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Lord Sewel: My Lords, it is rather difficult to reply in detail to the catalogue of what were not so much questions as accusations made by the noble Lord, Lord Mackay of Ardbrecknish. I have the feeling that basically his position is that if we proceed with legislation on the basis of the White Paper, we run the risk that civilisation as we know it will come to an end. I do not think that. I believe that his fears are based on a faulty analysis and his argument is flawed. In the White Paper, we have a coherent, clear and comprehensive way forward. But, above all, it is a way forward which is fair and balanced, stable and enduring. Those are extremely important objectives which we should seek to achieve.

That was one reason that we revisited the question of the number of Scottish MPs in the UK Parliament. We wanted to remove once and for all any lingering belief that somehow, the settlement itself would not be fair. It was in order to remove that doubt, to deal with that problem, that we took the view that it was right and proper to come forward with a fair and balanced proposal affecting the number of Scottish MPs at Westminster.

The noble Lord, Lord Mackay of Ardbrecknish, wondered what would happen if a Scottish parliament were unhappy about a matter which had been reserved to the Westminster Parliament. It is very simple. The

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Scottish parliament can debate any matter reserved to Westminster but cannot legislate on it. That is the point. It can debate what it likes, but on a reserved matter legislative competence rests with Westminster. Therefore, there is a clear difference of role and function which leads to clarity and stability.

The noble Lord also drew attention, as I expect will a number of other noble Lords during the course of the eventual Bill, to the fact that we do not propose anything like a second chamber. What we propose and what everybody who has been involved in the debate on a new parliament for Scotland has been advocating for the best part of 20 years is that a Scottish parliament should innovate and try to adopt new and modern procedures. Above all, it should address itself to what is seen as being some of the fundamental weaknesses of the legislative process. It should increase the amount of pre-legislative scrutiny. It should have a strong committee system, with an emphasis on pre-legislative scrutiny, and that removes the need for a formal second chamber. That can be worked into the processes.

The noble Lord, Lord Mackay of Ardbrecknish, referred to the Forestry Commission. That is a nice one and is simple to deal with. Legislative power and competence are devolved, so a Scottish parliament would be legislatively responsible for forestry. But clearly it is open to that body to make such administrative arrangements as it thinks appropriate. Those administrative arrangements could well mean the maintenance of a GB structure such as the way in which the Forestry Commission operates in any event. It may be that the noble Lord fails to recognise the difference between devolving legislative competence, on the one hand, and from that position to have the ability to make strong and effective GB or even UK administrative arrangements, on the other. They are not incompatible. They are often very sensible indeed.

I turn to the comments made by the noble Lord, Lord Steel of Aikwood. I recognise all that he said about the way in which the Government have moved and, I think, improved these proposals, certainly from those made in 1978. One important additional factor is that it will be remembered that in 1978 the Secretary of State for Scotland was to have considerable overriding powers. They now disappear and are not part of the procedures at all.

Yes, we have proceeded. We have given the new parliament stronger powers and a wider range of powers. Universities and higher education was not included in 1978. On the electoral system, we have moved to recognise the need to have an electoral system which makes the parliament inclusive rather than exclusive so that all the parts of Scotland can identify and accept ownership of the parliament.

5.6 p.m.

Lord Campbell of Croy: My Lords, the Statement indicates that the Government, in my opinion, are taking grave risks in relation to stability not only for the new proposed body but also for the workings, structures and systems of the United Kingdom.

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I have one particular point to raise. Almost all the functions to be allocated to the new body, including all those mentioned in the Statement, are already devolved as a result of massive administrative devolution to the Secretary of State for Scotland and his Ministers and to the Scottish Office. I should point out, as it was a long time ago, that I had the onerous duty of being in the appointment of Secretary of State for Scotland from 1970 to 1974. Indeed, no Secretary of State for Scotland before me is still alive.

Will any of the present Scottish Office functions remain with the Scottish Office? Will the Secretary of State still have any of his present functions? The noble Lord, Lord Sewel, mentioned higher education. Of course, that was transferred to Scotland about four years ago. Other functions which have been transferred in the past 20 years to Scotland--and there have been others--are now naturally included but were not included and in 1978 higher education was then with the Department of Education.

My noble friend Lord Mackay of Ardbrecknish made some penetrating comments. Your Lordships will be glad to hear that I shall not make any further comments now but I shall reserve what I have to say further about this for the debate on Wednesday.

Lord Sewel: My Lords, I think perhaps unintentionally the noble Lord, Lord Campbell of Croy, has actually made the case for devolution. He pointed out quite rightly that there has been substantial administrative devolution to Scotland. We are addressing the democratic deficit which administrative devolution creates. We are matching that administrative devolution with legislative devolution and democratic accountability within Scotland. That is the whole argument. Administrative devolution is not enough.

Lady Saltoun of Abernethy: My Lords, there is one small thing I am not quite clear about--among others--that is, will the Scottish parliament be able to vote for independence or to increase its own powers in other areas?

Lord Sewel: My Lords, I am happy to reply to that question directly. As independence is a matter for the constitution of the United Kingdom, it is a reserve matter. The parliament could vote to express an opinion but it would have no consequence at all in legislative terms. It cannot extend its own powers; the powers are devolved from the Westminster Parliament.

Baroness Ramsay of Cartvale: My Lords, it was with great pleasure that I heard the Statement which my noble friend the Minister repeated in this House today. I look forward to discussing at greater length the contents of the White Paper which is clearly a document of considerable constitutional and historic importance. At this point I merely ask my noble friend the Minister whether he can expand just a little on how Scotland's voice will be heard in Europe. I ask that question in quite a different spirit from the questions on Europe put by the noble Lord, Lord Mackay of Ardbrecknish.

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I wish in particular to know how the measures proposed compare to the proposals from the Scottish Constitutional Convention on this question.

Lord Sewel: My Lords, we have addressed the problem of relations with the European Union in chapter 5 of the White Paper. We recognise--we make no bones about it--that relations with Europe are the responsibility of the United Kingdom Parliament and Government. That is the starting off point. Having said that, we have made it absolutely clear that we are doing everything possible to ensure that Scotland's voice will be heard and will be heard effectively in Europe. I refer my noble friend Lady Ramsay of Cartvale to specific points in the White Paper. It states,

    "The UK Government wishes to involve the Scottish Executive as directly and as fully as possible in the Government's decision making on EU matters. It is part of the Government's intention that Scottish Executive Ministers and officials should be fully involved in discussions within the UK Government about the formulation of the UK's policy position on all issues which touch on devolved matters ... The Government also propose that Ministers and officials of the Scottish Executive should have a role to play in relevant Council meetings and other negotiations with our EU partners ... The Scottish Parliament will be able to scrutinise EU legislative proposals to ensure that Scotland's interests are properly reflected".

We are determined that Scotland will be properly represented in Europe. We envisage that there will be a Scottish representative office in Europe. We shall build upon the regional framework which is developing in Europe to make sure there is an effective Scottish presence in Europe and that Scotland effectively contributes to the UK line in Europe.

Baroness Carnegy of Lour: My Lords, the Statement states with regard to finance,

    "The tax-varying power will not apply to income from savings and dividends".

Does that mean that it will apply to everything else? Will it apply to all other income? The Statement continues,

    "The Inland Revenue will administer any tax variation, with the Scottish parliament meeting the administrative costs".

Can the Minister give us any idea at all of the order of the administrative costs?

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