Scotland Bill

HL Deb 17 June 1998 vol 590 cc1599-678

5.5 p.m.

Second Reading debate resumed.

The Earl of Buchan

My Lords, I hope to address noble Lords on the subject of Scotland after the ex-Cardiff pronunciamento from the noble Lord the Lord Privy Seal. I am at some double disadvantage here. I had confidently expected to be number 20, 30 or 40 in the enormous list of speakers, but having to bat at number four means that I am deprived of the right to make a short speech along the lines of, "Everything that could be said about this Bill has been said by other noble Lords", followed by a quick return to the seat.

This is a reprehensible Bill because it will lead to the independence of Scotland. As a hereditary Scottish Peer, shortly to be executed, I feel that I still have a duty to take part in important debates and at least to try to be original, which attempt shall be left until five minutes has elapsed, or at least to the end of my speech.

A strong believer in the Union by training and by sentiment, I look with horror on the work of an Administration apparently determined to mutilate the Union and then stand by, presumably, lamenting and wringing its hands as it watches its dismemberment. As a direct descendant of a member of the old Scottish parliament—unkindly dismissed by the noble Lord, Lord Steel, in his speech—who spoke at the time against the Union, but voted for it but was not one of the Peers who were richer as a result, I believe that, by inheritance, I have a claim to fair-mindedness.

My objection to the Bill is not merely prejudice or bias. It is just that it is hard to decide whether the "doing" of the Bill is worse than the deed itself. By the "doing", I am in fact referring to the Bill rushed through last summer, when no details at all were given on the subject of devolution for Scotland. I have already referred to the deed.

There may be Members of your Lordships' House who, like me, from habit or better reasons, read the Murdoch Sunday broadsheet. They may have spotted an article on Scots, the essence of which was that all Scots do not love all other Scots all the time, contrary perhaps to impressions given by spin doctors from Millbank when they are talking about Ministers in another place who, apparently, disagree with each other.

The title of the article was, "Aye, Jimmy, it's a grand sport is pulling the legs off a coo". It purported to be a review of a book by an Englishman entitled Bloody Scotland. Its merit was that it reminded one that from time to time Scots can be quite horrible to each other—Highlander versus Lowlander, and both against those in the Borders.

In the article, which I cannot believe no noble Lord read, there was a reference to a 14th century Earl of Buchan. I must digress on this. It recorded him as having set fire to a forest; driving out the animals and the inhabitants; killing the animals and eating them; killing the inhabitants and allowing them to be eaten by wolves. My family feel strongly that that is a libel. According to our records, the man in question most definitely had a social conscience. He might even have supported the Equal Opportunities Commission. He was a man in advance of his time. We believe that he was merely trying to conduct a census. In encouraging the inhabitants to come out of the forest, they over-reacted and afterwards everyone said, "It seemed like a good idea at the time".

Reverting to the serious point of the article, it served as a reminder of the violent things that Scots can do to each other in good causes. I have already referred to the Highlanders versus the Lowlanders. Let us hope that after independence, unable to blame the Union for its troubles, Scotland does not revert to endless squabbling.

Your Lordships may well ask why I talk about independence for Scotland in the context of a devolution Bill. It is because, although I deplore it, I think that one will produce the other—unless, that is, the Scots come to their financial senses. Sage and savant Billy Connolly probably got it right when asked "How can you spot a Scottish football fan?" he answered, "It is the one with the pocket calculator". Let thinking Scots do their national and international sums, therefore: no Korean subsidies for industry and no money from the Union any more.

Perhaps noble Lords will be familiar with the two rather dry figures that I dug out of a report, which emphasise what Scotland gets out of the Union. Per person, government expenditure in 1996–97 in Scotland was £4,826 whereas in England it was only £3,885. Where is the difference to come from? Not, incidentally, from oil. Therefore, perhaps I may offer a tiny word of advice to the Minister: how about using as a slogan for those who do not think that independence is right, "Vote for independence and be poorer"?

The point of this small speech is to ask what we are to do. If the Union between England and Scotland dissolves, rending apart monarchy and state with all its ramifications, and if we are removed from our fealty to the Crown, what should we do? I shall set about establishing my proper claim to the throne of Scotland, which I believe is the only legitimate Stuart claim, based on the wishes of James VI in 1625. I hope that I shall not have to establish that claim, but I believe that I will.

Lady Saltoun of Abernethy

My Lords, before the noble Earl sits down, was his ancestor by any chance "The Wolf of Badenoch"?

The Earl of Buchan

Yes, my Lords.

5.12 p.m.

Lord Kirkhill

My Lords, with almost 70 speakers on the list for today and tomorrow, it behoves most of us who will take part in this Second Reading debate to be reasonably brief—and I intend to follow my own injunction in that regard.

However, before I make a few comments about the Bill, perhaps I may claim your Lordships' indulgence for a moment to engage in a measure of personal reminiscence. It was 20 years ago, when the noble and learned Lord, Lord McCluskey—whose name is on the Speakers' List but who I note has not yet arrived—and I were, if I may put it like this, the Lords Sewel and Hardie of our generation. We are now, of course, 20 years older, but not a lot wiser. I recall that there was then vigorous opposition to the provisions, led by the noble Earl, Lord Ferrers, with very strong support from the noble Lord, Lord Campbell of Croy; the noble Earl, Lord Lauderdale, and the noble Lord, Lord Gray, whom I particularly remember because his skill at threading amendments into the schedules was well noted by the Scottish Office. Indeed, the noble and learned Lord, Lord McCluskey, had from time to time in those days to deal with rapier-like legal thrusts from the noble Viscount, Lord Colville of Culross. So, some of us are still around 20 years on as we consider a different Bill.

The Bill of 20 years ago was introduced by the then Labour Government, who were in a minority position and who did not have a manifesto commitment to that end but who knew that their support, particularly in Scotland, demanded some action. The position is different with regard to this Bill. It was a clear manifesto commitment of the present Government. A referendum has been held in Scotland and we all know the outcome. If there was perhaps a hint of illegitimacy about that first Bill, I think that I can claim that this Bill is, politically at least, entirely legitimate.

In the Bill of 20 years ago, a serious attempt was made to define each of the functions which stood devolved. It was not an entirely successful procedure, leading to much disputation and considerable legal disagreement—at least in this House. The present Bill, defining as it does in Schedule 5 the reserved powers—all else being within the competence of the devolved parliament—is a construction which should be more readily grasped by most of us.

Perhaps I may point out that this Bill has only eight schedules; the last Bill had 17. One consequence of that—I hope that it will not happen this time; indeed, I am sure that it will not—is that a number of breakfasts were held in this House, with people moving about—if not with vigour, then at least with some purpose—half-way through the night. I suspect that there is less chance of that happening on this occasion.

Clause 21 of this Bill, which is linked to Schedule 3, relating to the regulation and content of standing orders, might, with profit, be probed somewhat in Committee. I happen to know that my noble friend Lord Monkswell intends to discuss the matter in Committee. Those of us who live in Scotland would do well to recall that recently the Lord Provost of Glasgow survived an attempt to remove him from his provostship. Glasgow council attempted to change the standing orders to that end. However, the Lord Provost was able to deploy the argument that nothing in standing orders permitted any change to be made to the standing orders and therefore the meeting called was invalid. So, the question of standing orders, as introduced into a new parliament, is important and we must tread with considerable care.

It is important that we notice that Clause 26 will enable the Lord Advocate and the Solicitor-General to take part in the proceedings of the new parliament, but without the right to vote if they are not members. I believe that Clause 28 should require Committee scrutiny, given the protection afforded under European Community law and rights under the European Convention on Human rights.

I have, however, two reservations. The first concerns the power to vary income tax by 3p in the pound up or down. In my view, it is minimalist in effect. It is mainly cosmetic—or is seen to be so—and such a limited financial freedom allows virtual total control of the supply provision to remain with the other place. That is the present position. The Secretary of State is able to move allocations between departments, although there are limits. Such movement does not occur with great openness at the moment. Presumably, the Scottish parliament would hold Ministers to greater public account than is presently the case. But expectations that an Edinburgh parliament can deliver improved social and infrastructure facilities, properly heightened by the attitudes of the members, which reflect the public representations made to them, will be constrained by the PSBR to be set nationally. I understand why these financial shackles are to be applied but I believe that they can be more loosely fitted.

My second reservation is that, although the pre-legislative scrutiny will undoubtedly occur and can be developed, new concepts in a new parliament can be arranged. The lack of provision in the Bill of a revising chamber of any kind is a weakness. I do not need to belabour that point to Members of this House. All noble Lords can recall the many legislative second thoughts that governments of all persuasions have offered to this House for further consideration.

That said, I very much welcome the Bill. It is a new dynamic to Scottish public life and it has been created to that end. A wider cross-section of the public than is usual appears to be willing to contest the election under an entirely new electoral system. It is my fervent hope that the outcome will prove to be more democratic than past results and hence more transparently accountable.

5.22 p.m.

Lord Lang of Monkton

My Lords, I take part in this debate with a real sense of foreboding because I cannot remember a Bill being laid before Parliament that brought with it so much potential for division and damage to the fabric of our nation. Modern cinema is full of action films in which to underline the horrors of some particularly destructive or explosive episode a slow motion technique is often used. Here I sense the opposite: an uncontrolled acceleration towards disaster. We are all blandly assured of the Government's benign and enlightened intentions and invited to join the consensus. They say that it is going to happen and so we should make the best of it.

I am not part of that consensus. Of course we must do what we can to make it work, but let that not be mistaken for acquiescence. I believe this to be a thoroughly bad Bill. It does not even serve the evident self-interest of its promoters, born as it was of appeasement out of panic when nationalism first threatened Labour's Scottish heartland over 20 years ago. Since then Labour politicians have fed and nurtured the very demand to which they now claim to be responding. After all that time their proposals are still half-baked.

Many of us argued for years that a devolved parliament for Scotland within a sovereign state with no federal structure could not remain stable in the long term; that it would unbalance the United Kingdom; that it would lead to friction and conflict: and that with no chance of going back once the process had been started Scotland could only move by fits and starts towards separation. Before this Bill has even completed its passage through Parliament we see that process gathering pace. We used to speak of the slippery slope. There is no slippery slope. If recent opinion polls are to be believed we are now in free fall towards separation. I do not believe that the process will move as fast as the polls suggest, but there is no doubt that it has started. The path ahead will be one of rows, concessions, botched deals and further rows until Scotland is separate in all but name and eventually separate altogether.

If the Government wonder why they have so seriously miscalculated, part of the reason is that they have been singing so loudly the song of nationalism. One cannot outbid nationalism. In trying to do so one simply endorses it. It is no good uttering homilies about the Union at the Dispatch Box here or in another place, as the noble Lord the Minister has again done today while his colleagues in Scotland are out proclaiming the nationalist message and we are invited to enact a measure that will create the separatist vehicle.

Devolution of power is not in itself an alien creed. To my party it is a concept with which its philosophy is entirely comfortable. It is a means of defending individual liberty against centralisation and socialism, and it inspired many of our policies when in government. But we have always attached a higher priority to the maintenance of our nation's constitutional integrity. Against that background, and in the light of all that we said on this issue over many years in defence of that fundamental principle, it was incomprehensible that my party, the Conservative and Unionist Party, failed to oppose the Second Reading of this Bill in another place.

I recognise that under the conventions of this House and in the light of the Salisbury doctrine noble Lords cannot oppose a measure that has reached them with such strong endorsement. However, I hope that noble Lords are as deeply suspicious as I am of the cynical and pernicious use of that insidious instrument, the pre-legislative referendum. I accept that we must confine ourselves to warning of the dangers that this legislation poses and seeking to persuade the Government to accept amendments to mitigate them. They are many and they are serious. The Bill contains more flashpoints than the Gaza Strip. It is full of gaps, inconsistencies and contradictions and it ducks and fudges the hard choices. Further, it cheats the people of Scotland who have been promised self-government that this Bill does not deliver. The West Lothian question has not been answered but has simply been ignored, yet it remains central to the viability of the relationship between a devolved parliament within a unitary and sovereign state and the Parliament of that sovereign state.

How can the MP for Dunfermline properly vote at Westminster on housing or health issues that affect Devizes or Doncaster when he cannot vote on them for Dunfermline? How can he as Chancellor of the Exchequer decide on taxation levels in England when a separate parliament decides taxation levels that affect his constituents in Scotland? That is not just unfair but unacceptably unfair, and it will soon be seen as such.

Many of us have warned for years about how Scotland's interests as well as those of the whole of the United Kingdom would be damaged by the measures in this Bill. We were ridiculed. We pointed out that the Cabinet post of Secretary of State for Scotland would wither and die, if it were not actually abolished. We also warned that Scotland's share of MPs at Westminster, sustained since the Act of Union, could no longer be justified and that Scotland's higher share of Treasury funding which recognised Scotland's particular needs and problems would be challenged and reduced. We were told that we were scaremongering. Yet before the ink is dry all of these things are happening. There is even a provision in Clause 81 of the Bill for a reduction in numbers of MPs. The only remaining issue to be decided is precisely how large the reduction will be. The Treasury has so spiked the taxation provisions in Clauses 69 to 75 as to insert a one-way valve: Scotland will pay more if its parliament puts up taxes but it will not be allowed to be better off if its parliament reduces them.

As money will be at the root of many of the conflicts ahead I should like to say a little more about it. The issue here is not the Barnett formula, about which so much has been said and written. The issue is the Scottish block: the overall level of central government spending in Scotland through the Scottish Office. Spending per head in Scotland has historically been higher than in England, as it has also been in Wales and Northern Ireland, to recognise local circumstances and needs. More recently, those greater needs have moderated in relative terms, not least because of the substantial gains that have been made by the Scottish economy over the past two decades. But only the undertaking of a new, thorough needs assessment could measure that accurately and strike a fair new level in relation to England. And who can blame the English now for seeking one?

The Barnett formula, agreed in the late 1970s by the then Chief Secretary and Bruce Millan as Secretary of State for Scotland, already recognised the need for an adjustment. It was a straightforward formula designed to ensure that future increases to the already higher spending levels in Scotland would be at a lower percentage rate per head of the population than in England so that Scottish spending, far from being protected as some have understood it, would be gradually brought down in the direction of the English level.

It was a formula for gradual convergence. But it failed in its objective. It failed because the formula did not apply to all spending. It did not apply to in-year changes; and above all it failed because successive Secretaries of State for Scotland were able to negotiate special deals outside it with the Treasury and win battles in Whitehall that protected Scotland's interests. That, of course, will no longer be possible.

Indeed, in this and in most other respects, the new first minister will have considerably less power to look after Scotland's interests than the Secretary of State for Scotland does at present. And now it will be not the formula for annual increases, but the actual Scottish block itself—the very bone and marrow of the United Kingdom Treasury funds spent in Scotland—that will come under attack; and Scotland will be powerless to influence that reappraisal at the heart of government, powerless to protect those spending levels; and, with its pitiful and peripheral tax-raising powers, the Scottish parliament will be powerless to replace them.

Indeed, what the Bill proposes for taxation is the worst of all worlds, for it concedes the principle without allowing the substance. Sadly, finance is only one of the areas of near certain conflict. There are many others, such as the arrangements for dealing with Europe where Scottish ministers may "assist" the British Government Minister in negotiations but it will be with the British Minister that other countries and the Commission will negotiate. It will be he who will cast the United Kingdom vote; and it will be his party's policies that govern his attitude, not that of the ruling party in Scotland. How will Scotland's farmers, with their distinctively different set of problems, feel as they lose the influence that they have had in European negotiations with Scotland's ministers reduced to the role of observers?

How long will the shared powers between Edinburgh and Westminster in such sensitive areas as industrial assistance survive without a serious rift to the disadvantage of our inward investment policies? Every time the Government are challenged over the handling of disputes between Edinburgh and Westminster, they fall back on the concept of something known as a concordat. We heard about it today from the Minister. This is the new panacea. The dictionary definition of a concordat is an agreement between Church and state. I do not know whether the fact that the Scottish parliament will initially meet on The Mound has gone to its head, or whether it is just hoping to get by on a wing and a prayer. To me a concordat is a second cousin of a compact—something of which we heard much in the 1970s as the cure-all then for Britain's industrial relations problems. The late Sir Nicholas Fairbairn defined a compact then as, a small flat container, full of powder and puff'. That to me sums up the value of this Government's concordats. How can deals patched, I understand, not by Ministers but by officials in smoke-filled rooms, and without the force of law, possibly form the basis of a stable and durable relationship between the two parliaments?

What of the time bomb in Clause 27 of the Bill when after detailing in grand style how the Scottish parliament may make laws to be known as Scottish Acts of Parliament, it adds at subsection (7) that none of this affects the power of the Parliament of the United Kingdom to make laws for Scotland?

It has truly been said that power devolved is power retained, but that is not how the Government portray their proposals, and it is not how the people of Scotland understand them. If, after raising expectations of all that the Scottish parliament can do, it were to be overruled and overridden by this clause the whole venture would be doomed overnight. But it is Labour who have been telling us for years of the need for a Scottish parliament, as they claim, to put right the democratic deficit, and to make up for the lack of accountability. Thus are all the special privileges Scotland enjoys in this place dismissed in those two empty glib phrases. I refer to the higher share of MPs; the Scottish Grand Committee; the Scottish Select Committee; the Scottish Standing Committees; the territorial department of state; the Cabinet Minister and his four junior Ministers; the higher spending levels; the special Scottish legislation; not to mention the Scottish MPs serving as Ministers in United Kingdom departments, and the substantial number of active Scottish Peers in this House. That is not a democratic deficit. Indeed, there are many English who might consider that that is closer to being a democratic surplus.

Nor has there been any lack of accountability. Indeed, the capacity of our constitution to adapt and develop in an organic way within a unitary system to strengthen that accountability was demonstrated not many years ago by the new powers that I was able to secure for the Scottish Grand Committee to hold Question Time sessions, to pass Scottish legislation, to sit in Scotland, to move throughout the whole country of Scotland, and to do almost anything in fact that this new Scottish parliament can do, except raise taxes.

All the parliamentary benefits that have accrued to Scotland over the years will now be lost. There will be fewer MPs. They will soon become second class, part-time, shadowy figures as English Members understandably start to find ways to exclude them from their business. Scotland's funding will come under attack, but its ministers and members will no longer be able to take on the Treasury. Scotland's voice may be loud in Edinburgh but at Westminster and Whitehall it will be reduced to a whimper.

The power of a Secretary of State for Scotland is very considerable, not just in Scotland where he controls a territorial department with just about the most comprehensive range of powers anywhere in government, but, more importantly, at the heart of the United Kingdom's Government where he has a seat in Cabinet and the ear of the Prime Minister. I make this point not in a party sense, still less in a personal one. But Secretaries of State can defend Scottish interests at the centre of government, and with the weight of a major government department behind them they can win battles for Scotland, and over the years they have done so.

Power is easier to measure when it is lost—a matter which some in my party may now have cause to reflect upon at greater leisure. The tragedy is that it is only once the Scottish Office is corralled up in Edinburgh, its civil servants cut off from the mainstream of government, and its Secretary of State reduced to a cross between an errand boy and a ceremonial cypher, that the full extent of the loss of Scotland's power will become more apparent.

But perhaps the worst feature of this whole business—and here I agree with the noble Lord, Lord Kirkhill—is that Scotland's parliament will have no second chamber. Bicamerality is, and has been for centuries, a central pillar of our parliamentary democracy. Yet the new Scottish parliament will have no revising chamber, no chance for second thoughts, no pause for reflection. Every piece of legislation for which I had responsibility over my nine years as a Scottish Office Minister benefited from its passage through this House. If the Government wish to speak of democratic deficits, that is where they should look. It is a glaring yet wilful omission that Scotland will come to regret.

Those are only some of the reasons why I feel about this Bill a despondency that is close to despair. Scotland is being diminished. England is being ignored. The United Kingdom is being undermined. The Scottish parliament, after the initial fuss and fireworks, will do Scotland no favours. It will not advance the cause of democracy. But it will weaken all of us. The only ones to benefit will be those whose agenda is the destruction of the United Kingdom. We must hope against hope that the Government will listen and make changes even at this late stage, because as it stands this is a Bill that will break the back of Britain.

5.40 p.m.

Lord Thomson of Monifieth

My Lords, there are many difficult issues to be resolved in connection with the Bill. I was startled by the apocalyptic tone of the noble Lord, Lord Lang, in relation to the Bill. I found it hard to remember that he was one of the Secretaries of State in a Conservative government which, I suppose, could be regarded as probably the most disastrous in relation to the interests of Scotland during my time in politics. The Bill creates a system of devolution within a Scottish parliament as against the kind of separatism which the noble Lord, Lord Lang, put forward. If any party created a sense of separatism in Scotland it was the Conservative government and their operations. During those years, for example, a Secretary of State for Scotland allowed Scotland to be used as a guinea pig for a poll tax which, as my noble friend Lord Steel mentioned, was imposed on Scotland by the votes of the majority of the English Members of Parliament. The anomalies of running the political system in the United Kingdom are not confined to the difficulties created by the Bill but are inherent in the United Kingdom system.

In one sense I agree with the noble Lord, Lord Lang. This is a major constitutional Bill. It will give Scots exciting opportunities for a democratic control over their domestic affairs which is impossible in the crowded timetable of Westminster. I believe that the noble Lord, Lord Lang, largely glossed over that.

Beyond that, the Bill will have momentous consequences for the United Kingdom as a whole. Speaking as the current chairman—at least for a few more days—of the Scottish Peers Association, I find that the Bill contains a certain irony. I echo the words of the noble Lord, Lord Lang, in saying that our Members from all quarters of the House—life Peers and hereditary Peers alike—will no doubt demonstrate the revising qualities of this second Chamber at its best in seeking to improve a Bill which creates a Scottish parliament without the advantage of a second chamber. If there are not the revising operations of a second chamber after the publication of a Bill, it will make all the more important the proposals in the Bill for pre-legislative scrutiny and, equally, for the new proportional electoral system.

The Government, with their massive majority, deserve great credit for their courage in putting forward electoral arrangements which will prevent any massive Labour majority in the Scottish parliament. It is of course the best protection against the problems of one party domination which have disfigured local government not only in Scotland and not only in the Labour Party. It will be possible for the new Scottish parliament to pioneer a pattern of less adversarial party politics which I hope the rest of the United Kingdom will find useful to imitate.

The creation or, after 290 years, the recreation of a Scottish parliament throws up many problems and apparent anomalies for us to tackle in the later stages of the Bill; for instance, the West Lothian question, the Scottish role in Brussels, non-statutory concordats, which have been mentioned, and so forth. There are no perfect answers to any of those problems, but I take comfort from the fact that the British pragmatic experience has been that it is unwise to push logic too far in politics. Logic carried to extremes often reduces itself to absurdity. A little untidiness in public affairs is no bad thing. It would be curious for any of your Lordships who are content with the present rather eccentric structures of this House to go too far down the West Lothian road of logical democratic legitimacy.

I regard the Government's proposals in the Bill not only as meeting Scottish popular demand for greater self government but, equally important, as part of the sensible modernisation of the British constitution to meet the changing circumstances in Europe and in the world at large. It is part of the blueprint of a wide range of constitutional changes which we espouse on these Liberal Democrat Benches, recently spelt out by Robert Maclennan, the president of the Liberal Democrats. We are members of a European Community in a world where technology has created a global economy. In the face of such forces, we need the strong countervailing force of democratic devolution, not merely administrative devolution, to drive decision-making downwards wherever practicable to the national, regional or local community level.

I have a deep sense of being Scottish in terms of my national identity. Yet I am proudly British in terms of legal citizenship and strongly European by political conviction. I do not find any contradiction between those three positions. Independent national sovereignty in the 19th century sense of the term either for Britain or for Scotland is an anachronism for the 21st century. The Scottish nationalism of the SNP is dangerously out of date, as is the British nationalism of the Tory Eurosceptics. A look around the world shows that we suffer from too much nationalism, not too little. The United Kingdom is a success story of a rather untidy political, economic and monetary union of three, or three-and-a-half, nations, riddled with its own anomalies. Since political and economic union has not made the Scots noticeably less Scottish or the Welsh less Welsh, it should reassure us about developing a closer European Union without undermining our diverse national characteristics and a proper sense of national pride.

To have resisted the desire of the Scottish people for their own devolved parliament, as the Conservatives sought to do, would have fed the forces of separatism in Scotland, as indeed did their attitude when they were in government. The change in approach which we heard today from the Opposition Front Bench, as distinct from the speech of a former Secretary of State for Scotland, is welcome. It makes possible, not agreement on all the details of the Bill and the efforts to deal with some of the problems, but an underlying consensus about making a success of devolution.

The way the United Kingdom has evolved has produced a decent, tolerant, civil society and it has given the Scots, the Welsh, the English and those in Ulster a weight and an influence in the European Union and in world affairs generally which none of them could possibly enjoy separately. The best way to preserve that is to make a success of the devolution plans in the Bill.

For all the froth of public opinion polls which we see in the Herald and the Scotsman, I do not believe that the Scottish people will want to slide into the disruption and deep damage of separation. Once the new parliament is in place, what would be best for both Scotland and the United Kingdom is a period of stability while the new and difficult system settles down rather than a fresh round of feverish argument about a further referendum and separation. That would hardly serve the interests of the Scottish people.

It will be a major challenge to the political leadership of all the major parties in both Scotland and Westminster to make the new machinery work well, with its new voting system and untried concordats. However, it will give the Scottish people and members of the Scottish parliament the chance to devote parliamentary time to housing, education, law reform and job creation and to do so in depth, which has never been possible within the Westminster timetable. That is where the real interests of the Scottish people lie, rather than in a fresh round of constitutional turbulence.

5.50 p.m.

Lady Saltoun of Abernethy

My Lords, as secretary of the Scottish Peers Association, I am very happy to find myself speaking between my present distinguished chairman for the next six days and the noble Lord, Lord Hughes, a previous distinguished chairman of the association.

In common with about 50 other Peers speaking in this debate, I have an interest to declare. I am a Scot and my home is in Scotland. In common with the noble Earl, Lord Buchan, whose speech I enormously enjoyed, I too am about to have my hereditary head cut off.

I have made an attempt to read the Hansard reports of the various stages of the Bill's passage through another place, which is extraordinarily difficult because, unlike in this House, every sensible speech is constantly interrupted by people trying to score cheap, party-political points. At the end of the day, most of the really important issues, or many of them, have not been resolved and will affect the relationship between Holyrood and Westminster. The potential for conflict in many areas is enormous.

I shall not repeat a list of those areas because that has been done already by the noble Lords, Lord Mackay of Ardbrecknish and Lord Lang of Monkton. But there are one or two remarks which I should like to make. There appears to be no agreement or no definite ruling as to whether the Scottish parliament would or would not have the power to organise a referendum on Scottish independence or whether that could be something which would remain with the Westminster Parliament.

That is very important because I envisage that if a referendum were to be organised by the Scottish parliament, it would be because there was a majority of Scottish Nationalists there. Therefore, it would appear to me that if they were going to organise the referendum, they would have the power to load the question in their favour. That matter really needs to be looked into.

But most important—and I make no apology for reiterating it—there is the vagueness with which the question of finance has been treated, because there is nothing in the Bill to ensure that the proportion of the United Kingdom revenue allocated to Scotland will not be reduced or that Scotland's needs will be taken sufficiently into account. Nothing will contribute to the disaffection of the Scots with the Union quicker than finding that they have to make do with a reduced standard of service from both local and national government or that they must pay a lot more in council tax to make up for the shortfall in the Holyrood parliament's grant to local government caused by a reduced block grant from the Treasury.

I know that the Government say that they will not reduce Scotland's funding and I believe them. But some of their English Back-Benchers and their constituents have other views. Also, one must remember that no government can bind a future government. Governments do change. The Scottish National Party is just sitting, waiting happily for that to happen.

There is also the question of the accountability of the Scottish parliament to Westminster as regards how the block grant is spent and there is the question which has already been raised of who will be eligible to pay any extra 3p tax and all the problems which that will cause.

While I am sure that we are all agreed that money is not the only important thing in life, I am sure that we are also all agreed that it is extremely important and that lack of it is a very serious matter.

Those matters are important and they should be written on the face of the Bill and not left to committees, concordats or just to luck. I fear sadly that devolution is not really workable except in a federal context and the opinion polls suggest that the Scots, who are not fools, are well aware of that.

They are also deeply disappointed because they thought that the Government whom they helped to elect, would wave a wand and give them everything they wanted at once. They wanted old Labour as they knew it and they do not really like new Labour at all. There are many disappointed people out there, particularly in relation to such matters as public sector pay and the national minimum wage. Perhaps I may add that most of them do not want a modern parliament building. They wanted the fine, old, dignified High School.

The result is that I am afraid that the Scots will not vote Labour again and they will certainly not vote Conservative. They will vote SNP. The Scottish National Party's star is rising very rapidly and one cannot just discount the opinion polls. It is rising so rapidly that it may very well win the first election for the Scottish parliament, although it may not have an overall majority. The Government say merrily that most people in Scotland do not really want independence. What makes them think so? Is it the fact that the people of Scotland voted for them over a year ago? If a week is a long time in politics, a year is a very long time indeed, quite long enough for an electorate to change its mind. I believe that that "it will be all right on the night" attitude is extremely unwise. While there is not a lot they can do about it, they could at least accept amendments to this Bill offered in good faith which would give the Scottish parliament a better chance of success.

So far in another place, the Government have been extremely deaf and inflexible. Their arrogance in thinking their Bill is perfect and not capable of improvement except by themselves on comparatively trivial matters is likely to prove a very big nail in the coffin of the United Kingdom. We are not trying to wreck the Bill. We accepted the results of the referendum and our only concern is to make this measure work. I hope that in his rather patronising opening speech, the Minister was not implying that anybody in this House has a vested interest in making sure that the Scottish parliament does not work. I am not aware of any such person among your Lordships and I do not believe that there is any. After all, as I have already indicated, the majority of the speakers in this debate live in Scotland and have a strong interest in making sure that it works. But as the Bill stands, I fear that its chances of working are slender unless the Government will open their mind and ears to a number of important amendments.

5.56 p.m.

Lord Hughes

My Lords, when political parties want to make constitutional changes such as are proposed in the Scotland Bill, the first requisite is that they should establish that that is what the people of Scotland want. I suggest that before this Bill was put forward, that was done. The general election returned Members from three political parties in Scotland each of which wanted change of some sort—either devolution or independence. Not a single opponent of change was returned in Scotland.

The Government then went on, having achieved the mandate which they sought in their manifesto, to produce a White Paper. After the White Paper, there was a referendum. There were predictions in this House that perhaps less than 30 per cent. of the people of Scotland would be prepared to vote in favour of the parliament and in particular the tax position. That was proved wrong. There were overwhelming majorities as regards both parts of the referendum.

Therefore, the Bill was produced in the form in which it came before the House of Commons, with complete legitimacy. I was interested to consider the changes at the time that the Scottish Parliament was done away with. Many noble Lords will have watched the play "The Three Estates". The three estates of the Scottish Parliament were the nobles, the barons and the burgesses. The nobles formed one-quarter of the parliament but each of them had his adherents among the barons and the burgesses so that the nobles effectively ran the Scottish parliament.

It is interesting to find that out of 60 nobles who were able to take part in the vote to ratify the treaty, only three-quarters actually took part. Twenty-nine of them voted for ratification and 15 voted against. We talk about percentages being necessary, so I should point out that 45 per cent. of that Scottish Parliament voted for ratification.

I was particularly interested in the speech made by the noble Earl, Lord Buchan, especially in his claim to be the rightful King of Scotland. As I said, 29 nobles voted for ratification while 15 voted against. One of the nobles who voted against was the noble Earl's predecessor, the Earl of Buchan. Perhaps he did so because he was afraid that, with the abolition of the Scottish Parliament, his claim to the kingship would be diminished.

I move on now to the points raised by my noble friend and by the noble Lord, Lord Lang, regarding the powers and the composition of the parliament. I have been a Member of your Lordships' House for 37 years. I doubt whether the number of Bills which originated in the House of Commons and which were passed without any amendment accepted from this House would get into double figures for that period. Therefore, I do not think that I am happy about the Scottish parliament being a single chamber. I say that because, if there is no second chamber, it will, with the best will in the world, become a legislative fort which will require subsequent legislation to put right. It will be within the powers of the Scottish parliament to remedy that.

I got in touch with the Norwegian Embassy today to find out exactly how the Storting works there. People are elected to a single chamber. One of the first things that they do is to decide that 25 per cent. of the members should form an upper house and that 75 per cent. should form a lower house. All legislation which goes through the Norwegian Parliament is only passed in the first place if it is approved by both houses. If there are differences between the houses—that is to say, if one house approves legislation but the other does not—they meet together and the majority then decides what to do. I commend that to my noble friends on the Front Bench as a possible way in which they could, within their powers, decide to do something of that nature. I do not necessarily recommend that my noble friends should do so right away because, obviously, the first thing to do is to find out whether single-chamber government works. I do not think that it will be proved to work completely satisfactorily. I suggest that in the second parliament they might perhaps decide to follow the Norwegian example.

I was very disappointed with the speech made by the noble Lord, Lord Lang. He obviously speaks as a totally unreconstructed Scottish Tory. Judging by all the evidence from Scotland, I am glad to know that the noble Lord does not represent the views of Tories in Scotland. Indeed, if you want to find out who is expressing the views of Scottish Tories, you should listen to Sir Malcolm Rifkind. I say that because Sir Malcolm Rifkind and any other Tories who are now talking there are doing so on the basis that they will do the best that they can to make the Scottish parliament work. That is a reasonable point of view. They will be represented in the Scottish parliament because of the way in which people will be elected.

Many people are talking like the noble Lord, Lord Lang, but they are really making themselves propagandists for the Scottish National Party. If they are going out of their way to show that a Scottish devolved parliament cannot work, they are really saying, "You must look for an alternative to the Scottish parliament". But what are the alternatives? They are nationalism or the status quo. The state of the Tory Party in Scotland does not give any guarantee that the people of Scotland will ever want to return to the present situation.

I am glad that the Liberals, the Labour Party and the Scottish Tories will be working for a successful devolved parliament. I agree with one comment that was made from the other side of the House: I believe that an independent Scotland would not be in the interests of Scotland. Much has been said about the opinion polls, especially as regards the Scottish Nationalists doing so well at present. I do not believe that that will be the situation in a year's time. It has been inflated in the first place by the nonsense about the knighthood for a Scottish actor whose name escapes me for a moment. I wonder whether anyone has ever asked him if he would have accepted a knighthood proposed by Michael Forsyth. Indeed, he has never said that he wanted one; it is other people who have said that he has been refused.

I see that I am pretty near my time limit in this debate, but I shall have much to say in Committee. I have in mind in particular Schedule 5 which runs to 20 pages and lists all the things that the Scottish parliament will not be allowed to do. I am afraid that I am not likely to accept that every one of those things should be excepted from the parliament. However, there is one good thing in Schedule 8. Indeed, I was surprised to see among the deletions the words, with the consent of the Treasury". I never expected to see that in an Act of Parliament.

6.7 p.m.

Viscount Weir

My Lords, perhaps I may, first, make it clear that I speak as a Scottish Unionist. I define the word "unionism" as the belief that the preservation of the Union is a far greater and more valuable principle than the lesser disagreements which divide our political parties. I voted "No" in the referendum simply and solely because I felt that the consequences of devolution would, in the end, endanger the Union. But, equally, many Scots voted, "Yes" because they sincerely believed—as the Government argued—that, unless we had devolution, the Union would be weakened. Therefore, under my wide definition of unionism, I must class such people as fellow Unionists, even if I totally disagree with their reasons for favouring devolution.

When we look at the Bill, we must not focus only on its detail; beyond that, we must also ask whether the parliament will succeed in holding the Union together. However, before coming to the Bill, perhaps I may dwell for a moment on the referendum process which was its father. I do so simply because much that was said in the referendum campaign, and the manner in which the campaign was carried out, established some of the expectations in Scotland about the new parliament and also partly set its likely tone.

The whole affair was pushed through with undue haste to catch the ongoing tide of the election result. That may have been pragmatic politics, so I suppose it was quite acceptable to those who, unlike myself, are politicians. But it did not really leave enough room for any considered debate as to what was the best solution for our country.

The suppression during the campaign of any dissenting opinion in the Labour Party also showed an unfortunate disdain for democratic debate on what was surely a national rather than a party issue. But most obnoxious, however, was the formal campaign alliance between Labour and the SNP, in spite of the fact that each wanted devolution for totally opposite reasons. In this context some noble Lords may recall the jolly photographs in the Scottish press at the time of a pleasure boat proceeding up the River Forth containing Gordon Brown and Sean Connery. To say this scene brought to mind the biblical reference to the ox lying down with the ass is no harsher a description than the total cynicism that political pact deserves.

But it was not merely a cynical exercise, it was also a poorly judged one, which I believe was important in setting the adversarial tone of the referendum campaign which, for much of the time, seemed little more than the political equivalent of an ill-tempered England/Scotland football match. Believe me, that rather nasty tone—particularly from the SNP—continues to disfigure Scottish politics and will be a feature of the new parliament.

Where, then, is the new parliament likely to lead? I start with the reasonable assumption that the first Edinburgh government is likely to be a Labour-led coalition with the Liberal Democrats, and that this administration is likely to have an activist outlook towards expenditure. I say this because, on the Labour side, Scotland remains at heart distinctly more old Labour than new. Moreover, the Scottish parliament will be intimately involved in local government issues, and the history of Labour local government control in Scotland has consistently been one of trying to solve problems by enthusiastically throwing public money at them, often in a thoroughly reckless way, as Donald Dewar seems to have discovered only in the past few weeks.

I imagine the attitude of the Liberal Democrats in such a coalition might reflect the fact that it was the only party at the previous election to advocate increased taxation. Just as I foresee a Scottish parliament—or a Scottish administration rather—which will want to spend, so there is certainly no shortage of problems on which to spend. One can, of course, fairly remark that the financial appetite of a worthy social conscience is usually limitless.

We can be quite sure therefore that extra income tax will be levied. Business rates will also go up, although hopefully not to produce the absurd disparity between equivalent businesses in England and Scotland which used to exist—

Lord Mackie of Benshie

Under which government?

Viscount Weir

My Lords, certainly under a Labour government. No doubt the somewhat opaquely described powers to develop other methods of tax to finance local government expenditure will also emerge. I do not want to exaggerate the actual economic effect. Higher income tax will reflect itself in some higher pressure on wages, and increased rates will not help, particularly for smaller businesses. As for the other taxation possibilities, they are hardly likely to be encouraging.

The overall effect may be somewhat marginal, but even marginal cost increases, at a time when competition is so intense, are difficult. However, it is perhaps the impression given by marginal increases in taxation which is more economically damaging than increases themselves. I think it is the potential damage to business confidence and the business climate in Scotland which concerns me most. It could distinctly change for the worse.

I am half Canadian and I am much involved in business there. I dread a situation emerging analogous to that which now prevails in Quebec. I remind noble Lords that there are the same ingredients there. Independence or separatism is a live issue there, actively promoted by a strong party, and may well become the subject of a further referendum. The effect on Quebec has been most unfavourable. Montreal is no longer the business centre of the same importance as Toronto that it once was. Many leading Canadian companies have moved their headquarters out of Montreal. Investment in the province has been poor. All this is not because of actual independence, but simply because the possibility is so endlessly discussed and debated there. Why should the results of a similar political situation in Scotland be any different? The external perception of Scotland, particularly by potential inward investors, would undoubtedly suffer, as it has in Quebec.

In practice I believe all noble Lords know well that whenever there are problems in Scotland, the SNP will simply say that it would all be quite different if only Scotland had independence, and a full control of its destiny. That will be fed by the simple, regular and popular expedient of blaming England or Westminster. If the Barnett arrangements are changed so that Scotland ceases to be disproportionately favoured, it will all be far worse. Such, then, are some of the ways in which dissent and friction will in practice be fostered.

There is a different and a fundamental question which the Bill raises. There must be minimum requirements for any state to continue to be defined as a unitary one. Is it possible that, in spite of the reserved powers, a Scottish parliament could legislate for change in such a way, and on such a range of subjects, that eventually the accepted definition of a unitary state no longer applied to the United Kingdom? For example, many people would accept that one of the required definitions of a unitary state is that common rights to property exist across the breadth of the state, and to the equal benefit of everyone in it. If that is so, beyond what point might legislation by a Scottish parliament on rights to property effectively breach this unitary principle? Perhaps it is better and more simply expressed by just asking whether in our United Kingdom it would ever be reasonable that a Scotsman enjoyed lesser property rights than an Englishman or a Welshman, or vice versa.

Clearly there are other examples of this kind which might occur to your Lordships. However, the basic question remains of how far a Scottish parliament should be properly allowed to go on legislating change, so that gradually, over time, we lose the features of a unitary state, and we drift into becoming, de facto, a federal one? There are other shortcomings of this Bill worth mentioning. I happen to think that the United States' system where people of ability can be brought into the Cabinet, although they have not been elected, has much to commend it. When a Scottish administration will have to draw its Ministers from a fairly small number of people, it seems to me that a good chance to introduce better talent has been missed.

I also have some difficulty with the question of the element in the parliament who will be elected by proportional representation. I am not so much against the principle as a whole—with which I have much sympathy—but against the undemocratic opportunity which it gives parties to stuff their lists with the more amenable of their supporters. The suggestion is that that is already happening.

I conclude with two or three questions that the Government need to ask themselves. First, as an English backlash develops, and will develop further, how do they propose in practice to deal with Scotland's disproportionate share of funding? Secondly—and this is perhaps not such a serious question—in a few years' time will it be acceptable to the English to have a Scot as Prime Minister? Thirdly, does the current level of support for the Scottish Nationalists indicate that we have at last started down the slippery slope? Finally, if the Government had had the foresight to envisage today's political situation in Scotland, would they ever have started down this road in the first place?

In trying to answer such questions, I commend to the Government this story. When St. Peter showed the Scottish sinner the stairway down to Hell, the sinner said, "But I didnae ken, I didnae ken". St. Peter said: "Ah weel, ye ken noo".

6.20 p.m.

Lord Hughes of Woodside

My Lords, I rise to give my support to this Bill. It is undoubtedly historic and is a brave measure to change the constitution of the UK. I say that immediately since, as many noble Lords will know, I was not always in favour of devolution. In fact, in the other place during the 1970s I opposed the initial proposals when they were laid before Parliament and campaigned for a "No" vote in the referendum at that time.

My objections were twofold. The powers in the first Bill were far too narrow and limited. Secondly, the absence of revenue-raising powers meant that the body that would have been produced would have had fewer powers than a major local authority in Scotland. I was concerned not so much by the apparent rise of the SNP, but by its vicious anti-English rhetoric, its election tactics and its philosophy. I certainly did not want to make any concessions to the SNP.

I recall one election when members of the SNP were fondly under the delusion that they would beat me in my North Aberdeen seat. I was approached with mock sympathy. I was told that they were very sorry to see me go because we were really brothers under the skin; we were really all socialists—the only difference was that they were national socialists. The kindest thing I can say is that those comments were made out of gross ignorance. However, they sent a chill down my spine, and still do.

I do not resile in any way from my words and actions in the 1970s. However, I do not approach this Bill with the excessive zeal of a new convert. In the 20 years that have passed, I have become increasingly concerned at the relentless accretion of power to central government which was the hallmark of each of the Conservative administrations during their all too long period in office. Throughout a whole Parliament, the Scottish Office could not be scrutinised by the Select Committee on Scottish Affairs because the then Tory Back-Benchers from Scotland refused to serve on it. When they did finally agree to serve on the committee, they showed very little independence. They slavishly followed the Conservative Party line and voted down every proposal that was critical of government, even though the evidence was overwhelmingly in favour. I shall not go into detail. Anyone who wishes to look up the record of the Select Committee will find that the Division lists are there and the record is clear.

During that period of centralisation of power, local decision-making was squeezed, and that drove local government councillors to distraction. It is easy to criticise local government and to make local councillors the whipping boys. Heaven knows, they have made mistakes. I do not know whether those mistakes are large in comparison with those of central government. However, I believe that, properly organised and properly funded, local government can probably do more for the people in the localities than we can, either in the other place or in this House. We destroy local government at our peril.

Therefore my approach to devolution has evolved over the years in a pragmatic and practical way. The Bill before the House solves the problem of lack of power. The reserved powers are defined, and the rest is left to the Scottish parliament. The Bill is a powerful tool. It is an engine for change. I fully support the tax revenue powers contained in the Bill. It was always essential, in my view, to have rights and responsibilities enshrined in statute. Whether or not the proposal to vary by 3 per cent. is adequate, or whether it is the right mechanism, is beside the point at this stage. No doubt the matter can be debated seriously in Committee. In any event, once the parliament is up and running, that debate will continue.

I say in passing, although the matter is not for us to decide, that I do not think it would be wise for the political parties in Scotland to state as a manifesto commitment at the first election that they will not use this power during the lifetime of the first parliament. The people of Scotland voted overwhelmingly in the referendum for both the parliament and the tax-raising measures. They want a parliament which is innovative and which will produce visible signs of improvement in education, health, social services, the environment and so forth. I concede at once that money by itself does not necessarily guarantee progress. However, it seems to me inconceivable that progress can be made without spending money. For a new parliament to put itself in a straitjacket of that kind does not make much sense.

One of the issues that have dominated the debate on devolution was raised by the noble Earl, Lord Buchan, and the noble Lord, Lord Lang of Monkton. The question at the centre of the debate has always been: will the establishment of a Scottish parliament inevitably lead to the break-up of the United Kingdom? At one stage I frankly thought that it would. While I believe that it is not inevitable, much depends on how the new parliament functions and how it behaves.

My own view is that for a nation state to survive, it must have social cohesion. The 18 or 19 years of Conservative government did much to damage the social cohesion of the United Kingdom. If there is no social cohesion, then frankly a nation state cannot survive; nor does it deserve to survive. The problem is—and this is a message that we must send out loud and clear—that when modern nation states disintegrate because of a lack of social cohesion, social cohesion in the individual constituent parts often disintegrates even faster. So there are perils. Separatism frequently brings its own problems.

The rhetoric of the SNP has been somewhat toned down, at least in public, and its members deny that they are separatist. It is inescapably a separatist party. Its attitude towards a Scottish parliament clearly demonstrates that. It will give no promise to work constructively within the parliament for the good of the Scottish people. Its stated aim is that, if it gets control, there will be a referendum on independence. I am not entirely a fan of referenda, but they seem popular at present. Many claim that it is a respectable position. I recall, as my noble friend Lord Ewing will remember only too well, the late Norman Buchan, myself and some others arguing that a referendum should put three questions, including that of independence. In a sense there is nothing disreputable about holding a referendum on independence. What is disreputable is that the SNP will accept only one result.

I saw one of its spokesmen on television about 10 days ago. He was asked: "If there was a referendum on independence, would you accept a 'No' result?" "Certainly not", he said. "We will continue to have referenda until we get a 'Yes' vote". So if every year for the next 99 years we have a referendum to which the answer is always "No", the party will not accept it. But if there is one referendum vote saying "Yes", everyone else must accept the result. That is arrogance in the extreme and it is to the detriment of the Scottish people. Anything and everything is grist to the SNP mill.

Those of us who are politicians need to start blowing the trumpet of the good which is being done by government. I will not say that I agree with everything that has been done, but perhaps politicians are like this: we tend always to criticise and never praise. It is time we had some praise.

For example—the grist to the SNP mill—there is the reasonable proposition that the present Government should look at oil revenues and oil taxation. What is wrong with having a look at it? But it is presented by the SNP as an anti-Scottish measure, made worse, it says, by the fact that the Chancellor is a Westminster MP and a Scot.

The SNP will brook no opposition. I ask the people of Scotland this. I do not suppose they will bother to read the debate but I hope some people may mention it to them in passing. I shall not name the company because I do not believe in free advertising. But an insurance company spoke its mind and said that it was prepared to speak out in terms of the economic effects of independence. What did the SNP do? It said that what was necessary for Scottish people was to boycott that institution and withdraw their funds. It was conveniently glossing over, even if it had ever thought of it, that people who draw their money out of insurance policies before they mature lose a lot of money. So that was detrimental to the Scottish people, but the SNP did not bother about that. Of course, it back-tracked: it was the office boy who was employed to make the tea who wrote this little thing by accident. It is strange with parties and governments—and this applies to all governments—that whenever there is something patently bizarre, it is always the office boy who did it.

However, there is a serious point here—the back-tracking did not come immediately, nor was the suggestion denounced immediately. There are sinister forces around. Some people are extremely gloomy about the prospects of the result of the first elections, especially since the voting system under the Bill guarantees or intends to guarantee that no one party can govern on its own. I cannot say that I am or ever have been a great supporter of proportional representation, but there is some merit in a system which will not lead to the elective dictatorship which characterised the Thatcher years.

Any voting system is only effective if the parties taking part show responsibility once they are elected. I am not pessimistic at all about the first elections. I believe that the present public opinion polls are false. All that matters is the real election itself.

There were many in Scotland 18 months ago, especially in the media and even some within the ranks of the Labour Party in Scotland, who did not believe that the manifesto commitment on a strong and vibrant Scottish parliament would be delivered. They have been proved wrong. The Bill does precisely that. I give it a fair wind and hope that your Lordships' House will also give it a fair wind.

The eyes of the nation will then turn from the Westminster Parliament to those elected to serve in the new parliament. They will have an immense responsibility which I trust they will discharge effectively.

6.33 p.m.

Baroness Linklater of Butterstone

My Lords, this Second Reading of the Scotland Bill is a truly historic moment for anyone who is a Liberal, a Democrat and a Scot, as I am. As a Liberal, I believe that it represents the realisation of a policy and a principle which, as we all know, we have held dear ever since Gladstone first enunciated his big idea of "Home Rule all round" in 1879 to the good citizens of Dalkeith during his Midlothian campaign.

I am neither well qualified enough, nor is there time in this enormously long debate to indulge in too much historical scene-setting. But I am proud to recall the words of my grandfather, Sir Archibald Sinclair, in a debate in the Commons in 1932, shortly after he had ceased to be Secretary of State for Scotland. He said: There is a demand growing insistently from the Scottish people that they should be given the right, which they believe is theirs inalienably, to control their own domestic affairs". Further, prophetically, he said: if this demand is frustrated the extremists will seize and exploit their opportunity". Not only does that illustrate the settled long-standing wish of the Scottish people to control their own domestic affairs, but he foresaw the dangers which accompany procrastination and delay which could become an issue for us today.

The Bill is the realisation of this essentially Liberal policy and the Government are to be congratulated on having followed our lead and presented a Bill which reflects so closely the recommendations of the Constitutional Convention's proposals and the subsequent White Paper which the Scottish people endorsed so unequivocally and resoundingly in the referendum last year.

It is as a Scot who lives in Scotland that I welcome it too. The need for the Scots to have more control over their own lives and affairs is very real and rule from Westminster has, perhaps unwittingly, over the years, eroded Scottish self-confidence. So many talented people have gone away to spread their wings and realise their potential, while others at home feel frustrated or inadequate. By the end of the Tory era, we were being governed by a party which had no mandate in Scotland and who apparently could not heed or hear Scottish wishes or needs.

As the only party with a narrow unionist policy the Tories were, as a result, wiped out politically last year in Scotland. They have, of course, done a 180 degree turn, having been forced to face the new reality of both the Scottish decision and their own political situation. Having done such a U-turn, it behoves them to be as constructive and positive as possible, so that what is delivered to Scotland through the Bill is the best possible system.

As a Democrat, I also welcome the Bill. Indeed, like the noble Lord, Lord Mackay of Ardbrecknish, who was in his wiser youth a Liberal as well, in particular I welcome the proportional system of representation that is at the heart of the selection and election procedures to the Scottish parliament. This is another of the long-held beliefs of my party. I am delighted that MSPs will be elected as both first-past-the-post candidates from the current constituencies and on a proportional basis from regional lists. There are issues that we will want to raise at a later stage in the passage of the Bill on the detail of the arrangements, particularly on the question of open lists, to avoid the risk of political placemen on the lists, but the principle is there and greatly to be welcomed.

Indeed, it is as a Democrat that I also welcome the fact that it is through this system, and this system alone, that the Conservative voice will be heard again in Scotland. I did not feel happy that after the last election some 20 per cent. of the electorate in Scotland had no voice in Westminster. It is only right that they too should be represented.

This Bill is a good one. It is a good constitutional document which is, by and large, comprehensive, well structured and clear in its terms. That view is endorsed by distinguished constitutionalists and the Law Society of Scotland, among others, with no political axe to grind. That is not to say that it is perfect as a document and it should be improved. Senior professionals too in Scotland, such as those in education and the criminal justice system with which I have been involved over the years, look forward with positive anticipation to what a devolved parliament can bring in those fields. They already have their own distinctive Scottish character, but they welcome the opportunity to bring a better coherence and a new strategic approach to the enactment of policies, with more time for proper, informed discussion and decision making.

In the entire last Session of the previous Parliament, only 13 hours were devoted to debating Scottish education on the Floor of the other place. In future, such vital matters can be fully and openly addressed in a Scottish context, with the needs of our own children and young people in mind—avoiding sectoral politics. I am currently involved in a Scottish Office committee that is examining post-school provision for young people with special needs. That committee intends to have recommendations ready for the new parliament's consideration at an early stage, and with the chance of proper consideration this is exciting for all concerned. There is the chance for a fresh look at the criminal justice system and proper parliamentary time for modern criminal justice legislation—perhaps a 21st century Prisons Act to underpin a 21st century system could be considered. We already have the children's panel system to address the problems of young people in trouble, which is second to none. In future, its view will be addressed by a government who are familiar with and understand the system better than it has ever been understood by Westminster legislators. The optimism of the top people in all those fields is hugely important, and it is something upon which we can and must build.

Of course there are technical and practical concerns. It would be extraordinary if that were not the case, where major constitutional change is involved. I know that the Bill will receive the closest possible scrutiny. We will have our part to play. One clearly articulated fear is of over-centralisation by the Scottish parliament and the squeezing of local authorities in education, for example. Those issues must be addressed. Given the openness and accountability built into the new structures, I trust that they will be addressed.

People with fundamental concerns about the Bill—and I have no doubt how deep and genuine many of them are—take the view that almost any change from the status quo is wrong and that the Union unchanged is, ipso facto, best. Their attitude is, "Never leave a hold of nurse for fear of finding something worse." But for most of us, holding on to nurse is the one thing worse than leaving hold of her. She no longer offers what is needed and the status quo is no longer acceptable—as the ballot box has demonstrated. Fears of the slippery slope to separation from the UK that many noble Lords mentioned are exaggerated. Current support for the Scottish National Party is a concern and cannot be ignored, but it has everything to do with disillusionment in Scotland with the new Labour Government. It has little to do with separation or the break-up of the UK, as recent polls have also shown. Whose judgment are we to trust? The realistic optimists or the messengers of doom?

The Scottish people at Holyrood are at least as capable of managing their domestic affairs as the Parliament at Westminster. As a Scottish Liberal Democrat, I believe that the Scots with their own parliament as defined in the Bill can leave nurse behind and will emerge strongly and confidently from under the skirts of Westminster. Scotland is indivisibly part of the family of the United Kingdom and must ever remain so. With its identity properly asserted through the Bill, the whole family will be strengthened and the integrity of the United Kingdom assured.

6.44 p.m.

The Earl of Kintore

My Lords, I will begin my speech back in time, but possibly not as far back as my noble friend Lord Buchan. A forebear of mine and forebears of a number of other noble Lords taking part in this debate were so opposed to the Act of Union that they voted against it and generally showed dissent whenever they could. My forebear—I am indebted to the Library for this information—was, very wild, inconstant and passionate. Does every things by starts. Hath abundance of flashy wit. Hath good interest in the country…gives himself liberty of talking when he is not pleased with the Government". Those dissents and protests were genuinely felt but they probably had a lot to do with perceived loss of influence. My forebear was still hereditary Earl Marshal of Scotland, our Jacobite indiscretions still being a few years ahead. If my forebear was protesting because he thought the Union would not work, he was wrong. Apart from the Jacobite rebellions, the Union has been a considerable success. But we must move on.

Scotland is to have a parliament in Edinburgh with some power devolved to it and some reserved at Westminster, with the judicial committee the final arbiter that the Scottish parliament is acting within its powers. At present, Scots enjoy over-representation at Westminster. Under the Bill, provided that a constituent knows whether a matter is reserved or devolved, he can have both an MP and an MSP working for him in place of just one Member of Parliament. If some or all of the regional members can be called upon, the over-representation will be overwhelming. One solution could be to reduce the numbers of MSPs. However, assuming that more powers are devolved than are reserved and that we are trying to establish a successful Scottish parliament, the answer is probably to reduce quite significantly the number of Scottish seats at Westminster—leaving of course enough to preserve the Union.

Following exchanges in debates on the Government of Wales Bill, I am a little nervous of my next point. I understand that the Westminster Parliament should not direct the Scottish parliament as to how it should work, but I hope that it is in order to inquire whether there has been consultation regarding the working of the new parliament. Given its location in Edinburgh, quite a few of its members will be involved in a great deal of travelling, particularly from the north. I assume that activities on Mondays and Fridays will allow for that. I envisage a very busy first parliament for MSPs, but once the parliament is up and running MSPs may find that they can meet in parliament less often, thereby giving them more time to work in their constituencies.

When the results of the referendum for a Scottish parliament were announced I was in America, involved in Scottish work as the Chieftain of the New Hampshire Highland Games. An estimated 40,000 visitors, mostly American, came to admire my knees. Americans, who feel strong kinship with Scotland, told me that they thought the referendum was a vote for separation. I disagreed and said that the vote was a strong signal from the Scots for their own parliament in Scotland but with Scotland remaining an integral part of the United Kingdom. I hope sincerely that my interpretation of events is correct.

6.48 p.m.

Baroness Young

My Lords, I rise as the first English person to speak in this debate. I make no apology for that because there is an important English dimension to this issue and it is a matter that affects the whole United Kingdom.

The Bill is one of four constitutional Bills in this Session of Parliament but it is the most far reaching and important and it takes us, as the noble Lord, Lord Sewel, said, into uncharted waters. We have not been down the devolution route in this form before.

Constitutional Bills are different from other Bills. They are about making long-lasting settlements—one hopes settlements that are stable and enduring; settlements that cannot be easily changed or altered, unlike, for example, the education Bill, in which I have been recently involved. That again is an important Bill that can be changed, but constitutional Bills fall into a different category.

I believe, therefore, that it is extremely important that we take great trouble to get it right. We have had some warning recently from overseas experience. If we look to New Zealand, it had extensive debate and a referendum, but is now having second thoughts on proportional representation which has not worked out as it was thought it would.

Many noble Lords referred to the question of Quebec in Canada. I recognise that independence for Scotland is not the point of the Bill but, as almost every speaker referred to independence, the warning from Quebec is a real one. It has dominated Canadian politics; it occupies a great deal of national debate and national time and, as my noble friend Lord Weir said, it has had devastating economic consequences and a satisfactory solution has not yet been found. I suspect strongly that when the Government introduced this Bill in another place, they never expected that a few months on the Scottish National Party would be leading in all the polls in Scotland. These matters can have unexpected outcomes and it is important that we recognise that and face up to it as the Bill proceeds through your Lordships' House.

I turn next to the English dimension. The Bill applies to the whole of the United Kingdom and I hope that in Scotland there is no doubt that that is the case. No one will argue about the outcome of the referendum—certainly I shall not—even if none of the important issues raised in the Bill was actually put to the Scottish people when they voted. Now that we have the Bill, we must all want to make devolution work for the benefit not only of the Scots, but also for the benefit of the United Kingdom. But the Bill must be seen to be fair to all parts of the United Kingdom if it is to endure.

The English dimension is serious. For the first time in my political life I have heard English people say that we would be better off if Scotland became independent. I would not be entirely surprised if the issue were raised during the London mayoral elections next year. It would be an easy argument to advance. Why should so much more money go to Scotland—we had the figures set out earlier—instead of being used on the poorer parts of London? I have heard it said, nearer to where I live, why should we spend the money on the Scots when we could put it into our local hospital? What worries me in relation to some of the comments being made today is that the more the Scottish nationalist feeling is hyped up, the more we will get a contrary feeling in England ready to be hyped up when anyone wants to do that.

I do not subscribe to those views. But I share the view so well put by my noble friend Lord Lang of Monkton that we could, as a country, spend a lot of time tearing ourselves apart when, for hundreds of years, Celts, Anglo-Saxons and now newcomers, have lived together amicably. We have prospered together. We have had an influence on the world in which the Scots have played an enormous part, far greater than either our population or geographical size would suggest. In modern parlance I believe it is called "boxing above our weight". What I hope we will not do is simply turn that to boxing one another. The English dimension, though still relatively quiescent, if not dealt with, could damage not only our country but our standing in the world as a whole.

I want to turn to the role of the House of Lords because the Bill is before us and we are predominantly a revising Chamber. I accept, and believe that my noble friends do also, in the principle of the Bill and wish for a successful devolution. I hope that, as a revising Chamber, we may make improvements, as my noble friend Lord Mackay made clear in his remarks earlier this afternoon.

We must then consider the West Lothian question, which cannot be left aside. The noble Lord, Lord Steel, said "Quite frankly, we have no answer to that". But that is not good enough and a lot of people will feel that it is not good enough. If they are quiet now, they will not be quiet next year or the year after. No one has stated more clearly and more consistently the West Lothian question, the whole question of the Scottish block grant and the Barnett formula, than the honourable Member, Mr. Tam Dalyell. When the English wake up to what they are spending on the Scots, I can see how the arguments could come into play in a most unhappy way.

I want to make one further point in relation to the whole West Lothian question. It may be thought that having English regions can be a substitute for dealing properly with the West Lothian question, but that is a complete non-starter. Only in the North and South West is there any sense of regional allegiance. There is no demand for regions and, in any event, they would not have anything like the comparable powers of the Scottish parliament.

The Bill raises other enormous problems. The relationship of the Scottish parliament and the European Union was touched on briefly as well as the list that my noble friend Lord Mackay read out. They are big issues. They cannot be brushed aside. We must address ourselves to finding a solution if we are serious about wanting to make this work and wanting to keep the Union. We must recognise that, should we fail to keep the Union, it would be not only Scotland that would be diminished; England, Wales and Northern Ireland would also be diminished. If we look at our standing in the world, where would we be in the United Nations? Where would we be in the European Union and in the Commonwealth? Those are all big, international organisations in which we have, and always have had, an influence. The stakes for which we are playing therefore are extremely high.

My final point is that I hope that the noble Lord, Lord Sewel, and his colleagues will listen to the arguments put forward in this House. And perhaps I can offer a general piece of political advice. I have found that governments do better when they listen to the House of Lords than when they just listen to their own parties. That applies both to the present Government and to my own party when we were in power. There is a great deal of wisdom and experience in your Lordships' House. There is a great will to try to resolve those questions. Unless we resolve them, we will be faced with a doubtful and possibly dangerous situation ahead.

6.59 p.m.

Baroness Carnegy of Lour

My Lords, it is a very great pleasure to follow my noble friend Lady Young. Over many years, with her great experience of the political life of the whole of the United Kingdom, she has been a good friend of Scotland. I agree with every word she said, although I shall speak from a somewhat different perspective.

The noble Viscount, Lord Weir, asked whether the Government would have started down the route they are now going down if they had known what was going to happen. When I first entered the local government political scene, the Lord Provost of Dundee at that time gave me a good piece of advice. He told me, "In politics, the golden rule is never to get yourself on a hook you cannot get off'. It has always seemed to me that this Bill is the result of the Labour Party in Scotland forgetting that golden rule. When all those years ago, fearing the Scottish National Party, it set up with the Liberals its Scottish Constitutional Convention and told it to invent a devolution scheme and sell that scheme to the people of Scotland—there was not mention of the United Kingdom at the time—that was done. It was done with great efficiency. The noble Lord, Lord Ewing, who is not in his place at the moment, has, alas, taken his name off the list. I hoped that he was going to tell us his views about that. But it was done and the effect of a lengthy and well-publicised exercise was such that, as the years went by, there was no escape.

It was all right for a party in opposition but then, come May last year, it was not possible, I suspect, for Labour to implement its new and more up-to-date instincts. This Bill was virtually unavoidable. The Government were impaled on a hook and they could not get off. Now, as other noble Lords have said, the law of unintended consequences has taken over. The SNP is high in the polls, Donald Dewar's personal rating has collapsed and the Liberals share bottom place with my party in the polls.

The noble Lord, Lord Steel, said that the new parliament would improve the economic climate. I imagine that he has observed, as I have, that businesses based in Scotland are becoming somewhat unnerved. General Accident has merged with Commercial Union and is moving its headquarters south. Scottish Widows and Standard Life, both based in Edinburgh, have expressed grave anxiety. Policy holders of Scottish Widows, as the noble Lord, Lord Hughes of Woodside, told us, have been receiving rather unpleasant letters. Watson and Philip has added its warning. The chairman of the Bank of Scotland has said a good deal over the years about his fears for what higher taxes would mean in Scotland. Yesterday a survey was published of 150 small businesses. Three-quarters of them expect higher taxes under a Scottish parliament and 83 per cent. are concerned about the effect on their business.

In these circumstances, how should noble Lords view the Bill? We have heard a number of angles on this. I agree with my noble friend Lord Mackay of Ardbrecknish who said in his opening speech that it would be easy for some of us to shrug our shoulders and say "I told you so" and take little interest in the proceedings from now on. It would be easy for some—we have already heard a few voices talking in that way—to feel that amendments are likely to make little difference, that the Scots are heading for separation anyway and that the rest of the United Kingdom may be better off without us. If I may say so, I believe that is totally unjustified pessimism. I firmly agree that this House should put a lot of energy and its best skill into looking carefully at the Bill, particularly at the parts that are likely to lead to most controversy, and that we should do all we can to get the parliament to work as smoothly and fairly as possible so that it becomes stable and works to the satisfaction of all concerned. I agree with my noble friend Lady Young that that must surely be in the interests of every United Kingdom citizen, not just the Scots.

There are a number of controversial areas. Noble Lords have already said a good deal about them and much more will be said. I would simply refer to two aspects of the Bill which have not yet been mentioned. There is the obscurity of the drafting of Part IV of the Bill, which deals with the parliament's tax varying powers. The original simple idea of plus or minus 3 per cent. has now become very complicated indeed as the Bill attempts to cater for every possible change in tax structure that the Treasury might invent. There is also a complicated arrangement for the Scottish parliament setting a percentage tax variation and then having to change it. How will business, how will individuals and how will charities which depend on covenants understand this and plan ahead with any certainty? The Association of Chartered Accountants in Scotland is very concerned about the lack of clarity of these clauses and thinks that Clause 71, which defines who is a Scottish taxpayer, must be removed and totally rewritten or the Bill will not work at all. We must look carefully at that.

Another point which has not been completely covered is that the proposed procedure for the drafting and consideration of Bills is somewhat incomplete without some kind of second chamber. The potentially controversial mechanisms for ensuring that they are within the parliament's competence and do not contravene existing or impending UK or European legislation are somewhat difficult to understand. We must be very sure that they are foolproof. I believe that the noble and learned Lord, Lord Hope, may have interesting things to say on this point when he comes to speak. I hope that noble Lords will pay great attention to what he says.

There are many other key aspects that need our careful scrutiny. We must indeed all hope, as my noble friend Lord Mackay said, that the Bill does not prove to be another own goal for Scotland but that it operates reasonably smoothly and fairly, to the advantage of us all. I believe that your Lordships, if you put your shoulder to the wheel—and the Government willing—can ensure that.

7.7 p.m.

Lord Gray of Contin

My Lords, the Bill we are considering today is probably the most important that we shall study in the life of this Parliament. It has the most far-reaching implications for the future of the United Kingdom and, as such, it must be examined not only as a means of devolving power from the centre but as providing a ready-made jumping-off point from which Scotland could become independent. I found myself almost in complete agreement with what my noble friend Lord Lang and my noble friend Lord Mackay of Ardbrecknish on the Front Bench had to say. The only excuse I can make for repeating many of the points which they made is that I feel that they are of such importance that they cannot be uttered too often.

Thus it could well be that the break-up of the United Kingdom could become a reality in something less than a decade. Let us make no mistake. Once this parliament is operating, its frustrations, when it is unable to achieve certain of its desires, will lead it to blame Westminster, and the constant bickering which will follow will set up a very dangerous relationship between it and Westminster from which only nationalists will take comfort. Indeed, it is arguable—and it is likely that the nationalists would use such an argument—that any future long-term relationship between Scotland and England might actually benefit from Scotland becoming independent sooner rather than later thus avoiding the niggling arguments and resentments which could sour relationships over the next decade, making the eventual settlement of terms, in the event of independence, much more acrimonious than might otherwise be the case.

Then there is the demand, which has been mentioned by a number of speaker this afternoon, for a referendum on Scottish independence. After all, the Government were very happy to stand shoulder to shoulder with the Scottish National Party in order to obtain a yes vote in the devolution referendum, so why are they so bashful about trying to find out if the people of Scotland wish to proceed further along this path? If the Government feel squeamish at the thought of this, then the new parliament may well make it a priority itself, particularly if the nationalists win a majority of seats as seems quite possible. For all those problems and uncertainties the Government have nobody to blame but themselves. Everything which is happening was predictable. Labour has let the genie out of the bottle and it must take the consequences.

I have never argued the case against nationalism on the basis of Scotland not being able to survive on its own, but purely on the basis of the Union being much more beneficial to Scotland. My fear is that attitudes in Scotland will harden against the Union. I was very interested in what my noble friend Lady Young had to say about some of the attitudes which are developing in England as far as concerns the Scots.

In my view the Scottish parliament will stimulate resentment rather than pacify feelings. I doubt very much if there still remains within Scotland a majority to retain the Union; a situation brought about largely by those who have been preaching for some years now the gospel of devolution and playing right into nationalist hands. But what is certain is that pretending that the setting up of the Scottish parliament will change everything is quite wrong and is really another way of putting off the evil day and at very great cost.

Perhaps the only way left to save the Union is by creating a parliament in England for the English and establishing a federal parliament for the whole of the United Kingdom, for which the Liberals have been asking for ever and ever. Perhaps they are simply accepting this measure as a stepping stone. However, that seems to me a most costly and over-elaborate way of resolving a problem brought about principally by a failure adequately to explain and highlight the enormous advantages of the Union to all its members. In any event, it is doubtful whether even that will satisfy—

Lord Mackie of Benshie

My Lords, is not the noble Lord being a little defeatist? If the advantages of the Union are such, surely he can explain them to the people of Scotland.

Lord Gray of Contin

My Lords, the noble Lord did not have a lot to contribute. I am sorry that I gave way. In any event, it is doubtful whether even that will satisfy the appetite for independence, which wells up not very far below the surface in Scotland today. The polls indicate a massive swing to nationalism which, had it been reflected in the heavily populated central belt in the way in which it flourished in rural areas in 1974, might have given the SNP power in Scotland at that time. Now, for the first time, nationalism is reflected in the central belt of Scotland. That situation, taken along with sleaze oozing from Labour-controlled councils at an alarming rate, is causing a degree of panic in Labour circles in Scotland which is quite understandable.

My noble friends on our Front Bench have indicated that we must accept the reality of the situation and move forward to ensure that the new parliament is a success, and I accept their judgment. Of course, when the Bill receives Royal Assent and becomes an Act of Parliament, it will be the duty of all law-abiding citizens to respect its integrity, but that should not inhibit us from criticising it at this stage or at the later stages, but particularly at Second Reading.

I profoundly dislike any legislation which endangers the Union and I dislike this Bill in particular because I disagree with the philosophy behind it. I am undoubtedly one of a minority in Scotland at the moment, but a sizeable minority which does not relish what this Bill will do eventually. It gives us no pleasure to see our predictions of a couple of years ago beginning to happen already as far as nationalism is concerned.

I doubt very much indeed if this legislation will provide the people of Scotland with anything more than they already have through the Scottish Office and it is open to question whether those functions will be provided in as acceptable a form as at present. We already have a wealth of devolution in Scotland administered by a Secretary of State and his Ministers. The Scottish Office is the envy of many UK departments because so many problems can be resolved within the Scottish Office itself without constant reference to other departments, which is the lot of UK ministries. And what of the Secretary of State? He or she will become a very minor voice in Cabinet and a nonentity in Scotland.

The costs of establishing and operating a Scottish parliament are as yet uncertain, but if the initial costing of the creation of a parliamentary building is anything to go by, they will be much higher than forecasts indicate at present and that is merely a foretaste of what lies ahead.

Regarding the details of the Bill, we shall have ample opportunity to debate them in the months ahead. Much remains still to be questioned despite the scrutiny already given in another place. However, there are three areas which give cause for particular concern. The first was referred to by the noble Lord, Lord Hughes. It is not very often that I find myself in agreement with the noble Lord, but tonight I do. That is—

Lord Hughes

My Lords, I am glad that we do not often agree with each other.

Lord Gray of Contin

My Lords, that was well said. The first is the fact that Scottish Bills are to be denied the benefit of scrutiny by a second chamber. This is a mysterious decision since in principle the Government must agree with the existence of a revising chamber or they would simply do away with the House of Lords in its entirety. Also, since new members of the Scottish parliament are likely to include a large proportion of inexperienced members, it is particularly inappropriate for there not to be any method of having a second look at Scottish legislation.

The second problem relates to the method of election. It seems to me that having a mixture of constituency members and listed members will create two classes of member. The listed non-combatant, as I care to call him, will always be the poor relation. He or she is unlikely to command the same authority as a constituency member. Furthermore, if he or she becomes a Minister without any parliamentary or constituency experience, life will be difficult in the extreme for that individual.

The third area which gives me cause for concern is the preference that the Government have shown in Committee in another place for concordats. There is really no substitute for writing in requirements on the face of the Bill. Concordats at best are vague and at worst they are merely provided to get the Bill through Parliament, appeasing Members for the time being.

Finally, I am concerned about the status and the future of the Lord Advocate and the Solicitor-General for Scotland. A third Law Officer is to be appointed. I think that the Government owe us a more detailed explanation in due course of how the relationship between the Lord Advocate and the new Law Officer will be regarded. Who is to be the senior? Is the Lord Advocate still to be the senior Law Officer, or is the Scottish Law Officer who will be operating at Westminster to be senior to him, or to be considered senior to him? I do not propose to dwell on those or other legal subjects because there are distinguished luminaries in the legal profession who will no doubt look into those matters in much greater detail and who have much more knowledge of the subject than I do.

I look forward very much to the further stages of this Bill, but I shall need a lot of convincing that it will one day be to the benefit of Scotland.

7.21 p.m.

Lord Russell-Johnston

My Lords, I have three things to say. First, I want to pay homage to a man who was a Member of your Lordships' House and who would have been very happy to be present on this day. For all his political life, in much less sympathetic times than now obtain, he fought for home rule. As a tribute to him, I shall quote from the end of his maiden speech, which he made, unusually, on the day of his Introduction, 6th December 1967. But then, John Bannerman, Lord Bannerman of Kildonan, was an unusual man. He said:

there can be nothing surer in this life than the truth which we Liberals proclaim; and that is that the growth in stature of man depends on the extent to which he can control his own destiny. This is equally true of nations: and Scotland is a nation. That is why Liberals advocate federalism to replace the present form of centralised … government in Britain, so that all parts of Britain may be helped … That is not a selfish ambition. This is an ambition which we are determined is better for the United Kingdom".— [Official Report, 6/12/67; cols. 708–9.] John followed a long Liberal tradition, to which reference has already been made, which was rooted, as we are reminded by the exhibition in Westminster Hall, in Gladstone's efforts for home rule in the last century, continued in the federal United Kingdom Bill of the Asquith Government, which, as my noble friend Lord Steel said, fell only because of the outbreak of World War I. As my noble friend Lady Linklater reminded us, between the wars Sir Archibald Sinclair held the torch. The Covenant Movement, after the Second World War, was the natural heir to that tradition. Its driving force, John MacCormick—"King John", as many people will remember—was of course a Liberal candidate in Roxburgh, Selkirk and Peebles, the seat formerly represented by my noble friend Lord Steel of Aikwood.

I am proud to have made my little footnote in that record when, on 30th November 1966, in the other place I introduced the first home rule Bill since the war under the ten-minute rule. I said: we are not seeking separation from the United Kingdom, but sensible and effective devolution within it". I was barracked for that and the Speaker had to intervene. That is most unusual on a ten-minute rule Bill. Now I have heard from the noble Lord, Lord Sewel, almost exactly the same words—and from the same Government Benches, and so the wheel turns. I went on to say:

Nor is there any contradiction or conflict between wishing to see this and wishing to see the United Kingdom join the European Economic Community. Indeed, I would aver that the larger the grouping the greater the need for devolution within it".—[Official Report, Commons, 30/11/66: col. 458.] I say all this mainly because I happen to continue to think—although I suspect that it is not a general view—that consistency in politics, which seems these days to be a very rare commodity, as pragmatism, often linked to opportunism, conquers ideology, is a merit, a virtue and a valuable thing. On these matters, Liberal Democrats have stood up for what they believed in foul weather and fair. Those who have toiled long and hard in the vineyard have contributed to the quality of the fruit.

My other two points are relatively brief, but they are related to "the quality of the fruit". I refer secondly to the West Lothian question. My noble friend Lord Steel of Aikwood said frankly that there was no clear answer to this question and that although there are weaknesses here, they are less than the weaknesses of the existing system.

After all, the Government's proposals worked out, as my noble friend Lord Steel said, consensually in conjunction with the Scottish Constitutional Convention, are founded in the belief that in Scotland a co-operative approach can now work and that it is unquestionably better than the confrontational approach which is the essence of the Westminster system. I very much hope that that is so; I want it to be so although some of the speeches that we have heard do not entirely suggest it. However, I continue to believe that in the end, as the noble Lord, Lord Gray of Contin, suggested, the only sensible and logical answer to Tam Dalyell is federalism—a clear division of entrenched powers in a constitutional frame. Federalism remains a clear option, which may solve future problems, but I recognise that we are not talking of it now.

Thirdly, unlike the noble Lord, Lord Mackay of Ardbrecknish, who has vanished, with whom I worked long ago in the Scottish Liberal Party— Bliss was it in that dawn to be alive, But to be young was very heaven"— I strongly and warmly support the Government's acceptance of a proportional element in the voting system. It is, as the noble Lord, Lord Sewel, said, "fair". The noble Lord, Lord Thomson of Monifieth, put the argument against one-party domination on a minority vote. But the essence is the desire to produce in the legislative assembly a fair reflection both of the distribution of political opinion within the country and the interests of the different regions, such as the north-east, the Highlands and the Borders. That is something which is accepted pretty well all over the rest of Europe.

I get tired and angry with those who pomp and prate about democracy, but who are, and have been, happy to sustain a system which is blatantly unfair; with those who governed Scotland without a mandate and without very much regard for what the Scottish people felt—the noble Lord, Lord Thomson of Monifieth, mentioned the poll tax—yet listening to the speech of the noble Lord, Lord Gray of Contin, it is clear that the Conservatives still do not realise that they have been quite the best recruiting sergeants for the nationalism that they condemn. Indeed, they have produced the nationalism that they condemn.

I was saddened by the speech of the noble Lord, Lord Lang of Monkton. I hope that that did not reflect general Conservative views. I believe that it was the former Lord Provost of Dundee who remarked that perhaps Sir Malcolm Rifkind was a better guide to what was going on in the Conservative Party. The noble Lord, Lord Lang, sounded like a man with a closed mind which was continuing to close. He seemed never to have heard of Catalonia and Bavaria or regional developments in France and Italy. It is true that for this change to work we need open minds, tolerance, a commitment to success and patience with one another. That is what Scottish people want and also deserve from their politicians.

7.30 p.m.

Lord Nickson

My Lords, I have listened with great attention, as have all other noble Lords present, to the debate tonight. I wish to speak to a fairly narrow business point having worked all my life in Scottish companies in Scotland. For much of that time I had some responsibility for disbursing taxpayers' money to industry through various government bodies.

I have been struck by the unity on all sides of this House on one point: concern about the Union. That has come through from every single speech. If that unity is reflected outside this House in the political parties and in Scotland it should start to influence Scottish public opinion during the debates and in the run-up to the Scottish parliament and those who are persuaded by a populist, perhaps a "Braveheart", point of view. I suggest that collectively through all three political parties and the independents we must put across the facts. I believe that in business terms the Scottish national case is a dud prospectus. The balance sheet does not add up, nor could it. If Scotland went into that situation it would be the equivalent of a business going into receivership.

I shall finish with four brief light-hearted points. I ask noble Lords to attend to a little arithmetic. I apologise for elaborating these facts but they are true. As a percentage of GDP, public expenditure in the UK is about 42 per cent. Scottish expenditure as a percentage of Scottish GDP is 50 per cent. The overall Scottish GDP is about 8.5 per cent. of the UK figure. The population of Scotland is about 8.8 per cent. and public expenditure exceeds 10 per cent. Scottish expenditure exceeds the revenue collected from taxes in Scotland by about £7.4 billion. Even if one allocated all the oil revenues—it is inconceivable that any government would be willing to do so—that deficit would still be about £5 billion. The Scottish block vote is just over £14 billion.

This leads me to my second point. Of that £14 billion, about 40 per cent. (£5.2 billion) goes to finance local authority expenditure. The balance of local authority expenditure comes from self-financing. Most of that comes from the council tax. That produces about £1.2 or £1.3 billion and adds up to total local authority expenditure of £6.3 billion.

I am sorry to bore noble Lords with those figures. However, all of us who believe in the Union should try to get across in the manifestos and the process that leads up to the parliament the fact that the nationalist separatist policies do not add up. Scotland would be infinitely the poorer. If the budget were to break even taxes would have to go up by a fantastic amount. I suggest that all of us need to put across that point because it is not understood by the 52 per cent. of people who voted for this proposition.

That leads me to my concerns about the financial arrangements under the Bill. I believe that 3p in the pound resulting in £450 million is of mind-boggling irrelevance in relation to the potential gap in taxation. This is entirely covered in Part VI of the Explanatory and Financial Memorandum: Self-financed public expenditure—i.e. spending not financed by UK taxpayers as a whole—may increase or decrease depending on how the Scottish Parliament elects to use its tax-varying powers and how it decides to treat self-financed spending by Scottish local authorities". I suggest that there is the rub. If, as we have heard from so many noble Lords, there is a belief that the Westminster parliament is extremely unlikely under tight public expenditure control to increase the block grant—it could be decreased and would be very unlikely to go up—and the Scottish parliament is to work as it must for Scotland and Scottish business, there will be a great appetite for programmes and policies that require cash. The cash will not be there. In another context we have heard about "leaving nurse". There is perhaps a feeling that the effect of the thumbscrews applied by both the present and previous administrations to local authority expenditure may be less under a Scottish parliament. There will be a great appetite for local authority expenditure.

If the Scottish parliament has discretion and in its wisdom decides to pass responsibility for non-domestic rates to local authorities, the amount raised by that means will be £1.4 billion. That is equal to the amount raised by council tax and is included in the £5.3 billion. That would be subject to great pressure. There would be no more money from central government. The council tax could not be raised because the parliament would have to report to the electorate. Once again the tax would fall back on business. That is a major concern to business. I hope that the Government will consider an amendment to place some form of cap on the tax to be raised on business.

On Monday I attended a conference in Edinburgh to hear what the political parties had to say about business. The Labour view was put by Henry McLeish, the Liberal Democrat view by a distinguished industrialist and the SNP view by one of the Ewing dynasty. Perhaps I may run through those views quickly. Labour said that there was no point in having a parliament if it disadvantaged business and the economy; business must be involved; business policies must have priority; there must be a stable economic framework; inward and domestic investment were of equal importance; there should be strong emphasis on small companies etc. The Liberal Democrat Party spoke about wealth creation and investment in people and capital; there must be a sensible structure for business rates; tax stability was essential in the first four years; and there should be lower taxes if possible, certainly not higher than the rest of the UK. Well done to both of them.

The SNP said that a favourable business climate was essential; Scotland would succeed only if business succeeded; the Government created work and business created jobs; and no power should be given to local authorities to raise non-domestic rates above the English level. I point out that the SNP is saying to the public and to business something I wanted to hear.

I have spoken long enough. However, I express my concern that if there is no further amendment to the Bill the power that will be reserved to the Scottish parliament and ultimately to the Treasury to cut local authority expenditure if it becomes too high is not enough. Some further amendment at Committee stage of the Bill will be needed if business confidence is to rise. It is important that business plays its part.

Perhaps, with the greatest respect, I may correct my noble friend Lady Carnegy. I was deputy chairman of General Accident. My noble friend Lord Lang of Monkton is a director. On Tuesday we shall both be at the same dinner saying farewell to General Accident. We were both heavily involved in all those discussions. I have to say that that decision had absolutely nothing to do with devolution or a Scottish parliament. It was entirely about the ability to create a UK champion in the insurance industry which can compete worldwide and to protect Scottish jobs and investment in Scotland.

The Scottish parliament will sit where I had my office in Scottish and Newcastle. I hope that when they have a spare moment, all the MSPs will enjoy looking out, as I used to do, at King Arthur's seat and seeing the fulmars nesting.

Lord Sewel

My Lords, I hesitate to interrupt the noble Lord. However, he has drawn attention to the site of the Scottish parliament. Can the noble Lord confirm rumours that are circulating that because it is being built on the site of the present brewery it will shortcut the planning process, and that no change of use permission will be required?

Lord Nickson

My Lords, I should love to be able to answer the Minister on that point. However, as I retired as a non-executive of Scottish and Newcastle over five years ago, I am looking far into the past and have no current knowledge.

The Minister will be disappointed if I do not raise this point because he thinks that I cannot stand on my feet without talking about salmon. I just wish to thank him for Clause 100 which allows Her Majesty by Order in Council to produce regulations for Tweed and border Esk. He will understand why I thank him for that.

7.42 p.m.

Lord Hope of Craighead

My Lords, first, I must apologise to the Minister for the fact that I was unable to be present to hear his opening remarks due to business elsewhere in the House. I shall look forward with great pleasure to reading them tomorrow in Hansard.

I should like to say a few words about the constitutional aspects of the Bill and to comment on the provisions which it makes with regard to the appointment, removal and functions of the judiciary. For reasons which I shall attempt to explain in a moment, I believe that the new constitutional settlement for Scotland will have major implications for the work which judges do and for the way in which the work done by the judges affects the conduct of government. I also believe that insufficient attention was paid to that aspect of the devolution process when it was being explained to the people of Scotland during the referendum campaign. In the result, it is far from clear, despite all the enthusiasm which they have shown for it, that the people of Scotland have yet really understood the nature of the change in their parliamentary arrangements which will be an inevitable consequence of devolving legislative power to Holyrood from Westminster.

We all know the result of the referendum and we share a wish to see the best and most stable form of devolution that can be achieved. But if that end is to be achieved, it is essential that we should all have a clear understanding of the nature of the fundamental change which is being proposed.

One can best approach the first point I wish to make by looking at the issue of sovereignty. Much has been said about that issue in another place. It seems to have been approached by some of the Government's critics—I refer in particular to the Scottish National Party—on the basis that there was a choice between retaining parliamentary sovereignty at Westminster and transferring parliamentary sovereignty to the people of Scotland in their own Scottish parliament. That certainly is how the argument has been presented in Scotland, and I suspect that there is now a widely held belief—encouraged no doubt by the fact that the new legislature is to be called a parliament and not an assembly—that the Scottish parliament will enjoy the same sovereignty, and all the privileges which go with sovereignty, as the Parliament here at Westminster. But such a belief, if indeed there is such a belief, would be profoundly mistaken. In that mistake would lie the risk of dissatisfaction, and thus of instability, as the true nature of what has happened was revealed when the work done by the Scottish parliament was brought under scrutiny in the courts.

The fact is that there is to be created for Scotland a new kind of sovereignty. It is not parliamentary sovereignty but constitutional sovereignty. Parliamentary sovereignty will continue to reside here at Westminster. That is made absolutely clear in Clause 27(7) of the Bill. But even if the clause had been silent on the matter, there would have been no choice about this. A devolved parliament cannot be a sovereign parliament in the sense that Parliament here is sovereign. The essential characteristic of a parliament which enjoys parliamentary sovereignty is that its power to legislate on whatever matter it chooses cannot be called into question before the courts. But the essential characteristic of a devolved parliament is that it can only legislate within the powers which have been devolved to it. Any legislation which is enacted outside those powers is vulnerable to attack on the ground that it is ultra vires. My point is this. It is the judges, not the devolved parliament nor even the executive, who will have the last say as to whether or not it is within the powers of the parliament.

On one view it might seem that a new arrangement which subjected Scottish legislation to judicial scrutiny was an imperfect arrangement. After all, the position today is that Scottish legislation enacted here in this Parliament enjoys all the benefits of the principle of parliamentary sovereignty. Except in so far as a question may arise under European Community law, and, when the Human Rights Bill is enacted, under convention law, such legislation is beyond challenge once it has been enacted. There is no uncertainty. Public money can be expended and arrangements can be entered into privately in complete confidence that what has been enacted by this Parliament is the law. That will not be the position when legislation has been enacted by the Scottish parliament.

One has only to look at the devolution issues listed in paragraph 1 of Schedule 6 to see the scope which will exist for challenges to be made. No time limit is set for the making of those challenges. As has been pointed out by several noble Lords, there is to be no revising chamber. So in theory at least—I stress the word theory—subject to the exercise of the powers given to the court in Section 93 to vary retrospective decisions, legislation by the Scottish parliament could be set aside as not being within that parliament's competence long after it had been put into effect. In the wrong hands that could be very damaging.

But there is an entirely different side to this matter which we should properly recognise. The situation in which the Scottish parliament will find itself is the same as that in which parliaments or national assemblies of almost all the countries, states and provinces both in Europe and in the Commonwealth—Catalonia and Bavaria have been mentioned—which have written constitutions enact their legislation within the constitution. The United Kingdom is unique within the European Union in that it alone operates under the principle of parliamentary sovereignty. In all the other countries it is the constitution which is sovereign and binding on the legislature. The same is true in most Commonwealth countries, which see the principle of parliamentary sovereignty as outdated and even dangerous—nowhere more so than in South Africa. So on one view it can be said that the new arrangement which will apply in Scotland is a truly modern, state of the art, arrangement. Indeed, in another place the Secretary of State for Scotland said that this was a decisive step in the fight to modernise our constitution. In that respect, I agree with him. He also said that the objective was a new covenant with the people. That also is true, in the same sense as in all those other countries it is the constitution which is the covenant with the people. But the fundamental point which needs to be understood is that both the Scottish parliament and the Scottish executive will be have to respect and live within that covenant, and that it will the responsibility of the courts in the last resort to ensure that they do.

That brings me to the judiciary. This is not the time to go into detail; I can make only three or four general points. The first is the most important. It is that absolute confidence in the independence of the judges will be crucial in the working out of the new arrangements. That will have to work in two ways. The public must have complete confidence in the independence of the judges from pressure of any kind at the instance of those over whose actions they will have to adjudicate. And the judges themselves must have complete confidence in their independence if they are to do their job properly. Where devolution issues are raised the courts and tribunals before which they are raised will be brought more than ever before in Scotland into the arena which until now has been reserved for politics and the legislature. So independence from pressure from both the executive and the legislature will be essential if the covenant with the people is to be upheld.

The second point is related to the first. It will be necessary to look very closely at the provisions in Clause 89 about the appointment and removal of judges. We must ensure that what is enacted there will provide the best possible arrangement. In the past, this was left to practice and convention. Nothing was written down. Now we are to have a code for dealing with these matters. That is right and necessary, but the code will need to be complete and it will need to guarantee independence. The arrangements should be entrenched so that they will not be capable of being altered, or even modified, by the Scottish parliament. And the system for removal will need to take account of the protections which are available under convention law to ensure fairness and due process to the individual. As the Bill stands, the prospect of a challenge in the courts by a judge to his removal on convention grounds cannot be dismissed as fanciful. The position of the sheriffs, for whom a procedure for removal already exists in the Sheriff Courts (Scotland) Act 1971 but who are not mentioned in this respect in the Bill, will also have to be clarified as they, too, may have to deal with devolution issues.

The third point relates to the procedure for judicial scrutiny, including the provisions for references and appeals to the Judicial Committee of the Privy Council. Some of this ground is already being covered in the debates on the Government of Wales Bill. But in the context of a Scottish parliament which will enact primary legislation, the importance of getting these arrangements right is absolutely paramount. For example, I hope that Ministers will give consideration to increasing the number of holders of high judicial office in Scotland who are made Privy Counsellors. We must recognise that at present the only Scottish judges who are made Privy Counsellors and who become members of the Judicial Committee by virtue of their judicial office are the Lord President of the Court of Session and the Lord Justice-Clerk.

In England and Wales, and in Northern Ireland, the position is different. All members of the Court of Appeal are made Privy Counsellors on their appointment to the Court of Appeal. In the result, there is a large pool of serving and retired judges in England and Wales and Northern Ireland who can sit on the Judicial Committee with the Lords of Appeal in Ordinary. Under the present arrangements, the different position in Scotland is not important because the Judicial Committee is not required to adjudicate on Scots law. But that will change with devolution, so account will need to be taken of that—and of the future of appeals from the Court of Session to this House, as these appeals provide the only reason why Scottish judges are appointed to sit here as Lords of Appeal in Ordinary—in looking at the composition of the Judicial Committee for the purposes of this Bill.

The ultimate safeguard in any constitution is the separation of powers as between the legislature, the executive and the judiciary. The part to be played by all three branches is brought under scrutiny in the Bill. Perhaps for understandable reasons, the third branch, the judiciary, received little attention in the debates in another place. I know that that will not happen in your Lordships' House and I look forward to the examination of this part of the detail during the remaining stages of the Bill.

7.55 p.m.

Lord Sanderson of Bowden

My Lords, despite my anxieties about the huge constitutional change which the Bill brings about, I must try to be constructive and confine my main remarks to three aspects of the Bill which I believe will cause trouble and need to be examined. I was pleased to hear the Minister say that he would be open-minded when considering points as the Bill goes through the House and will not resort to what I would call "resist tactics" all along the line.

As a result of the Bill being enacted, the structures of our UK constitution will never be the same again. Implicit in that remark is that in the Government's eyes change will be for the better. I have to say that it will be for better or worse, richer or poorer, for longer than any of us will live. As has been said so often, the referendum result was decisive and clear. However, what is not so clear is whether the support for the Union in Scotland is as clear cut as true unionists such as myself would wish. This is the challenge which all three unionist parties in this House must face in Scotland in the years ahead.

The Government, having passed this Bill, cannot walk away from the knock-on effects in the United Kingdom of lopsided arrangements which have brought about the West Lothian question. It will have to be addressed if not by this Government then by a successor in the future. Being constructive, I hope that the Minister will see sense in instituting a review of the appropriate functions and powers of Scottish MPs at Westminster after the Bill has been passed and publish it during the course of this Parliament. If that does not happen, I believe that they will rightly stand accused of putting the cohesion of the United Kingdom at risk.

The noble Lord, Lord Steel, said that there was no answer to the West Lothian question. However, like my noble friend Lady Young, I believe that that is not an excuse for not trying to find a better solution than we have at present. Having had experience as chairman of the Conservative National Union Executive Committee, which covers the whole of the United Kingdom, I agree only too wholeheartedly with my noble friend Lady Young that there are stirrings in the camp in England. I know that once that fire begins to flame things will get very serious indeed for the unity of the United Kingdom.

The first issue of concern in the Bill, which the nationalists would have no difficulty in puncturing, is the concordat arrangement for the Scottish parliament in dealings with Europe, particularly in farming and fishing, which for some years I had the honour to represent in the Scottish Office. As the Minister knows, fishing is a very complex issue. It is more important in Scotland as to its size than it is south of the Border. So our Scottish voice is very important in the Council of Ministers.

While the Ministry of Agriculture takes the lead, it is not always easy for territorial Ministers—I am sure the Minister will agree with this—albeit from the same party, to reach a united view in order to put their case. I suggest that that will be even more so if the Scottish parliament and UK Ministers represent different parties. If there is no statutory framework governing Scottish participation in the Council of Ministers on those subjects, what is to prevent the National Farmers' Union of Scotland or Scottish fishermen's federations and others bypassing the Scottish parliament and dealing direct with the lead Ministry? If that were to happen, I believe that we should be handing to the SNP remarkably good ammunition and we must do our best to ensure that that does not happen.

Secondly, the Bill is not sufficiently explicit on tax-raising powers. As has already been said by my noble friend Lady Carnegy of Lour, the Institute of Chartered Accountants of Scotland has written to many of us suggesting that it is concerned about how Part IV is meant to interact with the basic rate of income tax and other parts of the system. It says: It is a fundamental point because it illustrates a lack of clarity in primary legislation designed to implement constitutional change". It goes on: If the tax raising powers are brought into disrepute this will have a knock on effect on the credibility of the new Parliament". I hope that in Committee, we shall consider those matters and in particular the view of the Inland Revenue, as I understand it, that it would prefer the SVR to be treated as a levy rather than as at present an extension of the basic rate tax. Why on earth did the Government abandon the 183-day rule on residence for something far more obscure and difficult to comprehend?

Scottish industry is watching developments most closely in those areas as the success of this parliament is so vital to its survival. It will no doubt be encouraged by the assessment of the noble Lord, Lord Steel, that real economic success—or did I hear the word "boom" mentioned?—may come as a result of the new parliament. But I have some doubts and was somewhat alarmed by statements from another place from the Liberal Benches which said that the funding settlement gets us off to a good start. However, we shall have to revisit that issue.

There is widespread talk in Scotland of the Scottish parliament, either directly or indirectly through local authorities, raising such taxes as the tourist tax—I think Councillor Geddes mentioned that—a local sales tax and higher business rates. I, for one, worked extremely hard for several years to try to bring down those business rates in line with England. We succeeded because a lot of money from the Scottish block had to go into that. But I do not regret a penny of it because we in Scotland, in industry, can compete on a level playing field with those south of the Border. Woe betide any government, whether in Scotland or at Westminster, who try to undermine that arrangement because the net result will be that industry in Scotland will suffer and some of it could easily move elsewhere.

As I understand it, as presently drafted, the Bill does not prevent extra taxes being levied if 3p does not raise the necessary sums. Furthermore, it does not prevent additional revenue being raised through local taxes. I hope that those matters will be studied carefully in Committee.

I am in total agreement with the noble Lord, Lord Hughes, and, surprisingly the noble Lord, Lord Kirkhill, on the question of the unicameral Scottish parliament. It may be because they, like me, have had to pick up the pieces from the other end of the corridor as regards legislation on several occasions. I cannot conceive of legislation coming from a unicameral Scottish parliament which will be any different from that which came from the other end of the corridor, from whichever party is in office. I hope that this matter will be looked at. I know that there is no easy solution. I was extremely impressed that the noble Lord, Lord Hughes, had taken the trouble to find out what happened in Norway to see whether a solution could be found.

The most important thing that we must do is to try to make this Bill better than it is. I hope that we shall succeed. I hope that the Scottish parliament will live up to the people's great expectations of it. Like my noble friend Lord Mackay of Ardbrecknish, I hae my doots but like a good marriage it will take hard work to make it work by those who really truly believe in the Union.

8.5 p.m.

The Earl of Lindsay

My Lords, in view of the long list of speakers, I shall confine myself to one principal issue. It was an issue raised by the Minister in his opening remarks. But despite the assurances that he sought to give us then, it remains a concern for my noble friend Lord Mackay of Ardbrecknish and other noble friends and noble Lords who have spoken since. I refer to the policy formulation and decision-making processes which will attach to agriculture, fisheries and environmental policy in Scotland after this Bill is enacted.

I should remind the Minister that concerns expressed by my noble friends and others during the debate are felt also by various organisations in Scotland. It is undoubtedly an area where more reassurance and clarity is required.

The effect of the Bill devolves legislative competence for agriculture and animal welfare, fisheries, the environment, natural heritage, pollution, water and so on to the Scottish parliament. But the critical decisions affecting those areas are, as many noble Lords know, determined largely at EU level. Hence the obvious sense for Scotland in the current arrangements whereby UK policies regarding such issues and the subsequent negotiation within the European Union are formulated jointly by Scottish Ministers, as UK Ministers, along with the appropriate Whitehall and other territorial Ministers.

Annex C of the very useful guide to the Bill points out that the Bill reserves all EU matters to Westminster, while at the same time, the new Scottish Ministers will lose the formal role which they currently exercise as UK Ministers in the surrounding policy-making process.

Thus as regards agriculture, fisheries and the environment, Scotland may well be gaining legislative competence and no doubt there will be opportunities where that new competence can be put to very good use. In opening, the noble Lord, Lord Sewel, welcomed the prospect of local solutions to local problems; and so do I. However, some of the very real problems which exist in those areas and their respective solutions are far from being local.

As regards the interest of Scottish farmers, fishermen and all those with an interest in Scottish environmental policy, the principal policies and measures which the new parliament will implement will not be initiated, negotiated or decided by Scottish Ministers or a Scottish parliament, but they will be initiated, negotiated and decided through a process that no longer has any formal role for Scottish Ministers.

The loss of formal competence in UK policy matters and EU negotiations will be a high price to pay. Neither the opening remarks of the Minister nor Schedule 5 provide much guaranteed comfort in that respect.

I regret that the future input of Scottish Ministers to the meetings and deliberations of EU Councils of Ministers will at best be rendered ambiguous. Along with many other Scottish Office Ministers in this House, many of whom have spoken already in the debate, while I was the agriculture and environment Minister, I attended more than a dozen agriculture Councils and four or more environment Councils. Although I was a Scottish Minister, my status as a UK Minister enabled me to speak regularly during the formal Council proceedings. Such occasions sometimes reflected agenda items that were of particular interest to Scotland, but that was by no means always the case. For all or most of two Agriculture and two Environment Councils, I was the only UK Minister attending. I thus led for the United Kingdom on the entire agendas and spoke for the UK on them as a Scottish Minister. Will that be possible in the future? From the Minister's opening remarks it appears that it will clearly not be, as he said that UK Ministers would always lead at EU Councils of Ministers. In future, Scottish Ministers will not be UK Ministers; in other words, they will not be Ministers of the Crown.

Further, with what ease and frequency will Scottish agriculture, fisheries and environment ministers be able to speak and contribute to EU Councils of Ministers in the future? When a Council of Ministers goes into closed session and only member state Ministers are allowed to remain in the room, how easy will it be for devolved Scottish Ministers at that moment to stay with their Minister of the Crown colleagues? Indeed, will Scottish Minsters be confined to the public areas of the Brussels and Luxembourg Council buildings, except where, under the provisions outlined in Schedule 5, they are providing assistance to a Minister of the Crown? Will Scottish Ministers be allowed to access the Council buildings and the Council chamber as and when they wish, even when their assistance has either not been sought by a UK Minister or has actually been refused by a UK Minister?

The Minister approves of the brevity of the reference in Schedule 5 to those areas in that he feels that it will deliver flexibility. However, brevity may also deliver uncertainty in such areas. Although it may sound far-fetched to some, if there are different parties in government both north and south of the Border it could well be that Ministers from both sides would be pursuing very different policies. Therefore, it is possible that the UK Minister in London could actively seek to prevent a Scottish Minister from attending a certain Council of Ministers. He may fear parallel press conferences from different Ministers in the UK preaching different messages on the same issues.

The latter are not nit-picking questions, because EU policy has such an immensely significant impact on Scottish agriculture, fisheries and environmental concerns. Rightly, therefore, it is the Scottish Ministers who currently decide when they want to go to Brussels, which Councils they wish to attend, whether or not they want to attend inside the Council chamber and whether, with the agreement of fellow UK Ministers, they actually want to speak. At present, Scottish Ministers are in no way confined in either their appearance or indeed in their movements during Councils of Ministers. That is an important prerogative that Scottish Ministers should retain. During later stages of the Bill, I hope that we will receive some reassurance and clarity from the Minister in that respect.

As has been said by various other former Ministers who have had experience of such Councils, there is often tension between Scottish Ministers and their Whitehall colleagues at these Councils, even when Scottish and London Ministers are of the same political party. We must make allowances in the future for the fact that those tensions might be very much worse where Ministers from either side of the Border come from different parties.

The current ability for a Scottish Minister to attend in his own right and of his own volition is, I believe, important for two further reasons. First, there is the fact that the haggling and late night horse-trading that an EU Council decision will often require can leave pre-arranged policies in tatters. The pre-agreed negotiating positions are unavoidably subject to adjustment and compromise. According to my first-hand experience, such last minute alterations can have significant implications for Scottish interests. In addition, there are also useful opportunities for Scottish Ministers to pursue valuable lobbying and diplomacy during a Council meeting outside the Council chamber itself—in other words, in and around the surrounding corridors, the surrounding offices and the surrounding watering holes. Such opportunities are vital to Scottish Ministers, especially when they are pursuing issues which are not actually on the formal Council agenda.

I do not want the advocacy of Scottish interests in Europe by Scottish Ministers in charge of agriculture, fisheries and the environment to be side-lined. Therefore, I derive no reassurance from the fact that, despite the innumerable hours that I spent in and around Council meetings, I never once met—nor, indeed, did I ever hear any reference to the presence of—a Minister from Catalonia, Bavaria or from any other devolved region. I do not want Scottish Ministers to be, as it were, reduced to a silent and non-speaking status.

I shall conclude with a brief reference to three other points. The first point is one which no doubt will be clarified as the Bill progresses. I seek clarification regarding the proposed devolution of legislative competence for food standards and the relationship that is envisaged between the Scottish parliament and the Food Standards Agency. My second point is particularly appropriate for the Minister. I believe that the Bill offers a very good opportunity for an explicit reference to the promotion of sustainable development in Scotland through the powers and procedures of the new Scottish parliament. I accept the argument that it is implicit, but I also recognise the fact that Scotland has often taken the lead in the past in such matters. Indeed, it was Scottish legislation that first included sustainable development on the face of a UK Act. I believe that there is good reason for Scotland to take the lead once again, and to do so to its own credit and advantage.

Finally, I turn to a point which has been well covered by various noble Lords; namely, the extent to which single chamber government can incorporate the same kind of scrutiny, revision and counter-balance in its operation as a second chamber would normally provide in most other governmental arrangements. I look forward to hearing the Government's response.

8.17 p.m.

Lord Hogg of Cumbernauld

My Lords, like my noble friend Lord Hughes of Woodside, I have expressed occasional sceptical views in the past about certain aspects of devolution. The fact is that I have previously questioned such matters, but I am now satisfied that what the Government propose adds up to good legislation. Of course, it is a Bill which results from a long-standing aspiration of the Labour Party and the people of Scotland, as has been said repeatedly. Indeed, it received massive support in the referendum.

The Bill also has the support of all Scotland's great institutions, including the Church of Scotland and the Scottish Trades Union Congress. I mention those in particular as they are the two mass membership organisations in Scotland today. Devolution is supported by all the political parties that are represented by election at Westminster and in the European Parliament.

I was pleased to see that Mr. Hague had called on his supporters in Scotland to make a success of the new parliament. I am sure that the Opposition Front Bench will forgive me if I say that we will judge that on the Government side of the House by the approach taken to the business of opposition during the passage of the Bill. However, for the moment we assume that there is something of a consensus surrounding the issue; indeed, that is how it should be.

I believe that how our people are governed is a matter upon which consensus should be sought among all Members of this House and the other place, as well as the political parties in the country. If we can agree on that, as I believe we have in the past, we underpin the political stability of our country which has been such a positive factor in our long history. I support the Bill because I believe the country is ready for another advance in democracy. Our structures of government are not set in stone. They have to change and develop. The judgment we have to make is how far-reaching change should be and that what is done is always with the consent of the people. I believe therefore that this Bill is the right measure.

The Bill is about extending democratic control over those measures already administratively devolved to Scotland. The powers and functions that are properly the responsibility of the United Kingdom are retained.

The Bill recognises the right of the Scottish nation to insist on the devolution of, and control over, those matters that have always been the preserve of Scotland through the terms of its treaty with England. The Scots have preserved their right to determine their own system of education which was developed out of events having their origin in the Reformation. The Scots want control over health and over social policy including law and order. The Bill serves those ends and strengthens historic commitments.

The Bill brings government closer to the people. In doing so it reinforces an essential quality in the make-up of the Scots that authority is derived from the will of the people and from nowhere and no one else. I told the General Assembly of the Church of Scotland last month that such principles were the very stuff of being a Scottish Presbyterian and the very stuff of being a Scot. I am a unionist. I recognise the great benefit of the Union over the past three centuries. The Labour Party is unionist and this Bill seeks only to devolve existing power. I believe the House understands very well the relationship between the parliaments. Time does not permit me to reiterate the arguments.

I am proud to be a Scot. I am a true patriot but that is very different from being a nationalist. I, too, want to say something about Scottish nationalism because the fear is often expressed by the opponents of devolution—we have heard much of that today—that this Bill will lead to separation.

Nationalism seems to me a small idea. The Scottish variety is no different. My right honourable friend George Robertson said it had a darker side. We know that to be true. Nationalism is exclusive. Its bottom line is surely that it says to minorities, "You are not one of us." That fact is expressed today in many of the former communist countries of eastern Europe with tragic consequences.

I do not believe such things could occur here, but there have been sad and unacceptable happenings in Scotland, not, I stress, at the hand of the SNP but as a consequence of the licence given to excesses by the rise of a nationalist ethos. Disparaging the English, even hating the English, has been fostered by films like "Braveheart". It was meant as entertainment—it was supposed to be cowboys in kilts—but it has been used to build a nationalist ethos.

In recent times there have been excesses that have horrified all decent people in Scotland. Those events, one tragic, are well documented in an article by Lawrence Donegan in the Scotsman of 6th June. If Members of your Lordships' House read the article they will understand the grounds for the deep worries and concerns many of us feel about nationalism's darker side. As I said, nationalism is a small idea not worthy of the Scots.

But, of course, there is worry about opinion polls. My right honourable friend the Secretary of State for Scotland made the point that when the Bill is implemented the arguments of the Scottish nationalists, and their appeal, will diminish. However, I am not inclined to take advice from the Conservative Benches about opinion polls because in real polls the Conservative Party in Scotland has lost all its seats. However, all the seats held by the Scottish National Party are seats formerly held by the Tories. Someone must explain to me how Conservatives and unionists can become nationalists. I have never understood that. However, that is what has happened. I do not think that those on the Benches opposite should give us advice about shifts in public opinion or what that may mean. The Bill will not lead to—

Lord Mackay of Ardbrecknish

My Lords, I am grateful to the noble Lord for giving way. At the risk of giving him a piece of advice, I hope I may tell him that for four years up until last May a certain political party said that it did not believe the polls. That did not turn out to be the case, did it?

Lord Hogg of Cumbernauld

My Lords, I am not saying that I do not believe the polls. I certainly believe that the polls as of today's date represent a shift in opinion. What I am saying is that I do not believe that this Bill when enacted will see those polls translated into reality at the ballot box. That is the difference between us. I am sceptical about taking advice from my good friend, the noble Lord, Lord Mackay of Ardbrecknish.

The point I was making is that I do not believe this Bill will lead to the break-up of the Union. It will build on our traditions of democracy, freedom and tolerance. I believe that it will defeat nationalism because it will rob it of its sense of grievance, and nationalism in Scotland is built on a sense of grievance, and that alone. The Bill expresses the settled will of the Scottish people, as has been said before. I hope that the House will give the Bill its full support, improve it by all means but at the end of the day enact it.

8.26 p.m.

The Duke of Montrose

My Lords, I feel particularly privileged to be able to speak on the Second Reading of this Bill. In declaring an interest I admit, like many other speakers, to one in my ancestry, my residence and my livelihood. Perhaps speaking with a little more relevance, I should say that this year I am president of the Royal Highland and Agricultural Society of Scotland, whose remit takes in all rural affairs.

A couple of weeks ago I took an ancient sword to be displayed in an exhibition commemorating the 700th anniversary of the battle of Falkirk. The sword's history can be traced back to Sir John de Graham, the historical right-hand man of Mel Gibson—I beg your Lordships' pardon; the noble Lord, Lord Hogg, has misled me. I meant to refer to the right-hand man of Sir William Wallace. I say that to illustrate how easy it is for the public to become confused as to whether facts stem from Hollywood or from history. Sir John was killed in that battle. The names of many succeeding generations of my family appear in numerous aspects of Scottish history from the Declaration of Arbroath to the Act of Union and beyond. I am tempted to pick a bone with the noble Lord, Lord Steel of Aikwood, for his rather sweeping statement about the part that bribery played in the passing of the Act of Union. However, I do not think that would advance our cause tonight.

At the present moment ordinary Scots find themselves surrounded by salesmen for devolution in all their beguiling colours. I hear little outside this Chamber of what used to be regarded as one of our great assets, the universally recognised "canny Scot". We hear little of how Scottish pride and independence of character can contribute to the associations and institutions of the whole country to which we as a nation belong.

I was glad to hear the Minister mention that this legislation is taking us into uncharted waters. We are offered new institutions, voting procedures and ways of drafting legislation with almost the same assurance as if they were new washing powder or wallpaper. Those products are at least the result of scientific and market testing. We have been offered some explanation by the noble Lord, Lord Steel of Aikwood, and we have heard the wisdom of the noble and learned Lord, Lord Hope of Craighead, as to the existence of those concepts elsewhere. But the public might have a better understanding of what we are about to undergo if they were described as novel or (dare one say it?) experimental arrangements.

Together in these British Isles we have developed institutions and traditions, industries and economic influence which have at times been an inspiration to the world. I would liken the United Kingdom to a family of brothers. We still need to consider our joint responsibilities for our past, as we do our potential for the future. For one member of the family simply to say, "I am leaving", would not negate our common parentage nor be sufficient to deny all that has gone before, and I personally hope that there is still greater strength in our all continuing to move together.

It would appear that a great many of the issues to be raised in relation to the Bill have inevitably been thrashed out in this House as part of the debate on the Welsh Bill. I noted in particular those raised by my noble friend Lord Crickhowell about the accountability and career implications for civil servants.

Having spent over 30 years in active farm and countryside management, including eight years on the council of the Scottish National Farmers' Union, my concern over this proposed legislation has focused on how it will affect agricultural and rural affairs. In terms of fundamental finance for Scotland, this looks like being the area where the greatest changes will be felt.

Scotland is familiar with the block grant from Westminster as it now stands. But the Scottish Office Agriculture, Environment and Fisheries Department has a budget this year, outside the Scottish Office block grant, of £509 million. Under the arrangements outlined in the White Paper it would appear that £173 million will no longer be negotiated with the Treasury by a UK Minister devoted to Scottish rural and environmental affairs. Is that sum simply to be added on to the present Scottish block grant, or will the sums of money devoted to similar areas in England be totted up together and, by the use of the Barnett formula, whose future cannot be guaranteed, a sum be added to the Scottish block? The agricultural and rural interests, which rely on that funding, will then have to bid, along with all the other demands of the Scottish economy, for what are bound to be fairly scarce resources.

I have spoken to some of those in agricultural education and research who are extremely worried about how what could become a relatively haphazard flow of resources could undermine their long-term viability. That leaves aside the impossibility of knowing for some time yet what the initial sum will be. Just yesterday I was talking to someone in this building who pointed out that that money provides the core funding for a world class biological research industry that provides 10,000 jobs in the Scottish central belt alone.

Other Members of your Lordships' House, notably my noble friends Lord Lindsay and Lord Sanderson, dealt with the question of Europe. I hope noble Lords will forgive me if I return to it briefly. My noble friends spoke of the pitfalls that are likely to be encountered in putting across the case that is required to secure the remaining sum of approximately £360 million of support which it is anticipated will come to Scottish agriculture this year from Europe. That is a not inconsiderable sum. In some ways it bears comparison with the sum which it is thought will be raised through an extra Scottish tax.

Almost by definition, within the European Union at present it is extremely unlikely that agriculture and the environment would ever be seen as matters of sufficient subsidiarity to be devolved to the Council of the Regions. But unless that happens, the Scottish minister for these matters will always been seen in European circles, in whatever role he is asked to speak, as the monkey rather than the organ-grinder.

The fact that there has been very little comment on the devolution proposals from those who represent agriculture in Scotland is perhaps just a symptom of the crisis that the industry is in at the moment. The drop in farm incomes, coupled with increased environmental and animal health regulations, leaves them without much time to consider many other aspects. However, it is revealing that when I talked to one of those responsible for one of the representative organisations he seemed to think that the best channel left for seeking to promote Scottish interests would be an attempt to persuade the English NFU to adopt the policies that would be most favourable to the Scottish context. Never an easy task! Is that not an indication of just how remote Scottish interests will be from the seat of influence under the proposed arrangements?

It is evident that the Government expect there still to be a Secretary of State for Scotland. One or two noble Lords have hinted at the fact that, given the very few responsibilities left, it is uncertain whether they would be adequate to justify a continued place in the UK Cabinet. Will the Minister consider what role that position could still play, and spell it out in rather more detail than is presently being revealed? That is surely the area where more muscle could be available for agriculture, as for other industries already mentioned, which are both Scottish and national industries and whose future is governed from Europe. They might be better served if some aspects of their administration were reserved in the first instance to such an office.

8.36 p.m.

The Earl of Mar and Kellie

My Lords, since I shall speak about history and the future, I ought to mention that among my predecessors were those who negotiated the Union of the Crowns and of the Parliaments and who raised the first rebellion against the Union.

The arrival of this Bill signifies the recognition that the constitution of the United Kingdom is unfair and in danger of breaking up. The main problem is the domination of the United Kingdom Parliament by representatives from England. By that, I mean that representatives from Scotland can be outvoted on Scottish domestic matters, the outcome being that democracy exists only at local level in Scotland. The Bill sets out a means of returning some aspects of national government to Scotland and introduces democracy at national government level for the first time.

The treaty of 1706 was signed between two sovereign, and hence equal, states. Therefore, one must conclude that Scotland entered the Union on a voluntary basis, at least de jure. On the face of it, that is fine. But the reality was that the English state had achieved all that it had dreamed of—the annexation of Scotland in all but name. The Bill puts in place a national parliament and in so doing rights a wrong that has been festering for the past 293 years.

The treaty is in tatters. It has been violated many times and is in need of renegotiation. The Scots of the 18th century made the mistake of seeing the treaty as a written constitution. The catalogue of violations starts with the abolition of the Scots Privy Council and the Scottish Mint in 1708, the imposition of the malt tax a few years later, and the abolition of the post of Secretary for Scotland in 1746. I acknowledge that that post was wisely re-established in 1885. Scots who had fought for the Stuart cause were hunted down and subjected to genocide following the defeat at Culloden—genocide, because their wives and children were killed as well. All that must remain in the past.

The question for Scots today is this. Is Scotland best served by being in a reformed British multi-national state, or by withdrawal and becoming a small European state? I am happy to accept either verdict so long as my compatriots come to a mature decision about it. It would be wrong to equate the SNP vote, either in an opinion poll or at a general election, with a vote on independence.

This is not a call for a referendum—at least not yet. I am keen that the Bill be implemented and allowed to bed down. I want these reforms to be well tested and therefore I am keen that there be no referendum on United Kingdom membership for at least 10 years. That provides an incentive to prove either that the reforms are the improvement hoped for or that the experience and confidence gained from this limited exercise of national government leads to a desire to take the consequences of sovereign government. It was helpful to have the statistics provided by the noble Lord, Lord Nickson.

Before moving on to the Bill, I have to say that the government of a United Kingdom does not have to be as narrowly defined as it is in the British constitution. There is no reason that there has to be a parliamentary union. The United Kingdom could also be a social, linguistic, economic and defence union. There could be a tax-gathering parliament in Scotland under the crown. That was exactly the negotiating position of the Scottish Parliament in April 1706. It is equally valid now.

So to the Bill. It introduces a devolved parliament to Scotland with this Parliament retaining the right to pass Scottish domestic legislation. That is enshrined in the obscure sounding Clause 27(7). Elsewhere, the Bill gives the right to any Secretary of State to overrule the Scots parliament if it appears that reserve powers or European legislation are being affected by Scottish legislation.

Those powers of the Westminster Parliament I regard as inevitable. It is a scheme of devolution after all. The question everyone will watch for is this: how will this Parliament and its government approach the use of those powers? Will confrontation be sought with the undoubtedly junior Scottish parliament or will the process be one of diplomatic negotiation? A process of advice prior to the third reading of a Scottish Bill would seem to me the best route ahead.

I hope to bring forward amendments concerning the funding of the parliament's environmental responsibilities. These are of greater proportion than the human population would imply. A needs-based assessment rather than a population-based formula is needed. I shall also raise the subject of children's rights-proofing of all legislation and, further to that, raise the subject of remote areas-proofing.

While canvassing to be a candidate for the Scottish parliament in the far north constituency, I came to realise that the anxiety felt in north-west Scotland about the domination of the parliament by the central belt would best be met by a remote areas standing committee, with the task, among others, of commenting on legislation in a rural and remote context.

I also mention my reluctance to see the membership of the parliament reduced in numbers, especially if it affects proportionality. One of the hidden safeguards for the remote areas is that the 129 members, and especially the regional members, give the remoter areas a disproportionately better representation than the central belt. This I approve of. It is a satisfactory way of counter-balancing domination by the more urban and populated areas.

The Bill is designed to define how the Westminster Parliament will act in the governance of Scotland. Therefore, I accept that the way the Scottish parliament will proceed is largely left to the membership to determine. I am surprised that the list of reserved powers includes broadcasting and abortion. In their own different ways, I feel that these are domestic issues and that they should be devolved. Not to have the power to summon the broadcasters to give evidence to parliament just because Clause 24 does not extend beyond the Border seems a travesty, especially when one considers the effect that they can have on the behaviour of the population.

In conclusion, this Bill contains the hopes of the Scottish people. Its enactment will probably reform the United Kingdom sufficiently to satisfy popular demand for Scottish autonomy within British solidarity. Meantime, it will certainly allow the people of Scotland to be seen in a different light in European circles as a re-emergent nation.

8.45 p.m.

Baroness Strange

My Lords, I must declare an interest as being Scottish, having lived nearly all my life in Scotland, where I still live, been to a Scottish school, a Scottish university and my family, the Drummonds, although originally Hungarian refugees, have lived in Scotland for nearly a millennium. I must also admit that my ancestors intermarried with Welsh, Irish and even English so I can claim unequivocally to be a member of the United Kingdom of Great Britain.

As your Lordships may be aware from previous debates, I, like my ancestor who was a member of a Scottish parliament before 1707, have both believed fervently in a united parliament of the United Kingdom. I have always been very much against going back. I voted "No" in the referendum and I am not a convert.

One of the ladies standing outside Errol School with a large placard saying, "Vote 'Yes"", said to me, "I voted for Scotland". "So did I", I said. However, I also believe very strongly in democracy and as a large majority in Scotland voted for a separate parliament—though no one did from my local hairdresser, post office or dentist—I reckon it is my duty to help try to make it work.

Once I was making a special steamed pudding for a lunch party for my grandmother when unfortunately the water got in and turned it all into porridge. However, I drained it a bit, put it in a flat dish in the oven with butter and sugar on top and said it was a sort of crême brulée. It was not as good as it should have been originally, but it worked. I expect King Alfred got away with the burnt cakes by saying that they were a new form of intensive cooking. Indeed, I have often wondered whether the burn in Bannockburn was not referring to a stream, or warriors, as in Anglo-Saxon beorn, but to some culinary disaster with the oatcakes.

Many of your Lordships have referred to current areas in the Bill which will need sorting out in order to make it work. The main problems are, of course, financial, because a new parliament, with the appropriate buildings, infrastructure and salaries of the members as well as their supporters, will all cost money. Some of this money may be raised by taxation in Scotland. There is a suggestion that some may be raised by cutting NHS spending in Scotland.

The Institute of Chartered Accountants in Scotland has also very serious reservations about the drafting of the tax clauses. And, of course, with heavier taxes to pay, new businesses will be less keen to invest in Scotland. It makes sense not to invest in a place where everything is going to cost you more. Already there has been difficulty about Mitsubishi shutting down its TV plant in Haddington. This may be just the tip of the iceberg and nobody who lives in Scotland and loves her wants her to turn into a "Titanic".

There is further the question of land reform. There is a strong bias in the Government's paper against private ownership of land. Having just returned from Bulgaria, which is finding its way out of communism and public ownership, I am very well aware of how public ownership does not work well. I am also aware of the efforts which private owners put into owning and managing land or any other assets. With public ownership, the feeling of personal duty and obligation is very much lessened.

Another area which certainly requires teasing out is that of Scotland's relationship with the European Union. Despite what the noble Lord, Lord Sewel, said when he referred to an enabling commission, Scottish Ministers must continue to attend the EU Council of Ministers as of right so that they do not lose their voice in Europe. My noble friend Lord Lindsay put that point much more pertinently. Agriculture, fishing and development funding are all things that we in Scotland need to discuss at first hand in Europe. They are all vital to our well-being. There is not as yet statutory provision for Scotland to set up a representative office in Brussels or to continue our veto on policies affecting farming and fishing.

Finally, there is the West Lothian question. As my noble friend Lord Weir said, there may in future be dissatisfaction about having here in England a Scottish Prime Minister, Scottish Chancellor of the Exchequer, Scottish Foreign Secretary and Scottish Minister of Defence. Even if the number of Scottish Members is reduced in the English Parliament, the question is still relevant. Flying around our dovecote at home are four beautiful white fan-tailed pigeons given us by the honourable Member for West Lothian. I can only hope that his metaphorical pigeons do not come home so easily and so persistently to roost.

8.50 p.m.

Lord Ellenborough

My Lords, apart from the distinguished exception of my noble friend Lady Young, I do not believe that any of the previous speakers comes from England. On Second Reading of the Government of Wales Bill, my noble friend Lord Crickhowell mentioned English dogs that bark in the night. One or two of them may have been placed rather far down the list, to speak when most people have gone home.

In all the devolution debates in which I have taken part over 20 years, I have always spoken as a UK Unionist. I am 100 per cent. English but always pro-Scots. I speak as one who is increasingly concerned as to whether there will still be a United Kingdom a decade from now. I am not reassured by the noble Lord, Lord Sewel.

In this Bill and that for Wales, we are debating not just the constitution of Scotland and Wales but that of the UK, which includes England. The Scotland Bill must be one of the most fundamentally important since the war because it vastly changes the way that this country is to be governed and effectively ends our unitary state. It seems important that some speakers from England should express a view.

Scotland is of course perfectly entitled to vote for its own parliament or even for independence, but I believe the vast majority of the population of the UK would view the latter course as an unmitigated disaster and tragedy. It is unbelievable that one has even to contemplate a break-up of the UK, which has been a force for good over two or three centuries, during which time the Scots have greatly contributed in so many ways—one could say, to a disproportionate extent given their small population. That is why, up to now, Scottish over-representation at Westminster and extra expenditure under the Barnett formula have been generally accepted.

I hope and trust that Scotland will not break away, but this Bill is seen by many as another, and so far the worst, example of a politically motivated constitutional innovation in the absence of any clear and considered idea of just where, how far and in what form that process may end for the UK. The Quebec situation has been mentioned. Can one imagine the hair-raising cliffhangers in a few years if that were to happen in respect of Scotland? Whatever the merits or otherwise of devolution, it must be durable. There is no point in bringing forward proposals that are not fair to all concerned—and the proposals are not fair to England. The English not only expect fairness but are just as entitled as the Scots, Welsh and Irish to express their national identity.

The irresponsible weakness of the Bill is that it builds up potential conflict between Scotland and England. The role of the Secretary of State and his influence in Cabinet will be greatly reduced, which will mean that the position of Scotland in the UK and within the Council of Europe will be much diminished. Worst of all, the Bill utterly fails to address the English dimension and the UK as a whole. Any concern expressed evokes absolutely no response from the Government. The problem for the Government is that there is no answer, or at any rate no palatable answer. They continue to adopt an ostrich-like stance, which will catch them out in the end.

Government policy has already been rumbled. The idea was to give Scotland a parliament in such a way that it would stop the Scottish National Party in its tracks, but all indications are to the contrary. Devolution has been described as a stepping stone to independence but, judging from recent opinion polls, it is more like a rocket. At the same time, the Government's idea is to shore up their strength at Westminster by using Scottish votes on English legislation and perpetuating the over-representation of Scotland as long as possible. The derisory sop of the potential reduction of 10 or so MPs at some time well into the next millennium—not at the end of this Parliament but at the end of the one after that—is pathetic. In any case, that will only alleviate the problem and, as Mr. Tam Dalyell and others have pointed out, the West Lothian problem goes much deeper than just voting on exclusively English legislation.

An even more serious dilemma is that Scots MPs could in due course determine the political complexion of English Secretaries of State responsible for education, health, the environment and so on. The Scotland Bill, like the Government of Wales Bill, highlights the problem that the Government will not face—how to balance the constitution of all four parts of the Union when they will have a different form of government. Scotland and Wales will be over-represented in comparison with England, and both Scotland and Wales will receive a higher proportion of government spending than in England.

The nightmare scenario of the Union will in all probability arise in five years. I hazard a guess that the SNP will not quite succeed in next year's elections for the Scottish parliament but, after a stultifying four-year period of a Scots parliament run mainly by Scots Labour, it will be a different matter. By that time, there will be the danger of rampant nationalism in Scotland. The Government will have a war on two fronts. By then, it will be blatantly obvious to the poor old English, who are normally so quiescent and slow to be aroused, that their affairs are being unduly and adversely influenced by Scots MPs. Sooner or later, simmering resentment will explode, when a hospital is closed down in Watford or wherever. The problem will initially be disguised by the large Labour majority in England but the Government should not assume that state of affairs will necessarily be the case after the next general election.

The Scotland Bill and Government of Wales Bill are widely seen as part of the Government's policy of fragmenting the UK—moving closer to a Europe of regions and away from the concept of nations. Regional assemblies for England as the Government's answer to the English problem is nonsense. At least the Welsh assembly and the Scottish parliament will be constructed on historic national borders and identities. No regional assembly in England would be comparable, but it would need to be so if the West Lothian problem is to be solved.

Many other ideas must be found if the UK is to survive. Any reduction in Scottish MPs merely alleviates or dilutes the problem; it does not solve it. The possibility has been raised of an English grand committee and so-called "English days" which might work temporarily, but they are riddled with anomalies and great difficulties could arise when, as is often the case, there is a Conservative majority in England but a United Kingdom which is Labour.

I was glad that my noble friend Lord Gray of Contin mentioned the possibility of an English parliament. But he said that that would be extremely costly and complicated and should certainly not be taken lightly. I have a little doubt in my mind that we will need an English parliament and the formation of an appropriate federal structure. Anyone reading the speeches on devolution in another place and the many articles in the press, will be struck by the increasing and substantial support that this has attracted—by no means just from Conservatives. Moreover, there would appear to be a growing acquiescence from the more enlightened Members of other parties that at least only English Members should vote on English matters.

Moving towards a federal structure will mean parliaments in England, Scotland, Wales and, hopefully, Northern Ireland—though were I a Northern Ireland Unionist I would worry whether there would be a UK to which to belong a few years from now. There would be a much reduced role for the UK Parliament which would have reserve powers similar to those proposed under the Bill before us. As has been pointed out, the predominant part—namely, England—would comprise over 80 per cent. of the whole. It has been pointed out that there has been no successful precedent for an arrangement whereby the main participant of a federation was so large. But, equally, so far as I know, there has been no unsuccessful precedent either. Such an arrangement would be more radical, more logical, more understandable and workable than the Labour constitutional quagmire of mishmash which is neither credible nor sustainable.

It may well come to pass that such an arrangement will be the last chance—the long stop, as it were—to save the Union a few years from now. It will certainly be a question of whether the will and determination exist to make it work. As matters stand, I fear that all the seeds of destruction of the Union lie within the Bill.

9.2 p.m.

The Earl of Onslow

My Lords, most of the activities of Her Majesty's present advisers can be regarded by most of us with a certain amount of approbation. Their start has been much better than that I remember of, say, Harold Wilson, or the back end of Edward Heath's term. It is fair to say that most generous minded Tories would say that the victory of the last election, even if over large, was not undeserved, perhaps because the victors were neither socialists nor Labour. However, there is one dreadful exception to that general approbation; that is, the desire of Her Majesty's present advisers to tinker with the British constitution.

The Welsh have been cajoled into a half-baked assembly. There is talk of changing the voting system in such a way that never again will the British electorate be able to chuck out their masters. There is a promise to further engorge the powers of patronage of the First Lord of the Treasury by allowing him to handpick the second Chamber. Now there is this Bill. I am afraid that the speech of the noble Lord, Lord Sewel, was full of pious platitudes, laden with meaningless phrases such as "concordat", and it certainly showed a lack of the intellectual vigour with which I normally associate him.

What I have to say will probably have less influence on Her Majesty's Government than did Laocoön on the wooden horse of Troy; the process has already started and is already decided. However, it is worthwhile pointing out that the Union of Scotland and England produced over the past 300 years a political unit which was probably the most successful, the most enlightened and the most beneficial to humanity than has been known since the days of the Antonines.

Before 1707 Scotland was poor, fractious and murderous. Mary Queen of Scots was temporarily Queen of the Scots only because the writ of the Scottish Crown was not writ large. England turned down three requests for an Act of Union. The English attitude can be summed up by that of Edward Gibbon who said of Scotland: The masters of the fairest and most wealthy climates of the globe turned with contempt from the gloomy hills, assailed by winter tempests, from lakes concealed in a blue mist and from cold and lonely heaths over which the deer of the forest were chased by a troop of naked barbarians". Only in 1707 after the death of Queen Anne's last child did the Union succeed because there was grave concern over the possible splitting of the two crowns, with all the terrible dangers that that would present.

What happened next was magic for both England and Scotland. The two countries added up two and two and made five. The Scots governed England. They produced the Edinburgh Enlightenment and the great engineering and industrial might of the 18th century, the Adam brothers, Adam Smith, Raeburn, and a Scottish Peer who could and did outbid the Vatican for the contents of the Orsini Library. Had there been no Union the plains now rich with harvest would have remained barren moors; waterfalls which now turn the wheels of immense factories would have resounded in wilderness; New Lanark would still have been a sheep walk and Greenock a fishing hamlet. Those are not the words of an Englishman, but the words of Lord Macaulay—the greatest of all Scottish historians.

If this Bill goes through and devolution happens—as I regret it will—the Scots will not be able to choose their government; it will be done in an unholy alliance cobbled together by party bosses as a result of proportional representation. There could even be such an unnatural animal as an alliance between the Scottish Tories and the Scottish Nationalists, just to ditch the other lot. That is what happens with proportional representation. Thank goodness for my noble friends Lord Ellenborough and Lady Young. Finally, the English question is beginning to be put. Somehow I thought that the 87 per cent. of the United Kingdom—judging by the Government's speeches, some of the speeches of the Liberal Democrats and even from my own Front Bench—did not exist.

There will be tension between England and Scotland if the Bill goes through. Five years ago one never saw a cross of St. George flying in the street. One now sees it quite frequently. Like the noble Earl, Lord Mar, even though he does not admit it, I am British by country. My country stretches from Cape Wrath to Kent, to Cornwall and to Lough Foyle. I am proud of it and I hope that it stays like that as long as it possibly can. By blood I am a bit Irish and a bit Welsh. I certainly have some Jamaican blood in me and a bit of Devonian blood. I live in England but I am British and proud of it and long may that stay so.

To change the constitution for the benefit, imagined or otherwise, of less than 10 per cent. of the population at the behest of only those 4 per cent. who voted is hardly democratic. England has had no say, and judging by the debate in your Lordships House today, when the vast majority of speakers have been Scots, perhaps she is not yet interested. But, unfortunately, she will wake up and the consequences could well be an English nationalism as petty and mean-minded as that of the SNP.

The West Lothian question does not arise in a unitary state. Nor does it matter that the British Parliament pays £777 more per head to the Scots than it does to the English; nor does it matter that the Scots are over-represented in the British Parliament; nor does it matter that they pay less in taxation; nor does it matter that they get greater subsidy. That is what central and unitary government does. What does matter—this is where my own party has gone wrong and I see no sign of the party presently in government putting it right—is that governments of all parties fiddle about with the height of kerb stones in villages and boss schools about. There is no real local democracy in local taxation and in local authorities. It is that which has caused this unhealthy bout of Scottish nationalism.

After devolution, can it be possible for Robin Cook's successor as British Foreign Secretary to represent a Scottish constituency any more than someone representing a Northern Ireland constituency has held any office of importance in the British Government since partition in 1922? Can one imagine a Scottish Member of Parliament acting as Home Secretary, as Chancellor of the Exchequer, or as Secretary of State for Defence? The English simply will not put up with it. That will be a cause of Scottish resentment and the English will be poorer by it. I do not mind the "Jockocracy" under which we are governed at the moment because it is "Jockocracy" of the Union.

This Bill is a seed bed of secession and of the destruction of the Union. If the present First Lord of the Treasury presides over the destruction of that great Union with his normal elfin insouciance, then his high crimes will be worse than those of Stafford and his misdemeanours worse than those of Montrose.

9.11 p.m.

Lord McCluskey

My Lords, perhaps I may be permitted to begin on a slightly personal note. It is 20 years and three months ago to the day that I had the honour and privilege of replying to the debate on the Second Reading of the then Scotland Bill. I am delighted to see that most of your Lordships are too young to remember that occasion, but those who do, like the noble Lords, Lord Mackie of Benshie and Lord Campbell of Croy, whom I am delighted to see here, and the noble Earl, Lord Onslow, have hardly changed. The three months that followed that debate were for me perhaps the most stimulating and exciting of my entire life. It was a period during Committee and on Report when this House did itself an enormous amount of good in terms of its reputation for examining legislation. I hope that your Lordships will find the next few months as stimulating as we found those few months in Committee and on Report.

In January 1985 I became a judge of the Court of Session in Scotland and since then, as all will acknowledge—perhaps not all—I have been out of politics. For that reason I have to return to Edinburgh before the end of the debate and I tender my apologies to the noble and learned Lord the Lord Advocate for that. I cannot properly join in the full debate, but I want to say something which is a matter of some importance. It echoes to a degree what was said by my noble and learned friend Lord Hope of Craighead. It relates to the appointment and removal of judges.

I have no particular interest in this matter now because I shall retire round about the end of the millennium. I thought I might sit once in the new millennium and condemn someone to death, just to go out with a bang! So I have no direct interest in the matter and I do not suppose I shall be removed under the provisions of the Bill. The 1978 Bill, which resulted in the modest little document, the Scotland Act of that year, contained no provision about the appointment or removal of judges.

Every schoolchild knows that the independence of the judiciary is a vital ingredient of a mature democracy. As my noble and learned friend Lord Hope of Craighead said, the effect of this Bill and this scheme on the administration of justice has hardly figured in the public debates. That is hardly surprising; one cannot expect people to get excited about the removal of elderly judges. The advantage of this House is that it can remedy that. I hope that it will approach this matter as thoroughly as the many other matters of detail about which your Lordships have spoken.

As a result of this piece of legislation, taken along with the Human Rights Bill 1998, the obligation of judges to step into what has hitherto been the political field is greatly increased. My noble and learned friend Lord Hope of Craighead mentioned Schedule 6. He is right to say—and your Lordships should note—that the devolution issues are very widely defined. The judges will have to determine delicate and difficult questions which the legislature cannot possibly foresee about where the boundaries are to be drawn between the legislative competence of a devolved parliament and that of Westminster.

Similar questions arise in relation to the acts of the executive and that includes the first minister. He or she is bound to be exposed to the same temptation as American presidents have been exposed to for the past 200 years and particularly this century. Even a man whom we all admire, Franklin Delano Roosevelt, sought to pack the Supreme Court of the United States because that court was striking down as unconstitutional legislation which he wanted to hurry through. He did not in fact succeed, but all modern presidents have packed the court with their nominees who reflect their political and philosophical views. That temptation is bound to face Ministers. It may lead to politicisation of the judiciary.

We have a strange situation at the moment for this perhaps the most mature and liberal of all the democracies in relation to the appointment of judges. They are appointed by the political power, pure and simple. I meet many lawyers from around the world. Some of them have come to me and said, "We want to tell you about the terrible scandal in our country: judges are appointed by the political power". I have to admit shamefacedly that that is exactly the situation that we have in this country. It seems to work moderately well, but as we advance in a constitutional sense I should have looked in the Bill for some provision whereby that power was diminished. But far from that being the case, it has in fact increased.

At present the judges of the Court of Session are appointed by the Secretary of State for Scotland on the recommendation of the Lord Advocate. When I was Solicitor-General for Scotland and Lord Murray was the then Lord Advocate, we found that the then Secretary of State, William Ross—later Lord Ross of Marnock—was proposing to appoint judges with a kind of minor consultation with the Law Officers. I can say this now. We threatened to resign if that happened. The matter was worked out between the Secretary of State and ourselves. The end result was that the Lord Advocate recommended the name of the judge. He has always had a tremendous independence from the normal political executive. The Secretary of State had the right of veto and that was as far as it went. There was elaborate consultation with the Lord President and perhaps, in certain circumstances, with the Dean of the Faculty of Advocates.

Under this Bill the Lord Advocate disappears from the process altogether and the first minister simply appoints judges of the Court of Session. I hope that this matter will be looked at carefully by the Government and that we are able to return to it in Committee.

The other aspect of the matter is even worse in a democracy and that is the removal of judges. At the moment nobody knows how to remove a judge of the Court of Session. It has never been done. It is thought that one possibility, based on the English model, is to have a resolution passed in both Houses of Parliament, but nobody knows whether that has any validity. Another method would be for the Lord Advocate to present a petition to the Court of Session itself and ask it to exercise its supereminent power the nobile officium. That might work and it might not. In practice, of course, one would expect people to twist the arm behind the scenes and make the offender an offer that he could not refuse. That is how it would be done.

The relevant provision in this Bill is Clause 89(6), which simply provides that the first minister can remove a judge. There are two safeguards. First, the first minister must specify the ground of unfitness as inability, neglect of duty or misbehaviour. He does not have to prove it; merely to specify it. There then has to be a vote in favour of that Motion by two-thirds of the membership of the parliament. One can imagine circumstances in which the first minister would not have great difficulty in commanding two-thirds of the membership of the parliament. He might thus have considerable power.

At the moment, even for sheriffs and sheriff principals, as the noble and learned Lord, Lord Hope of Craighead, said, under Section 12 of the 1971 Act—in fact, the provision dates back to previous decades—a sheriff cannot be removed unless the Lord President and the Lord Justice-Clerk conduct an investigation into whether or not there has been inability, neglect of duty or misbehaviour. They make a judgment on the basis of unfitness and if, but only if, the judges decide that the sheriff is unfit may the Secretary of State put an order before both Houses of Parliament. Each House has the right to annul that order. There is thus the involvement of a bicameral legislature and a powerful investigation, independent of the Executive. Under this Bill those elements will disappear. It is a curious feature of this Bill that, as it stands, the protection afforded to sheriffs survives, but the judges of the Court of Session may be removed by the method that I have described.

I consider that it is of the greatest importance that before the first minister lays before the parliament a Motion for the removal of a judge, whatever the majority he may need to pass that Motion, there has to be an independent investigation. There may be good reasons why the Lord President and the Lord Justice-Clerk are not the right people to conduct that investigation because they deal with the judges every day. At the moment we have half a dozen excellent people who could conduct that investigation, such as the noble and learned Lord, Lord Mackay of Clashfern, a retired Scottish judge; Lord Ross, the former Lord Justice-Clerk and a member of the Privy Council, and the noble and learned Lords, Lord Jauncey of Tullichettle, and Lord Keith of Kinkel. Indeed, there are several other judges who could carry out such investigations, some of whom are so young that they are younger than myself. As I have said, there are at least half a dozen, any two or three of whom could be selected by the first minister, just as the Secretary of State today selects judges for such tasks, who could conduct the investigation. If, and only if, they report that there is an unfitness for office should the first minister then remove that judge, following a vote in the parliament.

Those are issues of great constitutional importance. While I have been a Member of your Lordships' House, this House has always prided itself on concerning itself with constitutional issues because it has a strong sense of the constitution. I hope that, even if I am unable to be present on the occasions when I should like to be present, others will at least pick up this point and make the Government think again. I am grateful for your Lordships' attention.

9.23 p.m.

Lord Rotherwick

My Lords, this Bill is the result of a referendum in which all those resident in Scotland and on the electoral register there were entitled to vote. People born in Scotland but registered elsewhere were not so entitled; nor were people registered in England, Wales and Northern Ireland. That decision by less than 45 per cent. of Scottish residents will have an enormous impact on the rest of us. That is an interesting figure because, as the noble Lord, Lord Hughes, pointed out, it is the same as the percentage of noble Lords from Scotland who signed up to the Union. We must ensure that the resulting legislation is not only good legislation but that it contains adequate safeguards to protect the Union which is the United Kingdom. This Bill threatens that Union and UK Members have a duty to seek answers to the questions posed by it.

Twenty years ago Tam Dalyell first raised the West Lothian question, as so many noble Lords have said. We are assured in the press that Tony Blair, the Prime Minister, has determined that the extra representation granted to Scotland will be withdrawn, but that still leaves the problem of Scottish MPs who can vote on English home affairs when English MPs have no reciprocity. No one should doubt that the West Lothian question will return to haunt us over and over again unless we remove it now. An article in that most Scottish of newspapers the Glasgow Herald stated that to cut the number of Scottish MPs might dilute the West Lothian question but would not solve it. The probity of our legislature is in doubt if the Government use their present majority to ensure their future control of English home affairs by insisting that, while only the Welsh assembly and the Scottish parliament will enact legislation for their respective countries, all Westminster MPs may vote on English matters. This is not fair to the vast majority of the people of the Union and must be addressed.

The raising of taxes is an unpopular activity at the best of times. When they are not raised universally, and with the approval of a mere 38 per cent. of the affected population, they rankle, and eventually resentment spills over into action. Our history books are full of it. Scottish income tax, which is certain to be about 3p in the pound, will be levied on all those present in Scotland at the beginning or the end of the day for four or more days in a week. That leads to some anomalies.

I take the hypothetical case of A who lives and works in Scotland and obviously pays Scottish tax and the case of B who lives in England, works day shifts in Scotland and will not pay the tax. Let us take the case of C who lives in England, works permanent nights in Scotland and does not pay the tax either. However, if D lives in Scotland and has a sales territory which means that he is in northern England for, say, five days and four nights but is present in Scotland on Monday morning and Friday evening, he is deemed to be in Scotland for four days and is liable to pay the tax. We then consider the case of his boss. Let us say that his wife and children spend all week in the south of Scotland and live in a house registered in her name. His office is in Liverpool where he has digs to which he drives late every Sunday evening and from which he returns every Friday afternoon. He does not pay the tax.

One wonders how long such a state of affairs will subsist before there is an exodus south of the Border. How long before house prices in Berwickshire go up? How long before overseas companies find it preferable to locate elsewhere? How long before it becomes obvious that 3p in the pound no longer returns £450 million per annum? Will we not soon see people moving across the Border to live, thus adding to the problems of the Government, who, quite rightly, wish to reduce the amount of commuting by the people of this country? Will the tax also be applied to UK servicemen who as part of our Armed Forces are required to live on bases in Scotland? Will they have to pay it and claim it back from the MoD at a later time?

That takes me to the liability of Westminster to underwrite the Scottish experiment. Will the Treasury have to fork out if the tax yield is less than the target? Will it have to fork out if the target is found to be too low? Further, will it have to fork out if the revenue is on target but the Scottish parliament is spendthrift, similar to some west coast local authorities? Should there be a boom in Scotland resulting in a return of some of the £450 million, will the Secretary of State slice the extra from the block that he pays to Scotland?

Noble Lords have already referred to the Scottish block grant. Every Scottish resident receives approximately £4,505 a year compared with the English equivalent of £3,604. In 1996–97 the block grant for Scotland amounted to approximately £14.3 billion. Government spending per head was 23 per cent. higher than in England. I calculate that if that difference were removed, the Exchequer would have a further £2.7 billion to spend on, say, transport the building of hospitals or giving students their grants back. That was most adequately pointed out by my noble friend Lady Young.

Finally, I turn to a matter about which I am most concerned. In an echo of that once loved radio game, I am an English animal with strong Scottish connections—or perhaps I should speak of a UK animal. I am proud to be a member of the United Kingdom. But while I believe that we should recognise and honour the desire of the Scots to have a greater control over political matters Scottish, I am adamant that we should act to sustain this union. It is likely that the Labour representation in Edinburgh will be less than that of the SNP on its own, and highly likely that it will be less than the SNP coupled with the Conservatives and/or the Liberal Democrats. The central plank of SNP ideology is independence for Scotland; and its favoured method of attaining it is a referendum. I have already quoted Tam Dalyell. He is an arch critic of devolution and was quoted in the Guardian last August as comparing the Scottish Parliament to, the entrance to a motorway, without exits, to a separate Scottish state". In contrast Donald Dewar, arch proponent of devolution, wrote in the Scotsman in May this year that the parliament, will, if nationalists have their way, be dominated by infighting and their never-ending demands for further upheaval. It is a recipe for constitutional chaos". A straw poll of some university trained business people from Dublin yielded the opinion that within 10 years Scotland will be in the same shape as Ireland in the 1930s. In the face of that consensus I fear that legislation could become a Petri dish for the culture of the bacterium of civil unrest. My unease is worsened by the concurrent experiment with proportional representation which in other countries and at other times has brought vigorous minorities to the fore. I was somewhat uncomfortable with the comment made by the noble Lord, Lord Thomas of Monifieth, who spoke of devolution democracy. I understand there to be closed lists, and I can only see it as a second rate democracy. Should I be comforted by the Minister talking about people having "access easily"? How can one have "access easily" with concordats and closed lists?

The Bill must contain safeguards to ensure that no Scottish parliament can destroy the union of our nations by voting internally for independence. If that were to happen, this Government would be responsible, and future generations would hold them accountable for the consequent suffering and dislocation. Scotland's place in the Union is deeply valued. There is no evidence that the remainder of us wish the UK to be fragmented. Forty-five per cent. of Scotland has decided to have a larger measure of control over its own affairs; and so be it. But in doing so its people should acknowledge the pre-eminence of the Union, confirm their continuing allegiance to the monarchy and acknowledge the mutual dependence of the nations of this United Kingdom.

9.33 p.m.

Lord Belhaven and Stenton

My Lords, in my opinion this Bill, along with the other measures being brought forward by Her Majesty's Government, such as the proposed emasculation of your Lordships' House, is a step in a process which will result in the dismantling of the United Kingdom. It took many hundreds of years of terrible and destructive wars to lead our forebears, Scottish and English, to the conclusion that it would be best for this island to be united under one flag and one parliament. In 1707, some including my predecessor, the second Lord Belhaven, disagreed with that. But that was then. It is open to question what their views would be now. What can be said is that one of the most successful and benevolent constitutions which the world has even known is now in grave danger.

We should not have let Europe influence us in these particular decisions, but we have. In that regard, we do not need to take any lessons from France, which has had nine constitutions since 1789. We do not need any from Germany, which has had four constitutions since 1918, or from Spain, which is only just settling after a bloody and horrible civil war. I shall not mention the others. I say only that if the intention is to divide up this island on the basis of the German länder, we are asking for trouble.

The noble Lord, Lord Sewel, said that those who disagree with the Government's present policy are working against the Union. I find that an astonishing statement. It seems to me that it is a classic example of turning the facts upside down. It is the Government who are breaking the Union, not those of us who disapprove of this legislation.

However, given the present state of popular opinion in Scotland, something had to be done by whichever party was elected in the election last year. There is clear dissatisfaction with the status quo in Scotland. It is mistaken in my view, but undoubtedly it exists. I am inclined to agree with my noble friend Lord Tebbit that the referendum should have been on independence. To paraphrase Dr. Johnson, when a man is to be hanged in the morning he concentrates his mind wonderfully.

A clear option would have been fairer to the Scottish people—and I say that because I believe that this Bill will lead to independence. I realise that my noble friends, such as Lord Mackay of Ardbrecknish, who live in Scotland are now rightly dedicated to making the unworkable work and I wish them well. But as an independent Member of your Lordships' House, I have to express my view that it is unlikely to work.

I have always thought that there were only two consistent options for Scotland; independence or the status quo with as much devolution as the system can bear, which is more or less what we have had until now. In my view, this Bill should make provision for a further referendum on independence. If the vote is against independence it will, it is to be hoped, calm the wilder elements in the Scottish parliament. And if it is for independence we know where we are going and half the Cabinet will have to resign.

I regret all this. In 300 years our two nations have become very closely intertwined. How many English people have your Lordships met who confessed to having a Scottish grandmother? Very many, I guess, if their experience is the same as mine. Many people will find themselves living on the wrong side of the Border, as happened in Czechoslovakia. I am of their number, having lived in England since 1981. I do not think of myself as a foreigner here and English people living in Scotland ought not to think of themselves as foreigners there. Independence for small nations reduces the independence of the individuals who live in them. It may be fun for the politicians and nationalistic idealists, but it is a good deal less fun for the rest of us; a fact which most Scottish people have yet to grasp. It should be brought home to them.

Perhaps I may point to one possible consequence of the Bill which may not be all that far in the future. At present the Labour Party enjoys an unprecedented majority in the other place. But let us suppose that the Government are returned to power in the next election purely because of the Scottish vote. That means that England will have a Conservative Government but for the Scots. What happens then? Are English matters to be overridden by the Labour majority while the Scots have their own opt-out in the event of a Conservative Government? I realise that the English are the most tolerant people on earth and slow to wrath, but there are limits and I fear that we may see what those limits are sooner than Her Majesty's Government and others expect.

What I fear most is that that movement towards separation will create enmity between the Scottish and the English, an enmity which died nearly 200 years ago. For the first time in my life, I sometimes feel it is better, when living here, not to say that I am Scottish.

I notice also something which my more parochial and inward-looking fellow Scots might have missed: that is, the growth of English nationalism referred to by my noble friend Lord Onslow. The St. George's Cross is seen more and more in place of the Union Jack. In case no one has noticed, that is a direct response to the growth of Scottish nationalism and with the past few days in mind, I should say that English nationalism is not the explicit preserve of football hooligans. Many of my English friends and neighbours who have no interest in football are becoming increasingly nationalistic; and I do notice that.

The new assembly is supposed to bring government closer to the Scottish people. One must hope so. It will certainly increase the size of government bureaucracy under which the Scottish people will be expected to live. Every Scot will have two MPs—a privilege denied to the English and a doubtful privilege at that. On top of that, there will be Brussels. So I am wrong. There will be three MPs. I hesitate to give advice as to who to write to and which surgery to attend. But I congratulate the Scots. Surely in the whole of history no one has had such a galaxy—or should I say trinity?—of representatives. Whether that brings government closer to the people or on top of the people, only time will tell but it will undoubtedly be expensive.

Then there are the local councillors. All those men and women bring a huge baggage of bureaucrats and hangers-on, all paid, with them. I realise that my noble friends who live in Scotland must decide to make the best of a bad job and to try to make this work. From the southern side of the Border, while I wish them well, I cannot for the life of me see how it can work. In the end, it will please no one, north or south, and then we shall see.

9.41 p.m.

Lord Dean of Beswick

My Lords, I am one of the few Members from the English regions who has dared to test the waters in this debate. I should say immediately that although I am a former leader of Manchester City Council and a former Leeds MP, I am not speaking in that capacity. I am presenting my own views as I see them.

I am rather concerned. In some respects, I was hurt by the fact that I am supposed to support a measure of this importance without having a say in it until it reached your Lordships' House. Any move which can dismember the Union in which I have grown up is a matter for 50-odd million people, not 5.5. million people.

I am rather annoyed that I am supposed to march through the Lobbies in this House and vote for a measure on which I was denied the right to vote when the referendum was brought before the people. That is rather a strange way of treating the majority of people whom this issue will affect: by not providing them with the franchise to express their opinion.

Your Lordships may ask why I have a gripe about that. I shall tell you. Nobody has yet said what this exercise will cost. Perhaps I may return to an exercise which the last government undertook, if your Lordships would like some relevant costs to look at. Those costs are much less than the ones we are talking about here. Mr. James Prior, the then Secretary of State for Northern Ireland, instituted a Northern Ireland assembly. Let us look at what was paid to each member of that assembly. Most twin-tracked and were Westminster Members and also members of the assembly. It was decided to pay them two-thirds of a Westminster Member's salary, two-thirds of his expenses and two-thirds of everything else. We ended up with the most peculiar situation whereby the highest paid man in Parliament was the late Mr. James Kilfedder, because in addition to twin-tracking and therefore receiving one and two thirds salary and expenses as a Member of the other place and as a member of the assembly, he received also two-thirds of the Speaker's salary because he was the Speaker of that assembly.

I do not know what the total cost of that exercise was but it will have been much less than this exercise will cost. I believe that the House is entitled to know what is envisaged. There is nothing in the Bill about what people will be paid and what will be available for them to draw. I could, of course, concur and ask, "Well, what's it got to do with me?"—but I shall tell noble Lords what it has to do with me.

In opening the debate, my noble friend the Minister said that there was no intention to interfere with the present financial arrangements. But what did he mean? Was he referring to the equation for last year, or what will be paid next year as the block grant? Does he mean that the costs for this exercise will come out of that block grant?

Lord Sewel

My Lords, perhaps I may assist my noble friend and shed some light on the matter. The answer is, yes.

Lord Dean of Beswick

But, my Lords, that can only mean a diminution in the services in Scotland; indeed it cannot mean anything else. I believe it is a conservative estimate that the whole process will probably cost about £100 million. Therefore, £100 million less will be spent on hospitals and schools in Scotland. I do know a little about local government finance, but we have been given no guarantee in that respect.

Much has been said about the Barnett formula. I do not know what that formula is, nor indeed does anyone else, except for my noble friend Lord Barnett, who is not present in the Chamber. He was the architect of it. I suspect, and only suspect, that there may have been a case at some time in the past for the differential contained within the Barnett formula. However, it is possible for differentials over a period of time to become completely irrelevant and to go out of control. I believe a young Member of the House on the Opposite Benches gave us an outline of what it means in terms of the hard facts of life. I do not know whether the noble Baroness, Lady Young, gave that information, but I quoted sometime ago in your Lordships' House the actual differential per capita of payment between Scotland and England as being £871. I also calculated that if we take the English as being about 50-odd million up to that level, it would cost over £300 million. That is the sort of money that we are talking about.

For the life of me I cannot see that the English regions will accept the situation when they get to hear about it. Some of the MPs in another place have been rather slow to react. That is perhaps because some of them are new to Parliament and do not know the system. If this thing goes through, and it means that those south of the Border will be called upon to contribute substantial sums of money to this exercise, I suspect that when the Government cut the cake it will mean less cake for the other regions. I am not going to sit here and swallow that because I think that the Scots have done very well. Indeed, they are getting rather greedy because they have done so well.

I live in a city which could do with a lot of money being spent on it. In fact, parts of it are like a desert. No one talks to me about finding extra money for that, but extra money will be found for this exercise. If my noble friend the Minister says to me that it will come out of the block grant, it will not be the block grant within the existing ratio; it will be the existing grant with a "plus-age". If we divide up the national cake taking the biggest slice for England, the next slice, which will be a small one, will be for Scotland. However, in ratio it will be much bigger. It will mean that the only areas from which that extra money can come will be the English regions.

I have a suggestion to make which noble Lords may think rather foolish. If the Government propose to continue with the Barnett formula, I should point out to them that my noble friend has said that it is already out of date. So he must know what is wrong with it, even if the Government do not. It might be feasible to appoint a Select Committee of both Houses at this stage, under the chairmanship of my noble friend Lord Barnett, to look into the question of the Barnett formula and bring it up to date so that its application will be fair to all people. That would take the politics completely out of the matter. I do not suggest, of course, that the over-abundance at present in another place—I stress the words "at present"—of Ministers from north of the Border (the ratio at the Treasury is 3:1 in this regard) would result in any bias being shown whatsoever! However, if they wish to win the next election and retain their seats, they will not want to be regarded as the people who started to give money back to the English. Let us face it, this measure is a gift-horse to the SNP.

Every morning i1n the Library I am asked by Scots whether I have seen the public opinion polls. I reply, "If that applied to England, I would be frightened". They say, "We are frightened too". I cannot conceive that the Government's intentions for this Bill can be fulfilled. The SNP believes that it will carry everyone before it.

An aspect of this matter that interests me is that of Europe. I believe I am right in saying that the Scottish assembly will have no direct access to Europe and will have to gain access to Europe through Westminster. Can your Lordships conceive of a situation where the SNP was to become a powerful voice or win the elections? God forbid that that should happen, but according to the opinion polls it could happen. If the SNP were to become such a powerful voice, do your Lordships believe that it would sit back while Ministers in another place say, "We will tell you what to do as regards Europe"? In my opinion that is a recipe for disaster.

I shall not vote against the measure, but I shall certainly not vote for it at this point in time. I believe it is too fraught with difficulty for everyone concerned. I do not believe it has been clearly explained what ordinary people in Scotland will lose. If I had my way I would re-organise the financial aspects to give a fair deal to all. Those people who are lighting bonfires and waving the nationalist flag in Scotland will quickly sober up when they realise that money will be taken out of their pockets. If we "butter up" these people, that is only another incentive for them to continue their present behaviour.

I do not know what the outcome of the elections in Scotland will be. I do not think anyone does. As I have said, I believe this process is fraught with difficulties. The matter in the Bill that interests me deeply is that of finance. At the Committee stage of the Bill I shall scrutinise that aspect line by line.

9.53 p.m.

Lord Mountevans

My Lords, follow that, especially if you have a somewhat modest locus standi in this matter! I declare I was born in Dunoon.

I wish to approach the debate from a totally different direction. I take the opportunity to raise two tourism topics. That is a subject which has been close to my heart for many years, as many noble Lords will be aware. The first concerns the present and future relationships between the Scottish Tourist Board and the British Tourist Authority. The second concerns the threat of a tourism tax, which is implicit in tax raising powers.

I start with the BTA/STB relationship, pausing only to take my hand out of my pocket, for which I apologise. This was governed from 1969 by the Development of Tourism Act, which gave the BTA the duty of promoting Scottish tourism overseas. Many years later, political pressures—that is what we are here to discuss tonight, to a certain extent—led to the Tourism (Scotland) Act, which gave the Scottish Tourist Board some overseas promotional powers.

The Bill before us devolves tourism to the Scottish parliament. I have no quibble with that at all. The Tourism (Scotland) Act specified that STB's overseas activities should complement or supplement rather than clash head on with the BTA's work. The Secretary of State has a role to play. I hope that that will continue. What I would like to see in the future is the BTA and the Scottish Tourist Board playing their separate roles, with the STB continuing to be complementary, providing the best of Scottish tours.

The Bill as it stands gives Scotland the best of both worlds. Perhaps I may quote a press release issued yesterday by the Scottish Office. It noted that: BTA had promoted Scottish tourism well". It is nice to know that after all the years of slings and arrows of outrageous fortune. The fact that the industry in Scotland is able to call on BTA's experience and world-wide resources is a real benefit which we will retain". The words in the press release are attributed to the honourable Member for Cunninghame South, the Scottish Tourism Minister—someone with whom I have fought over the years, not necessarily face to face, but side by side, on transport, and someone for whom I have great admiration. He states that the Scottish Tourist Board should be politically accountable to the devolved parliament—I have no quibble with that—but that the Scottish tourism industry should also recognise the importance of the BTA in ensuring that Scottish interests are represented on a much wider scale than STB itself could aspire to. Those words are music to my ears. They articulate the future to which we must aspire. They are a tribute to the fact that from Ravelston Terrace (which, coincidentally, has a former BTA staff member as its chief executive), to Thames Tower and to the Scottish Office itself they are speaking with one voice.

I appreciate that the noble and learned Lord, Lord Hardie, whom I can see on the Front Bench, will have to respond to over 60 speeches tomorrow evening. However, I hope that he will find time to join me in congratulating all those concerned on evolving a practical and a strong way of ensuring that Scotland's vibrant tourism industry continues to go from strength to strength.

I have just mentioned a vibrant industry. But it is also an industry of fragilities. I refer particularly to seasonality. I hesitate to quote my own words, but once upon a time I said that no tourist goes to Scotland after the end of September, because there is nothing to do. The reason there is nothing to do is that no tourists go to Scotland after the end of September. It is not a perfectly strong industry. It is the second strongest in the British market. The biggest subject on which my former colleagues in the BTA receive questions is London—naturally, because it is a gateway. The second biggest is Scotland. So we have a vibrant, or potentially vibrant industry.

It is also a fragile one, if it is an industry at all. Perhaps I may quote the noble Lord, Lord McIntosh of Haringey. Responding to his first tourism debate on 18th June last year (col. 1332) he said that rather than call it an industry, we should regard it as a number of "interdependent sectors". He mentioned the hotel sector, the hospitality sector, the entertainment sector, the transport industry and many others. I could restate his sentiments from my own experience: a Scotrail sleeper to Inverness; breakfast in what I believe was called "the Porridge Court Hotel" by Compton Mackenzie (some noble Lords will remember the Station Hotel at Inverness); a hired car; John O'Groats; a delightful bed-and-breakfast near Dounreay; the boat to Cape Wrath, and all the other things that are so good in Scottish tourism. And that is just the first 40 hours from Euston. For four of us, it was the start of a delightful experience and one that was very much value for money.

However, were we to repeat the trip in a couple of years hence, and the tax-raising powers were in place, such a trip could be a soft target for a bed tax. I should find that a nightmare. I believe it would turn a vibrant industry into a potentially very fragile one. A tax could raise costs substantially. Four of us spending a week following the Scottish coastline and paying, say, a tax of £2 per person a night, would mean that we would have to find another £56. We might well be able to afford that, but I wonder whether the Glasgow citizen heading for a holiday camp in Ayr would not find it a very penal infliction indeed. I feel that it would be a discriminatory tax, not least for that reason. It would be a painful tax and a serious threat to the Scottish tourism industry which I value and support, not just because I was born in Dunoon.

The accommodation sector is not the only sector that would be hurt. Let me refer again to the remarks of the noble Lord, Lord McIntosh, about the many sectors within the tourism industry. Should we penalise one to the advantage of the many, perhaps to rescue the local tourism structure in Scotland? It has its problems. That is not a question for the Minister to answer, but one which those voters who work in the Scottish tourism industry, as well as their elected representatives, would do well to think about twice, if necessary, and then reject.

10 p.m.

Lord Hamilton of Dalzell

My Lords, there will be no vote on the principles of this Bill and the noble Lord, Lord Sewel, has already told us that he suspects those who speak against its principles of ulterior motives. One thing is certain: the Government will pay no attention to those who complain about the principles of the Bill.

I feel rather like a member of a ship's crew wrecked on a desert island in the middle of a vast sea of political opportunism, who is reduced to putting messages in bottles and throwing them into the sea, in the hope that at some stage in the future someone will realise that there were people who thought the Bill was wrong in principle.

I share with many other noble Lords the misgivings that devolution will foster the growing trend towards tribalism and violence that is so much in evidence today and will ultimately lead to a demand for independence. However, I wish to address my remarks this evening to the subject first brought up by the noble Lord, Lord Kirkhill, and very admirably by my noble friend Lord Lang: the lack of financial independence caused by the block grant.

It is a delusion that the democratic aspirations of the people can be satisfied by giving them votes to elect bodies that have power only over how a given sum of money can be spent, but have no responsibility for how much that sum amounts to or for how most of the taxation is raised to pay for it.

It is the reduction in the responsibilities of local authorities, the substitution of block grants for local taxation and the capping of local authority expenditure that has led to the centralisation of power in Westminster. This and the transfer of power to Europe have helped cause disaffection with the Westminster Government and encouraged the widely held conviction that there is a democratic deficit which can be solved by creating new assemblies. But these new assemblies incorporate the same defects.

The very serious question of the connection between taxation and government expenditure, the management of the nation's money, the part it plays in the democratic process and its contribution to the concept of sovereignty has been brushed aside. It is fundamental to the debate on economic and monetary union, therefore the Government do not want to discuss it. They have deliberately avoided discussing it.

In the debate in Committee on Clause 22 of the Government of Wales Bill concerning the transfer of powers to the Welsh assembly, the question was raised by noble Lords as to whether powers should be retained to withdraw functions given to the assembly if it went astray. In resisting the amendment, the noble and learned Lord, Lord Simon of Glaisdale, and the noble Lord, Lord Williams of Mostyn, asserted that they were convinced that, constitutionally, Westminster remained sovereign. Although I did not hear him, I am told that the noble and learned Lord, Lord Hope, also made that point this evening. I agree with them, but for the prime reason that Westminster will still hold the purse strings.

In Scotland, since English taxpayers contribute to the Scottish block grant which confines the ability of the assembly to spend as it would, the condition of Scotland will be rather like a child on an allowance from its parents. Financial waywardness in the assembly will be countered by the threat of a cut in subsidy.

This has to be. When countries share a currency and, in effect, join their bank accounts, autonomy has to be limited in this way. Imagine the situation if, to satisfy the expectations which will be fuelled by having their own assembly, the Scots were allowed to be a high tax, big spending economy. Sharing the same currency and language, businesses and people would flock to England where costs and taxes were lower and Scotland would be left impoverished.

It is necessary to make that obvious point about England and Scotland because, according to the opposite point of view, the freedom to spend and tax within a 3 per cent. budget deficit is claimed to be the essence of economic sovereignty within the single currency. It is a freedom that we could not exercise. Therefore, we find the Chancellor of the Exchequer announcing in his Budget that he is the guardian of the people's money. He is, and he still will be the guardian of the people of Scotland's money after the formation of the Scottish parliament. By that means, Westminster will retain its ultimate sovereignty over Scottish expenditure. If we join the single currency, that function will be transferred to Frankfurt and Brussels, but still not to Scotland.

The proposals will not and cannot reconnect the vital democratic link so that votes for expenditure have their counterpart in taxation for the Scottish parliament. The inevitable shortage of money will still be blamed on Westminster. It panders to tribal and nationalistic instincts without tackling the real problems caused by an unaffordable welfare state and the breakdown of the ability to finance local responsibilities from local taxation. The hard choices must still be made in Whitehall and the buck stops there.

The Bill will not for long improve relations between Scotland and Westminster, which I imagine is its main purpose. It will in time rebound on its perpetrators for having deceived the Scottish people into volunteering for a bad experiment. It is also an important constitutional change and a rotten idea. The Bill is misguided in principle and no amount of amending will change that.

10.6 p.m.

The Earl of Stair

My Lords, the noble Lord the Minister has brought before your Lordships' House perhaps the most far-reaching constitutional reform for 300 years. One of the reasons that I have the privilege to sit in this place is what happened more than 300 years ago, when the first Earl of Stair helped to bring to fruition the Act of Union of 1707. He died during the night following the last debate in the then Scottish Parliament, having had a hard battle persuading all parties to agree the terms of that Act. I hope that the same fate does not befall this Earl of Stair.

I am not only a Scot but a full-time resident of Scotland and I believe strongly that the United Kingdom can only be strong on both the world and European stage if the two countries remain united. This island is too small to divide into even smaller countries. I hope that even after the Bill has passed, the Government will fulfil their obligations to Scotland, both as a self-governing country and as part of a strong United Kingdom.

The referendum last September produced the conclusive result that the people of Scotland wished a devolved parliament, although the national turnout to vote of 74 per cent. was perhaps a little low for such an important decision. Galloway, an area that swung from a majority in favour of the Union in the last government to a majority of in favour of independence under this Government, managed a turnout of only 63 per cent. Perhaps the Government should have taken a forewarning of their present standing in Scotland.

I look forward to the passage of the Scotland Bill and hope that the Government will heed the many amendments needed to ensure the success of the new Scottish parliament. There is a danger that a parliament with legislative power over areas currently covered by regional councils may result in decisions in Edinburgh taking local government further from the electorate. I am thinking particularly of planning matters in this instance.

This Bill is in some places vague and glosses over some important divisions of responsibility between the devolved parliament and the Parliament in Westminster: first, on the matter of defence, which is a reserved item. However, due in many cases to the scarcity of the population and to the terrain, the majority of Scotland is classified as a low-flying area. For similar reasons, many units of the Army exercise in Scotland. The new Scottish parliament will have legislative powers, according to the White Paper, over many areas of the environment and some aspects of the air space. Will the Scottish parliament be able to legislate against or make very awkward the training use of Scotland for the reserved Armed Forces in the event of public pressure being applied to the members of the Scottish parliament?

The Scottish parliament will also have devolved responsibility for civil defence and emergency planning. Recently there was a serious breakdown in the water supply to areas of Glasgow and, even before that, serious flooding in Perth. In both cases the Army—both territorial and regular—was involved in relief work and assistance. Under the new devolved system, the question is not only who will authorise military aid but also who will pay for the use of the reserved equipment.

The noble Lord, Lord Mackay of Ardbrecknish, referred in his opening to the Forestry Commission. Financial arrangements have been based on the receipts of the commission being split fairly between Scotland and the remainder of the United Kingdom, the financing of the commission's activities being controlled by the Scottish executive. As long ago as 1947 the land use for forestry in Scotland and England was nearly 7 per cent. and nearly 6 per cent. respectively; it is now split almost 15.5 per cent. in Scotland and 7.5 per cent. in England. Consideration will be needed to ensure that the fair division of funding allows for the often extra environmental costs of establishing woodland in Scotland. That is particularly relevant if the devolved parliament can legislate for planning and environmental matters. We need an assurance that the fair provision of funds for Scottish forestry referred to in the White Paper will allow for the extra costs and can be flexible in the event that new plantings, and particularly replanted clearfells, do not carry extra costs which penalise Scottish forestry in the future.

Finally, speaking from these Benches, I am pleased that there is to be provision for non-aligned individuals to stand for seats in the regional lists. However, if sufficient of the electorate vote to enable an independent candidate to take one of the seven regional seats, then that seat should remain occupied by an independent for the duration of the parliament. Under Clause 9—page 5 of the Bill—if a seat belonging to a registered political party becomes vacant, it is automatically filled from that party's list by another candidate and remains vacant only if there are no more candidates from that party. The procedure is simple. The returning officer merely notifies the presiding officer of a change. However, if a seat becomes vacant that was occupied by an independent, it must remain unfilled until the next election. That omission could easily be overcome by allowing the next independent candidate with the highest share of votes to fill the vacancy on the same basis as a registered political party. In constituencies the size of the Scottish regions the deficit of one independent member is liable to leave a large proportion of the non-aligned electorate unrepresented.

10.13 p.m.

The Earl of Kinnoull

My Lords, it is a privilege to be the 35th speaker in this wide-ranging, informative debate on this historic Scotland Bill. If I had not suffered the good fortune to come just before my noble friend the Opposition Chief Whip, I would have been tempted to retire in silence on the basis of the dog having his evening stroll and, on reaching the 12th tree, finding there is nothing left. It is impossible not to repeat at least one of the many issues raised. I shall therefore, as a matter of brevity, leave my noble friend to stir us with his usual forceful and penetrating speech to complete the first leg.

Like other noble Lords, I worry about the framework under the Bill for the Scottish parliament. I appreciate that the Government have sought a framework with a light touch, relying on good working relationships between Edinburgh and Westminster. I believe that they are dangerously over-optimistic. Almost as night follows day, there are bound to be conflicts. There is bound to be resentment on both sides.

I give one example of a potential resentment. It concerns the Scottish fishing industry. I must declare a small interest, having served for 20 years with the Fishermen's Mission, which looks after fishermen and their families at fishing ports, particularly at times of tragedy. That happens all too frequently, as indeed we witnessed last Sunday. The Scottish fishing industry represents 66 per cent. of the entire UK fishing quota and it is a vital and important industry to Scotland. What is likely to happen when it comes to the common fisheries policy being renegotiated in Brussels? Will there be a Scottish voice leading the negotiations for the United Kingdom? Almost definitely not, as no one other than the Secretary of State will be serving at that time in the national Cabinet, and it looks as though he will be stripped of most of his powers by then.

Of course it will be said that the British negotiations will be a team effort. But that still denies, I suggest, the Scottish hopes raised by Scotland having its own parliament and its own voice, not deflected by some alternative issue such as Greek olive oil, brewing in Brussels, or some trade-off.

I should like to raise another issue—the potential confusion for the Scottish people as to whom they should consult in the future if they feel there is an injustice. Should it be their Member of Parliament at Westminster; should it be their constituency Scottish Member of Parliament in Edinburgh or their regional Member of Parliament in Edinburgh; or even the Secretary of State or the first minister? I hope that the Government will iron out such a confusion and publish clear guidance for the Scottish people as to their rights.

Finally, I worry about the future of the Scottish parliament and where it will lead. Resentments and conflicts between Westminster and Edinburgh caused by the inherent imbalance between the subordinate parliament and Westminster are bound to lead in future to the talk of independence. Like others, I would regard the break-up of the Union as wholly damaging. I hope that the Government will confirm that in no way are they contemplating in the future a referendum for independence and that it will not be achievable by a Scottish parliament alone under the Bill.

10.17 p.m.

Lord Strathclyde

My Lords, I may be speaking at the end of the day but it is not yet the end of an old song. I am sorry that the Government have chosen not to provide a "winder-upper" this evening but it gives me the greatest pleasure to be able to wind up on behalf of the Opposition and to be the last speaker of the day. It is now late but it surely justifies the decision that was taken to have two days on this Second Reading. Otherwise we would have been here all night. I am just sorry that it took the Government quite so long to reach their decision.

If anything, this debate has proved that the Scotland Bill is better than the new drug Viagra in keeping the House of Lords active and awake with this record number of speakers. But what happened to the Labour Party today? Why were there so few representatives of the people's party speaking on the Second Reading of this, their flagship Bill? It has become very fashionable in government circles to name and shame. I shall resist that temptation except to say this. It is a long time since I have spoken on a Bill to do with Scotland without seeing some old and good friends on the other side who are sadly absent. I hope there is no truth in the rumour that because some of those noble Lords disagreed with the Government's policies they were asked not to speak up today. That would be truly shameful.

My noble friend Lord Mackay of Ardbrecknish in his opening words talked a little about the timing of the Bill. He pointed out the rather leisurely pace at which it has gone through Parliament. I welcome that because it means that the Scottish Office and its Ministers will have an opportunity to re-write it during the Summer Recess when they have realised the wisdom of your Lordships who will wish to make amendments. I am delighted that the noble Lord, Lord Sewel, said that he would listen carefully, I hope that meant that he will accept some of the amendments put forward. There is certainly no reason to rush. This Bill will be delivered in good time for the new Session some time at the end November.

The noble Lord, Lord Sewel, said a number of interesting things, but one thing of particular interest. He said that the Bill was part of a far-reaching constitutional programme. I agree with that as far as it goes. He spoke about the Scottish Bill and the Welsh Bill, the new mayor for London and other things. But one thing he did not mention was reform of the House of Lords. I have a question for him. Was he on or off message on that? Did he inadvertently make a great constitutional declaration or was he simply showing his own prejudice that there are more important things to do than worry about this House?

More importantly, is it really part of an overall vision, a design for constitutional change that the Labour Party is taking through involving Scotland, Wales, London, the Human Rights Bill, the independence of the Bank of England and all the other matters that we have heard so much about over the past 12 months or so? I do not believe it is. What we are witnessing is a rag-bag of constitutional policies tacked together here and there with no coherence apart from one thing and that is that every Bill passed through this constitutional package removes power from the House of Commons. If that is the intention, why is it that this Government are incapable of saying so?

The intention for this Bill was entirely political. It was nothing to do with better government for Scotland, but simply to provide different government. In what I thought was an uncharacteristically cheerless and ungenerous speech, the noble Lord, Lord Thomson of Monifieth, blamed everything on the last 18 years of Tory misrule in Scotland. In particular, he complained of the experiment of the poll tax. What is this Bill if not a constitutional experiment on the people of Scotland?

Lord Mackie of Benshie

My Lords, the Bill may be a constitutional experiment, but the people of Scotland agree to it. That is the difference between this legislation and the poll tax.

Lord Strathclyde

My Lords, I am so glad the noble Lord mentioned that, because the Scottish people were asked in a pre-legislative referendum. I would expect the Liberal Democrats to agree with the whole concept of such legislation, but we did not and we still do not now. The motivation for the Bill was entirely political. It was for the parties of the Scottish Constitutional Convention, in which the Liberal Democrats played an important part, to take as much power as possible and stop the nationalists. That was the political motive.

I do not know whether the Bill is going to work or not. I do not know whether a Scottish parliament will work. I wish it every success. But I am certain about one thing. The evidence so far is that this legislation is not the settled will of the Scottish people. In the course of the past six months all it has done is to push people further and further towards the arms of the nationalists. I wonder what those who promoted this idea so much think of it now.

Perhaps I may turn to a more parochial issue. I refer to the unicameral nature of the Scottish parliament. My noble friend Lord Lang of Monkton, in an excellent speech, talked about bicamerality and said—I think that I quote him correctly—that it is central to parliamentary democracy. He is right. In their discussions, Scottish Office Ministers must at some point have deliberated whether or not there should be some kind of second Chamber, or senate for the Scottish parliament—and decided not to have that. When the noble and learned Lord the Lord Advocate winds up tomorrow, I should like to know why the Government took that decision—and why they took that decision for Scotland but not for the Westminster Parliament. They have said time and time again that they want to have a second Chamber for the Westminster Parliament. Why is a second Chamber being kept for the English but not for the Scots? Does the noble and learned Lord believe that that will lead to better legislation—or to worse legislation—for the people of Scotland?

Anybody listening to this debate will have been impressed by the number of Peers who referred to the relationship between the Scottish parliament and Europe. Those listening to the debate will have been particularly impressed by the number of noble Lords who spoke from real experience. I believe that over half a dozen Members of this House who have spoken today have practical experience of being a Minister in the Scottish Office with responsibilities for dealing with Europe. I suspect that the noble Lord, Lord Sewel, and his colleagues have worked hard to find a solution to the problem of how to pretend to devolve power on such issues to the Scottish parliament while at the same time retaining that power for the nation state of the United Kingdom, Ministers of which will have power in the Council of Ministers. That will not do. The industries which depend so much on the decisions that are taken in Brussels, such as the agricultural and fishing industries, must not be fobbed off by the idea of concordats, especially when they have no legislative base and we have no idea how they will work in practice.

I urge the Minister during the Summer Recess to discuss this, widely and cross-party, to try to find a solution to this problem, otherwise the people who will lose out will be the farmers and fishermen of Scotland who depend for such a large part—not just of their income, but for the policies which dictate the way in which they do business—on the decisions that will be taken by people over whom the Scottish parliament will have no authority. The speech of my noble friend Lord Lindsay was particularly powerful and convincing on that point.

This Bill was intended to be the flagship of the Labour Party programme, but the flagship has proved not to be a flagship, but a fireship—and now the wind has turned, just as some of us warned that it would. It is driving the fireship, Labour-lit, towards the heart of its own fleet. There is, I think, a faint feeling of panic in the ranks of the Scottish Labour Party. I cannot say that I sympathise too much, but let us hope that the wind does not rise into a gale that could engulf the Union itself.

Both the Labour Party and the Liberal Democrats have fallen into the nationalist trap. That trap was set some 20 years ago in the 1970s. It has now become fashionable to "bash the Nats", but that will not work; it never has. What has to be done is to make a very clear case for the Union, for the United Kingdom. I hope that we shall hear a little more from the Labour Party about the benefits of this United Kingdom than we have heard over the past few years. Labour Members use and play the language of nationalism against us. One of the reasons for our decline and eventual doom last year was precisely that.

The Labour Government will be judged on this single issue—on whether this manages to keep the United Kingdom together. If they have unleashed the forces of separatism in the United Kingdom, the electorate will never forgive them for taking us all down this road. This is the last time that the House will have a major Second Reading debate on Scotland. Let us hope that if we ever return to this subject it is not to debate the "Scotland Independence Bill".

Baroness Ramsay of Cartvale

My Lords, I beg to move that this debate be now adjourned until tomorrow.

Moved accordingly, and, on Question, Motion agreed to.

House adjourned at half-past ten o'clock.