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The Earl of Onslow: My Lords, before the noble Lord sits down, I ask him how it is that he can mention Scotland and Wales and say nothing about England, which represents more than 85 per cent. of the United Kingdom. He has said nothing about how these measures will affect us. This has been a long, involved

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Scottish and Welsh special pleading session. If the Government are not careful, the English will get cross and that will be disastrous for the United Kingdom.

Lord Sewel: My Lords, I am tempted to observe that the noble Earl did not actually hear what I said. I mentioned the United Kingdom quite a lot. Secondly, I mentioned England on several occasions when Ipointed out that the process of devolution does not stop at Scotland and Wales. It goes on to deal with the regions of England. That is essential to our argument.

Moved, That this House take note of the Government's proposals for devolution in Scotland and in Wales, as set out in the White Papers Scotland's Parliament (Cm 3658) and A Voice for Wales--the Government's proposals for a Welsh Assembly (Cm 3718).--(Lord Sewel.)

3.54 p.m.

Lord Mackay of Ardbrecknish: My Lords, this is a very important debate and a serious one as it relates to the future of our country. I am very sorry that we could not have it over two days--one for Wales and one for Scotland. I intend to be brief in order to set a good example to those who follow. But nobody should take my brevity as a sign that I have in any way weakened my resolve that these White Papers represent dismal reading for those of us who believe in the Union.

I start today where I finished my remarks after the Statement. What do these White Papers do for the Union? That is my litmus test. The Welsh White Paper describes the Welsh assembly as firmly embedded in the United Kingdom. In the Scottish White Paper, the Secretary of State, Donald Dewar, says in the foreword:

    "Scotland will remain firmly part of the United Kingdom".
In his Statement he described the proposals as giving strength to the enduring partnership of the United Kingdom.

I said to your Lordships then, "I hae ma doots". Those doubts are reinforced in Scotland and Wales by the news that the Scottish National Party and Plaid Cymru are to campaign vigorously for "Yes" votes. Therefore, the separatist lion is to lie down with the Unionist lamb. So Alex Salmond, the leader of the SNP, will be asking me to vote "Yes, yes" in order to destroy the Union. The Secretary of State, Donald Dewar, and his friends, want me to vote "Yes, yes" to strengthen the Union. One of them is wrong. They both cannot be right.

Interestingly, a recent poll in Scotland shows that only 17 per cent. believe that a Scottish parliament will lead to stronger ties with the rest of the United Kingdom. Almost double that number--33 per cent.--believe that it will lead to the break-up of the United Kingdom. I wish that I could believe Donald Dewar; I wish that I was part of the 17 per cent.; but try as I might, I remain part of the 33 per cent. I see the White Papers not as cement in the bricks of our 300 year-old Union but as a demolition team ready to tear it apart.

Even as we speak, the other place is throwing out your Lordships' proposed change to the second question in the Scottish referendum. Rather than ask, "I agree that a Scottish parliament should have income tax-varying powers", later today that question will be simplified to

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say simply, "I agree that a Scottish Parliament should have tax-varying powers". Today and on previous occasions I have found the arguments of the noble Lord, Lord Sewel, on that issue thin in the extreme.

Now that I have studied the White Paper I know why the Government do not want to specify income tax and also why they are so reticent about explaining their reasons. In paragraph 7.13 we see the beginnings of the explanation. We have always discussed plus or minus 3p. in the pound, although, to be honest, most of us believed that it would inevitably be plus 3p. in the pound. But that is not the whole story because it is actually plus or minus £450 million. That £450 million is to be preserved. It is to be index-linked in order to preserve it.

The noble Lord managed to get round that, at least to his own satisfaction--certainly not to mine. I ask him again what will happen if the 3p. in the pound does not raise £450 million. What tax is to be imposed or raised to make up any difference? It cannot be within the 3p. in the pound, which I believe the noble Lord mentioned in his speech, because that will not raise £450 million. Where is the extra to come from? How will the shortfall be met? What tax will be raised? I expect an answer today; not in writing, but today.

If we move on to paragraph 7.26, we see the completion of the reason for not specifying income tax. Dealing with the parliament's powers over local government finance, it says:

    "The Scottish Parliament will be responsible for determining the form of local taxation, both domestic and non-domestic".
It adds:

    "It will be for the Scottish Parliament to decide whether to retain the power to set the non-domestic rate poundage ... or to devolve that responsibility to local councils".
It says also:

    "It will therefore be able to alter the form of the council tax, or replace it if it so decides".
It is no wonder that the Government want the parliament to have tax-varying powers. Non-domestic rates will be decided either by the parliament or by the local authority. There is a tax-varying power. Business better be warned.

Council tax payers had better be warned as well for not only could council tax be raised or varied--I use the more elegant expression favoured by the Government--but it could be replaced or added to, perhaps by a local income tax so beloved of their partners, the Liberal Democrats. It may take the form of a local sales tax. Yes, they are tax-varying powers indeed.

I have reached the conclusion that the Government are absolutely right to throw out your Lordships' amendment to the Bill. It would be totally wrong and dishonest to ask us to agree or disagree about income tax-varying powers because that clearly is not the plan. It is much wider. We see in the White Paper why the Government were determined in Committee and on Report to keep income tax out of the question. If we vote for tax-varying powers, we will be voting for a much wider variation than just plus or minus 3p. on income tax. Business and individuals in Scotland will have no protection against other tax increases from the

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Scottish parliament, or via it from local authorities. Such frankness by the Government, although probably unintended, is at least to be welcomed. Those of us who will vote on the issue now know exactly from the White Paper why we are being asked to keep the question general.

I turn briefly to Europe, and especially to agriculture and the fisheries. I am afraid that today the noble Lord, Lord Sewel, has, again, failed to persuade me as to how the system will work. In paragraph 5.4, the White Paper clearly says that the agreed "UK line" will have to be adhered to by the Scottish executive. I posed some questions on the matter and tried to engage the Minister in debate, but he singularly did not want to engage in it. I am not surprised. I was not impressed by his previous answers on fisheries, and I am not impressed today.

However, I shall try again. This time I should like to talk about the beef ban. There is a view that, to lift the ban, we should start with Northern Ireland, given the protections which are in place in the Province. The Scottish NFU is, I understand, fiercely opposed to such a move. Let us assume that, notwithstanding this opposition, the UK Government decide to make progress in the negotiations and have the ban lifted in Northern Ireland as the first step. How comfortable would the noble Lord be if he were responsible for agriculture on the Scottish executive? Presumably he would have resisted the policy in the confidential discussions, but he would need to adhere to it; and, indeed, defend it in the Scottish parliament, in the Scottish press, and to the Scottish NFU.

A few moments' thought is all that is needed to see the total impossibility of this scenario. The proposals in the White Paper on these relationships are simply not of the real world. Given the overwhelming European aspect on agriculture and the fisheries policy, I offer the noble Lord some free advice. Before we come to deal with the Bill, the noble Lord should decide to leave agriculture and fisheries with the Secretary of State for Scotland; that is to say, firmly within the UK Government and Parliament and firmly within collective Cabinet responsibility. Otherwise, the interests of Scottish farmers and Scottish fishermen will be sidelined in the forums and in the policy-making decisions which matter most to them.

There is much more that concerns me in the White Papers. However, I rest my case on the two policy issues I have mentioned; namely, finance and Europe. At the heart of my worries are the points I made right at the start concerning the litmus test: does this enhance and maintain our Union? The White Papers show me red; indeed, deep, deep red for danger. As I said when the Statement was repeated in this House, this is a bleak day for our 300 year-old Union. Nothing I have seen since that day has convinced me otherwise.

4.3 p.m.

Lord Steel of Aikwood: My Lords, we are all grateful to the noble Lord, Lord Mackay, for his example of brevity. I shall try to follow that part of his

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example, if no other part. I shall deal only with the Scottish White Paper, as my noble friend Lord Thomas of Gresford will deal later with the Welsh White Paper.

Listening to the noble Lord, Lord Mackay, yet again I have to say that I agree with the comment made by one of my honourable friends in another place that the Scottish Tory Party must have the flattest learning curve in history. They do not seem to have learnt a thing from their total wipe-out at the general election. Indeed, we are still having the same old views trotted forward as though they had a massive endorsement from the people three months ago. Clearly they have no such endorsement.

I believe that the Scottish White Paper and the proposals before us represent in four particular areas a substantial improvement on the proposals brought forward by the previous government and put to the Scottish people in 1978-79. In the first place--and I well remember taking part in the referendum campaign at that time--there were complaints that the creation of a Scottish parliament, or Scottish assembly as it was then called because it did not have the same powers, would represent a third tier of government. Since then local government has been reduced to one tier and, therefore, there will not be three tiers of government; indeed, there will be only two. So that argument has been removed.

I turn now to the second argument that has been removed. With the creation of a proportional representation system as outlined in the White Paper, the legitimate fear in many parts of Scotland in the outlying areas, including my own, was that the Scottish parliament would be dominated by an artificial Labour majority from the central belt. That argument was used in the last referendum but is now gone. It is a welcome improvement.

The third improvement is one to which the noble Lord, Lord Mackay, takes such objection; namely the taxation powers. I should like to be quite frank on the matter. The fact that the powers of raising or lowering income tax are specifically mentioned is necessary because income tax is a UK responsibility. However, in that respect, I do agree with the noble Lord, Lord Mackay, that there are other areas involved. Indeed, when is a tax not a tax? The answer is when it is a charge. Of course the Scottish parliament will have power to levy other charges or taxes as it so wishes.

Let us suppose, for example, that the people of Scotland decided--or the politicians in Scotland decided--that there should be a dog registration scheme. It is quite within their competence to do so and they will be quite entitled to levy a charge for it. The noble Lord might call it a tax, but why should they not do so? Other dafter proposals have been raised before, such as a hotel bed tax. But again, although I would not agree with it, it is certainly within the competence of a Scottish parliament. I believe that the responsibility of a Scottish parliament to be able to deal with its own finances is a major improvement in this particular scheme.

Fourth--and perhaps even more important, although not so easy to understand--is the fact that the powers of the Westminster Parliament will be specifically reserved in the legislation that will come before the

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House, rather than the other way around. To put it bluntly, the Scottish parliament can do whatever it likes as long as it does not trespass on those issues specifically set out in the legislation which are reserved for this Parliament. I also believe that to be a great advance.

I believe that the proposals in the White Paper are to be warmly welcomed. I wonder whether the noble Lord, Lord Mackay, or any of his colleagues have read the paper that I have with me entitled, To Make the Parliament of Scotland, a Model for Democracy, which was published a few years ago. The authors were Bernard Crick and David Millar. It is a most valuable paper and runs to well over 50 pages. Perhaps I may read just two short extracts to your Lordships. On page 2 the authors say:

    "A new and a national Parliament has an historic opportunity to innovate, not merely to create and adopt procedures more effective and more responsive to public opinion than those at Westminster, but to show Westminster and other centres of power that new ways are needed, can work and are better".
On page 3 the authors also say:

    "The tradition-bound procedures of the Westminster Parliament and its excessively confrontational nature are sufficient enough reason for Scotland's Parliament to make a clean break with Westminster's procedures. Scotland's Parliament need not suffer from excessive executive control and party domination in what is likely to remain, quite apart from the consequences of a new electoral system, a multi-party system".

All I can say to noble Lords on the Conservative Benches is that a great deal of thought and work have gone into the proposals behind the White Paper since the Scottish Constitutional Convention published its original proposals some years ago. The fact that the Conservative Party has not been part of that process is entirely its fault. Indeed, the fact that its members are raising such questions proves that they have not thought the matter through. For example, the paper to which I referred dealt specifically with the increased influence that the German Lander have had on German federal policy in Europe. Therefore, why should we think all the time that Westminster will suppress Scottish views on Europe when the lesson from the past, with the European acceptance of the role of such governments in Germany, is that it is those Lander governments who have influenced federal policy. I do not think that the issue should always be seen as one way round.

Another issue has been raised by noble Lords on the Benches beside me; namely, that the SNP will support the proposals. The SNP took no part in the constitutional convention and has had no hand in the drafting of these proposals. It has been entirely negative about them. It has a completely different objective; namely, a separate independent Scotland. There is no public support in Scotland for that proposition. Indeed I venture to suggest that a great many of the 20 per cent. or so who voted SNP at the previous election will be perfectly happy with the proposals that are before your Lordships' House at the present time. It is only a tiny minority even of those who support the SNP who want a separate army, navy and air force and all the other things that go with a separate state.

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I firmly believe, contrary to the noble Lord, Lord Mackay, but with equal vehemence, that these proposals represent a security for the future of the United Kingdom with decentralised government rather than the continuation of a long held grievance in Scotland that our affairs are not being properly considered. If the SNP supports these proposals for the wrong reason, that is something we shall have to bear with our customary fortitude. It is not something which need trouble us unduly.

I said that I would not speak for long. I wish to raise one other issue regarding the new procedures of the parliament which I mentioned in relation to the Statement the other day. The White Paper refers to a search for a building. I again warn the Government that people in Scotland, although enthusiastic about these proposals, will count the pennies. They will not want grandiose schemes for a new parliament building involving vast expense if that can be avoided. I hope that the Minister will respond to this point at the conclusion of the debate because I have mentioned it before. Is the search for a building to include the Royal High School in Edinburgh which has already been paid for by the taxpayer and converted to a parliamentary building? I know its limitations as I have been inside it many times. Is it technically and financially possible to consider the option of using the Old St. Andrew's House as parliamentary offices and providing a tunnel between the two, as is common in many parliaments in the world, notably in the United States? Those who have been there will have seen the quick transit system in place there. I believe that would be a cheaper option and one that should be pursued.

I conclude with a quotation from one of my most distinguished deceased constituents, Sir Walter Scott. In his novel The Heart of Midlothian he put the following words into the mouth of one of his characters:

    "When we had a king and a chancellor and parliament--men o'our ain, we could aye peeble them wi' stones when they werena guid bairns. But naebody's nails can reach the length o' Lunnon".
It is to put that right that we are approving this White Paper today.

4.12 p.m.

Lord Rodger of Earlsferry: My Lords, I, too, shall be brief. That is not because I regard these as other than important proposals. They are important not only for Scotland generally; they are also of particular importance for the Scottish legal system which is my particular concern. I shall therefore confine myself to making three short points which are interconnected.

The first and basic point arises from the obvious fact that what the Government are embarked upon is a programme of major constitutional reform. They admit that; it is the whole essence of their policy. In particular what is envisaged is a new Scottish parliament and a new Scottish executive. Those bodies will be new and therefore will not be bound by, or affected automatically by, the many unwritten arrangements and conventions which operate in many areas of our affairs at present. Those arrangements and conventions are not related purely to minor matters. On the contrary many are related to matters

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of great importance. Unless the conventions or something similar are reproduced in substance under any new arrangements in Scotland after devolution, certain crucial safeguards will be lost.

To put the matter shortly, any devolution legislation which follows a successful referendum outcome will require to spell out certain matters which are in effect taken for granted at present. I give two examples. The first of these--which is related to my second point--concerns the independence of the judiciary. I do not think that anyone in your Lordships' House would dispute that the independence of the judiciary is vital for the protection of the liberty and rights of citizens. It will remain of crucial importance after devolution. At present it depends on a combination of factors relating to such matters as the appointment of members of the judiciary, their salaries and the security of tenure of the judges. These matters work in a subtle way. It appears to me that no government of the United Kingdom can be indifferent to the maintenance of the proper standard of independence of the judiciary in Scotland after devolution because, as has been stressed, we shall remain very much a part of the United Kingdom. These arrangements are matters which depend, in large measure, on arrangements and conventions which are not written down. They should be addressed as regards any devolution legislation which is brought before Parliament.

The second and not unrelated matter concerns the independence of the office of Lord Advocate. As many of your Lordships will know, he is the head of the prosecution system in Scotland. Paragraph 4.8 of the White Paper relating to Scotland states that the independence of the Lord Advocate will be maintained. However, that is mentioned rather en passant. Again, I stress that this is not a matter which can be left to chance. In my view it is something for which specific provision should be made in any legislation which is brought forward. At present it rests on well established convention. The Government will recall that the convention became firmly established precisely because of an attempt by the first Labour Government to interfere with the prosecution discretion of the then Attorney-General. These temptations have arisen in the past and may arise again. Rather than leave the matter--if it should arise--to be sorted out in some sort of scramble, in my view the legislation should deal with that important matter at the outset.

I conclude by saying that the Government should recognise the nature of the exercise in which they are engaged. They are proposing major constitutional changes; they therefore require to consider carefully the full implications including those for established conventions which may seem unobtrusive but which are nonetheless important. The values and the standards which those conventions ensure at the moment should be carried over into any solution for devolution after the referendum.

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