Devolution: A Decade On - Justice Committee Contents

Examination of Witness (Questions 480-499)


22 APRIL 2008

  Q480  Mr Turner: Well the Opposition did continue to exist in Scotland as opposed to Liberals, did it not?

  Lord Steel of Aikwood: Yes, you are right because the Government changed in 1997, but supposing the Conservatives had been re-elected in 1997, you would have had an impossible situation where the Government would have had nobody to man the Committee. It was a cumulative process.

  Q481  Mr Turner: So that justifies devolution.

  Lord Steel of Aikwood: No, it does not justify it; it was a contributory factor. You asked me if it contributed and I would say, yes, it contributed. Basically there has been a long campaign to restore the Scottish Parliament and indeed if you go back to the history of the Act of Union in 1707, you will find that the riots in the streets of Edinburgh were not about the Union, they were about the abolition of the Scottish Parliament. It was never really accepted by the Scots throughout history that Parliament should have been abolished when the Union was formed.

  Q482  Mr Turner: I think the Irish Government also was supported by very few Irish people, yet it was possible in both 1992 and 1997 to formulate a government which had no representation of the Government. It had members but not members of the Government.

  Lord Steel of Aikwood: I cannot comment on Ireland.

  Q483  Mr Turner: Professor Mitchell identified five possible responses to the English question: providing symmetry through home rule of all four countries; no Scottish representation at Westminster or a reduction in such representation; parliamentary procedures including limiting the issues on which Scottish MPs can vote at Westminster; the maintenance of the current levels of parliamentary representation with no change. What are the advantages and disadvantages of each system?

  Lord Steel of Aikwood: The obvious one to pursue is to create English-only committees. That is what happened under the previous arrangement for Scottish Bills, that the committee stage was dealt with purely by Scottish Members. There is no reason why the committee stage could not be dealt with purely by English Members, whether in an English grand committee so called or just standing committees. You have a United Kingdom Parliament and in the end, on report and third reading, the votes would have to come back to the chamber as a whole, but at least that would give a semblance of devolution to England in the legislative process.

  Q484  Mr Turner: You say there is an obvious answer but I am not sure it is obvious.

  Lord Steel of Aikwood: Simply because it follows the pattern of what we did in Scotland before. That is exactly what happened.

  Q485  Mr Turner: But now we do not, so why not go that one step further in England?

  Lord Steel of Aikwood: It is up to the English. I keep saying this: it is not for me to say what the English should do.

  Q486  Mrs Riordan: Last week we had Lord Barnett at this Committee. Do you agree with him that the Barnett formula needs to be revised and, if so, how would you revise it?

  Lord Steel of Aikwood: The formula itself is not the issue. I know he keeps going on about how unfair it is that it is based on population and not on need but if you stop to look at need in Scotland where you have a country with more farmers, more roads, thinner population, more people on benefit, more pensioners, more people on higher education—

  Q487  Chairman: You are describing my constituency.

  Lord Steel of Aikwood: All I am saying is that, if you base the Barnett formula on need, I suspect the end result would not be very different from being based on population. My own view is that the issue which we ought to be addressing and which I hope the Commission will address is whether any formula is the right way to finance the Scottish Parliament. I have said before, and I happily repeat here, that no self-respecting parliament can exist permanently on the basis of a grant from another parliament and that is why I support the view that we should be searching for ways of devolving revenue-raising powers as well as spending powers. I am not alone in that; I brought along this month's Holyrood magazine and Jeremy Peat, the economist, says this on Page 49 "Scotland also exhibits a marked lack again in terms of international comparisons of revenue autonomy" and this is the bit "no other country within the OECD grouping exhibits this combination of highly limited devolution of revenue powers but close to total devolution of expenditure powers" and that contrast is what we ought to be looking at rather than replacing the technicalities of the Barnett formula with a Barnett formula Mark II.

  Q488  Mrs Riordan: If the Commission did recommend replacing the Barnett formula for Scotland, would the formula's continued use for Wales and North Ireland be credible?

  Lord Steel of Aikwood: Well is the present one credible? It is a source of constant argument. There is a belief that the Scots are getting more than they deserve and this is borne out of people in England seeing, for example, no tuition fees, care for the elderly. What they do not understand is that that all comes out of the block grant. It is not that we are spending more money than we are entitled to, it is a block grant and, whether the block grant is on the existing Barnett formula or on the new formula, once it is passed over to the Scottish Parliament, it is up to them to decide how to spend it and if they decide to spend it a different way from down here, well that is devolution in action.

  Q489  Mrs Riordan: I understand what you are saying but do you think any revision of that formula or the creation of a new mechanism should consider the distribution of public funding to the English regions? I know you talked about Scotland.

  Lord Steel of Aikwood: I would have thought yes was the answer. If you were having any review of a continuing grant basis then clearly you would have to look at whether it was being fair to the other regions as well. I am looking particularly at the Chairman who represents a patch just over the border.

  Q490  Chairman: You mentioned the fact that quite clearly expenditure in Scotland from the block grant involves making choices and choosing to spend more on certain particular things. Am I mistaken or is it the case that up to now we have not heard very loudly in the Scottish Parliament anything which conveys that other things are being squeezed in order to meet these particular commitments, that the level of block grant expenditure up to now seems to have protected Scotland from the intense argument about what it has to give up in order to have free tuition fees and in order to have free personal care for the elderly, or is that a mistaken impression from not reading the Scottish papers every week?

  Lord Steel of Aikwood: It is a partly a mistaken version because of course the annual budget is debated hotly in Parliament and there is a finite amount of money and if you spend more on something here then there is less to spend on something else and that has always been the case through each year of the Parliament.

  Q491  Mr Tyrie: You said a moment ago that no parliament should rely on a grant from another parliament, and that at least in the long run you felt that was an unsustainable situation for something that wants to call itself a parliament and behave as a parliament. The logical continuum, to move across the spectrum from full grant payments to no grant payments at all, is full fiscal autonomy, is it not?

  Lord Steel of Aikwood: It is quite difficult to achieve. If you retain the United Kingdom, however much you devolve revenue raising you are in the end always going to have to have some equalising measure or accounting responsibility at a UK level for matters of common interest, foreign affairs, defence, all these budgets.

  Q492  Mr Tyrie: But full fiscal autonomy is a well understood notion in those countries which have high levels of devolution, including fiscal devolution. Is that the way you think we should go?

  Lord Steel of Aikwood: I would certainly head in that direction.

  Q493  Mr Tyrie: I was describing a continuum. What I was going to try to explore with you was whether you have in your mind some logical resting place on that spectrum that suits you, for which you find the arguments forceful.

  Lord Steel of Aikwood: I did chair a commission which produced a very detailed report and it was helped by a number of people expert in this field, which I make no claim to be. They ended up by suggesting that income tax and corporation tax were the two things that ought to be fully devolved.

  Q494  Mr Tyrie: Do you think if we went down that road that the English question or the lion's share of the English question would in practice go away?

  Lord Steel of Aikwood: It is largely a matter of perception. There is this perception that at the moment the Westminster Parliament is paying for things in Scotland, so my answer is yes. If it were seen that the Scots had to raise the money they spend, that would be thought to be reasonable.

  Q495  Mr Tyrie: Do you agree that if we were to go down this road, we would have to re-open Barnett, even if, as you suggested a moment ago, who knows what the outcome might be? You also said a moment ago that if it were re-opened, who knows, one may find that their generosity was not in fact generosity at all but something that was equitable. Do you agree that inevitably, if we go down the road towards full fiscal autonomy to include, for example, income tax and corporation tax, we would have to open up the Barnett formula?

  Lord Steel of Aikwood: Absolutely; yes, I do.

  Q496  Mr Tyrie: One last thing. You made another very interesting remark. I hope I wrote it down roughly accurately, but you can correct me if I have not got it quite right. Until the English decide that they want a grand committee for English affairs—the phrase you used, implying that sooner or later the English are bound to say that they want an English grand committee. Do you think that it is also the case that sooner or later, inevitably—you also mentioned English-only committees to examine Bills that are clearly English only or dealing entirely with English matters—do you think that that is an inevitable direction in which we will now move?

  Lord Steel of Aikwood: I would have thought so, but that is a matter for your House.

  Q497  Mr Tyrie: It is a matter for the English or it is a matter for the UK Parliament?

  Lord Steel of Aikwood: The UK Parliament obviously. If you think that is a sensible way to proceed, and I personally do, it is a reasonable debate to have in the Commons.

  Q498  Mr Tyrie: Do you think it is possible to find an adequate method of certification of Bills to distinguish between English-only Bills and Scottish Bills? Imagine a government that did not really want Bills to end up in English-only committees tacking on a clause that had some Scottish ramification to what was clearly designed for England.

  Lord Steel of Aikwood: We used to have precisely that.

  Q499  Mr Tyrie: It would be relatively straightforward, would it not?

  Lord Steel of Aikwood: Already, as you know, the Speaker has to certify certain Bills as being money Bills. I cannot remember what other category he has. It is not an insuperable problem.

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