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The Earl of Onslow: What are you doing?

Lord Mackie of Benshie: My Lords, we try. I am very pleased with the Government. The Tories keep saying that the Liberal Democrats are in the pockets of the Government, but we are delighted with the Government. They are promoting a policy that we have been advocating for 50 years, not for 20 years. The White Paper is much better than I thought it would be. The Government have gone a long way and of course I am pleased with them. When I am pleased with them I shall say so and when I am displeased with them

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I shall say so, but at the moment they are doing exactly what we in the Scottish Liberal Democrat Party have rightly wanted for years.

Many proposals in the White Paper strike me as good. I was pleased to see in particular that Scottish investment and enterprise would come under the Scottish parliament. That is vital. The noble Lord, Lord Elis-Thomas, said that devolvement to Wales of the investment policy had been splendid. However, the people who showed us the way were those in the Stormont Parliament 45 years ago. If someone then expressed an interest in building a factory in Scotland we had to tell them that there may be someone who dealt with it. But Stormont had set up a body which encouraged investors, showed them around and did everything to bring them into Northern Ireland. We did so much later, but Stormont was a devolved parliament doing a good job for the country. We shall need that in the future.

As regards agriculture, the split between the Westminster and Scottish parliaments can work perfectly well. However, a great deal of investment and work must go directly into Scottish agriculture in order to promote excellent products. We are entering an extremely tough time. Every party in this country is advocating a free market, which will need organisation if ever anything did. A good example is the Dutch who, from the most unhealthy part of Europe lying below sea level and as a result of good organisation, have managed to sell Dutch seed potatoes far better than we have sold Scots seed potatoes. That is an example of what a Scottish devolved parliament close to the people could do. I am looking forward to it being a major factor in the development of Scotland.

Finally, I hear the Tory Party carping about the proposal and prophesying death, destruction and the break-up of the United Kingdom. The noble Lord, Lord Mackay of Ardbrecknish, said that terrible things would be imposed on the Scottish people. I make the point that I made to the noble Viscount, Lord Weir, that if the Scottish people are foolish enough to elect people who act against their interests they will deserve all they get. However, they may have the power to elect good people. I was delighted to hear the noble Lord, Lord Sempill, say that he will stand. I hope that he will stand as an opponent, but if he is not elected he can slip his name on a list somewhere else. The proposal represents a chance for good people to go into the Scottish parliament and do a great deal of good for Scotland and its people. They will not need to go to England, but they can go if they wish. It is a nice place, with nice people, but the Scots should have a chance to stay at home and make a good job of Scotland.

6 p.m.

Lord Rees: My Lords, the noble Lord, Lord Sewel, opened the debate in his usual apparently rational and courteous way by saying that the Government are adopting a non-adversarial approach towards this great constitutional question. He may have persuaded himself of that, but he will have to do a much harder sell to noble Lords on these Benches and to the country outside. I say that because we remember, and shall go

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on remembering, how the Government guillotined in the Commons the Bill which we have just debated and so prevented any full and rational examination of it. They left it to us to debate it properly. By one of those ironies of political life, while we are debating in a courteous and rational way the principles of devolution, the other place is probably brushing aside the well constructed, justified amendments which were carried. I believe that there were only three on this occasion.

Let us tell noble Lords on the Benches opposite that if they believe that the Welsh people will be persuaded by the specious arguments which the Government adduced to support having the referendums in Wales and Scotland on different dates, they must under-estimate the perspicacity and intelligence of my fellow countrymen. For various reasons they may have the ear of the noble Lord, Lord Elis-Thomas, whose charming speech I so much appreciated. I assure the noble Lord that the Conservative Party--and I am proud to call myself a Welsh Unionist--is certainly not standing apart from the debate. Indeed, if I am given an opportunity I shall be very happy to involve myself in that debate west of Offa's Dyke. We feel that it is right and proper that we should consider seriously what are the advantages not only to Wales and Scotland but also to the United Kingdom as a whole, and even to England, if the noble Lord will allow me to say so, before we commit ourselves to becoming involved in what seems to us at first blush--and after all, we have had only a week or so to consider the proposals and we have not heard any very full details in defence of them from any government Minister--the voyage of discovery on which the Government wish to embark this country.

In the time available, the House will be relieved to know that I shall confine myself to Wales. However, there is so much to discuss about the Scottish White Paper. I was interested to find that the Welsh White Paper is twice as long but half as expensive as the Scottish White Paper. But, of course, half of the Welsh White Paper is in Welsh. It is interesting that the Scottish White Paper is only in English and not in Gaelic as well. The Government may wish to reflect on that. The noble Lord, Lord Sewel, is obviously bilingual and would no doubt love to address his fellow countrymen north of the Border in Gaelic. But let us leave that aside.

The White Paper, attractively printed and voluminous as it is, is long on political cliche but very short on serious analysis of the real underlying political problems. The noble Lord, Lord Elis-Thomas, is one noble Lord, detached from the cares of government, who has perhaps most persuasively advanced the arguments which he feels apply for its adoption in Wales. The White Paper is entitled A Voice for Wales. That says a little bit about the White Paper. My fellow countrymen are known for their fluency. They are perhaps not appreciated for it but they are known for it. They have four tiers of government inside the Principality in which to exercise their oratorical talents. Do they really need a fifth? That is worth pondering. Of course we are all products of elective democracy but there comes a time when one must stop debating and actually get down to action.

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Let us look at what action will be available and let us look also at the structure of a devolved government for Wales. First, there is the Secretary of State himself. In advance, I offer my profound sympathy to anyone who is offered that office because he will not be answerable for the Welsh assembly. However, whether or not that is formally the case, he will be bound to be answerable to it because he is going to sit there. He will no doubt be compelled to defend the Government's position on a whole range of delicate questions like the amount of the block grant and such matters. But he will also be answerable to the Parliament at Westminster. He will sit uneasily in the Cabinet. I suspect that he will be loved and admired by nobody. Perhaps that is the wish of the Labour Party. Perhaps it wants an emasculated Secretary of State for Wales; so be it.

Let us come on to the MPs who currently have the privilege of representing Welsh constituencies. They will have noticed that the future of the Welsh Grand Committee is clouded in obscurity and not yet decided. It will be one of the oddities of this solution, if it is adopted by Parliament, that Welsh MPs will be able to comment on a range of sectors of government in England but disabled from so doing in Wales because they will be a matter for debate in the Welsh assembly.

One could elaborate on the very delicate position in which Welsh MPs will find themselves. I do not believe that their voice will be enhanced. No one has had the temerity to talk about the west Glamorganshire question or anything like that. Perhaps we should ask the honourable gentleman from the other place, Mr. Dalyell, to come along and apply his keen, analytical talents to the position of Welsh Members, whether they are over-represented, and how they should be treated. I suspect that the pressures will grow, if this assembly really takes off, to limit the number of Welsh MPs or to limit their scope for intervention in debates in the other place. Therefore, if they think carefully about it, I do not believe that they will appreciate what is proposed.

Let us turn to the assembly members themselves. They have no power to raise taxes but they are responsible for funding local authorities, although central government will still retain the power to cap local authority budgets. That will not be a very enviable role. As regards their executive powers, their entry into power will be preceded by a massacre of quangos. I do not know whether that will really assist Wales. Noble Lords from both sides of the House have paid unstinting tribute to the Welsh Development Agency. I do not believe that its power and effectiveness will be enhanced by rolling it into one massive overall quango.

I turn now to relations with Europe. It is readily admitted that there will be no place for members of the assembly in a Council of Ministers. But, graciously, officials answerable to the assembly may be offered places at UKREP in Brussels. Yes, there will be some influence. As regards ambassadors for Wales, I do not believe that they will be given that kind of credit. There may be quantity but I suspect that there will not be quality. There may be some influence but there will be no powerful voice in Europe.

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In short, I believe that the proposals in regard to Wales will result in a multiplication of debate, of officials and of cost. They will create a breeding ground for friction between Westminster and Cardiff and will prove a positive discouragement to foreign investment in Wales. They will damage and not strengthen the United Kingdom and Wales. That is why, if the noble Lord, Lord Elis-Thomas, will forgive me, I will go on about the slippery slope and I continue to consider the relationship between Wales and the United Kingdom as a whole because that is one of the fundamental questions which deserves much more serious consideration than has been given to it by the White Paper.

The United Kingdom has for something over 400 years, perhaps slightly longer bearing in mind the identity of the leader of my party in this House, been a successful political entity. Indeed, I believe that we can go back to Henry VII who brought numerous bright, intelligent and thrusting young Welshmen, like his ancestors, to this side of Offa's Dyke. If we go on to consider the Union of the Crown, the number of penniless Scotsmen who came down to marry English heiresses and acquire English and Welsh properties was considerable. Therefore, let us not hear that Scotland and Wales, and Scotsmen and Welshmen, have not benefited from the Union of the Crown and the Union of the kingdom.

The United Kingdom has acted as a player on the world stage providing scope both at home and abroad for the energy and talents of inhabitants from whatever part of these islands. I hope that the residents of Wales and Scotland--not the Welsh and Scots, because, again, one must recognise that there are a huge number of Welshmen and Scotsmen who live south of the Border and east of Offa's Dyke--who are the only people entitled to participate in the referendums, and ultimately Parliament itself, will put aside these ill-thought out proposals so that we can concentrate on the real problems of these islands which call for solution.

6.11 p.m.

Lady Saltoun of Abernethy: My Lords, the highest praise that I can give to the White Paper is that it is very well laid out, clear, and easy to read and understand. The noble Lord, Lord Peston, told us during the Committee stage of the referendums Bill that even the thickest of us would be able to understand it. Well, he was right. I warmly congratulate all those responsible for producing it. The content is another matter. I think that it is a better scheme than that on offer in the 1970s, but I am very sad that we have come to this point, for I think that we are in a heads you lose and tails you do not win situation. If this does not work--and I am very much afraid that it will not--it will lead to the break-up of the United Kingdom; but, if we do nothing, I believe that that will also lead to the break-up of the United Kingdom. I only hope that I am wrong.

I turn now to some points of detail. As the noble Lord, Lord Monson, said, the West Lothian question has still been mainly ignored. Reduction in the number of MPs at Westminster, although very necessary, is no

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answer to it. Leaving it to the House of Commons to consider future arrangements for Scottish business is only a partial answer. I fear that the only real answer lies in a federal system, where the devolved powers would be identical for all parts of the UK. Did I detect a glimmer of hope that the Government are beginning to realise this?

We have been told that the Scottish Parliament is to be up and running by the year 2000. We are now at the end of July 1997, only two years and five months away from the year 2000. We are told in paragraph 10.6 of the White Paper that the Old Royal High School, which we had always assumed would be the parliament, may not be suitable and that a new parliament may have to be built. I have read in press reports, although it may not be true, that a worldwide competition may be held for the design. A new site may have to be acquired and planning consent obtained before building can begin--or, can Secretaries of State override planning authorities? If the Government think that they are going to have a new building of any more permanence and dignity than a pre-fab or a conglomeration of portacabins ready in the time available, in straight Scots parlance, they must be daft.

Perhaps I may refresh your Lordships' memories about the building of this beautiful palace. The old Palace of Westminster was destroyed by fire in 1834. The competition for the design of its replacement was announced on 24th August 1835, and the closing date was 1st December of that year. Barry's winning entry was number 64 out of 97. No estimates had been asked for. The foundation stone was eventually laid on 27th April 1840. The Lords moved into this gorgeous Chamber in 1874, and the Commons into theirs, which had had to be rebuilt because they did not like it, in 1850. That took 12 to 15 years.

I am sure that nothing so elaborate is contemplated for Scotland, but 129 MSPs will all want an office each and room for their secretaries, so it would have to be a sizeable building. I cannot for the life of me see how anything suitable could possibly be ready in the time available.

Surely the only sensible thing to do is to use the High School and the offices across the road, with modifications, at least to start with and then see how it goes. If it is not satisfactory, then is the time to consider a new building. Apart from anything else--such as, the cost--experience in the High School would point to the pitfalls to be avoided in the design of a new building.

If we are to have a new building, let it at least be a dignified building in dressed stone, in traditional style, designed by a firm of Scottish architects experienced in that kind of work, not some construction of glass and steel designed by some foreigner wanting to make a statement and gain publicity. Moreover, let it be in the centre of Edinburgh, near the railway station, not away in Leith, although I have to say that one of the arguments I have heard against the Leith site--namely, that it would be undignified because it is adjacent to Safeways--is quite ridiculous. I wish this palace were adjacent to Safeways, and I expect quite a number of your Lordships do too.

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I liked the suggestion in a letter to the Scotsman last Friday, from one Mr. H. L. Smith, that the Monument on the top of Calton Hill should be expanded with a kind of Parthenon-style building to provide a great debating chamber, linked by lifts and tunnels to the Old Royal High School and St. Andrew's House. That is the kind of suggestion that should be listened to.

I have a few short questions for the Minister regarding other matters. The first concerns the liability to pay what, for the want of a better phrase, I shall call the tartan tax. What would be the position of the Secretary of State for Scotland or the Scottish Law Officer to the Government of the United Kingdom--what a mouthful!--or, indeed, any Scottish MPs at Westminster, who may well spend more time in London than in Scotland and therefore might be able honestly to claim that their principal residence is not in Scotland but in England? Would they, or would they not, be liable to pay that tax?

My next question concerns cost. We are told that the Scottish parliament will cost £20 million to £30 million a year to run. What we have not been told is what the salaries and allowances of the MSPs will be. We are also told in the White Paper that there will be a "First Minister" and a "team of Scottish Ministers". How many Ministers is it anticipated that that team will consist of, and what will their and the First Minister's salaries be? Indeed, what will the salaries of the MSPs be? I foresee a possible problem because, if those salaries should be less than those of Westminster MPs, there will be a definite disincentive for candidates to stand for the Scottish parliament as opposed to the Westminster Parliament.

6.18 p.m.

Lord Hamilton of Dalzell: My Lords, I, too, should like to talk about Scotland. I expect that what I have to say about Scotland applies equally to Wales, and perhaps more so. The proposition for Wales, with no power to tax on offer, seems to me to be a very expensive garden fence over which, at best, the Welsh will be able to indulge their predilection for conversation but, at worst, might have some fearful battles, as my noble friends Lord Crickhowell and Lord Rees, pointed out.

A view of events is frequently moulded by a family's history, even if it no longer includes a direct interest. Mine is one of an ancient Scottish ancestry which came to an end in Scotland when my great-uncle died in 1951 and the Dalzell Estate was compulsorily purchased by the borough of Motherwell. Until the early 19th century we owned three estates in Scotland, but two of them had to be sold following the failure of the socialist experiments of Robert Owen which were aimed at resolving the terrible unemployment which followed the Napoleonic wars.

My three times great-grandfather was a serious minded man who felt that something should be done to alleviate the plight of the men who had saved Britain and Europe from Napoleon. He became a friend of Owen and financed an experiment of his own, modelled on Owen's. It has always been an object lesson to me

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that his good intentions should already have come to a dismal end by 1826 and that human nature should have proved so conclusively that socialism as an ideal was doomed to failure.

Nearly 200 years later this lesson has now been learnt from Soviet Russia even to the inner enclaves of the Labour Party but not, it seems, in Scotland. The noble Lord, Lord Steel, talked about flat learning curves. I wonder why that might be. Is it because we have created a dependency culture through the massive subsidies that are received?

Leaving Scotland was a difficult decision for my father. I now thank my lucky stars that he did. I do not want to have to pay for a new Scottish experiment. However, I still have a feeling of empathy with my Scottish roots and sympathy for the Scottish people. I do not believe that the Westminster Government have in the past behaved with great sensibility towards them. The coincidences which led to the poll tax being introduced first in Scotland, followed by the reorganisation of the local authorities which happened there but hardly at all in England, helped fuel the impression that it was a good idea to try political changes on the dog, so to speak, in Scotland before feeding them to the English. It is in that vein that I ask myself why, when ostensibly the purpose of the referendum on devolution is designed to ask the Scottish and Welsh what they would like, the Government are so determined to campaign and manipulate it so that the answer is yes.

I appreciate that there is some hubris coming from my compatriots with their lowland accents, who so nearly brought British industry to its knees in the 1970s. At long last they have regained political power. They doubtless hope that it will never be taken away again, at least not in Scotland. However, that view does not seem to me to coincide with what we are given to believe is new Labour. Are we to have a division between new Labour in England and old Labour in Scotland? The answer is probably yes, but I cannot see that that would be an object worth striving for. The demands of old Labour cannot be met by the Treasury.

If you want to find the answer to this question, I believe you should look carefully at the financial arrangements for the new Scottish parliament. It appears to me that the devolution proposed for Scotland, with its limited powers to tax and spend, bears a considerable similarity to the proposals governing the introduction of the single currency in Europe with all its political disadvantages. There, ostensible powers to tax and spend are to be strictly governed by budgetary limits to be reinforced by a stability pact which would levy fines on a miscreant European government.

Paragraphs 7.22 to 7.28 in the Scottish White Paper lay out the means by which most of the freedom to tax and spend will be controlled by budgetary limits set by Westminster, to be enforced by fines. I point out that this is the total of tax. I do not deny the statement of my noble friend Lord Mackay that the method of raising the tax may change. The fines will be the withdrawal of what are, in

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effect, convergence funds provided by UK taxpayers. Paragraph 7.22 states,

    "The Government's objective is to establish clear lines of accountability for local government spending and taxation. Its aim is a system in which fiscal self-discipline is reinforced ... by the obligation on the Scottish Parliament to absorb any costs for UK taxpayers flowing from decisions on local government finance".
That covers the block grant which will diminish in response to any deviations.

Paragraph 7.23 includes central government support for local authority expenditure in the new block grant. Paragraph 7.24 states,

    "The remainder of local authority self-financed expenditure, which consists largely of council tax revenue will, as at present, fall outwith the Scottish Parliament's assigned budget ... The Scottish Parliament will have the powers to control local authority current expenditure, through capping or other means".
However, after all that, paragraph 7.24 continues,

    "If growth relative to England were excessive and were such as to threaten targets set for public expenditure as part of the ... UK economy"--
let us suppose a deficit of 3 per cent. of GDP--

    "and the Scottish Parliament nevertheless chose not to exercise its powers, it would be open to the UK Government to take the excess into account in considering the level of their support for expenditure in Scotland"--
in effect, the fines. The measure is therefore open to the same criticisms as are levied at the single currency. You can have only one Minister of finance and the political independence which is left when there is no budgetary autonomy is largely illusory. It covers only how a limited amount of money can be raised and spent rather than how much.

The sort of Labour government which seem likely to be elected in Scotland may well have a penchant for high taxation and high spending. They will be restricted in that ambition to the £450 million yield from their 3p. latitude in income tax. Once spent, that will be that.

Many noble Lords have pointed out that there is a strong possibility that once a Scottish parliament is elected it will want to have more power over its own affairs, leading to the break-up of the United Kingdom. I agree with that. It is no different from what I suspect would be the reaction of all the British people if they chose to share their sovereignty with Europe in this way.

It is extremely frustrating for a government to be defeated for reasons which they ascribe to someone else--ask any Conservative councillor. However, the most difficult problem arises when the electorate, having exercised their democratic right to change their government, find that it makes no difference to their situation. The new government may have insufficient powers to raise income to fulfil their electoral mandate. I watch with interest the scene in France following the election there. The danger is that M. Jospin's abandonment of his election pledges will lead to political instability.

Scotland is being devolved on the European model. It is being offered subsidiarity to the United Kingdom Government by giving it a measure of sovereignty rather than having a measure taken away. Poor old Scotland.

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I reckon that the dog will surely die. My message to the Scots is that it seems unlikely that either this House or the Conservative Party can save you from the fate which is coming your way. But take heed; you may be induced to believe by Mr. Alex Salmond that there is more money available in the European Community than there is in the United Kingdom. However, the Germans, ravaged by a series of what might be called asymmetric shocks from eastern Europe, are getting tired of being the paymasters. Ask yourselves, who will succeed them and before you fall into this trap for goodness sake vote no in the coming referendum.

6.27 p.m.

Baroness Smith of Gilmorehill: My Lords, it is with a special sense of pride and a feeling of the completion of a task that I speak in this debate to welcome the White Paper, Scotland's Parliament.

There was real excitement last Thursday in Edinburgh when the White Paper was published and the feeling in Scotland over the weekend was entirely positive. I know that there is a great deal of work still to be done and I am keen to play a part in that process. However, by 11th September I both hope and expect that we shall be able to say that a piece of unfinished business is well on its way to completion. There is an almost tangible feeling of expectation in the air which means that this time Scotland will not stand back from the challenge.

The scheme which the White Paper represents goes further than the scheme which was in place in the 1970s. It has been improved and modernised for the next millennium. I never thought that the old scheme should be reintroduced, regardless of what had happened since. The previous proposal was right for the time; this one is right for now, and for the future.

I wish to take a few minutes to talk about the essence of the case for devolution which has been argued about for so long in Scotland. Administrative functions have long been devolved to the Scottish Office. They cover all the matters which most affect the lives of the people of Scotland--health, education, housing, local government, the environment, and much more. The issue has been that the degree of democratic accountability which could be provided by this House and the other place was no longer adequate.

What has been so long lacking is a direct democratic control over those Scottish Office functions so that the resources can be managed in a way which more closely reflects the wishes of the Scottish electorate. This White Paper recognises the strength of feeling in Scotland over many years. Sometimes I feel there is a limited understanding down here in London of the feelings north of the Border. Insensitivity on a grand scale has been shown by the former government, and the sense of alienation felt by the Scots was not just against the government of the day but more generally aimed at the process of government itself. That is potentially very damaging.

In the interests of the democratic process, this proposal is therefore very important indeed. And it will also demonstrate that what the Scots really want is a greater and proper degree of independence within the

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United Kingdom. I have no doubt that this is the best way to develop and strengthen the government of the UK and is not the first step on some mythical slippery slope.

The proposals recognise Scotland's distinct identity and the strong ties that bind us with the other nations of the UK. These plans will modernise our constitution and give added strength to the partnership of the United Kingdom. A Scottish parliament will give Scotland a new sense of self-confidence and self-esteem. The Government are to be congratulated on the White Paper, which meets these aspirations. It completes the task set by the Government's manifesto and I believe that it should command the support of the whole House.

6.31 p.m.

Lord Fraser of Carmyllie: My Lords, I regret that I have to say to the noble Lord, Lord Sewel, that I regarded his opening of the debate as a most inadequate explanation and elaboration of what is contained in the White Paper. We have only one day in your Lordships' House not only to consider the White Paper for Scotland but also the White Paper for Wales. More significantly, we have no other parliamentary opportunity before the referendum to consider any of the detail or to ask any further question about it. I am surprised that the noble Lord has given no regard to the myriad queries which have arisen from the White Paper for Scotland since that first uncritical triumphalist fest at Edinburgh Castle last Thursday. It simply will not do to describe the reactions of all those who have asked questions about what is contained in the White Paper as hysterical. Many of us who disapprove of the White Paper bow to no one in our belief in the distinctiveness either of the Scottish legal system or the Scottish education system. We shall not be silenced. We shall not be told that it is not our right to ask questions about them.

In launching the White Paper for Scotland last week--my noble friend Lord Mackay of Ardbrecknish spotted the point as well--the Secretary of State for Scotland said in a ringing conclusion that this renewal would strengthen the United Kingdom. May I put the point to the Government in what is personally a rather painful way? Fewer people in Scotland believe that to be true than voted for the Conservative Party at the last election. Something less than 17 per cent. of Scotland believe that that will be the outcome. What troubles me is that those people in Scotland have recognised what the Secretary of State has not recognised: that there is an inherent instability in the arrangements he has put forward; and that the Government have caused that instability by exciting contradictory expectations.

Paragraph 4.2 states:

    "The UK Parliament is and will remain sovereign in all matters".
I entirely agree with that expression of constitutional thought. It is classic Diceyan analysis. I believe that it is correct; and indeed I support it. The difficulty is that the White Paper is said to be based on what is contained in the workings of the Scottish Constitutional Convention. The trouble is that time and again, with a rather garbled understanding of what Lord President

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Cooper said in the famous McCormick case in 1953, the constitutional convention has said that that is not where sovereignty lies: it is in some inchoate way invested in the people of Scotland.

It is not simply the Scottish Constitutional Convention that has taken a completely different attitude. In his maiden speech on the Second Reading of the referendums Bill, the noble Lord, Lord Steel of Aikwood, said:

    "Lord Cooper, in his celebrated 1953 court judgment, was quite specific about it. He said: 'The principle of the unlimited sovereignty of Parliament'"--
as expressed in the White Paper--

    "'is a distinctively English principle which has no counterpart in Scottish constitutional law'".
The noble Lord continued:

    "It is important that that is understood".--[Official Report, 17/6/97; col. 1124.]
Perhaps I may say this to him. There is one group in this country which has certainly not understood that; and that is the Government.

We then look to see what that exciting of different contradictory expectations will lead to: where it will lead to tensions being exacerbated and not relieved. As regards chapter 3, some seem to consider that the proposal that those matters be reserved constitutes a satisfactory solution. Let me test the issue briefly in this way. Let us set aside the points of conflict that are likely to emerge over issues which as yet we cannot precisely predict if the parliament is to be established in Scotland. However, let us test it against some of the contemporary political issues in Scotland.

I well recollect while in Government the keenness of anxiety, in particular among those who live in the north of Scotland, when some Whitehall departments suggested that we should have summer-time and double summer-time. I wonder whether those who live in Orkney and the Shetlands in the north of Scotland realise that the question of summer-time and double summer-time will be exclusively reserved for the UK Parliament. Do those Scots also appreciate that while solicitors will be within the remit of the Scottish parliament, astonishingly estate agents and insolvency practitioners will rest within the jurisdiction of this Parliament?

I might wish for those things to happen, but I am concerned that this instability is built into the system. I do not see that the situation has been resolved in a way which relieves that pressure.

The last of my examples--perhaps I may take some credit for it--relates to the Misuse of Drugs Act 1971 and any legislative change affecting the Act. That matter is to be reserved for the United Kingdom Parliament. After raising that point in debate with the noble and learned Lord the Lord Advocate, I am delighted to note that it will remain here. Drugs found in the north-west of Scotland are often destined for London, and drugs seized at Dover are often destined for Glasgow; so we want a united approach on that great social evil of our time. But if it is to be reserved for the UK Parliament, I invite your Lordships to reflect on this. Let us imagine, as happens from time to time, that we have a weekend

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of drug deaths in Glasgow. The local MSP goes to Edinburgh and says, "We must do something about this. We cannot allow this to continue in its present form". Let us imagine that he is told by the presiding officer, or whatever he will be called, that nothing can be done about the legislative position because that is a matter for this Parliament. It leaves in place some real points of conflict.

I turn to the position of the "third man". Unable to resolve the arrangements that are presently in place for the Scottish Law Officers, in contra-distinction to the 1978 scheme the Lord Advocate and the Solicitor General are to go to the Scottish parliament. In the most byzantine of conclusions, the only way in which the matter is resolved is by putting in place a third man, a new Scottish Law Officer. That seems an unworkable solution, undermining the position of the Lord Advocate of Scotland, who, as the Faculty of Advocates so rightly states, is effectively the cornerstone of our distinctive legal system.

With my innate sense of indolence, it is a job that I would dearly like to occupy. I cannot see what that officer would have to do other than to provide himself as a luncheon companion for an under-employed Secretary of State who had just completed his most important annual task: determining who was to be on his guest list for the visit of the Moderator of the General Assembly.

It is said in the history of the office of the Lord Advocate that at one time he occupied a small, dark room somewhere in the Home Office. I fear that that is the room to which this third man will eventually be sent. It is, in short, a second-class solution for what I believe to be a first-class legal system. It will reduce the proud, independent legal system of Scotland to nothing more than a regional variation.

Finally, I turn briefly to the matter of taxation. I wish to pose a number of questions to the Minister who will reply. I hasten to say that I do not expect him to give me answers to them, because I believe I know the answer to all of them--it is yes. However, I shall pose them; if I am wrong, I should be grateful if he would arrange for someone to write and correct me.

To turn first to paragraph 7.26, which my noble friend Lord Mackay of Ardbrecknish correctly identified as dealing with the key issue in relation to taxation, am I correct in saying that a parliament would have power to impose a local income tax without a 3p. limit, or indeed without any limit at all? Secondly, would it have power to abolish the unified business rate entirely and return the levying of non-domestic rates to individual local authorities. Thirdly, would it have power in accordance with former Labour Party policy to remove the exemption from rating of agricultural land and buildings? Fourthly would it be entirely open to a Scottish Parliament to institute a rating arrangement for Moss Morran, St. Fergus, Flotta and Sullom Voe, which would be a system entirely different to that covering either Teesside or Bacton? If I am wrong in my belief that the answer to all those questions is an unequivocal yes, I look forward to an early response from the Scottish Office.

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The noble Lord, Lord Steel, said that it was no bad thing that a parliament should have powers to tax. That may be an argument, but the Government have been remarkably coy in telling people just how extensive that tax-raising power might be. I hope that now, after Mr. Henry McLeish has been open about the matter that he looks forward to spending the 3p. on income tax, at least we shall enjoy rather more open debate. If nothing else comes out of the two days' debate here and in the House of Commons, I trust that the people of Scotland will realise that what is proposed for them in terms of taxation is not at most a further 3p. on income tax but the prospect of almost infinite variation of the taxation that might be put upon them.

6.44 p.m.

The Earl of Buchan: My Lords, I shall attempt to be brief, bearing in mind that the noble Lord, Lord Mackie of Benshie, holds the record up to now of four minutes. As the twenty-third speaker in a debate in this learned Chamber, it is difficult to think of anything new to say. However, one of the advantages of speaking in this position is that other noble Lords have made points that one can pick up. I am sorry to see that the noble Lord, Lord Steel of Aikwood, is not in his seat. I should like to take him to task on a point that he made about the remarks of the noble Lord, Lord Mackay of Ardbrecknish, whose defence of the United Kingdom is certainly not a dishonourable course. I imagine that many noble Lords and noble Baronesses will be extremely worried about the "breaking up of the United Kingdom" aspect of the legislation. So it is a perfectly fair point to raise.

Had the noble Duke, the Duke of Montrose, been in his place I should have congratulated him on his maiden speech. I should have pointed out to him that he is one of five Members present and speaking in the debate whose ancestors sat in the last Scottish Parliament. They are: myself, the noble Lord, Lord Sempill, the noble Lady, Lady Saltoun of Abernethy, and the noble Earl, Lord Lauderdale. For my part, I would confine all these proposals to the waste-paper basket straight away, whether or not they cost £6.50. In my opinion the proper course is simply to re-prorogue the 1707 Parliament and offer to those whose direct descendants still exist a seat in that parliament. However, I accept that that course is not likely to be followed.

To put a serious point to the Minister, what is the hurry in relation to this legislation? Why has it to be rushed through in August 1997? Surely Scotland will not disappear. The Scots will still be here in November. Even if a canal were built from Carlisle to Newcastle, Scotland is most unlikely to float away. Those who legislate in a hurry repent at leisure. The repentance is likely to be on the subject of the United Kingdom.

Will the Minister say a little more about a Scottish parliament's relations with the common market? I believe that the United Kingdom will speak with a louder and more powerful voice than Scotland, Wales and England separately.

The noble Baroness, Lady Carnegy of Lour, passed a few comments on the influence of the Scots. She made a very good point about the number of Scots in the

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Cabinet. As noble Lords will know, three of the great offices of state are held by Scots. The Secretary of State for Scotland is a Scot; the Defence Secretary is a Scot; and the Transport Minister is a Scot. So far as the Treasury is concerned, we are most unlikely to hear an English voice in the Treasury now, because two of the junior Ministers in the Treasury are also Scots. Surely this will represent the high tide of Scottish power in United Kingdom history for ever. Why the Scots, who have the real power now, should wish to throw it away for the illusion of power in a small, independent country, I am completely at a loss to know. No doubt the Minister will provide a brief answer to that point.

I support the noble Lord, Lord Renton, in his "cake" argument. Perhaps the Minister will say a little more about how "less" can be "more" at the same time.

This time I support the noble Lord, Lord Steel of Aikwood, who is still not in his place, on the matter of the building of the new legislative chamber or whatever it is to be called. Noble Lords will share my view that Edinburgh is one of the most beautiful cities in the world; it is the Athens of the north. The thought that it might be desecrated by, as the noble Lady, Lady Saltoun of Abernethy, suggested, some trendy, useless, slick building for the chamber horrifies one. I note that Cardiff has escaped that approach with its opera house, although it looks as though the Victoria and Albert Museum will be landed with it.

Finally, I wish to ask the Minister a small question of detail. The document headed "Price of Scotland's Freedom" lists the number of individuals who were alleged in 1707 not to have been poorer as a result of the Act of Union going through. Who should correspond to the gentleman who is described as, "the messenger that brought the treaty of union to London"? That gentlemen was paid £60. Perhaps a modern equivalent would be Alex Salmond, the Member in another place for Banff and Buchan, the man without whose actions this whole Pandora's Box would never have been opened.

6.50 p.m.

Lord Mackay of Drumadoon: My Lords, I begin my contribution by saying a few words about the future role of the Lord Advocate, a subject touched upon already by the noble and learned Lord, Lord Rodger of Earlsferry, and my noble and learned friend Lord Fraser of Carmyllie.

As the White Paper makes clear, over the past 250 years the Lord Advocate, as a Law Officer of the Crown, has played a significant role in the government of Scotland and thereby the government of the United Kingdom. In recent years the Lord Advocate's influence has extended far beyond his departmental responsibilities by virtue of the fact that he sits on various Cabinet committees and is privy to the vast volume of correspondence that goes around Whitehall every day. The Lord Advocate's role as independent public prosecutor and his role as constitutional and legal adviser on Scottish affairs to the United Kingdom Government are very important. He also plays a very

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major role in the formation of policy and the planning and approval of legislation prior to its being brought before Parliament.

In addition, the Lord Advocate and the Solicitor-General for Scotland, as Law Officers, play their part in providing Law Officers' opinion to the Government. One of the conventions of your Lordships' House and indeed of another place is that neither the existence nor the contents of Law Officers' opinion are made known. But the practice is that on most matters, unless they are peculiarly Scottish or English points of law, an opinion is prepared by at least one English Law Officer and one Scottish Law Officer. Such joint opinions are prepared on a very regular basis. Many deal with the compatibility of secondary and primary legislation with European Union treaty obligations and the European Convention on Human Rights.

Over the years, the Lord Advocate has represented the Crown, not only in the Scottish courts but before the Appellate Committee of your Lordships' House and in the courts in Luxembourg and Strasbourg. On many occasions the Lord Advocate has represented the Government at international meetings and conferences the length and breadth of the world. Therefore, there is much force in what the Faculty of Advocates recently said in a memorandum it submitted to the Secretary of State for Scotland; namely, that the Lord Advocate,

    "is an effective guardian of the [Scottish] legal system, who provides an authoritative voice for Scotland and Scots law in London, Europe and beyond".
I regret to say that within the various branches of the Scottish legal profession there is growing concern that, if the devolution proposals proceed, the Government may have chosen the wrong option for the future role of the Lord Advocate. That concern is shared by those who support devolution, those who oppose it, and those who take a neutral stance, as I anticipate the Faculty of Advocates and the Law Society of Scotland will do when they come to respond in detail to the proposals set out in the White Paper.

Let me briefly indicate why I have some concern that the proposal set out in paragraph 4.8 of the White Paper may not be the right way forward. I fully accept that any Scottish executive would require the services of law officers to provide it with advice on legal matters and to represent its interests in the courts. One anticipates that, despite the consensus politics that have been talked about, there will be occasions when the Scottish executive requires to be represented in court in legal disputes with UK government departments and other public authorities, such as local authorities.

I accept the need for such legal advice and legal representation. But it is by no means obvious that the duties should be carried out by the Lord Advocate and the Solicitor-General for Scotland. The White Paper suggests that that is appropriate because the Lord Advocate's responsibilities for the investigation and prosecution of crime are to be devolved. I find that a somewhat strange comment. The Lord Advocate has always been the public prosecutor in Scotland. He, his Crown Counsel and the procurators fiscal appointed by him have traditionally investigated criminal activity in Scotland, sudden deaths and the like. He alone has been

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responsible for the prosecution of crime in Scotland. The situation is different from that which applies in England where other public bodies, such as Customs and Excise and the Health and Safety Executive, have a role to play. So I do not regard his duties as being devolved. I have always taken the view that they have been based in Scotland; he is a master of the investigative procedure and a master of the prosecution.

It is proposed that his independent department, the Crown Office, should come within the ambit of the Scottish Office; that it should cease to have a separate budget, as it has at the moment; and that it should be paid out of the funds which the Scottish Office receives from London or from any tax that may be raised. I have a concern that that might serve to challenge the very important independence of the Lord Advocate, about which the noble and learned Lord, Lord Rodger of Earlsferry, spoke earlier.

In the same way that the Crown Prosecution Service in England comes within the ministerial responsibility of the Attorney-General, I believe that the prosecution of crime in Scotland should come within the auspices of an independent department under the ministerial responsibility of the Lord Advocate.

There is a danger of such interference. The noble and learned Lord, Lord Rodger, talked about an historical example of it. I regret to say that more recently in England I have detected some signs of the possible interference of the Home Office, in respect of the Crown Prosecution Service, in setting out the approach that the prosecution should take to issues of whether or not there is a sufficiency of evidence to proceed and whether there are sufficient prospects of conviction; and, in another example, whether it is the rule that prosecutors should give reasons to victims as to why a prosecution has been taken, has not been taken or has been departed from if one has begun. It is very important that the public prosecutor is entirely independent. I believe that that independence would be reinforced if his department were separate from any political department.

But it is not just the question of structural independence which is important. The Lord Advocate, his Crown Counsel and procurators fiscal prosecute in the public interest. The public interest is not just limited to devolved matters or to the residents of Scotland. It requires to take account of much wider considerations, not least because, as my noble and learned friend Lord Fraser mentioned, matters such as the misuse of drugs, firearms, health and safety at work regulations and road traffic matters are not to be devolved. Therefore, many of the charges which will be prosecuted in Scotland will be for contraventions of legislation passed by this House and another place on previous occasions and to be passed on future occasions.

It is important that the Lord Advocate should remain a member of the United Kingdom Government so that he can play a full role in the formulation of the policy leading to such legislation and play a full part in the debates as a government Minister in the promotion of such legislation. No doubt arrangements can be made either through the Solicitor-General for Scotland or by some other means to ensure that he co-operates fully

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with any parliament in Edinburgh and with any Scottish executive and, very importantly, with other agencies involved in the criminal justice system. The White Paper proposes that if the Lord Advocate and the Solicitor-General are not members of the Scottish parliament, they should have the right to take part in debates. That may be possible for a new parliamentary body; it certainly would not be possible for your Lordships' House and another place.

Mention has been made of a third man. That has been humorously referred to in Scotland since the White Paper was published. Whether it is a cricketing analogy of someone who stands on the boundary and occasionally answers a question he may be asked or whether it is a more shady character who frequents the darker aspects of the corridors of power I am not sure. What is quite clear is that to try to create a new officer to fulfil the role in Whitehall and Westminster, in your Lordships' House and in another place, that has been fulfilled by Lords Advocate over the years, would be an extremely difficult exercise.

I am concerned that unless that role is fulfilled then in an ironical way Scots law will suffer. People frequently say that one of the reasons for having an independent devolved parliament for Scotland is that Scotland has its separate legal system. One of the ironies of devolution may be that because so much of the law which will apply in Scotland will still be passed by this Parliament unless the Scottish legal voice is fully heard and understood, there is a danger of our legal system becoming more Anglicised than some criticise it for already.

I hope therefore that when the Minister replies he will undertake at least to discuss with his ministerial colleagues the possibility of giving further consideration to the future role of the Lord Advocate and undertake to consider the possibility of a public discussion with all branches of the legal profession--the Senators of the College of Justice, the sheriffs and others involved--to see whether any productive way forward is possible.

In conclusion, perhaps I can ask the Minister a few questions about the proposal to refer to the Judicial Committee disputes on the question of vires. While I fully understand what will happen if a dispute arises before legislation is passed, I am slightly unclear what will be the position if a dispute arises during the course of a court action, whether it be criminal or civil proceedings. If such a dispute arises in front of a Senator in the Court of Session or a sheriff in a sheriff court, is it proposed that there and then the matter should be referred to the Judicial Committee for decision or some form of ruling? Or is the proposed way forward that the judge should decide the issue and that there should be some right of appeal thereafter?

Another issue that arises is why the Judicial Committee should be limited to serving Lords of Appeal in Ordinary. Is there not a case for extending the committee to any Privy Counsellor who has held or who holds high judicial office in the United Kingdom? That provision would allow the noble and learned Lords, Lord Roger, Lord Bingham of Cornhill, and others similarly qualified to sit in an appropriate case.

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What would be the position if rights of appeal in civil cases to the Appellate Committee of your Lordships' House were abolished? Would there still be Scottish Lords of Appeal in Ordinary? Can there be any guarantee or is any guarantee offered that there will always be members of that committee who are qualified, trained and experienced in the practice of the law of Scotland? Those are troubling questions; they are serious questions. It may be that the answers cannot be given tonight but I hope that they will be given before the devolution referendum takes place.

7.5 p.m.

The Earl of Lauderdale: My Lords, as a Scot who has travelled pretty widely, I come to this debate focusing on Scotland. I have to say that I was born and reared abroad. Singapore? Hong Kong? No; Staffordshire. Where was I schooled? Paris? Vienna? Berlin? No; Sussex and Oxford. I still say "abroad" and alas I have come through it all "without a Scots tongue in ma heid"; that I regret.

I wish to say what a pleasure it was to hear the noble Baroness, Lady Smith of Gilmorehill. I regret that she is no longer in her place. I have never heard her speak before and felt that she spoke with grace and dignity. Of course, we remember her late husband and the part he played in getting this idea off the ground. It was a great pleasure to listen to the gracious way in which the noble Baroness addressed the House. I wish I could agree with everything that she said; unfortunately, I cannot.

This all has to make sense in terms of a realistic comprehension of Britain's role both in history and again in the modern world, not least the fact that we poured out our blood and treasure when standing alone for the free world in World War II. Or, on the other hand, perhaps this is just the prelude to an escapist scuttle from the role and destiny of our people?

Andrew Neil, editor-in-chief of the Scotsman newspaper, wrote on 25th July,

    "Why I, as a Scot, am sad today".
He focused on two points. First, a gross diminution of Scots influence at Westminster through cutting the number of Scots MPs, and the role of the Scottish Secretary of State "withering on the bough", as he put it--the withering, that is, of his influence in the Cabinet. Mr Neil cited paragraph 4.5 on page 13 of the White Paper with its claim that without their own parliament the Scots could no longer claim their current "over-representation" at Westminster but should be willing to accept a cut of about a dozen from the present number of 72 MPs. Such influence as we might be allowed to retain would be confined to defence, foreign affairs and UK economic policy. But we have to face gigantic contradictions which run right through the White Paper.

How can Scotland genuinely take part in management of the UK economy when fiscal power is to be split between the Whitehall Exchequer and the Scottish "Executive", with its power to alter levies north of the Border. How again could Scotland expect to provide

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Britain's Prime Minister, Britain's Foreign Secretary and Britain's Chancellor of the Exchequer? I am happy they are all Scots.

The White Paper and the Government's Statement on it are bestrewn with pledges about retaining the Union, keeping the United Kingdom together and so forth. But there is little examination of the UK itself. That was well summarised, if my memory is correct, by the noble Earl, Lord Russell, in a recent letter to the Independent. I apologise to him in his absence for not warning him beforehand that I intended to quote him. I hope I get the quote right. He said, in effect, that the Union of the Crowns in 1603 had been a grouping of sovereign states with, and under, an accepted top figurehead or symbol--something analogous perhaps to the Commission's place in the current European Union of sovereign states.

Personally, I would rather, in the political world of today, find a new term for "the United Kingdom". To that end I appeal to the imagery of the Great Seal of the Realm which calls the Head of the Commonwealth "Prince (in Latin princeps) of the Gathering of the Peoples". Such a term--albeit in Latin--established in the Great Seal makes me prefer to describe the UK as "the gathering of the British peoples".

The noble Earl, Lord Russell, argued--I hope that I am not misquoting him--that the proper way to change it all would be by negotiating a really new and modern Treaty of Union. It is idle to deny, as the White Paper keeps trying to do, that there is nothing explicit or implicit to threaten the UK as such. But if a bitter quarrel about tax or levies on oil and gas revenues from the Continental Shelf did not set off an explosion of volcanic proportions, then white is black and black is white. Such is the kind of quarrel that is almost inevitable sooner or later between the Scottish Executive and the London Treasury.

Worse still, the small print includes provision for the UK auditor's office finally to decide which fiscal costs and figures are relevant to the calculation of the longstanding English subsidy to public expenditure per head in Scotland as against the much lower figure for the English. In that regard the White Paper scheme ties and binds the Scots with gilded cords whose decorative tassels have cunningly hidden the power of an iron stranglehold.

Another contradiction lies in the reservation to Westminster's Parliament--and hence to the UK as a whole--of the power of decision on foreign policy. This is stated just when the present arrangements mean that Scottish or Welsh soldiers serving in UK forces abroad are to be denied a vote in the referendums. Still another contradiction lies in the proposal that Scotland should have a representative office in Brussels with access to the Commission, almost within yards of the offices of the long-established UKREP--the official office representing Britain's interests in Brussels. Just when the European Union's top centralists are pressing for a unified defence strategy to replace the current ad hoc arrangements with NATO, the White Paper asserts that Scotland's input to UK foreign and defence policy should not be at the heart of Whitehall, where decisions must be made, but initially in the frontline itself--like

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Scottish and Welsh troops now serving in the several British squadrons in Bosnia but denied a vote in the forthcoming referendums.

A politically more serious and more practical way to go about this whole proposition would surely have involved twin resorts: examining how the Treaty of Union could be renegotiated to suit today's conditions; and an equally serious response to the widespread public dream of a Scottish parliament, something with which I have long sympathised. This could and should have been done by examining what for years has been working so well, the Convention of Scottish Local Authorities (CoSLA).

The convention meets in plenary session each year but has yet to find a permanent home. It is condemned to shuffle around from Glasgow to Edinburgh and then to Perth, Aberdeen, Dundee, Inverness and so on, like a travelling circus. It should long ago have been decently housed in the High School building opposite the Scottish Office in Edinburgh where at least it could have had regular annual sessions and all the publicity that would naturally attend a Scotland-wide assembly.

The remit of CoSLA excludes such extraneous matters as debates on NATO, foreign affairs and the UK economy, let alone any other areas such as defence, the Western European Union and the eastward expansion of NATO. These are all areas which the White Paper excludes from the Scottish parliament and which are already excluded from CoSLA's remit. Such issues--with the bogus litany of refrains about holding the Union together--have been dragged in as a sop to all who see in this White Paper project all the signs of the dynamic of revengeful and narrow nationalism burrowing away. It may at the moment be unpopular in Scotland. At any rate the SNP did not attract a great many votes in the last election. However, it is there, it is bitter and it would be idle to pretend that it does not have at least emotional links with those who some of us in other parts of Scotland refer to as the Glasgow Irish.

All this is much in the English mind just now. But as the first year of the new Labour administration unfolds--with the Wales referendum artlessly slotted in for just a little while after the anticipated Scottish "Yes"--much will become blurred and misunderstood once the public's imagination is caught up, for instance, in the election of London's new mayor--quite soon now, it seems. For this means a new focus of political pressure and expression being brought into being. The scale of the vote for London's mayor will be at least 5 million electors--more than all the Scots and Welsh electors put together.

I have one final point. Surely HM Stationery Office does not have to adorn the White Paper with a right mockery of the Scottish national flag, the Saltire. Here is one more irritating example of bureaucratic condescension. Enough is enough. The Saltire is a white St. Andrew's cross on a sky-blue background--not just a rather messy, big, brown smudge.

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