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Baroness Carnegy of Lour: My Lords, before the noble Lord sits down, does he not agree with the noble Viscount, Lord Weir, that the figure of 80 per cent. in the poll as the number of people in favour of a Scottish assembly is the same as it was the last time round, and that the votes in the referendum showed that less one-third of the electorate voted for the Bill, which is why it fell in the end?

Lord Taylor of Gryfe: My Lords, this is a time-limited debate and I shall not intrude on someone else's time. As I recall, at the last referendum, the pro-assembly group failed to gain 40 per cent. of the electors. I suggest that if a referendum was held now, the result would be somewhat different.

5.5 p.m.

The Viscount of Oxfuird: My Lords, I too would like to thank the noble Lady, Lady Saltoun of Abernethy, for giving us the opportunity to debate this important subject and to consider the implications and the possible alternatives that are being canvassed for the future government of Scotland.

The noble Lady has often spoken in the past in your Lordships' House on this subject. I particularly recall the contribution that she made to the debate initiated by the late Lord Morton of Shuna on 13th January 1988 which appeared in Hansard at col. 1246. She described the Union as,

The American, John Dickinson, coined the immortal words in his Liberty Song,

    "By uniting we stand, by dividing we fall".

How very true those words are today when we come to consider our own United Kingdom and in particular the position of Scotland within that United Kingdom. The importance of our union must be viewed in an historical context if we are to understand the very real benefits that it has brought to all of the parties to that union. Professor Sir George Clark's book in the Oxford History of England series highlights this. In it he describes the

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work of the commission which was established by the Parliaments of Scotland and England, which led to the achievement of the Union in 1707. I quote,

    "The Commission worked with real good will. On both sides they included men of the highest legal and political ability and they did their work well. A failure of intelligence or temper might easily have made it extremely difficult; but in sittings which lasted only three months, in the middle of the all absorbing business of war, they completed and signed their treaty".

I hope that the same spirit of goodwill can guide us all in the months and years ahead when it seems that the whole question of devolution will be coming again to the top of our agendas.

Trevelyan, in his History of England, stresses the immense benefits that the Union brought to both Scotland and England in the 18th century. Scotland gained free trade with a huge English domestic market and with the overseas markets of the emerging British Empire, and England gained free access to the best educated and most actively minded people in Europe.

It is upon the economic benefits accruing from the Union, right up to the present that I should like to concentrate my remarks this afternoon. That does not mean that I am not sensitive to the very real dangers that a bungled devolution might mean for our Union, but merely that I believe that the tangible problems that would be created by trying to implement such a devolution have been very adequately covered by other noble Lords this afternoon.

Speaking in 1988, my noble friend Lord Home of the Hirsel, said in Edinburgh,

    "With Scotland in unity with England, the United Kingdom in unity with Europe and Europe in unity with the Atlantic Community, there can be no threat to our increasing wealth".

I ask your Lordships to concentrate your minds on the positive economic benefits of our Union and not to be seduced by the theoreticians who seek the Holy Grail of misguided nationalism.

Summing up a debate on this subject in 1989, my noble friend Lord Sanderson of Bowden emphasised how important economic success is to the very lifeblood of Scotland. A similar point was made strongly last week in the Scottish newspaper, the Herald, on 28th June, and I am grateful to my noble friend Lord Goold, who had hoped to speak in this debate, for bringing it to my attention. I quote:

    "Labour's approach to devolution could seriously affect inward investment in Scotland and lead to major companies transferring their headquarters south of the Border, the Director-General of the Institute of Directors warned yesterday.

    "He said Scottish businesses such as Scottish and Newcastle, Morrison Construction Group, Standard Life and Scottish Widows were very closely integrated with the rest of the UK and their ability to create and maintain wealth depended on this. But devolution could result in them moving their headquarters South of the Border.

    "The impact would not be immediate. Clearly if you have made an investment of £60 million, you are going to stay with that. But over a long period, you would see a gradual drain of investment away from Scotland. After all why have your main base in Scotland when the tax regime is more favourable in England?"

Let us not forget that Scotland has been a major beneficiary of inward investment, particularly in the manufacturing of electronic components and equipment in the so-called "Silicon Glen". Labour's approach to devolution would certainly put that benefit at risk.

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The facts are clear. In 1990, net capital investment by foreign-owned manufacturing firms in Scotland totalled £423 million, one-third of total UK manufacturing investment. With 1.5 per cent. of Europe's population, Scotland produces 11 per cent. of Europe's semi-conductors, 35 per cent. of personal computers, 50 per cent. of automated banking machines and nearly 60 per cent. of workstations. Those are impressive figures, which we should not put at risk.

Lord Taylor of Gryfe: My Lords, I am sorry to interrupt the noble Viscount in a time-limited debate, but can he say how it is possible for Southern Ireland to have an equally impressive record of inward investment with its limited population and with an independent parliament, as compared with Scotland? Why would companies move out of Scotland just because it has a Scottish Assembly? It is nonsense.

The Viscount of Oxfuird: My Lords, I suggest that the noble Lord reads in Hansard the rest of my contribution.

I was delighted to read in the April edition of Engineering magazine, a respected business periodical for the engineering sector, a piece under the heading, "Celtic Revival". I shall quote:

    "A previous slump in the output index of Scottish mechanical engineering halted by the end of last year. The latest Scottish Business Survey published at the start of this year, suggests that this is the long awaited turning point for the industry. Of the firms taking part in the survey some 43 per cent. expressed some business optimism.

    It is a situation broadly supported by the Fraser of Allander Institute of the University of Strathclyde, which has been examining the mechanical engineering sector. In a recent report, the Institute noted that the engineering industry had, by necessity, become increasingly sophisticated and specialised over the years in order to survive".

There is now clear evidence that a turning point in the Scottish industrial economy has been achieved after years of painstaking hard work. I believe that Scotland is poised to share with the whole United Kingdom the benefits of an economic upturn which has already begun.

I beg your Lordships not to throw away those benefits by imposing upon Scotland an ill-conceived and motley hybrid of constitutional changes which will provide no tangible gains, but merely provide a tinker's charter for muddle and obfuscation.

Scotland is potentially one of the wealthiest parts of our kingdom. The Scots are brimming over with energy, with creativity, with a love of learning and with a willingness to adapt. As a United Kingdom we are greater than the sum of our parts. I urge your Lordships not to meddle but to preserve the status quo.

I conclude with the reminder of my noble friend Lord Younger in his article in the House Magazine of March this year, when he wrote:

    "Our greatest achievement is, I believe, to have joined with England and Wales to create Great Britain, without losing our individuality in the process. This track record bodes well for our fortunes in the 21st Century when we will have much leadership to contribute to Great Britain and the wider world".

If it isn't broken, for heaven's sake don't let's try to fix it.

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5.15 p.m.

Baroness Elles: My Lords, this debate, which is of crucial importance both to this House and to the United Kingdom as a whole, has been admirably introduced by the noble Lady, Lady Saltoun of Abernethy, both with clarity and balance. I should like to join others in thanking her, in particular for her approach. She did not lay down rules; she asked questions. I believe that many Members of your Lordships' House, including myself, are searching for answers to the same questions. I have not yet heard satisfactory solutions. Like other noble Lords, I declare my passionate devotion to the Union although I believe that I am the only Member of your Lordships' House to speak who happens to have a 100 per cent. English father. I am therefore taking part in the debate as an English citizen of this country. I share the determination of noble Lords from Scotland to retain the Union which is the United Kingdom.

The Opposition have declared their intention to establish a parliament in Scotland. As that would raise issues already touched on by previous speakers, I shall not discuss it. It is, however, worth recalling that recent detailed figures published by the Treasury show that England pays more income tax per capita at £1,165 compared with Scotland's £1,050, with Scotland receiving £3,976 per capita to England's £3,263. Nobody complains about that. However, we must question whether the rest of the United Kingdom would be willing to continue that financial imbalance.

We must remember the cost of setting up a parliament in Scotland and the fact that it would be an expensive body to run, paying salaries commensurate with Members' tasks. I wonder whether the Scots realise when they vote for the party opposite that it will be an expensive business for them, to say nothing of the costs of running elections almost every year for one body or another. It is evident that the party opposite realises that there may well be a financial deficit since one of its first propositions is that a Scottish parliament would have the right to raise taxes. The hidden costs for Scotland could harm the competitive edge that it has succeeded in gaining in recent years through the skills and abilities to which my noble friends Lord Weir and Lord Oxfuird referred. That would be a loss not only for Scotland, but for the United Kingdom as a whole.

While it is the desire of the party opposite to gain popularity in order to form a government at the next election—at almost any price, it would seem, including that of risking the future of the United Kingdom—it might bear in mind that voting is not the preferred activity of Scots, nor of the populations of most democratic countries. When the party opposite talks about the "democratic deficit" with a sad voice, it is worth recording the fact that 25 per cent. of Scots did not vote at the last general election in 1992; that only 38.2 per cent. voted at the European parliamentary elections in 1994; and only 44 per cent. at the local elections in 1995. I do not see where the passionate desire for mending the democratic deficit is evident. Indeed, when the votes are counted, there is no guarantee that the majority would be held by Labour, as I am sure noble Lords opposite recognise. To set up a

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parliament is one thing, but to set up a parliament in which the Labour Party would or could be in a minority seems nothing short of incredible.

In considering the future of Scotland it is natural to look at the aspirations of the different political parties as set out in their party manifestos and in their leaders' speeches. Attention should be drawn specifically to the SNP manifesto published before the 1992 general election and also to the manifesto for the European parliamentary elections held in June 1994 as well as the policy statements made in the recent Perth and Kinross by-election. Its 1992 election programme headed, "Independence in Europe. Make it happen now" states:

    "Meanwhile—as confirmed by eminent legal opinion"—

it does not say whose—

    "as a successor state to the United Kingdom, Scotland continues to be part of the European Community".

And in the EP elections manifesto for June 1994:

    "an independent Scotland will not need to apply for EU membership—all that will be required is a change in our status within the Community from powerless province to independent member state ... Scotland will continue as a member of the European Union".

Apart from the complete misconception that Scotland is a powerless province when it is represented, as part of the UK, as one of the four leading players in the EU and has been a major beneficiary in terms of financial aid as a result, it would become a small country among many and among the four or five other small countries which obviously need the support of major countries to be heard. With the increase in the use of qualified majority voting, as supported by the Labour Party, and the right of veto which could disappear with a Labour government, which is one of the strengths of a small country, Scotland's voice would be hardly a whisper, if heard at all. It is also to be questioned whether the Scots, should they be so ill advised as to vote for independence, would surely want then to decide whether they wished to join the EU. That would be a further political hurdle.

I would like briefly to comment on the deception of the Scottish people into believing that they would cast off their centuries old membership of the UK and immediately remain as members of the EU as an independent state. That worries me greatly. There is no legal certainty whatever that this would be so. All eminent legal opinion—I am sure that my noble and learned friend will agree that it is only an opinion—is subject to alternative views. I do not pretend to know the answer but nor does anyone else at the present time.

Perhaps I may mention three major queries. First, can the Treaty of Union of 1707 be abrogated when it is not possible to return to the status quo ante? Surely, the answer is no, since there is no longer a Scottish parliament nor a Scottish kingdom; nor is there an English parliament or a kingdom of England. Both were joined by mutual agreement to form a United Kingdom and a United Kingdom Parliament.

Secondly, the question of the succession of states is a very complex subject—I would not dare to enter into it—but there is no assurance in international law that if Scotland were to secede from the UK it could automatically remain or even become a member of the

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EU with all the obligations and rights set out in the EEC Treaty. That is an international treaty binding the member states which ratified it. Thirdly, all the member states would have to agree to the membership of a new state if only to agree the budgetary contribution, the weighted voting, number of MEPs and so forth. These matters could take up to five years to negotiate, in accordance with present accession demands. In the meantime, would the financial aid flowing through to Scotland because of UK negotiations continue to flow?

There is no precedent in the EU for such a situation. It could be resolved eventually, possibly, by united political will, including the UK's, but it cannot be dismissed by the SNP in such a facile way. It is doubtful, for instance, whether countries such as Belgium or Spain, which have territorial issues, would be willing to support such a move. Even Greenland, which some years ago wanted to leave the EC, did not secede from Denmark but remains part of the Kingdom of Denmark, a full member of the EC. That took about two years to negotiate.

These are fundamental questions which arise despite the claims of the SNP. As I said, there is no legal certainty of automatic membership of the EU. The Scottish people are being deceived if they are being told that that is the truth. They do not deserve to be cheated. Those of us who have a special affection for, and close links with, Scotland through family and other relationships—and there are thousands of us throughout the southern part of the kingdom—would certainly do everything possible to ensure that those close links are retained under the concept that we all are and will remain citizens of the United Kingdom of Great Britain and Northern Ireland. If that relationship were to be changed both Britain and Scotland would be the losers.

5.25 p.m.

The Earl of Buchan: My Lords, I too congratulate the noble Lady, Lady Saltoun, on initiating the debate and on her comprehensive speech which fitted neatly into her allotted 20 minutes. I hope that the noble Lady will not mind if I draw attention to one of her charming Christian names, the rightly Scots Flora. That is no secret; it appears in any good reference book. If by the end of the evening some wonder whether she might not also adopt the name Pandora, so be it. This particular constitutional box is one which some, I know, strongly feel should be kept nailed shut.

I am bound to say that I find it extraordinarily difficult to square the circle of Scotland's position vis-o-vis England in the United Kingdom, even having listened to the speeches of your Lordships. Three aspects of that were mentioned by the noble Lady. The first was the existing position of the Union; the second was the Labour Party's proposals and the third was the Scottish Nationalists' proposal. The noble Baroness, Lady Elles, referred to people who do not vote. If they are linked with the "don't knows" and "don't cares", that would be the other side of the square.

As regards my own position, perhaps I may slightly divert the discussion. Some noble Lords may be aware that Isabella Countess of Buchan crowned King Robert

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the Bruce in 1306. That was a double first for Scotland: the first crowning of a Scottish king, and the first such crowning by a woman. Noble Lords who watched a recent programme of "Mastermind" will share my wife's indignation on hearing a wrong answer to the question: who crowned Bruce? Some other countess was given the credit. Watch out Magnus Magnusson, we shall be after you with Bruce's broken Bannockburn axe!

On the subject of trying to keep an open mind, some noble Lords may remember the Moderator's advice to a Member of your Lordships' House many years ago when he was asked, "How shall I find out what a Scotsman thinks?". The answer was, "Consult the writings of Robert Burns first and if they are no good find a precedent". Robert Burns was born shortly after the Young Pretender's unsuccessful effort to reclaim the Crown of the United Kingdom; let it be noted, not only of Scotland. Unfortunately, Robert Burns does not give us much help.

The search for a precedent has been more fruitful in that the sixth Earl of Buchan was a member of the Scottish Estates at the time of the Union. What did he do and what would have qualified him to be a founder patron of the Cross-Benches in your Lordships' House? First, he denounced the proposals in the estates because he said that they would interfere with the rights of Scottish Peers in the new parliament. For that he was punished by losing his offices under the Crown, which was, presumably, an early case of "not being one of us". Nothing has changed much in 275 years, therefore!

Subsequently, being a strong supporter of the Hanoverian succession, he came back into favour. This mention of the Scottish Estates at the time of the Union leads to an interesting question. If Scotland were independent, who might sit in the Scottish parliament before elections had taken place assuming, as some do, that the last Scottish Estates was adjourned only in 1707? On a reconvening of the Estates, I believe that I, as a direct descendant, could claim my ancestor's seat. No doubt other noble Lords whose families were wise enough to collect UK Peerages in the intervening period would be in the same position. I would have the right to sit in both the Scottish and English Parliaments at the same time. Therefore, on the same day I might vote in Edinburgh to declare war on England, to cries of "Remember Bannockburn"; rush back to London on the shuttle and vote in your Lordships' House to decline the challenge, to shouts of "Don't forget Flodden". That is fanciful nonsense.

However, that is nothing to the nonsenses and horrors of wrenching apart Scotland and England without proper, careful thought. In that regard, I must support the proposal made by the noble Earl, Lord Perth, however imperfect it may be, that a Royal Commission should be appointed to consider the whole matter.

Like many other noble Lords, in the Labour Party's proposals I am quite unable to understand the relationship which is to exist between members of the

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Scottish assembly and Members of this Parliament. But I certainly understand the words of Mr. Robertson in the Scottish Grand Committee who said:

    "The fact is that separatism will not happen. The people of Scotland do not want it and have not voted for it. It is not desirable or sensible; it is unsellable ... Separatism is the constitutional option which dares not speak its name".—[Official Report, Commons, Scottish Grand Committee, 17/5/95; col. 10.]

With regard to the Scottish National Party, it is impossible not to detect a change in sentiment from 20 years ago, at least in my part of the world. I support the plea made by the noble Lord, Lord Taylor, for some action. It is impossible also not to respect the sincerity of Mr. Salmond, the leader of the Scottish National Party, although I wish that he would rename his constituency from Banff and Buchan to Banff and Buchan-who-does-not-always-agree-with-him.

On the subject of North Sea oil, never mind the old oil, what about the new deep seawater oilfields? It would be wrong for the Scottish Nationalists to claim those for Scotland. I believe that they belong to the Imperial and Royal Kingdom of Orkney and Shetland which is bound by treaty to England and Norway.

One final matter which is not directly connected with this question is that when I was perusing the parliamentary debates, I looked at some of the debates which were held at the time of the Union. My eye was diverted to a problem which the parliament of the day was having with the press. Plus ça change, my Lords, because a Motion was introduced saying:

    "That the great liberty taken in printing and publishing false, scandalous, and impious Libels, creates division among her majesty's subjects, tends to the disturbance of the public peace, to the encrease of immorality, prophaneness, and irreligion, and is highly prejudicial to her majesty, and her government".

We have all heard that recently but let us consider the proposal to put that right. It was:

    "That all Printing-Presses be registered with the names of the owners, and their places of abode".

It must have seemed such a good idea at the time and a fat lot of good that has done us.

I should like to quote to your Lordships from the speech of Queen Anne who had what I believe is the last word on this matter when she addressed your Lordships' House in January 1707. She said:

    "My Lords and Gentlemen; You have now an opportunity before you, of putting the last hand to a happy Union of the two kingdoms, which I hope will be a lasting blessing to the whole island, a great addition to its wealth and power, and a firm security to the protestant religion.—The advantages which will accrue to us all from an Union, are so apparent, that I will add no more".

There it is, my Lords.

5.35 p.m.

The Earl of Balfour: My Lords, I am very proud to be a citizen of Great Britain. I shall do all I can to uphold the treaty of the union of the parliaments of 1707 because I am convinced that this United Kingdom is well represented and governed by this Parliament at Westminster. Between the union of the crowns in 1603 and 1707, Scotland had its own parliament but it lacked the political power to enable Scotland to become economically sound. Many Scots moved to London and gained posts of great influence in commercial and political circles.

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After 1707, the number of Scots moving south increased vastly. Countless Scots have settled in England over the past 300 years. They have fought alongside the English in every part of the world. In trade and commerce, they have excelled. We have had half a dozen Scottish Prime Ministers this century. There are Burns clubs in almost every town and village in the land. Although rugby matches at Twickenham and Murrayfield may still be hard fought, the ties between the two countries are now virtually indissoluble.

I have no wish to see Scotland's strong representation in this Parliament at Westminster weakened in any way by we Scots having some form of devolved parliament of our own. This Parliament represents a total population of 58 million, out of which Scotland's population is only 5 million or 8.5 per cent. And yet we are extremely well represented. We have our own Secretary of State for Scotland who is always a Cabinet Minister. We have 72 Members of Parliament and a very good representation in your Lordships' House, including our own Lord Advocate. The average parliamentary seat in the United Kingdom represents 89,000 people. In Scotland, the average MP represents only 69,400 people. Therefore, again, at present Scotland is well represented.

Also in proportion to our population, we receive a very good allocation by way of Exchequer grants. I have heard arguments that North Sea oil and gas belongs to Scotland. It does not. It belongs to the individual companies which have developed it. All those companies have bought the right to search for and exploit that oil and gas under a government licence.

If there is to be a criticism of this Parliament, it is for the lack of support over the years for the very valuable export trade of whisky and beer from Scotland. The Scotch Whisky Act 1988, piloted through this House by my noble friend Lady Carnegy, was basically a support from the European Parliament in guaranteeing that Scotch can only be the product of Scotland. I ask the Government to remember that in our cold climate we need whisky as an anti-freeze.

I believe also that in Scotland we have suffered from far too many of our industries being heavy industries; for example, shipbuilding and steelmaking. We could make money out of ships that were no more than 16,000 tonnes, but we could never compete in the building of ships of 100,000 tonnes.

Ravenscraig steel mills should never have been built in Scotland because, basically, one requires three products to make steel: iron ore, limestone and coking coal, all of which had to be imported to Scotland and the iron ore from overseas. It is only in the Durham area that we have enough coking coal and limestone.

Besides the drinks industry, one of the success stories of Scotland is our development in electronics and computer ware which, with our high standards of education, we should always be able to achieve.

I shall do all in my power to preserve our Scottish legal system, which I consider in many ways to be superior to that of any other country. Equally, I am convinced that our mental health care, our education standards and our children's reporter system are very good. However, if we had our own parliament which relied on the small population of Scotland for its own

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finances, I very much doubt that we would ever have the necessary finance from taxes to maintain those high standards. Finally, I thank the noble Lady, Lady Saltoun, for initiating today's debate.

5.42 p.m.

The Earl of Lindsey and Abingdon: My Lords, I should begin by stating that, contrary to what the first part of my title may suggest, I am in fact three-quarters English and only one-quarter Scottish. However, I have lived in Scotland for the past 16 years, as well as at other times during my life. I, too, am most grateful to the noble Lady, Lady Saltoun, for initiating the debate.

The purpose of my speaking today is not to get too involved with the arguments regarding what sort of alternative government Scotland should adopt. I prefer to leave that to others of your Lordships who have far greater knowledge of the constitutional consequences that might arise. My aim today is to try to give an assessment of someone like myself looking from Scotland towards the Palace of Westminster and at the Government in London and to offer some reasons why things have gone against the present Government and the Conservative Party; but which, in my opinion, could also result in the demise of a future Labour Government and party in Scotland in the long term if they adopt their present devolution policies.

The Conservative Party in Scotland has declined during the past 15 years for two main reasons; first, that it is looked upon as an English parliamentary party—a point raised by my noble friend Lord Weir—and has not really made any effort to rectify that by also giving it a truly Scottish dimension. Secondly, it has also tended to use Scotland as an experimental ground for new legislation, the most famous of which was the community charge or poll tax. However, a plus mark has been earned for the abolition of two-tier regional and district councils and reverting back to a single local government authority next April.

Devolution as proposed by the Labour Party would only bring back yet another layer of government which, in the long term, would lead to conflict with the United Kingdom Government and calls for more powers, ending in complete independence. The 3 per cent. tax raising proposal would have a devastating effect on inward investment, regardless of what some noble Lords have said. In the part of Scotland in which I live, which is south of Glasgow, I have seen over the past 15 years a remarkable transition from old, traditional and out-dated heavy industry and coal mining to the new high technology industries.

In conclusion, I make no secret of my wholehearted support for the Union, with the possible further extension of powers to the Scottish Grand Committee, with purely Scottish legislation being taken, if possible, on the floor of the Old High School in Edinburgh. As long as the main portfolios such as foreign affairs, defence and the Treasury remain in the hands of a UK government, that should go some way to overcoming the West Lothian Question and satisfying a Scottish identity within the Union.

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I have no idea where your Lordships' House would stand in any proposed changes to the constitutional situation in Scotland. However, I have always been a believer in the old Scottish representation system that we had before life peerages came in and the Scottish system was amended. In spite of my hereditary position, I would support some form of representative peerage for the whole of the United Kingdom. I think that that would be a rather more gentle way of reforming your Lordships' House.

5.47 p.m.

Lord Ellenborough: My Lords, as one who played a part, albeit a small one, in the debates on devolution in your Lordships' House in the late 1970s, I must say that I find it almost beyond belief that the Labour Party, if it were to get the chance, would wish again to get sucked into the devolutionary quagmire which submerged it once and which will, undoubtedly, submerge it again.

The noble Lady, Lady Saltoun, has indeed done a great service in highlighting the great dangers to the unity of Great Britain that exist today. Certainly, as a committed Unionist, I fear greatly for the continued state of the Union. We hear much grandiose talk about Britain's role in the world as we approach the millennium, but the question is: will there be a United Kingdom of Great Britain and Northern Ireland a decade from now, or merely perhaps a Disunited Kingdom of several little regions submerged, for good measure, into Europe?

As one of the relatively few English speakers in today's debate, I find it a little difficult to discuss Scotland in isolation. There are dangers from what is happening in Europe, events in Northern Ireland and, of course, the proposals for devolution of one kind or another for Scotland and Wales; and, indeed, for the English regions. As to Europe, an increasing number of people are worried as to whether the Government—any government—will take a firm enough stand at next year's Inter-Governmental Conference.

Of course, there is little point in taking a firm stand on Europe if the Union itself is to collapse and disintegrate from within. In Northern Ireland, the Government are preparing the way for a devolved assembly, and a greater say by Dublin in Northern Ireland affairs. A Labour Government will propose a Scottish parliament with full legislative powers, a Welsh assembly, and an assortment of mini-parliaments and assemblies for trumped-up regions of England.

I appreciate that there is a case for an assembly in Northern Ireland for historical reasons, because of the deep sectarian divide and the different aspirations of the two communities which make it quite different from Scotland—not least that a part of the minority community in Northern Ireland may wish to join a foreign republic. Nevertheless I must emphasise that the proposal for an assembly in Northern Ireland makes the Government vulnerable to charges of inconsistency and sits uncomfortably with their pledges to preserve the status quo in the rest of the UK. That was seized upon and exploited by Opposition parties in the recent Perth by-election.

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If the Government's credibility is not to be undermined in the future, the Government had better get their act together in this respect as it is a difficult argument to get across on the doorstep; otherwise there is a danger that the Government, perhaps unfairly, will be perceived as part-time Unionists—staunch Unionists for Scotland but perhaps not quite so staunch Unionists for Northern Ireland. Any lack of conviction about the Government's attitude towards Unionists in Northern Ireland bodes ill for Unionists in the rest of the UK.

As a Unionist I have no doubt at all that a separate parliament for Scotland and an assembly for Wales would be an unmitigated disaster and lead to constant friction between Westminster and Edinburgh. The SNP would have all to play for and would agitate and engineer a confrontation. There might quite possibly be a cross-party consensus that would develop in Edinburgh over aspects of economic policies placing an intolerable strain on the relationship between London and Edinburgh. It would, as other noble Lords have said, be no more than a halfway house that would eventually, I am afraid, lead to an independent Scotland. There can be no doubt that an end to the Union which has evolved and worked so well for nearly three centuries would be utterly tragic. It would weaken Scotland and weaken England, as together in the UK we are of course far greater than the individual parts.

Of course not all is right. It is no good being too rigidly Unionist. In practice successive governments have not always tended to give British affairs a sufficiently Scottish or Welsh dimension as well as an English one. Sometimes Westminster is too insensitive. If there were time, one could give examples. Certainly it would be helpful, when my noble and learned friend replies to the debate, if he could report on further progress on the proposals in the document, Scotland in the Union, towards updating the working of the Union.

In the meantime the issue of devolution will rumble on as it has for decades. The recent Perth by-election was a pretty dreadful result for the Government, but we should recall the result of other by-elections in the past, such as the Hamilton by-election in 1967 when a Labour majority of 17,000 was overturned by the SNP. Alarm bells rang everywhere and instant devolution was the rage.

I emphasise that if a referendum—there certainly should be a referendum if it came to it—was to be held on the single issue of devolution for Scotland and Wales, the result could quite well be broadly similar to the one held in 1979 when over 67 per cent. of the Scottish electorate voted no or failed to vote yes and a vast majority in Wales voted no, despite opinion polls at the time which showed that there was likely to be a contrary result. Why should this be so? It would be because supporters of devolution always concentrate on benefits but a referendum would bring home clearly the disadvantages, the costs and the adverse effects—considerably reduced Scottish representation at Westminster. As it became clear that the plans for an assembly or parliament would lead to swingeing tax increases, frighten investment and destroy jobs, public enthusiasm would wane, as on previous occasions. It should be stressed that once there is sovereign control over affairs, that means a sovereign duty to pay the bills.

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One thing is sure: a combination of over-representation at Westminster, with Scottish MPs at Westminster voting on English matters and English (and Scottish MPs) at Westminster unable to vote on Scottish matters, and England still subsidising expenditure by a Scottish parliament over which there was no control would be a recipe for disaster. That would be an unequal distribution of power, and to paraphrase one of Churchill's famous remarks, would be something,

    "up with which the English will not put".

It would, of course, cause an explosion and it could indeed spell the end of the Union.

I have indirectly referred to the West Lothian question; it is almost obligatory to say something about it. I shall simply say that it would be difficult to change a unitary nation into a federal one, but the only answer would be the ultimate absurdity of all regions being given exactly the same powers. Nothing less would do. The East Midland region would require to have its Prime Minister just as Scotland would have its Prime Minister, and its own limited tax-raising powers just as Scotland. The same would apply to the West Midland region and so on. The whole thing is so absurd that sometimes one wonders whether Scottish devolution is so ill thought out and so flawed that it is perhaps no more than a wicked ploy by the present leader of the Labour Party so that, in the event of his becoming Prime Minister, he could get rid of some of his more unpalatable colleagues and send them packing from Westminster to Edinburgh.

I would say therefore that the best form of government for Scotland is the present one but it is most important that the Government emphasise more strongly and with greater clarity what they have already done in implementing proposals for updating the Union, and what other measures they have for recognising the Scottish dimension in our affairs.

5.57 p.m.

Lord Tanlaw: My Lords, I am sure we are all most grateful to my noble friend Lady Saltoun for bringing before us this most important issue and allowing us the opportunity to debate it today. I do not intend to take up my full 10 minutes because I wish to raise one question only: it has not been touched on before today but has been touched on on other occasions. It concerns the time standard.

In a devolved or decentralised United Kingdom, who will be responsible for the time standard? Will it be Westminster—I put in a plea for Westminster—or will it be the devolved administrations? I only ask this because this is, unfortunately, an area where the noble Lady and myself may disagree on the wisdom of whether Scotland harmonises with Central European Time or remains with the status quo as it is today. That is not the point I am trying to make. What I am trying to say is that I think the matter of the time standard in this country should be decided long before we reach the constitutional and legal complexities of devolution, when there is a severe danger that we may find that those of us who live in Scotland will be on Scottish standard time and there may even be Welsh standard

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time. There is a real danger here that political considerations may be put way in front of longitude or latitude, or indeed common sense. I make a plea that this subject should not be forgotten. It has not been mentioned today and I am not aware that it has been raised in relation to any of the constitutional matters that have been discussed in such depth, either behind closed doors or in open conference.

I should also like to know what is the position of Her Majesty's Government in relation to the implementation of Single/Double Summer Time. It appears that the attempt of the noble Viscount, Lord Mountgarret, to get a Bill through your Lordships' House affecting only England and Wales was simply another delaying measure by the Government to prevent them having to come to a decision on the issue before the next general election. What is the position of the opposition parties? There has been no pressure by them to bring this matter further forward than it was in 1989, when the last statistics that we have before us were produced.

I have raised this question, as have other noble Lords, but we are getting no replies. People are looking in the other direction and saying that there are other more important matters to be dealt with in the Palace of Westminster. We are prepared to discuss devolution and the constitutional reform of your Lordships' House, yet we overlook one of the basic issues affecting our lives—namely, the time of day. I should like to know from noble Lords in opposition who are going to promote devolution whether the subject is included in their programme. I should be interested to know which department in a devolved government based in Edinburgh would be responsible for the time standard.

All the evidence shows that a small minority of Scottish hill farmers, the Scottish construction industry and men working on high ladders in Northern latitudes seem to have tremendous pull with the Government in influencing their decision for us not to go ahead and harmonise with Central European Time. It is an absurdity that this situation is allowed to continue. Those who have to do business and the travelling public are inconvenienced. What is the point in getting a train to Paris which takes three hours when our clocks say that it takes four hours? Those are matters that have been discussed on other occasions.

It is not to the benefit of Scotland to be on a separate time. Many noble Lords have talked about inward investment. Have they considered that the turnover of business in Charlotte Square could be increased by another 20 per cent. if our time was linked to Central European Time? Apparently in Scotland we live in another world. As I have said before, it is a "Brigadoon" situation.

I would like noble Lords on both sides of the House to get together in a committee. If they are prepared to look at devolution, will they please pay attention to the time standard and come to some decision so that businessmen will know where they stand? Can we please have some more statistics? If there are that many hill farmers—and Scottish hill farmers would have another hour in bed—and a large number of people in Scotland who feel strongly, then perhaps we can have

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more statistics. Such information is not available to the Scottish Civil Law Office, which apparently is responsible for this subject in Scotland. I bet not many noble Lords knew that. I had to find that out in a rather roundabout way.

There has been a lot of talk. Other noble Lords have talked about referendums. When other questions of great constitutional significance are considered, for goodness sake let us take the opportunity to consider the question of time and get it out of the way before we get involved with devolution.

This is a matter which will continue to come up. If there is no referendum and the question has not been put properly to the people, we shall make a bad decision on the British time standard simply because political considerations will take priority. In that case, the decision is bound to be wrong.

I ask merely that in all the consultations and committees and in all the manifestos that will be produced before the next general election, some clear indication—much clearer than we have at present—will be given as to where the Opposition parties stand and where the Government stand. They have avoided the subject like a raging bull; they turn the other way and run like mad whenever the subject comes up. Let us have some real commitment. Businessmen, whose support all the parties want, need to know what is their policy.

That is my only contribution to the debate. I am grateful to my noble friend for allowing me to make it once again.

6.5 p.m.

Viscount Hood: My Lords, a century ago a parliament for Ireland was the great political issue of the day, the composition of the parliament and its powers being essentially those which are now contained in the Labour Party's proposals for Scotland. There were many differences between the Irish situation and that of Scotland, but the main issue then, as now, was what was to be the Irish representation in Westminster and what powers was it to have.

It was first proposed that there should be no representation. However, it rapidly came to be realised that that would inevitably lead to separation. It was then suggested that the Irish membership of the House of Commons should vote on certain subjects, the so-called Imperial subjects—foreign affairs, defence and trade. However, that was recognised as being an impossible distinction. Gladstone concluded that the distinction could not be drawn as it passed the wit of man. How much more true that must be now with our involvement with the European Union.

As an Englishman I am aware of the periods when the majority of the Government in the House of Commons has been much less than the Scottish representation. That was eminently true in the Parliaments of 1974 and 1976. While all authority lies at Westminster that is unobjectionable, but it becomes objectionable when a Scottish parliament has been created.

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Gladstone said in relation to Ireland:

    "I will never be a party to allowing the Irish to manage their own affairs in Dublin and at the same time come over here and manage British affairs. Such an arrangement would not be a Bill to grant self government to Ireland, but one to remove self government from England. It would create a subordinate Parliament indeed, but it would be the one in Westminster, and not that in Dublin".

If one substitutes "Edinburgh" for "Dublin" and "Scottish" for "Irish" that statement is relevant to the present problem.

I view with great concern the concept of a Scottish parliament. If there were to be a federal parliament in Westminster that would have some logic. However, as an Englishman I do not believe that there is any demand for breaking up this country into Cumbrias and Wessexes. The English do not want that. So we are left with the problem of the West Lothian issue.

I fear—and I recall my noble friend Lord Gray of Contin saying the same—that if there is devolution as now proposed it will inevitably lead sooner or later, and maybe sooner, to separation of the country and the destruction of the Union. That would be a tragedy for England, but it would be a disaster for Scotland.

There have been many speeches about the economic effects of independence for Scotland. I should like to touch on two aspects. One relates to oil. As your Lordships will recall, the ownership of oil in the North Sea is regulated by a treaty, which is about 30 years old, between the riparian powers dividing on the map the areas between the riparian countries. Those treaties were made by their governments and ratified by their parliaments. They will continue irrespective of what might be done in terms of devolution for Scotland. In those treaties, there was no concept that any one of the riparian powers would be divided. Since those treaties, there have been innumerable long-term agreements between all the major oil companies of the world and the United Kingdom to which the Government of the United Kingdom—not a government in Scotland—is party. In a proper world, those cannot be altered. No doubt by negotiation in the financial circumstances of a separation, they would be one of the factors; but that is very different from assuming that the oil from the North Sea would immediately appertain to territorial Scotland.

My other point relates to the European Community. My noble friend Lady Elles has already spoken on it. In great detail she raised the doubts about whether Scotland would be admitted as a member of the European Union. We all know that admission is by unanimous vote. We all know that every negotiation has been long. But there would certainly be a gap. Numerous important industries in Scotland, owned by foreign companies, enjoy the many benefits of Scotland but they require the membership of the European Union if they are to continue manufacturing there. They would have hastily to withdraw if that were not the case.

I follow what so many other speakers have said. I hope that the aspirations of Scotland, with which I have the utmost sympathy, can be achieved without constitutional change because constitutional change will lead to trouble.

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6.12 p.m.

Lord Belhaven and Stenton: My Lords, after listening to about 90 per cent. of this debate, it occurs to me that the British Constitution and your Lordships' House are still the wonder of much of the world. Only last week I showed a Polish lady from the Polish Sejm around this Parliament. She observed to me that she liked the House of Lords better. People come here to see how we manage our affairs because we have the reputation of being the best managed country in the world. We have had that reputation for some 200 to 300 years, almost since the Union between Scotland and England.

Like other noble Lords, I am grateful to the noble Lady, Lady Saltoun, for introducing the debate. Her speech is a classic; I shall read it with great interest. She has obviously gone to a great deal of trouble to elicit her facts. Her descriptions of devolution and Scottish independence made my hair stand on end and made me rather glad that as a Scot I am at present resident in England.

In the year 1707 a predecessor of mine in the Belhaven title, the second Lord Belhaven, was a prominent opponent of the Union with England in the last Scottish Parliament. He made a speech which was widely reported in Scotland, and distributed in broadsheets around the streets. I believe that it caused a bit of rioting too. I have read the speech many times and have often wondered whether he really said the words attributed to him. The speech was flowery and very emotional—I would not dare to make such a speech in your Lordships' House today. However, I shall quote the most famous sentence. Addressing the Lord Chancellor, as was customary in the Scottish Parliament in those days, he said:

    "Above all, my Lords, I think I see our ancient mother Caledonia, like Caesar, sitting in the midst of our senate, ruefully looking round about her, covering herself with her Royal garment, attending the fatal blow, and breathing out her last with an 'Et tu quoque mi fili!'".

As a Scot who has been in exile for the past 12 years, I recently visited Scotland. I did not think that after nearly 300 years of Union our ancient mother Caledonia was doing too badly. I thought that she was doing rather better than when I left in the early 1980s.

So what is the problem? If one takes Scotland as a political entity—and it still is a nation—it is somewhat unfair that she should have been governed for the past many years by the party which managed to poll only 24 per cent. of the vote. That is more than the Liberal Democrats, but still not enough possibly to justify being a government. On the other hand, we might say that southern England would be unfairly treated by a Labour Government. But southern England is not a political entity or a nation—we do not know where it starts or finishes; Watford, or somewhere—in the sense that Scotland is.

However, it appears as though the majority in Scotland now want a Scottish parliament. But I wonder whether those people have faced up to what that means. We have heard much about it today, in particular from the noble Lady, Lady Saltoun. If Scotland is to govern her own internal affairs, with her own Parliament, her MPs in Westminster will certainly have no moral right

4 Jul 1995 : Column 1049

to vote on English internal affairs. We have heard that previously. But what happens if we have a Labour majority in the other place which depends on the Scottish vote? In what position does that put the people of England?

We have already had raised the question of over-representation of England. I shall not pursue it. That would have to cease and the Labour Party would lose an important part of its Scottish power base. I suppose that the party opposite has considered that situation. However, the Labour Party imagines that by one means or another it will overcome the problem and have its cake and eat it. For a short time, perhaps it will. But the Labour Party must know that the situation will not last. No amount of fiddling about with English regions will solve the West Lothian question. The party must know that. So why does it persist in its present policy?

I have to say that some time ago, in the late 1940s and 1950s, when my father and others founded a movement called the Scottish covenant and achieved one million votes for home rule, the Labour Government were absolutely opposed to the idea. But the Labour Party has changed its mind on that, as it has on many other things. It is afraid of the SNP and wants to steal its thunder. However, the solution which the Labour Party and the Liberal Democrats propose is, in my view, half baked and will not work. As I see it, the only logical policies on this subject in Scotland are those of the Conservative Party and the SNP: either independence, with all that it entails—and, as we have heard today, it entails a great deal—or things as they are, with all that that entails. I do not see that there is any half-way house; and I think that the parties opposite are deluding the Scottish people and themselves by suggesting that there is one.

I suggest that we could have a referendum on Scottish independence. It would be a clear choice and people could make up their own minds. Let us have that, as we should have a referendum on Maastricht—another treaty of union which may have more far-reaching consequences than its proponents are at present prepared to admit.

The parties opposite, with certain honourable exceptions (that does not mean that others are dishonourable), are enthusiastic about Maastricht. Indeed, in the debates on the Treaty of Maastricht two years ago, the Front Benches seemed to be interchangeable. Her Majesty's Government could have spared themselves quite a lot of trouble if they had called on the Opposition to answer even half of the amendments.

I would seem to be digressing but I am not. If the parties opposite are serious about regional assemblies, and about being at the heart of Europe at the same time with more power for the European Parliament and Commission, why should any of us waste our time coming here, and waste the taxpayers' money? The Palace of Westminster would be ideal as a museum. To use a fashionable phrase, the place would be cost effective. It is not so now because people are paid who sit in another place, we are paid expenses, and so on.

4 Jul 1995 : Column 1050

I would urge that we have no more nonsense about Scottish parliaments in the UK. I believe that it is nonsense. Let the Scottish people decide what they want—independence or the Union—and do not encourage them to imagine that they can have their cake and eat it.

Incidentally, I do not believe that the comparison with southern Ireland by the noble Lord, Lord Taylor, is apt. southern Ireland has been a massive beneficiary of EC subventions and subsidies and I do not believe that there is a parallel with Scotland.

Finally, it seems to me that Scotland already has a good deal of devolution. It would be perfectly practicable to give it more by returning powers to local government which have recently been eroded. Attention was drawn to that point by the noble Lord, Lord Taylor. Scotland has its own legal system, education system and its own established and self-governing Church. There is an abiding patriotism among Scots of all persuasions which the Union with England has not affected one little bit. More devolution except at local government level will mean a Scottish parliament. In my opinion, sooner or later a Scottish parliament will lead to independence. I do not see any middle way.

6.20 p.m.

Lord Lyell: My Lords, I wish to thank my noble friend Lady Saltoun for her great speech and for giving us the opportunity today to speak. Noble Lords may recall the 1992 general election. I do for one reason. It was then that the French television station, Antenne 2, brought a team to Kirriemuir. My noble neighbour Lord Mackie seems excited. It was not to film the cattle or the Kirrie show that it came, but to interview me about the general election in Scotland. It is no coincidence that the team is across the road on the lawn today, not far from your Lordships' House. I was able to stress to the excellent team from another part of Europe that it seemed to me that that general election and political scene in Scotland had four items on offer.

The first item was independence. The noble Lady made an excellent speech about that. With accountants and young men of figures, it seems to me that some of the arguments advanced for independence in Scotland are based on the calculation of 2 + 2 = 5—an outburst of joy and a vast boost in economic activity in Scotland. Bluntly, I do not believe it. For an independent nation, we merely have to look to south-west of Scotland at a proud, free and independent nation of 3½ million people—it has been mentioned three times by the noble Lord, Lord Taylor of Gryfe—and that is the Republic of Ireland. The noble Lord was quite harsh on three of my colleagues, and I hope that he will be able to restrain himself and not interrupt because my time is limited. He will have heard Mr. Tony O'Reilly, a famous Irish wing-threequarter who went on to become a world man of business and headed the Heinz corporation. What did Mr. O'Reilly have to say as recently as last week? It was quite time that the United Kingdom Government raised taxes on business. Where? In Northern Ireland, so that taxes would be in step with those in the south of Ireland. Fascinating. Thus the tax regime on business would be the same throughout the United Kingdom.

4 Jul 1995 : Column 1051

That is one element of the great success that might have been evident in the Republic of Ireland, but it shows that the United Kingdom and Scotland are still in the lead.

My noble friend Lady Saltoun spelt out excellently her sums in the economics of independence. The point on the Republic of Ireland being a major beneficiary in the European scene was raised by my noble friend Lord Belhaven and Stenton. I am reminded of my activities across the water in Northern Ireland and the cry of many farmers, "Act fast while grants last". That is the motto of some nations who are looking for inward investment.

The second item that was and still is on offer in Scottish politics is devolution—what I call the Labour option. I was fascinated to hear the noble Lord, Lord Carmichael, and look forward even more to hearing the noble Lord, Lord Ewing, to see whether there is unity in the Labour Party. The West Lothian question is still with us. The parallel has been proposed with the Northern Ireland Members of Parliament before 1971, but it is not strictly relevant since the numbers were very different from those with a devolved Scottish Parliament.

The third option that was evident during the 1992 general election was the Liberal Democrat option of a federal system. I wonder whether it would be a serious problem to many of us in Scotland as long as it was acceptable throughout the United Kingdom. The trouble is that people, particularly the Liberal Democrats, know that regional assemblies on the lines of, for example, the federal German system are not popular and are not high on the list of demands for England and Wales. The noble Lord, Lord Taylor of Gryfe, also knows that parallels are to be seen in Switzerland; but perhaps we will not go too far down that road. He will know of the problems with the referenda on the Alpen Initiative.

The fourth option which was and still is on offer as regards politics and the constitutional position in Scotland is the Conservative option: leave well alone; "it ain't broke, don't fix it", but you can certainly improve it. On Sunday at a party meeting in my area of Scotland it was mentioned to me that the Conservatives have, according to the polls, 11 per cent. of the support of the electorate in Scotland. That is most interesting; but I wonder where, on the basis of the same polls, devolution stands in the priorities of all those who expressed dislike or hatred of the Conservative Government. The point was well made by my noble friend Lord Gray of Contin.

Whenever I watch television or listen to the radio in Scotland, I hear the same arguments, the same quotes and the same views, the same happy word lines as I have been hearing over the past 20 years. I am reminded of the former Member for Berwick and East Lothian, the late John Mackintosh. Twenty years ago in another place he spoke of a devolved system for Scotland and whether it would improve government. A young colleague to whom he was speaking gazed up at the sky and said that he had no idea. It seems to me that we have not advanced much in the past 20 years. Any noble Lords who come north of the Border and turn on the television or radio will hear that devolution is the number one item on the agenda.

4 Jul 1995 : Column 1052

I was happy when the noble Earl, Lord Perth, recited, "nanny knows best". He was referring to the man in Whitehall; but to any of us who turn on the television or radio in Scotland, it seems that nanny—the media—tells us that it knows best and that constitutional reform will bring about exactly what I suggested: 2 + 2 = 5—an outburst of joy. I hear, "It won't go away". As a cynical accountant, I wonder why, with both Radio Scotland and BBC television in Scotland, instead of being told what is coming, we are continually asked, "Please watch BBC Scotland or listen to the radio". That makes me, as an accountant, mildly suspicious. I ask why they are doing it. Is it anything to do with the enormous boost in satellite television that I see around Scotland?

Looking around the Chamber today, I see that there are still the Angus five; it was six when my noble friend Lord Strathmore was here earlier. My noble friend and neighbour Lady Carnegy made a notable speech, and we are lucky to have my noble and learned friend Lord Fraser to reply at the end of the debate. There is also my noble neighbour Lord Mackie. Many of your Lordships will not know that my noble friend Lady Elles is a former Angus resident, she used to go there 26 or 27 years ago, so she speaks with considerable experience of what we want in Scotland. My noble friend Lady Carnegy used three figures which are particularly relevant: 8.8 per cent. of the population of the United Kingdom is in Scotland. The taxpayers of Scotland contribute 8.3 per cent. of the tax. We draw out 10.3 per cent. I have two words to say: "Hush, hush!". Do not disturb the status quo; we have a new single tier of government; please let it settle down. But with all the improvements that we might make, let us not disturb the Carnegy formula.

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