1974–77 enterprise took the former route. Secondly, should the line be drawn by broad description of subject or by very detailed mapping in terms of the existing statute book? The 1974–77 enterprise took the latter route.

The 1974–77 approach, in those respects, produced very long and complex Bills and was much criticised accordingly at the time and afterwards. The White Paper takes an opposite approach, but it should be recognised that there are considerable practical difficulties whatever course is preferred. There is no logical reason to suppose, as paragraph 3 of the White Paper appears to claim, that the difficulties are removed simply by reversing the approach.

The choice of approach to delineation interacts with how it is to be policed. Who is to decide whether the Scottish Assembly has overstepped its powers? During the 1974–77 saga, that was a matter of hot debate within the Government, centring around the issue of judicial review. One school held, virtually as a matter of basic legal and constitutional principle, that it would be wrong to deny citizens the right to argue in the courts that an assembly Act that disadvantaged them exceeded the powers granted by Westminster in the devolution statute. The other school held, partly in awareness of the boundary complexity problem that I noted, that it would be unreasonable in practice, for lack-of-certainty reasons, and politically objectionable to Scotland that the primary legislation of the Assembly should be liable at any time—perhaps, long after enactment—to be struck down by the courts as ultra vires. The more broadly drawn the delineation, the greater—so that school argued—the risks.

If the latter school prevails, the question of who is to police the boundary still arises—at some point, someone must. If there is no general right of post-enactment judicial review of the vires of primary legislation, there has to be some procedure—legal or Westminster/ parliamentary—for providing a nihil obstat at the time of enactment. In paragraphs 4.16 and 4.17, the White Paper sets out a procedure for considering vires and resolving disputes before assembly Bills pass into law, but the last sentence of paragraph 4.17 still envisages—albeit in brief terms that do not show, for example, who would have the right of action, private citizens or merely Westminster/Whitehall—that that challenge could be made after the passage of the Bill.

No course is free from difficulty. It is fair to acknowledge that, in the two decades since 1974–77, because of the European Court, public opinion has become more accustomed to the idea that the legal system might indeed be able to overrule democratically enacted statute. However, that does not make the experience politically comfortable and the scale and weight of its incidence might—depending on the quality and style of the devolutionary delineation, the political climate and how widely any right of challenge to vires extends—be a good deal more onerous than in the European dimension, especially since it would be additional to that dimension.

Finally, what additional taxes could be raised by the Parliament over and above the specified income tax power, if the Treasury were to restrict the amount of additional revenue available to the Scottish Parliament as a result of possible future changes to the United Kingdom tax structure? Unless those matters are cleared up before the Bill becomes law, business and individual taxpayers will be condemned to perpetual uncertainty.

The House has been very patient with me. I shall end by saying that, unless we resolve some of those problems, we will find that the demand for self-government in Scotland and the maintenance of the unitary character of the British state are ultimately compatible only in the realm of rhetoric. The House has been patient, but we must go into those matters in depth in the days before us.

8.2 pm

Mr. David Wilshire (Spelthorne)

It is fortuitous that I am speaking after my right hon. and learned Friend the Member for Sleaford and North Hykeham (Mr. Hogg) and the hon. Member for Linlithgow (Mr. Dalyell), for reasons that will become clear.

There are some Labour Members, or there would be if they were here, who believe that an English Member of Parliament like myself has nothing relevant to contribute to this debate because they see this Bill as an exclusively Scottish measure. That probably explains the answer to an earlier question—why there are so few English Members here. Most of them have worked out that they will not be listened to in any event, so why bother to have a say? Scottish Members who think like that are wrong. I am certain that there is a relevant English dimension and I am just as certain that that dimension is potentially very nasty.

The English dimension that I want to discuss is not the set of issues that my right hon. and learned Friend the Member for Sleaford and North Hykeham raised. I want to discuss what will happen if the Government choose to ignore those relevant points and all the other relevant points about English concern. If they ignore the English dimension, they will reawaken English nationalism and history teaches me at least that that is a very ugly phenomenon. Therefore, we should not proceed with this Bill until we have thought through the English dimension and ensured that the Bill does not lead to English nationalism. If that is so, the Bill is premature and should not receive a Second Reading tomorrow night.

Today and tomorrow, the Government seek to make a fundamental constitutional change in just one part of the United Kingdom. That makes the Bill a dangerous ad hoc process. To make matters worse, the Bill will be followed by the Government of Wales Bill, which would make a different set of ad hoc changes that will also be dangerous. After that, if the Government are successful, they will try to achieve yet a different variation on the same ad hoc theme in Northern Ireland—three sets of ad hocery.

In contrast to all that ad hoc change, the Government seem to believe that they can get away with little or no change in England. If I understand them correctly, their current approach is to offer a pledge in their next election manifesto that they will consult us, the English, on some half-baked artificial local government region scheme. Treating the English like that is simply playing with fire.

Do not get me wrong, Mr. Deputy Speaker, I am not against Scottish devolution in principle if that is what the Scottish people want and the recent referendum certainly suggests that they do. I am not necessarily against this form of devolution, provided that it is part of a United Kingdom-wide package and that it is not simply ad hocery.

So, I am against proceeding with this Bill in isolation. The wider UK implications have yet to be thought through and they must be before we go any further down this track. As it stands, the Bill simply plays fast and loose with the British constitution. Before we proceed with it, the Government need to devise a United Kingdom-wide framework based on a full constitutional review of all four parts of our nation. Before they draw up that framework, they need to decide whether they are considering regionalism or nationalism.

At the moment, the Government seem to be totally confused on that matter. First, they are offering us a Scottish Parliament. In a week or two, they will offer us a Welsh Assembly, even though only a quarter of the Welsh people seem to want it. Later, they will talk about English regions—what a total muddle and what utter confusion.

The Government are tinkering with both regionalism and nationalism at the same time. They are treating those two different concepts as though they were interchangeable, which they most certainly are not. The Government need to make up their mind what they think they are doing. Is their devolution policy based on regionalism or nationalism? If I understand the Bill correctly, I must conclude that the Government are acting on a sense of Scottish national self-identity. If that is so, the Bill is about nationalism, which is why I worry about the reawakening of English nationalism.

On whatever concept the Bill is based, the Government simply have to treat the other three parts of the United Kingdom in exactly the same way, because if they do not, as others have said before me, they will provoke an English backlash. Indeed, I get the impression that that backlash has already begun.

Far too many people seem to have forgotten what English nationalism is capable of. Even the briefest scanning of the history of the United Kingdom should be enough to remind us all: rape, pillage and mayhem leap from virtually every page of that history. Throughout Scotland, Wales and Ireland there are countless monuments to the local heroes who were slain in a vain attempt to stem a relentless tide of English domination. It is worth looking back at what history has to teach us.

As a proud Englishman, I can well understand the national pride of the Scots that underpins the Bill, but as one of the 47 million men and women in England I caution the 5 million Scots to pause for a moment and consider how they might fare if this huge English majority decides that it is being pushed about by a small minority.

Mr. Shepherd

Does not my hon. Friend accept, though, that England is in a sense the melting pot? Hundreds of thousands of Scots, Welsh and Irish live in England, and many hon. Members, myself included, claim that we are part of a wider family. I am Scottish by birth, with a Scottish mother and an English father, and many of us can trace Irish or Welsh ancestry. This is the melting pot; the division between England and this Union of ours is not so bleak or so black and white.

Mr. Wilshire

I sincerely hope that my hon. Friend turns out to be right. There are, indeed, within the 47 million a number of people who feel as he does, but I most certainly sense that there are also great numbers who consider themselves English, which is what leads me to speak tonight. I worry about what will happen if those people in the English majority decide that they want to do something about what is going on.

Some, indeed, have already started: several constituents have asked me whether the Bill means that we, the English, will stop putting our money into other people's pockets; however hard I try, in fairness to the Government, to explain that it is not really like that, it does not do much to reassure them. "What about the English?" has been a recurring theme in my constituency, at least, ever since the Scottish and Welsh referendums. What about the English indeed? The House would do well to take that sentiment seriously.

Let me make it clear again for the record that I am not opposed to all the details in the Bill, only to the timing and the ad hoc approach. If the Scots want home rule, that is fine by me, provided that we, the English, get the same. Trying to fob us off with so-called regions is pathetic. When the Scots sing "Flower of Scotland" and the Welsh sing "Land of My Fathers", what, pray, are the worthy burghers of Spelthorne to sing—"God Save Our Glorious South-East", perhaps? God save us from it, would be my sentiment.

If the Government are determined to go down this route, I believe that there is only one safe way to do so: as part of a federal constitution. My right hon. and learned Friend the Member for Sleaford and North Hykeham made precisely that point. Such an approach would probably lead to a Scottish Parliament in Edinburgh, which is what the Labour party wants, a Welsh Parliament in Cardiff, a Northern Ireland Parliament in Belfast and an English Parliament in, say, Birmingham, with Westminster left to deal only with matters such as defence and foreign affairs.

Mr. Grieve

Does my hon. Friend agree that the problem with a federal solution is that it can work only where the parts are roughly equal? The only experience of federalism in a different context, in Germany after 1870, showed clearly that it was impossible to discharge the burden of governing Germany without also being in control of Prussia, because one single entity was wholly dominant over the others. Is not that good evidence to show that federalism in its pure form is unworkable in this country?

Mr. Wilshire

I am grateful to my hon. Friend for making that point because, having rehearsed where I consider that the debate ought to be taking us, I was about to say that I would vigorously oppose that approach, for precisely such reasons as he has given. At least the scheme that I have outlined is intellectually and politically honest, which is more than can be said for the Bill.

The Bill is at best a cheap attempt to buy off Scottish National party votes; at worst, it could lead to the break-up of the United Kingdom and the reappearance of an extremely unsavoury English nationalism. I am implacably opposed to both those possibilities, but I genuinely fear that that is where we may be heading. That is why I urge the House to deny the Bill a Second Reading tomorrow night.

8.15 pm

Mr. Malcolm Chisholm (Edinburgh, North and Leith)

My right hon. Friend the Secretary of State gets embarrassed when praised too much; he should be used to it by now, but out of respect for him I shall get it over with at the beginning: I congratulate him on a technically brilliant Bill that is more radical than anyone could have imagined a year ago, when I was shadow spokesperson on constitutional affairs, and that delivers the policy in the White Paper with clarity and comprehensiveness, and with speed, notwithstanding what the right hon. Member for Devizes (Mr. Ancram) said.

There have been a few additions since the White Paper: I am sure that we were all greatly enlightened to learn from schedule 5 that outer space is a reserved area, but I hardly think that many people would have changed their vote on 11 September because of that information.

I also congratulate my right hon. Friend—my last congratulation—on his choice of a site for the Parliament. The two main alternatives were in my constituency, but I believe that nobody can criticise him for going for a new-build option in the historic heart of Edinburgh; indeed, I praise him for it.

I also commend, in far more muted terms, the more positive attitude towards constitutional change of the right hon. Member for Devizes and several other members of the Conservative party since the referendum, but I ask them to reflect on the wisdom of pushing for more to be included in the Bill in respect of Europe, financial matters and the so-called West Lothian question.

I would be interested to see the Conservative amendments on the last two matters. I wonder whether Conservative Members will be able to reach a common position, because the differences in their party about finances and the so-called West Lothian question probably reflect a fundamental fault line between those Conservatives who genuinely want to make the Union work and those referred to so often this evening as the English nationalists.

I believe that only English nationalism, not Scottish nationalism, can destabilise and be a threat to the settlement, but I do not think that we can put anything in the Bill to control that. I would like to believe that the Conservative and Unionist party is genuinely Unionist.

It is absolutely right that relations with the European Union are a reserved matter. Especially since the Single European Act 1985 and the advent of majority voting, it is far more in Scotland's interest to be part of a large voting bloc—the United Kingdom. It is also right that the specific details of how the Scottish Parliament relates to the United Kingdom in the European Union should not be entrenched in the Bill. The constitution unit said that long before the general election.

As my hon. Friend the Minister for Home Affairs and Devolution said, there will be a Scrutiny Committee in the Scottish Parliament and there will be far more opportunities for the Scottish voice in Europe to be heard. The hon. Member for Banff and Buchan (Mr. Salmond) read out the figures for the past 18 years of how many European Councils Conservative Ministers had attended, so it ill befits Conservative Members to talk about the Scottish role in Europe under their running of the Union. I believe that the Government have got it right on Europe, and I look forward with great confidence and optimism.

I ask Opposition Members to reflect more broadly on the underlying reasons for the Bill. Many hon. Members have moved a long way since 11 September, but unfortunately some have not moved any distance. I commend to them one of the great speeches on constitutional reform given in the House by Malcolm Rifkind in 1976, on the night when he resigned from the Front Bench to support the Labour party on devolution.

In that speech—on 16 December 1976 if any Opposition Member wants to read it—Malcolm Rifkind made some of the classic arguments for the Bill that we are discussing. The first thing that he said was that devolution—obviously it was a different scheme—is about good government for Scotland and the United Kingdom, and he pointed out that there has been a vast accumulation of powers within the Scottish Office over the 100 years or so since it was set up. The simple reality is that these issues cannot properly be dealt with—notwithstanding the brilliance of the present incumbents on the Scottish Front Bench—because at the moment in the Scottish Office there are the equivalent of eight or nine Whitehall Ministries, and we get only one Question Time a month and not many debates. The current debates on the Bill are the exception rather than the rule.

The issues are that there should be time for legislation and for scrutiny of policy, and that Ministers should be accountable, because from recent experience in the Scottish Office, and from dealing with Scottish matters from the Front Bench before that, there was very little opportunity for that. One compensation is that I can make more speeches now, because we do not have many debates on Scottish matters. There is very little accountability, apart from the one Question Time a month, because of the institutional structures that have existed for the past 100 years. The fundamental underlying argument for the Bill is better and more accountable government. I very much look forward to the Scottish Parliament delivering better government for Scotland.

Many massive and exciting developments in the Scottish health service have not received the credit that they deserve. There was a White Paper before Christmas, and there will be a Green Paper very soon. Perhaps it is because they have been so broadly welcomed and not attracted criticism that they have not flooded the media. The House has not had an opportunity to examine those policies in detail, and there will probably be little opportunity to do so. I look forward in the Scottish Parliament to a great opening out of the health debate, and the interrelationship that the Government emphasise between health and other policy areas, such as housing and the environment.

The Bill is a tremendous opportunity for better government for Scotland. In fact it is even more exciting than that, because it will mean not just better government but the beginning of a new politics, which is very fitting, because they will coincide with the new century. I shall pick out just four aspects of the new politics for the new century which the Scottish Parliament will trailblaze, and which I hope that, in time, Westminster will copy.

First, we will have an example of power sharing. I think that it has been said that the 21st century will be the century of power sharing. In a sense independence, to which those in the SNP still attach themselves, is the doctrine of the 19th century. Interdependence and power sharing will be the way for the next century, and that will be embodied in the relationships that will develop between the Scottish Parliament and Westminster. Clearly, many of those relationships will have to evolve. It is not right to put some of these things on the face of the Bill. As long as people want to make it work, it will work. Perhaps my colleagues will disagree, but I have enough optimism about the Unionism of the Conservative party to believe that it, too, will want to make it work. I commend Scottish Conservatives by and large on having taken that attitude since the referendum.

The second aspect of the new politics is, of course, proportional representation, which is right. It is something that I came to believe in partly through my experience of the constitutional convention and from working with other parties within it. One of the advantages of PR is that it will lead to less confrontational and more co-operative politics in the Scottish Parliament.

If British people vote for PR in the referendum that we have promised them, in many ways the West Lothian question will disappear, because that question arises from the fact that it would in theory be possible for Scottish Labour Members, presumably, to be the crucial elements within a future Labour Government, whereas under PR, Labour votes from Scotland are unlikely to be decisive in the same way, although I must point out that, between 1979 and 1997, we put up with this in spades in the sense that all our policies in Scotland were imposed on us by a massive majority of English Tory Members of Parliament.

Mr. Grieve

I am much obliged to the hon. Gentleman for giving way. If these measures are to be part of a total constitutional package, would not it have been wise to have submitted them in toto to the electorate? He says that PR will remove the West Lothian question, but surely that is one of the matters that should have been put to the English electorate as part of their consideration as to whether they would accept the totality of the package. The danger is that the proposals are ad hoc, and therefore at some point there is a danger that they will simply be tripped up and fall flat in the mud.

Mr. Chisholm

I hear the point that the hon. Gentleman makes. I do not personally see the West Lothian question—which is why I keep saying the "so-called" West Lothian question—as an insuperable obstacle. Some people are very hung up on a symmetrical constitutional arrangement. We do not have symmetrical arrangements at the moment. My hon. Friend the Member for Linlithgow (Mr. Dalyell) omitted to mention Spain, for example, where asymmetrical devolution is well tried and tested. I do not personally think that it will be a problem. I am just pointing out, as part of my section on PR, that were the United Kingdom electorate to vote for PR, it would take away completely the theoretical problem that could arise in future of Scottish Labour Members of Parliament being the determining voice within a United Kingdom Labour Government.

Mr. Shepherd

The whole point behind the West Lothian question is equality of citizenship. We are not equal citizens. How on earth does the hon. Gentleman's PR proposal do away with that? It does not, of course, and that was an extraordinary syllogism—or whatever it was—that he threw in. He knows perfectly well that PR does not address the question. Even if there were PR across the whole of the United Kingdom, Scottish Members of Parliament, however elected, will have a competence in areas that are denied to English Members of Parliament in relation to Scotland. In fact Scottish Members of Parliament will have no responsibility to the electorate for the conclusions of their decisions on wholly English matters.

Mr. Chisholm

Perhaps I am beginning to regret the aside that I made. The hon. Gentleman gave an interesting example. I was merely saying that the perceived problem, as far as I can see, is to do with a theoretical possibility. I accept that the hon. Gentleman takes a different position on that, but I do not think his view is shared by a large number of people. I shall move on.

I said that one of the features of PR is that it would lead to a less confrontational, new style of politics. The procedures of the new Parliament will build on and develop that. It is quite right that the procedures have not been put in the Bill in detail, as they should be up to the Parliament. We have talked about a people's Parliament. By that we mean a people's Parliament in terms of how it operates and who is in it. There will be opportunities for far more pre-legislative scrutiny in Scotland than we have here. Although we can have Special Standing Committees, we tend not to use them. There will be a debate about what kind of Committee structure we want in the new Parliament. It does not have to be exactly the same as in Westminster. Many of the Government's policy initiatives cut across traditional areas—welfare to work, child care and so on—so the new Parliament may wish to embody that. It will be up to the new Parliament to decide.

We also want a people's Parliament in terms of who will be in it. I do not criticise the Government but simply ask them to consider how that could be brought about. We are committed to gender equality in the Scottish Parliament but we risk a legal challenge. I regret that the Labour party did not challenge the ruling on all-women shortlists a couple of years ago, but we must now live with that. Will my right hon. Friend the Secretary of State consider introducing a temporary special measure to exclude the first elections from the Sex Discrimination Act 1975? Some argue that the Act should not apply anyway, but given that there may be a challenge on the basis of that Act, a temporary special measure as detailed in the United Nations report of the Committee on the Elimination of Discrimination against Women could at least be considered.

All the debates about amending the Sex Discrimination Act have had in the background the threat of a European challenge under the terms of the equal treatment directive. I have been looking at that matter and am slightly puzzled by it. The treaty of Rome seems to say that the EU has no legislative competence in relation to national legislation. Also a statutory quota is in place in Belgium, for example, under a law of 24 May 1994, whereby 33.3 per cent. of candidates must be female. That is less than what we want, but the principle is established. Under the Danish equality of treatment legislation, sexual discrimination is not allowed but an exemption from the Act may be granted and, in such cases, equality of treatment is promoted for both sexes in a transitional period by giving one sex preferential treatment to redress actual inequality. If that already happens in Europe, I wonder whether the equal treatment directive will be the block that has been suggested. I know that the Government are looking at all those matters and I would welcome a report on them.

I wish to pose two more questions, just in case the Government get too carried away with all the praise that I am giving them. The first relates to the Equal Opportunities Commission. We are committed not just to gender equality in the Scottish Parliament but to policies that establish gender equality. The Equal Opportunities Commission is a key body in the United Kingdom; will the Government consider making it a cross-border public body so that it has a locus within the Scottish political system? The Parliament could then call for reports from the EOC.

Secondly, clause 113 of the Wales Bill says: (1) The Assembly shall make appropriate arrangements with a view to securing that its functions are exercised with due regard to the principle that there should be equality of opportunity for all people. (2) After each financial year of the Assembly, the Assembly shall publish a report containing—

1. (a) a statement of the arrangements made in pursuance of subsection (1) … and
2. (b) an assessment of how effective those arrangements were in promoting equality of opportunity."

Could we have such a clause in the Scotland Bill?

My three questions are related but they are not criticisms. I repeat the praise and congratulations that I gave at the beginning of my speech. I spend some of my time criticising the Government on one particular aspect of policy, but I take this opportunity to congratulate the Government on their many achievements since 1 May. Of those achievements, this Bill is the crowning glory.

8.34 pm

Mr. James Paice (South-East Cambridgeshire)

I shall oppose the Bill tomorrow night, because of how it is drafted. I wish to make it clear, however, that I do not oppose the principle of devolution. Unlike the hon. Members to whom the hon. Member for Edinburgh, North and Leith (Mr. Chisholm) referred, who may have changed their minds since the referendum, I have always believed that the principle of devolution is right. I would go so far as to say that it is an essentially Conservative principle of driving power down, so that it is closest to the people whom it affects. That is a fundamental principle.

I also accept the will of the Scottish people as portrayed in the referendum, but we should not necessarily take that as meaning that they have agreed to every dot, comma and clause of the Bill. After all, they were presented with a White Paper on a take-it-or-leave-it basis, with a single qualifying question on the issue of tax-raising powers.

I oppose the Bill as drafted because it creates constitutional anomalies which neither it, nor any other declared Government policy, sets out to address and correct. I oppose it also because it fails totally to provide for proper accountability of the new Scottish Parliament. I do not profess to say what is right for the people of Scotland; I am not qualified to speak for them. However, Members of this House have a much wider and more fundamental responsibility on behalf of the whole of the United Kingdom to reflect on the implications for the United Kingdom of any measure that may be put forward, even if it applies to only one part of the United Kingdom.

The Bill provides for a Parliament with considerable powers, many of which probably go much further than was originally expected. They include the 3 per cent. income tax-varying power, which is the only accountability provided for. At the same time, the House is considering a Bill for a Welsh Assembly, which will have much less power in terms of what takes place in Wales. We are promised proposals for regional assemblies in England and possibly some form of assembly in Northern Ireland. I would be wise not to digress into that: I just hope that some positive results come from the current talks.

In promoting this Bill, the Government seek a popular measure without real thought for the long-term future of the United Kingdom. By setting up an array of bodies in various parts of the UK with different levels of devolved power and accountability, they have made future constitutional crisis a certainty.

Real constitutional change and political courage would have come from reforms across the whole of the United Kingdom, including, fundamentally, reform of the public finances to allow for true local accountability. Interestingly, throughout Labour's period in opposition, it opposed the concept of capping local authorities. In theory, that opposition was right, because such capping destroys local accountability.

Like the new Government, our Government were hamstrung by the issue of public finances. The fact that local government expenditure is part of national expenditure means that it is an economic instrument. As a result of that capping, local elections over the past few years have been fought entirely on national issues, not on the notion of local accountability for how local services are run. The Conservative party learned that to its cost, and our national unpopularity caused loss of control locally, regardless of how councils were run. Just as surely, Labour will have the same experience in the coming years.

The Bill's promoters will claim that the 3 per cent. income tax-varying power will achieve that level of accountability, but I do not believe that it will. I shall again use a local government analogy. The Government's special capping limit agreed for Cambridgeshire will have to be exceeded by, interestingly enough, 3 per cent., simply because that is our total standard spending assessment. It could be argued that that is the fault of the local authority, but the blame will be laid at the Government's doorstep. Just as surely as the blame for constraint in local authority expenditure in Cambridgeshire in the past few years was laid at my party's doorstep, so the Labour party will now be criticised.

That will happen in Scotland, because Members of the Scottish Parliament will say, "Never mind the 3 per cent. that we may or may not use to vary income tax: the problem is the block grant provided by the United Kingdom Parliament." We cannot foresee exactly what will happen, but, if the Barnett formula is revised or reviewed, or, as several hon. Members have said, the block grant is reduced for one reason or another, we will create a platform on which nationalism will be allowed to flourish.

The nationalists will be able to build resentment about the continued, alleged English or United Kingdom, parsimonious attitude to the amount of money being passed to Scotland. The 3 per cent. tax-varying power will become less relevant.

Those who seek an independent Scotland will exploit the belief that the House is interfering with the operation of the Scottish Parliament. That will be exacerbated if the day ever comes, as surely it will, when the House is controlled by a different political party from that which makes up the Scottish Parliament.

Mr. Swinney

Does the hon. Gentleman accept that people who aspire to independence may have different motivations? As a result of the success of the limited powers of the Scottish Parliament, people in Scotland may decide that their self-confidence as a community is growing, and that they want to assume full control of all their affairs. That seems a natural state of being, to which people in Scotland may aspire.

Mr. Paice

The reasons for aspiring to independence are varied. I do not dissent from the hon. Gentleman's view. I believe passionately that it is not in the interests of Scotland or the rest of the United Kingdom for the United Kingdom to be broken up. If that day ever comes, I will fight vehemently to dissuade people from going down that road.

I want to concentrate on the purely financial issue. I believe that devolved government should be based on the ability to raise the necessary finance to fund devolved expenditure. Many of my hon. Friends may argue that a Scottish Parliament would increase taxes, drive out business, kill off any inward investment and increase unemployment. That may happen, and it would be a tragedy for Scotland if it did, but that is what democracy is all about.

I would oppose such policies in any way I could, but we must accept that democracy is about the public making choices. People have a right to choose. With every Labour Government, they have decided, after a relatively short time—about six years—that enough is enough and that they cannot stand their profligacy, and they have thrown them out. If the public do not like high spending and high taxing, or if people decide that that is what they want, they have the right to choose.

I have many specific concerns. I recognise that the Government have tried to deal with some of the problems. I am a fervent opponent of the concept of proportional representation, but I accept that the Secretary of State is trying to address the concern of people in rural parts of Scotland that they will be dominated by the central belt. I believe that they will be, but I recognise that the Government are at least trying to deal with that problem, and I am happy to pay tribute to them, although I do not think that their solution will be satisfactory.

The Bill is the start of the agenda for constitutional change that the Government have no plans to complete, but completed it will have to be at some stage in the future. When the Bill is enacted, the United Kingdom Parliament will have different levels of power as it affects different parts of the United Kingdom.

The debate this evening on the West Lothian question has concentrated on the rights and wrongs of Scottish Members of Parliament voting on English matters, on which they cannot vote in the Scottish Parliament, even though they affect their constituents. However, there is a more fundamental aspect. Is it right for the House of Commons to have Members from across the United Kingdom who have different responsibilities and powers? We shall have to face that fundamental problem as the Bill goes through the House.

The basic tenet of the House of Commons was fought for over centuries. Every hon. Member is elected by popular franchise under our present electoral system, and once elected they are all equal. We vote on matters that affect other parts of the United Kingdom as well as our constituencies. As a result of this legislation, no longer will every hon. Member be equal. We must recognise that serious problem, and during the passage of the Bill, we must try to address it.

Mr. Grieve

Is my hon. Friend aware that, apart from anything else, it is difficult to reconcile that change in status with the European convention on human rights? We propose to incorporate one of its articles, which concerns the freedom of the electorate to choose their legislature. That is incompatible with the creation of a Scottish Parliament, unless approval is first obtained from the entirety of the electorate in the United Kingdom.

Mr. Paice

I confess that I had not thought of that, but I should have realised that my hon. Friend, with his wide knowledge and wisdom, would come up with yet another important aspect concerning the different status that will be held by different hon. Members.

I do not agree with those hon. Members, including some of my hon. Friends, who suggest that the solution is simply to debar Scottish hon. Members from voting on English matters. That would compound the problem of their variable status. When people are elected to the House of Commons, they are elected to be part of the governance of the United Kingdom, and they should be equal, whichever part of the United Kingdom they represent.

The Bill will result in resentment on both sides of the English-Scottish border. The Scots will resent the financial aspects to which I have referred, and that will be a cause of continuous friction. There will also be increasing resentment in England about the Scottish influence. The problem is more than just the West Lothian question: it is also the varying roles of hon. Members of this House. It is not merely that Scottish Members of the House of Commons will be able to vote on English matters, but that they may be debarred from holding ministerial office and dealing with matters that are wholly English. That is another aspect of whether this variable status is acceptable. A Member elected to this House for a Scottish constituency will be not legally but morally debarred from acting as Secretary of State for Health, or for Education and Employment or as Minister of Agriculture. Scottish Members who aspire to ministerial office have not yet thought that problem through.

I do not believe that the solution is to be found in regional assemblies for England of the type suggested in some quarters. It is offensive to Scotland to suggest that such regional assemblies are equivalent to a Scottish Parliament. What is more, there is no such thing as regional identity in most parts of the United Kingdom. The regions in question would be wholly artificial, without historical boundaries or natural affinity.

There is, for instance, no affinity between Lowestoft or Great Yarmouth and Cambridge or Hertford. I know from my time as a Minister dealing with regional offices that people in Devon and Cornwall do not feel themselves part of the same region as Bristol, where their regional office would be—they hold up their hands in horror at the very idea. It is thus a non-starter to suggest that regional assemblies in England can replicate the sort of devolved powers proposed for Scotland.

If the Bill becomes law, I have come to the conclusion—surprisingly, so have some of my colleagues—that the only permanent solution to the resulting constitutional morass will be English and Welsh Parliaments with similar devolved powers, responsible for raising funds for their own devolved responsibilities and operating under a reformed and reduced UK House of Commons.

These proposals represent the antithesis of the old cry that there should be no taxation without representation. Over the past few years, we have moved towards the idea of representation without taxation, and the Bill follows that route. Certainly, there is a small amount of taxation at the margins, but there is no true democratic accountability of the kind that people deserve.

Others have said that devolution will lead to the break-up of the United Kingdom. I do not think that that is necessarily so. I have always believed that devolution is right in principle, although this Bill might indeed lead to the break-up of the UK. It fails to answer some of the most fundamental questions to do with democracy which I and others have asked tonight. It will give rise to ever more friction between the peoples of Scotland and England.

Far from being the enduring solution to the problems of many years, the Bill will be a step towards darkness and ever increasing divisions between our separate countries. In years to come, some Government—I fear that it will be a Conservative Government—will be faced with clearing up the resulting constitutional mess, a task that will have to be done if we are to retain the United Kingdom of Great Britain and Northern Ireland. That unity of the nation is fundamental to the well-being and responsibilities of this House. If we allow the Bill to pass in this form, we shall be doing that unity a great disservice.

8.53 pm

Mr. Frank Doran (Aberdeen, Central)

I join my colleagues in welcoming the Bill which, as many have said, is much more radical than we had expected before the election. I also welcome what it means to the future of democracy in Scotland and in the United Kingdom generally. I also congratulate Scottish Office Ministers on the way in which they have dealt with the Bill since the election.

I have no doubt about the need for constitutional change. My vacation from this place between 1992 and 1997 sharpened my view of the need for constitutional change for Scotland and for the UK. This evening my hon. Friends and I, listening to Conservative speeches, have been given some merriment by the rattling of English sabres and by the talk of an English backlash emanating from Members such as the hon. Member for Spelthorne (Mr. Wilshire), who spoke of the rise of English nationalism.

I remind Conservative Members that we did not pluck this idea out of the ether; there has been a long process of dialogue about devolution, in Scotland and throughout the country, not just since the 1992 election, but ever since the last devolution proposals came before the House in 1978. Moreover, it was not just the people of Scotland who voted at the election—the people of England also voted for a Government on whose list of priorities devolution figured prominently. Now the Government, following the referendum, have delivered that devolution—

Mr. Grieve

I understand the historical strength of feeling about devolution in the Scottish context, but might I point out that it was the Labour Government who thought it necessary to seek the approval of the Scottish people for the principle behind their devolution proposals? Yet there has been no such process of consulting the electorate of England on how they view the knock-on consequences of the proposals. Does the hon. Gentleman appreciate that those of us who represent English constituencies and who firmly believe in the Union have our ear close enough to the ground to know that that is just not tenable?

Mr. Doran

The hon. Gentleman has made that point several times tonight in various forms. The consultation exercise was held during the general election. The Government went to the people clearly promising referendums on devolution for Scotland and Wales, and the English people voted in favour of that.

Devolution for Scotland and Wales is the start of a process of bringing democracy much closer to the people and of removing power from Westminster. The centralisation of power at Westminster over the past 18 years has been brought to a juddering halt. That in itself is a massive achievement. It is a process that will be difficult to reverse, despite what Conservative Members say about how a Conservative Government might act—although I note that Front-Bench Conservative spokesmen have stated that they will not attempt to reverse the process.

As for the rest of the country, I look forward to debates in the House on taking the devolution process beyond Scotland and Wales and into the regions of England, which of course will be granted their consultation process, too. I particularly welcome the form of the Bill, not only because in it the Labour party has kept in full its manifesto promises, but because the spirit and the principle of the White Paper that was published in the summer are set out in full in the Bill.

The Bill is a model of how the working arrangements of a modern Parliament should be set out. Not surprisingly, the House could learn some useful lessons from it. For example, I am especially interested in the provisions of clause 22, which for the first time will provide a statutory basis for the registration and declaration of interests. It also introduces the concept of criminal offences for those who abuse the provisions. The House could look at that and learn from it. Much of what has happened over the past few years and which has so damaged the Conservative party might not have happened if there had been such sanctions. I have always found it difficult to understand why hon. Members are treated differently on these issues from other public servants, including elected local government members. In Scotland, that will certainly be put right.

As I said, the Bill sets out the framework for a modern Parliament that will operate in the new millennium. I shall devote the rest of my speech to considering the impact of the new Parliament on the part of Scotland that I am proud to represent—the north-east and particularly the city of Aberdeen. I do that not just for parochial reasons, but because one of the devolution myths is that the whole of the north-east of Scotland voted against devolution legislation in the 1979 referendum. It is certainly true that in Grampian, which contains my area of Aberdeen, there was a narrow majority against. I have never been convinced that Aberdeen city voted against the legislation.

One of the main problems with the 1978 legislation was the fear that the proposed assembly would be controlled by Scotland's central belt, to the detriment of the regions. That was obviously a major issue in the campaign, and it was raised again by the opponents of devolution in the recent referendum.

Aberdeen is crucial to Scotland's economy. Some key industries are based in the city, and they are important not just to Scotland but to the whole United Kingdom. For example, the city is the oil and gas capital of Europe, and oil development in the North sea accounts for a substantial proportion of the United Kingdom's industrial investment. About 56,000 direct jobs in the oil industry are based in Aberdeen and the surrounding area, and many of the 330,000 oil-related jobs in the rest of the United Kingdom depend on the industry in Aberdeen. This year, the industry will contribute about £4 billion through taxes and royalties to the Exchequer.

Aberdeen is also a major fishing port and provides a substantial number of jobs at the harbour and the fish market and in the processing and transport of fish. Peterhead harbour, which is just a few miles from Aberdeen, is the largest fish market in Europe and between them, Aberdeen and Peterhead markets land about 70 per cent. of all white fish landings in the UK. Fishing is part of the food industry that is based in the north-east of Scotland, and it is renowned for the quality of its produce. Despite the recent bovine spongiform encephalopathy crisis, we produce fish, beef, dairy products, drink—particularly whisky—and other agricultural products that are sought not just in the UK but throughout the world. Aberdeen city alone accounts for nearly 32 per cent. of Scottish food exports, and that figure does not include whisky exports.

We have a substantial paper manufacturing industry, and Aberdeen city accounts for about 30 per cent. of Scotland's paper exports. We have substantial manufacturing and engineering industries and a significant textile industry although, like the rest of that industry in the UK, it has reduced in recent years and we are concerned about our largest private manufacturer, Richards, which has been producing textiles in the Broadford works in Aberdeen for nearly 200 years. There is much concern about the future of jobs in the company, mainly because of recent boardroom squabbles about the direction that the company should take. [Interruption.]

I am glad that hon. Members are interested enough to listen. Aberdeen's economy is buoyant. We have heard much about the financial aspects of devolution. My area is probably the richest part of Scotland, and we probably have the lowest unemployment rate in the UK of about 2 per cent. We have all the problems of success. There is a shortage of industrial land and high property costs. There are higher than average wage rates, higher housing costs and skills shortages in some areas, but those problems are all being tackled.

Mrs. Eleanor Laing (Epping Forest)

I am delighted to hear the hon. Gentleman speak about the buoyancy and success of the Aberdeen economy, because it is a part of the country to which I am quite attached. Does he agree that that success must be based on 18 years of Conservative government?

Mr. Doran

In the main, it is based on the fact that we are close to the North sea. We have access to the best fishing grounds in Europe, and I do not think that the Conservative Government put the oil in the North sea. It was certainly first exploited under a Labour Government, and the structures that the Conservative Government exploited were all put in place by the previous Labour Government.

Aberdeen is a modern and optimistic city, and it is planning for its future and looking forward to the millennium. I speak to people from companies in my constituency who have a much longer perspective. The past 30 years have seen dramatic changes in the city, and we are now not just planning for 2000 but looking ahead to 2020. That is the perspective of a confident people, confident businesses and confident institutions, including our local authority. The people of Aberdeen are optimistic. They are forward looking, modern in outlook and delighted to be part of the most dynamic local economy in the UK and perhaps in Europe.

Mr. Gray

Although we are greatly enjoying the guided tour of the hon. Gentleman's constituency and doubtless there will be a few press releases for the local press, what on earth have those comments to do with the debate?

Mr. Doran

If the hon. Gentleman takes the trouble to listen, I will tell him.

In the September referendum, the confident people whom I have been describing voted convincingly for the Scottish Parliament. More than 70 per cent. of Aberdonians voted for a Scottish Parliament and more than 60 per cent. of them voted for the tax-raising power. On key issues, they are prepared to trust their future to the Scottish Parliament. Their confidence is not misplaced. The Bill ensures that Scotland will be governed by a modern Parliament as part of the Union, and with the certainty that all parts of the country will be properly represented in the new Parliament and able to play their full part in our new constitutional arrangement. My constituents enthusiastically welcome that.

9.5 pm

Mr. Donald Gorrie (Edinburgh, West)

This is a great day for Scotland and for England. It is clearly a great day for Scotland because at last we are on the way to achieving democracy there, which we have never had because, before 1707, Parliament was distinctly less democratic than it is now. It is a sort of birthday. We are giving a group of people an opportunity to run their affairs better. That is what democracy and public life should be all about, so we strongly welcome the Bill. Any idiot can criticise it and, in a few minutes, I shall do precisely that, but the Bill's main thrust is along the lines that my party has wanted for many years. The Scottish Constitutional Convention has brought that together.

It is an important day for the English. As several speeches have shown, the English are starting to wake up, which is a good thing. The fact of the Scottish Parliament coming along has made English representatives and English people ask, "Who am I? What system runs me? How is my democracy going to develop?" For the first time, some English people are realising that English and British is not synonymous. It is an important development. The English nationalism that we have heard about should be harnessed productively. The English have to get their act together and start to think how they want England to be run, whether it be by an English Parliament, by regional assemblies or by a mixture of both.

Mixed up with that, we have had the usual Conservative stuff. The bottom line is that many Conservatives do not trust the Scots to run their own affairs without making such a mess of it that they will destroy the United Kingdom. That was exhibited by the right hon. Member for Haltemprice and Howden (Mr. Davis), who wanted this Parliament to have financial control over the Scottish Parliament because the Scottish Parliament could not possibly keep its books in order.

Clearly, all public money should be accounted for and, as my hon. and learned Friend the Member for Orkney and Shetland (Mr. Wallace) said, the Scottish Parliament must have a good system of accountability and of looking after public money, but this Parliament does not go round examining in detail how local authorities spend their money. There is a law saying that local authorities have to account for their money properly. In the same way, the Scottish Parliament will do that. We do not need an English nanny state looking after the money for which the Scottish Parliament is accountable.

It has also been argued that, as a result of the Bill, Scotland's influence in Europe will be weaker. I cannot see how that can possibly be because, under the present system, Scotland's influence in Europe is as near to zero as makes no difference. Surely, if there had been a Scottish Parliament, with the great interest that the Scots have in beef, agriculture and fishing, we would never have allowed our beef and fishing industries to get into the complete shambles that they have, when the whole thing is run on a UK basis.

Another argument is that the timing is wrong. It goes back to the words of St. Augustine: Give me chastity … but do not give it yet. It is said that people are, in principle, in favour of devolution, but that they do not want it yet; the timing and the small print are not right. If we waited for some omnibus UK scheme—an all-singing, all-dancing scheme, with every part of the UK beautifully balanced and marvellously run—we would all be dead. It would not happen. In fact, this Bill, with all its implications, has been introduced because of the irresistible demand of the Scottish people to run their own affairs. That is provoking a constitutional debate throughout the United Kingdom, which is a great step forward. It is a very encouraging day for both the Scots and the English.

I want to deal with three aspects of the Bill. The Secretary of State dismissed the suggestion that there should be some voter choice in the list. We want the voters to have some say in who gets in from the list. It is not an intellectually taxing task to ask the voters to number, one to five, on the list the people from the party they favour. Indeed, if they were allowed to put "x" against one preferred person, that would be better than nothing. It is not a great deal to ask, and it would negate the argument that the lists are a wicked plot hatched by parties in smoke-filled rooms.

The question of gender balance was well dealt with by the hon. Member for Edinburgh, North and Leith (Mr. Chisholm), who represents the constituency neighbouring mine. It is an important issue. It should be possible to insert a clause to provide that, in the interests of getting more women candidates elected, we should be allowed to disregard the equal opportunities legislation that gets in the way of such matters.

The hon. Member for Glasgow, Pollok (Mr. Davidson) made a long speech. The main thrust of his argument was that the voters in Orkney would benefit in some way and that that was unfair. The proportional aspect comes from the list, so overall the votes will be much more equal in weight than they are now. It means that, for example, in Glasgow it will be worth voting something other than Labour. It is not healthy in any country, city or council for there to be such a huge preponderance of one party, as is the case in Glasgow. It is certainly not to the benefit of the hon. Gentleman's party. A proportional system will introduce a little democracy into Glasgow.

There is a long list of exclusions, as one or two other hon. Members have mentioned. Some of them are serious, and we should try to get that changed. Examples are broadcasting, equality legislation, abortion, rail transport and bus subsidies. I do not think that the Scottish Parliament will be able to subsidise the buses necessary to get people to Holyrood. Other exclusions include radioactive waste, pedestrian crossings, road safety, regulation of insolvency practitioners and other such people, licensing of theatres and so on. Another is betting and gaming—something dear to the hearts of many Scots. It will not be under the control of the Scottish Parliament. That is a serious matter. Another is mock auctions, so the cynical might say that elections would not be allowed. Another is coats of arms. Those of us who are snobs would not be allowed to get our coats of arms from the Scottish Parliament. I declare an interest as I am a deputy lord lieutenant. Lords lieutenants will come under Westminster, not the Scottish Parliament. Such matters could be much better—

Mr. Gray

Is not the hon. Gentleman aware that the Lord Lyon is directly responsible to the Queen? Or is he suggesting that the Lord Lyon should be responsible to the new Scottish Parliament?

Mr. Gorrie

Yes. I thought that we lived in a democracy. Indeed, we are trying to create a democracy.

The Scottish Parliament will control gas if it is carried in a boat, but Westminster will control gas if it is carried in a pipe. There are many foolishnesses in the list of exclusions.

There is an unfortunate gulf between Ministers' excellent words and their actions. The Secretary of State said that it was very bad to tack Scottish legislation on to English Bills, but that is precisely what is happening with the Crime and Disorder Bill.

The Secretary of State has made a personal decision on where the Parliament should be sited, and he has made a personal decision that the voting day for the Scottish Parliament should be the same one as for local elections. Either of those decisions may or may not have been good, but the manner in which they were made was not satisfactory. We do not want to create a benevolent despotism—because the Secretary of State is such an excellent man, despotism would surely be benevolent—as that would not be satisfactory. The Scottish community should have had some say in where the Scottish Parliament sits. It is unacceptable for such a decision to be made by one person acting with a few advisers, regardless of whether the decision is good or bad.

The Liberal Democrats want to work towards the genuine sovereignty of the people—not the sovereignty of Parliament—whereby the Scottish people will have a real say on what happens. We hope that the English will wake up and do the same.

9.15 pm

Mr. Frank Roy (Motherwell and Wishaw)

In my short time as an hon. Member, I have already had many memorable experiences. One incident that I shall almost certainly never forget occurred on 11 September 1997, when my wife and I attended our local polling station to vote in the Scottish referendum, and a first-time voter—a young lad—came up to us with a huge smile on his face. He said, "Mr. Roy, I was too young to vote for you on 1 May, but I'm voting today. It's my first vote, and I'll be voting yes-yes. Imagine me having a say in something as special as this."

That young man typified young people in my constituency, who—like everyone else in my constituency—turned out to vote for a Scottish Parliament. In north Lanarkshire, where my constituency is situated, 123,063 people—82 per cent. of those who voted—voted for a Scottish Parliament. Furthermore, 72.2 per cent. of voters voted to give that Parliament tax-varying powers. The figures are remarkable. I looked up the total vote in Scotland for the Tories on 1 May, and it was only 30.7 per cent. Having listened to some of the speeches and arguments made by Conservative Members in this debate, I believe that it is remarkable that they achieved even that.

The figures in north Lanarkshire were the third highest in Scotland, which makes us very proud. Such a result from that generation in my area is surprising, because those people have been disfranchised and disillusioned, having grown up during the worst excesses of our previous Government. For them, politics were a distant and sleazy matter, and they did not feel that they were a part of the process. Our young people had become alienated and were not stakeholders in our nation.

On 1 May, the election of a new Labour Government who were committed to principles of equality, social justice and fairness signalled the beginning of the reconnection process for many of those young people, such as that young lad. On 11 September, young people in Scotland put their trust not only in politicians but in the people of Scotland to build a new Parliament for a new millennium and for a new generation.

Why was the referendum so important? Why did young people connect so clearly with a Scottish Parliament? What did they see on 11 September that was different from what had come before? The difference was the relevance that a Scottish Parliament would have to their lives. It would affect their daily lives in a manner that Westminster never seemed to do. They were full of hopes and expectations.

Those young people's hopes and expectations are not unjustified. Consider the powers that will be exercised by the new Scottish Parliament over the issues that directly affect each one of those young people in my constituency. The powers will connect them and the Scottish Parliament. The Scottish Parliament will have power over jobs and training. It will be an engine for job creation, revitalising communities that were devastated by 18 years of Tory mismanagement. In my area, we have lost so much, yet we still have much to offer, and I believe that the Scottish Parliament will harness that potential and the potential of that young lad.

Building on the excellent work of Scottish Enterprise and Locate in Scotland, the Scottish Parliament will build a dynamic, vibrant economy. We shall have no more of the skivvy schemes that the previous Government foisted on people such as that young lad. Instead, we shall have a new deal. We shall provide quality training for all our young people, giving them the skills that they will need to compete in a global economy.

The Scottish Parliament will have power over education. In Scotland, we have always been proud of our education system, which develops the potential of each individual. With the establishment of a Scottish Parliament, we shall be able to bring that education process closer to the people, making it more responsive to the needs of individual Scots. There will be lifelong education from the cradle to the grave, enabling people to be all that they can be.

The Scottish Parliament will also have power over housing. Youth homelessness is at an all-time high, but the Scottish Parliament will develop a close working relationship with local government, building on projects such as the rough sleepers initiative, to ensure that young people no longer live in danger on the streets of Scotland.

In addition, the Scottish Parliament will have power over the environment. Young people care about the environment and are deeply conscious of the effect that today's living habits are having on the planet. They want to prepare for the future, and the Scottish Parliament will enable them to play a part in that planning process.

Clearly, the powers of the Scottish Parliament will have a profound effect on young people, but the beauty of the Parliament is not only what it can do for young people, but the fact that it will give a voice to young people and what they can do for the Parliament. Politicians must enter into a dialogue with young people, working with them as we enter the new millennium and encouraging and enabling them to play a full part as proper and equal citizens—indeed, as stakeholders in their and our society.

I am aware that my hon. Friend the Minister for Home Affairs and Devolution is undertaking a review of the rules and Standing Orders of the Scottish Parliament. I welcome that review and think that one of the key priorities of that process must be to provide a mechanism that gives young people and other groups that have been excluded from the political process a voice. The challenge of involving all our citizens is one that I know the Parliament will warmly embrace, and that is why I am willing to speak up on behalf of the young lad whom I met on 11 September and ask the House to support the Bill.

9.22 pm

Mrs. Eleanor Laing (Epping Forest)

I know from considerable personal experience that it takes a long time to recover from a properly celebrated Scottish new year.

Mr. McAllion

Is that what happened to the hon. Lady's arm?

Mrs. Laing

I had better make it clear that I did not break my arm at new year.

Today is 12 January: I do not believe that the many Scottish Labour Members who are absent today are absent because they are still recovering from the new year celebrations. It is clear that they no longer consider the United Kingdom Parliament worth attending. Presumably they are in Scotland, starting their campaign to follow their leader, the Secretary of State for Scotland, into the new Scottish Parliament.

It must be a difficult decision: whether to do half a job in Edinburgh or half a job at Westminster. At present, there are 72 Scottish Members of Parliament representing the people of Scotland. Once the new Parliament has been set up, there will be 72 Scottish Members of Parliament here and another 72 in Edinburgh.

Mr. Salmond

There are 73.

Hon. Members

And another 59.

Mrs. Laing

I am coming to them.

This is another matter that has not been addressed in the Bill. The constituency Members of Parliament who are elected to Edinburgh will have significant responsibilities, but nobody has told us what the regional Members will do. To whom will they be accountable? The question has not been answered.

I was vehemently opposed to the Bill in the first place. I accept, however, as most of my colleagues do, that the result of the referendum was clear, although the people who voted had not seen the Bill. I hope, as we are now to have a Parliament in Edinburgh, that many of my friends and family will be elected to it. [Laughter.] Hon. Members are wrong to assume that every member of my family is a member of the Conservative party.

My main concern is not only for the people of Scotland, but for the people of Epping Forest and the rest of the United Kingdom. As my right hon. and hon. Friends have eloquently explained this evening, the Bill most certainly affects the whole of the United Kingdom. My concern is that whatever transpires, the Union should not be weakened. There is already too much factionalism. I see no conflict—[Interruption.]

Mr. Deputy Speaker (Mr. Michael J. Martin)

Order. The hon. Lady has listened to everyone in the debate and she is now entitled to a hearing. It is bad manners to start holding discussions in the Chamber.

Mrs. Laing

Thank you, Mr. Deputy Speaker.

I see no conflict between being a citizen of the United Kingdom, being British, being the representative of the constituency of Epping Forest in Essex, where I live and work, and having been born in Scotland of Scottish parents and brought up and educated there. I believe that the conflicts arising from the Bill and the consequent operation of the Parliaments will cause conflict within the United Kingdom and will cause damage to the Union, to the Government and to the people of our country. By "our country", I mean the United Kingdom of Great Britain and Northern Ireland.

Hon. Members of all parties who have listened to the debate must agree with me because all day we have been hearing arguments not only about the West Lothian question, but about which powers are to be reserved for this Parliament or that Parliament. Although the Secretary of State spoke about clause 27, he was not decisive about the supremacy of this Parliament. I ask him again to tell us whether the supremacy of this Parliament is protected in the Bill.

We have heard arguments about the Barnett formula and about which part of the United Kingdom is a net contributor to public funds. We have heard arguments about the future representation of Scotland and of the United Kingdom in Europe. All those conflicts exist now. Are the Government suggesting that the Bill will resolve them?

I am also concerned about the protection of the Scottish legal system. I have no interest to declare, but I am a qualified Scottish solicitor. I do not make any money from it. In fact, I never made much money from it. [HON. MEMBERS: "Oh."] It is all right because my husband does.

I shall raise detailed points in Committee. I am, however, concerned about the protection of the Scottish legal system. Clause 45, for example, is not clear about the appointment of the Lord Advocate and the Solicitor-General. We have not had an answer to the question whether the Lord Advocate is to be independent in terms of the administration of the Scottish courts and the Scottish Law Commission. The Bill does not say—another small point in which it is deficient.

Schedule 6 is also unclear. It is all very well to give the Judicial Committee of the Privy Council the power to hear appeals on devolution issues, but who will have a locus to bring such an appeal? Will an ordinary citizen be able to do so?

The Minister for Home Affairs and Devolution, Scottish Office (Mr. Henry McLeish)

Read the Bill.

Mrs. Laing

I have read the Bill. It is not clear whether an ordinary citizen will be able to bring an appeal on a devolution matter.

My third concern is the conflict created by having two classes of Member of Parliament and MSP.

Mr. Wallace

Will the hon. Lady give way?

Mrs. Laing

I am afraid that I do not have time.

Here at Westminster, some Members will deal with all matters that concern their constituents and others will deal with only some matters that concern their constituents. They will not be equal. In Edinburgh, meanwhile, some MSPs will represent constituents and some will not. That is not a recipe for harmony.

An interesting point has been raised about gender balance. We are talking about different classes of MP and of MSP. If some of the ideas that have been mentioned this afternoon were put into practice and there were positive discrimination in favour of women, we would be creating second-class MSPs.

Mr. Connarty

Why?

Mrs. Laing

Because saying that a woman requires positive discrimination to be elected to an institution such as the Scottish Parliament is like saying that a man can go swimming on his own but a woman always has to wear waterwings. That is not true. Many women in all parties have been elected to this Parliament and done a very good job without having benefited from positive discrimination. Many able women in Scotland will put themselves forward as Members of the Scottish Parliament. They do not need positive discrimination. Gender balance is absolute nonsense.

I have pointed out only some of the discrepancies and conflicts in the Bill. I urge hon. Members to urge the Government to iron out those conflicts before it is too late.

9.31 pm

Mr. Oliver Heald (North-East Hertfordshire)

We have had a good first day's debate, which was illuminated by some of the speeches, although it was noticeable that, when the hon. Member for Edinburgh, West (Mr. Gorrie) was on his feet, the lights dimmed. We heard excellent speeches from the hon. Member for Linlithgow (Mr. Dalyell), my right hon. and learned Friend the Member for Sleaford and North Hykeham (Mr. Hogg), my right hon. Friend the Member for Haltemprice and Howden (Mr. Davis) and my hon. Friend the Member for South-East Cambridgeshire (Mr. Paice) which set out some of the agenda to be debated. The hon. Members for Ochil (Mr. O'Neill), for Edinburgh, North and Leith (Mr. Chisholm), for Motherwell and Wishaw (Mr. Roy) and for Glasgow, Pollok (Mr. Davidson) spoke of their enthusiasm for the new Parliament. It was obvious that, for many of them, it was the realisation of something for which they had campaigned for many years.

The hon. Member for Pollok was so congratulatory of the Secretary of State and mentioned him in the company of so many illustrious Scots, that one thought that, in this Burns season, he would recite "The Immortal Memory". We were grateful that he did not. However, the hon. Gentleman raised some serious issues that the Minister will have to consider, such as the splitting of Orkney and Shetland.

The hon. and learned Member for Orkney and Shetland (Mr. Wallace) spoke of his party's quest for federalism in the United Kingdom and the hon. Member for Cunninghame, South (Mr. Donohoe) raised a number of transport issues. As usual, the hon. Member for Banff and Buchan (Mr. Salmond) made it clear that he saw the Bill as a step in the right direction—towards separatism. We must consider his remarks in that context. Finally, my hon. Friend the Member for Epping Forest (Mrs. Laing) raised important questions about the regional Members of the Scottish Parliament and their relationship to constituency Members and the importance of the Union.

My right hon. and learned Friend the Member for Sleaford and North Hykeham raised the issue of the stability of the United Kingdom under the proposals. I see many flaws in the federal structure for which he argued, but the point that the question of the stability of the arrangements for the United Kingdom will not go away was well made by him and by my hon. Friends the Members for Spelthorne (Mr. Wilshire) and for South-East Cambridgeshire.

The Conservative party, as a democratic party—

Mr. Wallace

A democratic party?

Mr. Heald

Yes, a democratic party—in fact, the world's oldest democratic party. We accept the result of the Scottish referendum, but it is right, as the Secretary of State said, that we should look at every eventuality when considering the proposals.

I shall make three points and then ask the Minister six questions. [Interruption.] I think that six is enough to be going on with. He has only 15 minutes.

The arrangements for the future must be stable. The point that they are not stable has been well made. The problem will not necessarily arise in the current Parliament, with a large Labour majority in England and in Scotland, but it will arise one day. The time will come when the Scots vote to decide an English issue in this Parliament. At that point, the tensions will be exacerbated. The hon. and learned Member for Orkney and Shetland, who is enjoying a conversation with his hon. Friends at the moment, asked about the Stormont experience. He should be aware that one of the issues that irritated the Labour party in the 1960s—Harold Wilson in particular—was that, on issues such as steel nationalisation, the Ulster Unionists, who had their own Stormont Parliament that dealt with steel issues, voted with the Conservatives and made it difficult for him to have his way. He said: I would hope that Northern Ireland Members, who are here, and who are welcomed here, for the duties they have to perform on behalf of the United Kingdom in many matters affecting Northern Ireland, would consider their position in matters where we have no equivalent right in Northern Ireland. He also said: I am sure the House will agree that there is an apparent lack of logic, for example, about steel, when Northern Ireland can, and presumably will, swell the Tory ranks tonight, when we have no power to vote on questions about steel in Northern Ireland"—[Official Report, 6 May 1965; Vol. 711, c. 1560–61.]

Mr. Wallace

The hon. Gentleman said that, if the votes of Scottish Members upset what would otherwise be an English majority, tremendous tensions might be produced. What tensions does he think were created in Scotland over the poll tax, when the votes of English Members imposed an unwanted tax on the people of Scotland against the majority wish of the Scottish representatives?

Mr. Heald

What is sauce for the goose is sauce for the gander. The hon. and learned Gentleman cannot have it both ways. If it is right that Scottish votes could decide an English issue in this place, which would happen under the arrangements proposed, without English—or, indeed, Scottish—Members here having any right to decide Scottish matters, it is inevitable that a large group defying the wish of English Members on English issues could create far worse tensions than were created for Harold Wilson in the 1960s by a tiny number of Ulster Unionists.

The hon. and learned Member for Orkney and Shetland said that federalism is the answer. Creating federalism is his historic mission, but I see difficulties with it. It is not my policy or that of the Conservative party. It is for the Government to come up with a solution to the problem known as the West Lothian question. They recognise that there is a problem. The Chancellor of the Exchequer, the Deputy Prime Minister and the Minister for the Regions, Regeneration and Planning have acknowledged it, but in the Bill the Government have failed even to attempt to solve it. That is not good enough. They should try to answer the question. I hope that they will meet that challenge. If they do not, the arrangements will not be stable or durable. The acid test of looking at every eventuality, which was set by the Secretary of State himself, will not be met.

The second issue is the role of Scotland in Europe. As several hon. Members have said, nothing in the Bill protects Scotland's direct access to the European Council of Ministers. Promises were made in the White Paper that, for example, Scottish Executive Ministers would have a role and be able to speak for the UK in the Council. That would be a very difficult right to enshrine in law because, if there were differing political complexions in the Scottish Parliament and the United Kingdom Parliament, it would be unlikely that the UK Government would want a different political viewpoint to be put forward in the Council. I wonder whether that is why, having made such promises in the White Paper, nothing on that matter appears in the Bill. There must be some reason why the promises were made and are not being fulfilled.

The other point in the White Paper about Scotland's representation in Europe was that there should be a requirement on the UK Government to take account of Scottish pre-legislative scrutiny. The White Paper offered that the UK Government would take account of scrutiny, but that is not referred to anywhere in the Bill. We are entitled to ask why the promises were made but are not being kept in the Bill.

My third point is about funding. There is a lack of clarity on resources which threatens Scottish business, Scottish people and jobs. There is no commitment in the Bill, for example, to provide a particular level of funding for Scotland. [Interruption.] The Secretary of State laughs, but clause 61 leaves it entirely to him to decide how much Scotland gets. It says: such amounts as he may determine. He seems to take the duty very lightly. The clause gives the Parliament no satisfactory assurance of its money. It means that, if a general, UK-wide review of public spending concluded that Scotland received too much, the block grant could be reduced. It means that the UK Government could effectively cap the Scottish Parliament's expenditure. It also has implications for the tax-varying power.

One of the speeches that most informed the debate was that of my right hon. Friend the Member for Haltemprice and Howden, the Chairman of the Public Accounts Committee. He properly made the point that there is no provision for accountability to the UK Parliament. Although £14.6 billion is to be remitted to the Scottish Parliament, there is no mechanism for the Comptroller and Auditor General to look properly into it and see the documents. [Interruption.] if that is not correct, I would be happy to give way. It is certainly the view of my right hon. Friend the Chairman of the PAC. Ministers will want to consider that issue and decide what proper accountability there should be.

Mr. McLeish

What about clause 66?

Mr. Heald

If the hon. Gentleman had heard my right hon. Friend's speech, he would have heard his analysis of that clause.

What would the Scottish Parliament be saying if it were to use the tax-varying power to reduce the basic rate of income tax by 3p? It would be saying that it did not need all the block grant. On some occasions, the Scottish Parliament may want to express that. If it did, it would be unthinkable if the Treasury did not take account of such information and cut the grant the following year. [Interruption.] The Secretary of State may laugh, but where in the Bill is the Scottish Parliament's financial position protected? Nowhere. The matter is entirely discretionary. The Secretary of State cannot laugh, and say, "Oh well, it will be all right in the end." He must do what he said that he would do: look to every eventuality and provide proper protection and provision in the Bill.

I shall make one last point before I ask my questions. The level of finance is uncertain. One aspect of the tax-varying powers which has caused great concern to the Confederation of British Industry in Scotland—and to a number of business organisations such as the Retail Consortium—is that the tax-varying powers will not apply to corporation tax for the large companies, but will apply to the small business man, the sole trader or the partnership. They are asking for an exemption for small, unincorporated businesses so that they have a level playing field with the big boys. I ask the Secretary of State, and the Under-Secretary who is to reply to the debate, to consider a plea that is being made on behalf of small businesses in Scotland, as clearly that matter should be addressed. There are a number of other issues concerning finance to which we will return in Committee if the amendment is not accepted.

Perhaps I can ask a series of questions which summarise what I have been saying. Why does the Bill make no attempt to solve the West Lothian question? What are the Government's proposals to do that?

Mr. Ernie Ross (Dundee, West)

The West Lothian question does not exist.

Mr. Heald

The hon. Gentleman may say that, but the Chancellor, the Deputy Prime Minister and the Minister responsible for regional government do not agree.

Will Scottish Executive Ministers be able to represent the United Kingdom in the European Council of Ministers? If so, why does not the Bill say so? Why is there no provision in the Bill to secure a level of funding for Scotland and the Barnett formula? Will the Minister state his policy on business rates? Are they to be returned to local authorities' control, as the Labour manifesto suggested? Finally, will the Minister agree to exempt unincorporated businesses from the tax surcharge?

Once those questions are answered, and once the points that I have made have been addressed, the House will be in a position to vote on the amendment. The answers so far have not been satisfactory.

9.46 pm

The Parliamentary Under-Secretary of State for Scotland (Mr. Sam Galbraith)

It falls to me to bring tonight's proceedings to a close, and I know that we will all want to return to this debate tomorrow. It is almost customary for individuals to say that we have had an interesting debate, and I will not disappoint anyone by not repeating that statement tonight.

I have gained encouragement from seeing how the official Opposition have cut their cloth today. The overwhelming support of the voters on 11 September may have not only given them a better understanding of the views of the people of Scotland and the strength of support for our proposals, but forced them into a better understanding of the realities of the issues and the need for us to tackle the problems. Some of the issues are difficult and we make no pretence about that. However, after 18 long years of failing to recognise the problems, the Conservative party has engaged itself. It is to be congratulated on that.

We firmly believe that the Bill is good for Scotland and good for the United Kingdom as a whole. I am glad to see that that view is now shared by Opposition Members. The comments today have ranged from pro-federalist to anti-federalist; from those in favour of the Barnett formula to those against the Barnett formula. I hope that Opposition Members will get their position cleared up by the time we go into Committee.

I enjoyed the speech by the right hon. Member for Devizes (Mr. Ancram), who said that he accepts the principle of the Bill. That is an amazing conversion. People are coming out of the woodwork, and saying that they have always accepted the principle of devolution. Where have they been for the past 18 years?

The great problem with their conversion is that Opposition Members put so many obstacles in the way that it is almost impossible to see how they accept devolution in practice. I will try to deal with some of these obstacles as I go along. We have heard individuals say that they do not want this or that. Some have said that they do not want regional assemblies, but that is a matter for Conservative Members to debate elsewhere. We cannot let the failure or acceptance of other devolution problems south of the border distort the right of the Scottish people to their own devolved assembly and that is the important matter.

The other argument that I was sceptical about was, "Hang on a minute. Okay, we accept the principle, just give us time and we'll come back with an even better solution." How many of us remember that? Have we not been there before? We hung on for 18 years and we are not going to hang on any longer. For that reason, we will push the legislation forward.

I do not share the pessimistic view of the right hon. Member for Devizes, who sees a Bill full of problems, says that we cannot possibly have consensus and that there is no way that we will agree. Those might be the workings of the Conservative party, but that will not be the way it works in Scotland.

Mr. Stephen Day (Cheadle)

I am grateful to the hon. Gentleman for giving way so early in his speech. It should come as no surprise to him that the Conservative party recognises the expressed will of the people of Scotland. The Government do not seem to understand the problem at the heart of this legislation. The constitutional implications go beyond Scotland and the Government's proposals contain no reference to the ultimate effect on the United Kingdom constitution. That is the important point and the hon. Gentleman seems totally to ignore it.

Mr. Galbraith

Opposition Members keep saying that they are willing to accept the views of the Scottish people. I wish that they would not say it in such a patronising way, as though they were doing us a favour. We have expressed our views and we are entitled to them.

I hope that hon. Members will agree that there are a number of ways of dealing with the matters that they have raised. Some will be best dealt with in Committee and some in the reply to the debate tomorrow.

I must first tackle the question of sovereignty, about which the right hon. Member for Devizes and the hon. Member for Banff and Buchan (Mr. Salmond) had opposing views. The right hon. Gentleman said that absolute sovereignty must be written into the Bill. The hon. Member for Banff and Buchan said that we should not do anything about it. We want to avoid both those ridiculous extremes. We propose devolution, not federalism or independence and it is written unambiguously and factually into clause 27(7) and that is all that is required.

Mr. Heald

Surely the hon. Gentleman would admit that either this Parliament is sovereign or it is not.

Mr. Galbraith

That is one of the other things that has amazed me in this debate. Perhaps it is because the Conservatives have come to the subject late in the day, unlike Labour Members, who have been at it all these years. Neither the Liberal Democrats nor ourselves have ever disputed the fact that this Parliament should remain sovereign. It is written into clause 27(7).

Mr. Salmond

It is certainly in dispute here. Did the hon. Gentleman not sign a declaration of Scottish sovereignty, or perhaps I am misleading myself? I remember such a declaration of sovereignty, which was signed by the hon. Gentleman and the Liberal Democrat party and with which I agreed. Clause 27(7) is not a moderate but an extreme position. It gives the United Kingdom Parliament a power that is unaffected even by devolved matters. On which devolved matters should the United Kingdom Parliament legislate after the Scottish Parliament is established?

Mr. Galbraith

The reason for the inclusion of that provision has just been clearly illustrated. There are two problems. One is that Conservative Members have only just engaged in the debate and do not have the answers. As the hon. Member for Banff and Buchan knows, we have been through that issue, but he keeps asking the same questions and getting the same reply. Sovereignty rests with the Scottish people, but the hon. Gentleman must not assume that they will exercise it only in the way that he wants. They will exercise it in whatever way they choose, so please let him not ask that question again. It is the third time that it has been answered for him and that ought to be enough, even for him.

Mrs. Ewing

Surely the point is that we must accept that sovereignty lies with the Scottish people. We are not arguing the case assuming that everyone necessarily agrees with our viewpoint. We are challenging the Government to tell us whether they will accept the sovereign wishes of the Scottish people.

Mr. Galbraith

I said that I was willing to answer that three times for the hon. Member for Banff and Buchan, but I should not have to answer it a fourth time for the hon. Lady.

Mr. Ancram

The Minister has been very patient on the question of sovereignty. He accused us of extremism, but I think that he will accept that clause 27(7) is lifted word for word from the Northern Ireland Constitution Act 1973. The phrase that I used in my speech was taken from the Government of Ireland Act 1920. I would have thought that those were very good precedents, and I do not see why he is not prepared to accept both.

Mr. Galbraith

I am not sure what point the right hon. Gentleman is making. Is he saying that the provision is adequate or inadequate? Does he want anything more? The Bill does what he wants, and I do not know what he is carping about.

The hon. and learned Member for Orkney and Shetland (Mr. Wallace) wanted some details about electoral arrangements. We will of course discuss it in Committee, but we intend to introduce proposals requiring a deposit of £500 for a constituency and £1,000 for the regional candidates' list. He also asked whether the power of intervention by the Secretary of State in clause 33 would be subject to judicial review. The answer is yes. It is implicit in the Bill that the Secretary of State's decision to intervene must be taken only on reasonable grounds, which would always be open to judicial challenge.

The hon. Member for Banff and Buchan asked whether concordats could be agreed before the setting up of the Scottish Parliament. The answer is no. Preparations can be made, but they can be signed only between the Scottish Parliament and Ministers here. I hope that that reassures the hon. Gentleman. He also asked about broadcasting. The White Paper made it clear that broadcasting is a reserved matter, but paragraph 2.11 said that it would be possible for the Scottish Parliament to invite various people to give evidence and discuss the issue. That has always been the position: no one can be required to come along on a matter that is not reserved.

Ms Roseanna Cunningham (Perth)

Will the Minister give way?

Mr. Galbraith

No, I have only four minutes left.

Ms Cunningham

It is on that specific matter.

Mr. Galbraith

I am sorry, but I really have to move on.

The hon. Member for Banff and Buchan also said that there were far too many reserved powers. There is always dispute about where the line should fall. We took the view that it was in Scotland's interest to reserve powers in certain areas, but that can be discussed in Committee. The hon. Gentleman also asked about entertainment in cinemas. The health and safety regulations are of course reserved as they are currently. He talked about the regulation of film and video classification. I think that we all agree that that would best be left on a United Kingdom basis. There is a UK market, and that is the best way to handle the matter.

My hon. Friend the Member for Cunninghame, South (Mr. Donohoe) asked about transport. I can assure him that Strathclyde passenger transport authority will certainly have the powers and receive the moneys.

The right hon. Member for—how is it pronounced?

Mr. David Davis

Haltemprice and Howden.

Mr. Galbraith

I thank the right hon. Gentleman very much. He pronounced Ochil wrongly, so I think that he will excuse me for getting his constituency wrong. He wanted to ensure that there was proper scrutiny of the Scottish Executive. I could not agree more. It is right and proper that the Parliament should determine how it holds the Executive to account.

The Bill sets out the framework—it is only a framework—for the minimum requirement that will have to be laid down for the Scottish Parliament to legislate on such matters. It must provide for the Executive to prepare accounts, which must be published, so they will be available to the House. It can also provide for the designation of accounting officers. Clause 66 provides that the head of the Parliament's audit service must be independent of both the Parliament and the Executive. In addition, the Secretary of State will be required to account to the House for the Scottish Parliament's expenditure. The Treasury will appoint an accounting officer for that expenditure under current arrangements. I realise that the right hon. Gentleman would like more supervision and control, but that is not devolution. That is the system that we have in place to try to deal with this.

The hon. Member for Edinburgh, West (Mr. Gorrie) raised a very important point about whether the Scottish Parliament will be able to subsidise buses down to Holyrood, and maintained that it will not. I realise that that is an important point to him. I am happy to reassure him that bus policy does not include bus subsidies, but that a bus will be subsidised for him to be able to take a trip down to Holyrood. I am sure that he will be very pleased on that matter.

Just before you blow the half-time whistle, Mr. Deputy Speaker—

Mr. Deputy Speaker (Sir Alan Haselhurst)

Order.

It being Ten o'clock, the debate stood adjourned.

Debate to be resumed tomorrow.