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UK Government: Scotland

Volume 586: debated on Thursday 16 October 2014

Motion made, and Question proposed, That this House do now adjourn.—(John Penrose.)

I have a petition to present to the House—signed by 120,000 people in Scotland, yes voters and no voters in the referendum alike—which shows that people are determined that the vow made by all the three main party leaders on the Tuesday before the referendum is kept. It was organised by 38 Degrees, whom I congratulate on its initiative. Its preamble regrets, and indeed opposes, the Prime Minister’s attempt on the day after the referendum to amend the vow on Scotland’s future, and asks him to keep to his original vow free of any new conditions.

Today’s debate becomes even more relevant after what the Leader of the House—I am pleased that he is with us in the Chamber—said on Tuesday when he made it clear that he intends to move ahead with what he called English votes for English laws. In my brief speech, I want to show that that would in effect reduce the rights of Scottish representatives at Westminster. I am grateful to the Secretary of State, who is also with us, for replying to the debate.

Today, I want to look at where we can agree, rather than where we disagree, to see whether it is possible to move beyond an agreement simply on the timetable to one on the powers of the Scottish Parliament, and whether there is a will on all sides of the House to resolve issues of English as well as Scottish, Welsh and Northern Ireland representation and rights. In an attempt to be constructive, I will put forward five suggestions that might help to avoid what must never be allowed to become a constitutional impasse in this House and this country.

First, I believe that we can all agree on 16 new powers for the Scottish Parliament, which range from devolution of attendance allowance and housing benefit, which have been agreed by all parties, to the conduct of elections. There are areas where we would have to ask the Conservatives to accept Labour and Liberal Democrat proposals, covering the entrenchment of the Scottish Parliament in the constitution and new powers over the Work programme, the Crown Estate, the rail franchise, borrowing for infrastructure, and Executive authority for UK health and safety, equalities and employment law. There are also areas where I would ask Labour and the Liberal Democrats to accept Conservative proposals—those for a fiscal commission and for an annual statement for taxpayers on how and where the Scottish Parliament’s money is spent. Given what each party has said in its submissions and afterwards, I believe that there is scope for agreement on every one of these new powers. I hope that the Secretary of State will say that he also believes that that can happen.

Secondly, on tax, the three remaining powers out of the 16 relate to income tax, fairness in taxation and VAT. There is general agreement that we should devolve, first, a wider power to set an income tax rate in Scotland, and secondly, a power to set top rates of tax too. I suggest, however—I will explain why in a minute—that we should reject the 100% devolution of income tax. We should instead agree to retain income tax as a shared tax across the United Kingdom, with 75% of it devolved to the Scottish Parliament, alongside the devolution of 50% of VAT revenues. That will ensure that the test of accountability is met, with the Scottish Parliament being responsible for raising the majority—54%—of its spending in 2016, the year in which the proposals would be implemented.

Thirdly, and I would like to think that we can all agree on this, the status of Scotland, Wales or Northern Ireland in this House should not be downgraded. As was recognised by the Strathclyde commission—I want the Leader of the House to read that report from his party—in contradiction to statements subsequently made by the Prime Minister and the Leader of the House, Scottish MPs, like Welsh and Northern Ireland MPs, should continue to vote on all issues that come to the Floor of the House of Commons. This is what the Conservative party said in evidence before the referendum:

“In our view, it is important that any sense be resisted that MPs for Scottish, Welsh or Northern Irish constituencies somehow perform any lesser a function than MPs representing seats in England. The establishment of stable constitutional arrangements for the future of the UK must address this. It would be unfortunate if the feeling were to gain ground that there were two classes of MP. Even under a scheme of enhanced devolution, such as we have proposed in this report, MPs for Scottish constituencies will continue to have significant responsibility for safeguarding the interests of those whom they represent.”

It was therefore not the intention of the Conservative party before the referendum to withdraw Scottish Members of Parliament from voting on tax laws or other laws within the UK. That, and not the current position that the Prime Minister expresses, should be our guide in resolving these issues.

I have always said that we should be prepared to consider a change in Committee procedures on England-only Bills, under which English MPs would form the Committee that debates them. However, we should insist —I will explain why later—that when any Bill comes to the Floor of the House on Report or on Second or Third Reading, the whole House and nothing but the whole House is able to vote.

My fourth proposal is that we should agree that the case exists for far-reaching changes in our constitution. That requires a public debate, which could take the form of a convention that engages all the regions and nations, and civic society. The Secretary of State will be able to answer for this, but I believe that the Liberal Democrats agree with the Labour party on that course.

Finally, we should all agree that we must focus not simply on the constitution, but on the issues that were raised in the referendum by the citizens of Scotland, not just in respect of the powers of the Scottish and UK Parliaments, but in respect of what we do with those powers. How we can create better jobs and a better national health service, and how we can wage a war against poverty as part of our commitment to social justice—those are the policy issues that were raised in the referendum and we should give our attention to them immediately.

The constitutional crisis that is in the making—for that is what it is—has to be addressed. I am pleased that the Leader of the House is listening. The crisis arises from the statement that was made by the Prime Minister the morning after the referendum, when he promised English votes for English laws. In practice, the proposal turns out not to be any new English rights of representation, but a reduction in Scottish rights of representation in this House of Commons. That issue was clearly material to the referendum. It is the failure to tell people of the proposed change in Scottish representation before the vote that has fuelled the demonstrations, petitions and allegations of bad faith, betrayal and breach of promise that have dominated too much of the Scottish political debate since the referendum.

Conservative Members should understand that the Conservative plans for the constitution do not end there. Under the proposal to devolve all income tax to the Scottish Parliament, Scottish MPs would be removed not just from ordinary law-making on English matters, but from the most decisive votes that a Parliament can have—votes on income tax rates and, thus, on passing the Budget. With Wales on the point of demanding income tax powers and Northern Ireland seeking corporation tax powers, we could find, at a stroke, that Scottish, Welsh and Northern Irish MPs are excluded from the right to vote in Westminster on Budget and key tax decisions. In the end, that might extend to London, which is also seeking its own powers of taxation.

The proposal to devolve 100% of income tax and then to exclude Scottish MPs from voting on income tax is, in my view, both anti-Scottish and anti-British. It is anti-Scottish because it would exclude Scots from voting on key matters and make them second-class citizens in the House. It is anti-British because it would abandon income tax as a shared tax and because it threatens to end the whole system of pooling and sharing resources across the United Kingdom that underpins the unity of the United Kingdom. It looks like a Trojan horse for fiscal autonomy, which would split the Union and enable the SNP to get through the back door what it cannot get through the front door in a vote of the Scottish people.

England makes up 84% of the Union. Scotland makes up 8%, Wales 5% and Northern Ireland 3%. When that is translated into Members of Parliament, the 533 English Members can outvote the 117 parliamentarians from the rest of the UK at any time and routinely if they choose. The English predominance is so great that every generation has had to balance the power of the majority to impose its will with some protection for the interests of the minority nations.

America, Australia, Spain, Switzerland, Mexico, Brazil, Germany and many other countries, through their constitutions, have found ways to manage the gross inequalities in the sizes of their regions, provinces or nations. The provisions that those countries make for minority states or regions show that a blanket uniformity of provision, such as English votes for English laws simply mimicking Scottish votes for Scottish laws, does not ensure fairness of treatment.

The House knows from our debate on Tuesday that in America, the smallest state of just half a million people has the same number of Senators as the largest state of 38 million people. Tasmania, the smallest state in Australia with 700,000 people, has the same Senate representation—12—as New South Wales, which has 7 million people. This is true of the Spanish Senate, the Swiss Council of States, the South African National Council of Provinces, and the Brazilian, Nigerian and Mexican Senates. In Germany, the state of North Rhine-Westphalia—in a constitution written by the UK—has about 30 times the population of the state of Bremen, but only double the number of Bundesrat seats. We are not unique. Countries have to make special arrangements that recognise the position of minority nations or regions, and ensure that uniformity of provision is not the means to ensure equality and fairness of treatment.

I thank the right hon. Gentleman for giving way and recognise his tenacious defence of the Union. May I ask him about money and the issue of equality he has raised? As a result of the Barnett formula, Scotland has double the ambulance staff and nurses per person that England has, and Wales gets a third less spending on social services for the elderly. By ruling out any change or review of Barnett—I appreciate that that is what the vow involves—the right hon. Gentleman is sending a message to the elderly, the patients and the vulnerable in my constituency that somehow they matter less. What would he say to them?

I should not have given way to the hon. Gentleman as he has not read what the Prime Minister and the leader of the Liberal Democrats said, as well as the leader of the Labour party. It was not me who committed us to the Barnett formula; it was them. The Barnett formula exists to allocate resources according to need across the whole United Kingdom. Let us be clear—this is the issue at stake—that there is no country in the world whose Parliament has a first and second class of representatives. There is no democratic state in the world, federal or otherwise, where one part of the country pays its income tax to the national Government, and another part does not, yet those are the two proposals of the Conservative party. It would be strange if this House, which is known as and calls itself the mother of Parliaments and is a worldwide beacon for fairness and equality before the law, became the first law-making body in the world to decree two classes—a first and second class—of representation.

If this were only about the rights of Members of Parliament, it might remain an insiders’ issue among the political elite. But the designation of elected representatives as first and second-class citizens is not simply about the sensitivities of a few politicians, but about the status of each nation in what has hitherto been one United Kingdom. According a first-class status to England, but a second-class status to Scotland—and possibly then to Wales and Northern Ireland—is bad enough, but the effect of that is that the Government of the day would also be a servant of two masters, and not sure whether their continuation depended from one day to the next on English votes or the votes of the whole United Kingdom. Government Members might find it appealing that no MP from a Scottish seat could, under such a system, ever again be Chancellor or Prime Minister of this country, but if I may say so, that is closing the door 20 years too late.

This change would also contradict the Conservatives’ devolution commission report that I mentioned earlier:

“Scottish MPs are and must remain as qualified as any other to hold high Government office, including the offices of Prime Minister and Chancellor of the Exchequer.”

That is not my view but the view of the Conservative party report from the Strathclyde Commission.

In conclusion, there is a way forward that listens to more sensible voices; a way forward that starts with a balanced programme of devolution that maintains income tax as a shared tax, is built around a sensible accommodation on exclusively English Bills, and is open not only to devolution within England—including to the powerful cities and regions of the country—but also to a wider debate about what kind of constitution our country needs. What Scotland has shown is that it is possible to engage the public in a debate about the distribution of power in our own country. Therefore, as the debate about English cities and regions and the future of the British constitution gathers pace, the constitutional convention that the Leader of the Opposition has proposed makes a great deal of sense.

Under the last Labour Government, we brought citizens together to debate how their rights could be respected. By extending that process to a constitutional convention that embraces every region, nation and civic group, the voice of England would be heard. It would be heard not in angry opposition to the voices of Scotland, Wales and Northern Ireland, but alongside them as part of securing what I want to see with the proposals we are putting forward today: a better future for all nations and regions as part of one United Kingdom.

I congratulate the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown) on securing today’s debate. Further, I congratulate, and commend him, on the role he played in the course of the independence referendum campaign. Nobody who heard his speeches and witnessed his passion and enthusiasm would have been in any doubt about the importance of the contribution he made in securing a united future for us all on 18 September. I know that he, like me, felt that he was fighting a campaign not just for himself but for his children and their generation. I venture to suggest that his contribution to it gives him a legacy of which they, in time, will come to be truly proud.

I want to make a few observations on the general state of the debate today. Shortly thereafter I will come on to address the points that have been made by the right hon. Gentleman in his speech. This has been a week when the topic of the referendum and its consequences have never been far from the Chamber. This is the fourth day this week, in fact, that I have been at the Dispatch Box. I welcome that. It is a good and right thing for the United Kingdom Parliament to be considering this issue.

Right hon. and hon. Members across the House have expressed their support for our still United Kingdom, a good illustration of what it means to be part of a country that shares risks and pools its resources. Scotland has come through years of fundamental uncertainty. The referendum outcome has put an end to it. With a positive choice from more than 2 million people in Scotland to remain within the United Kingdom, now is the time for us all to put aside party interests and to work to build a better United Kingdom for all: a future with a strong Scottish Parliament within a secure United Kingdom, because that was the clear verdict handed down by the people of Scotland.

The First Minister and the Deputy First Minister said during the campaign that, in their view, the referendum was a once-in-a-generation, perhaps once-in-a-lifetime, event. Both Governments agreed from the outset that the objective was to hold a referendum that would be legal, fair and decisive. That referendum was delivered. But decisive means that a decision has been made, not that the question should be asked again in three years’ time. Had the result gone the other way, it would have been considered unacceptable for those of us who campaigned to keep the United Kingdom together to demand a re-run in 2017, and so it is wrong now for nationalists to manoeuvre for that outcome. People voted clearly and decisively to reject the Scottish National party’s core proposition. It is not for anyone to tell them that they got their answer wrong. Uncertainty will only try people’s patience and sap business confidence, just as it did in Montreal. The SNP has been given an answer by voters in Scotland. Now is the time to acknowledge and accept it and work in the interests of 100% of the people of Scotland.

I grateful to the Secretary of State for giving way, unlike the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown). It took two hours for the Prime Minister to come up with English votes for English laws after the referendum. It has now taken four weeks for the Barnett formula. Seventy Members of Parliament have signed a motion for a debate for Barnett to be reviewed. Barnett was in the vow. Is Barnett safe?

Yes. Barnett is safe, because it was in the vow. I caution the hon. Gentleman. He seeks time and again to suggest that, somehow or another, the vow made by the party leaders—[Interruption.] The hon. Gentleman asked his question, now he can sit and listen to the answer. He says time and again that somehow the Prime Minister, the Leader of the Opposition and the Deputy Prime Minister were not acting in good faith. He seeks at every turn to undermine public confidence in the vow. If he still wants to pursue the cause of independence, and if he wishes not to accept the verdict of the people of Scotland expressed on 18 Sept, that is fine. But if he and his party are taking part in the Smith commission in good faith, frankly they should accept that all of us are doing so in good faith.

For the SNP to accept the verdict of the people, they must accept that the Smith commission’s work will not deliver the content of its White Paper or other outcomes detrimental to the core unity of the UK family—and this comes to the heart of the contribution from the right hon. Member for Kirkcaldy and Cowdenbeath. The SNP will not get independence by the backdoor. The vow given by the party leaders during the referendum campaign and the timetable that he and others supported are designed to strengthen Scotland within a secure United Kingdom. That is what people voted for, and that is what they will get—more powers for the Scottish Parliament within a modernised United Kingdom and delivered to the timetable we promised. In fairness, the soon-to-be First Minister has acknowledged in her party’s submission to the Smith commission that the outcome of this joint working will not be independence. It is important that negotiations take place with a genuine recognition of that fact.

The right hon. Gentleman listed 16 areas in which agreement could easily be sought. He will forgive me if I do not address all 16 now, not least because, with the Government having tasked Lord Smith with constructing a consensus, it would be wrong for me, as a Minister, to second-guess the outcome. However, the Smith remit states that his heads of agreement should be consistent with respect for the decision of the people of Scotland on 18 September. In other words, they must be consistent with the continuation of the constitutional framework and integrity necessary to maintain a United Kingdom. The four nations within the family must continue to operate as a single country.

I also draw to the right hon. Gentleman’s attention the terms of the Command Paper published on Monday. Chapter 2 reminds us of the principles that underpin the Scotland Act 2012: any proposal should first have cross-party support; it should be based on evidence; and it should not be to the detriment of other parts of the UK. On all three points, if Smith came up with proposals that undermined our constitutional integrity, they would not be consistent with the framework that we have set him in the Command Paper. I hope the right hon. Gentleman will take comfort from that.

I have always said that—and this is truer today than it has ever been—the independence referendum offered us the opportunity not just to finish the job of devolution to the Scottish Parliament by giving it the extra powers the right hon. Gentleman and I believe it needs in relation to taxation, welfare and so on, but to implement a process of constitutional change across the whole of the UK. I respectfully say to him and the rest of the House that ultimately the logical conclusion of this journey is a federal structure within the UK. The only way to achieve that in our lifetime is by building the strongest, broadest consensus, and that requires a constitutional convention of the sort to which he referred. Indeed, he and I both know, because we have been around this course several times in Scotland, that that is the way to deliver constitutional change.

That requires us to bring together others besides just the political parties—it will always fail if it includes only the political parties, because unfortunately they always see things through the prism of their own self-interest. For that reason, we have to bring in wider voices—civic society, the business community, the trade unions, the Churches and just interested citizens who have something to say. It is for that reason that, as somebody who passionately believes in the United Kingdom, I see an opportunity opening out to us now to build a new constitutional architecture. In that respect, I very much hope that the right hon. Member for Kirkcaldy and Cowdenbeath will remain engaged in the debate, because I believe he has a substantial contribution to make to it.

We have an unprecedented opportunity. The Smith commission can move forward through the collective endeavour of all five of Scotland’s biggest political parties. Never before has so wide a spectrum of parties come together in Scotland’s interests. That is something to applaud and welcome. All those taking part in this work must be willing to compromise, as the right hon. Gentleman has said today—again, I commend him for the thought that he has obviously put into this already. We have an opportunity to harness the energy of both sides of what was a quite remarkable debate and, as a result, secure a better deal for all of Scotland. The Commission will look at serious and weighty issues: taxation, welfare and the role of the Scottish Parliament in our public life. The challenge is to empower Holyrood further and, as a result, make it more accountable to those who elect it. Lord Smith of Kelvin is an able man facing a considerable task. With genuine good will on all sides, he is also the man who can see that task through.

Of course, this process is not without consequences for the rest of the United Kingdom. The right hon. Gentleman has already touched on the subject of English votes for English laws. It is clear from the debate we had in the House on Tuesday, and indeed from contributions at Scottish questions yesterday, that that will be a live debate for some time to come. As I said at Scottish questions yesterday, in my view it is a solution that, if seen as an end in itself rather than a step along the road, risks creating new problems to replace the ones that already exist in our current constitutional settlement. However, this is a genuine issue that requires genuine consideration within that wider context. The debate itself showed the strength of feeling and brought to light the complexities and intricacies of finding a solution that will strengthen the United Kingdom’s democracy. Again, the one thing that was apparent at the end of six and a half hours’ debate—I was here for nearly all of it—was that there is not yet any clear consensus in England on what the future shape of the constitutional architecture should be.

I know that time is short, and I appreciate the time the right hon. Gentleman has spent at the Dispatch Box this week re-emphasising that the vow and the timetable are on track, but will he at least acknowledge that the Prime Minister’s clumsy, inappropriate and highly political speech on the morning after the referendum has opened up the door for these kinds of questions to be asked? If he had not done that and had abided by every single part of that vow, we probably would not have been in this position this week.

What I would say to the hon. Gentleman is that I think the Prime Minister was reflecting questions that are being asked in other parts of the United Kingdom. However, I am able to give him an assurance from the Dispatch Box today—this is an assurance that repeats the comments of the Prime Minister himself—that, as my right hon. and learned Friend the Member for North East Fife (Sir Menzies Campbell) put it the other day, change in Scotland will not be held up while England catches up. These two debates obviously have issues that have a symmetry and run in parallel, but one debate will not be allowed to hold up the progress of the delivery of the vow in Scotland. As I have said, it is pretty clear that we have already done much of the work and built much of the consensus there that is still required in the rest of the United Kingdom.

I am glad that the hon. Gentleman accepts at last that the United Kingdom parties are proceeding in good faith. It would be a shame if he were unable ever to stand up and say it in public. [Interruption.] We are getting on with it. The hon. Gentleman sits there chuntering from a sedentary position, but he ignores the fact that we have already delivered, ahead of timetable, the Command Paper that was part of the vow. He might not like to accept that we are delivering—that we are doing what he said—but he cannot deny it and that is why he remains in his seat.

In the few seconds that remain to me, let me say that it is clear that the referendum was won decisively. It might not have been welcomed by the nationalists, but everybody else was pleased that we got the decision that we wanted and that will indeed be good for our children in the future as the years progress.

Question put and agreed to.

House adjourned.