Examination of Witness (Questions 480-499)
RT HON
LORD STEEL
OF AIKWOOD
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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