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The Parliamentary Under-Secretary of State, Scottish Office (Lord Sewel): My Lords, I am enormously grateful to the noble Lord, Lord Beloff, for trying to get me off that particular hook, but I have to own up to the fact that I wrote it.

Lord Beloff: My Lords, I suppose that keeping bad company does in the end affect one! Therefore, in the light of the 30 or 40 speeches that I have heard or read, I must reconsider the issues on which we are embarked. It was pointed out by the noble Lord, Lord Strathclyde, yesterday evening that the Labour Benches did not fill up with enthusiasts for this Bill. On the other hand, then and subsequently there has been no lack of Peers to fill the Liberal Democrat Benches. Indeed, we got more of a flavour for what the Bill is about from the Liberal Democrats than we did from members of the Labour Party. That is not surprising because after years in the wilderness there was a real prospect, give or take a few extra seats from PR, that the Liberal Democrats will provide some Ministers. There will actually be loaves and fishes for them after so long.

On the other hand, I cannot say that their arguments were very impressive. The noble Lord, Lord Steel, must live in a world of total fantasy if he believes that the experiences of Spain or Germany are relevant to what we are doing. He indicated that in recent months he had, no doubt with great pleasure, travelled backwards and forwards to Barcelona. To compare Catalonia and its undoubted important place in Spain with Scotland is as far fetched as comparing the climate of Barcelona with that of Edinburgh. If, on the other hand, the noble Lord, Lord Steel, had spent more time in the Basque provinces he might have found that even devolution is not always a cure for everything.

There is a tendency on the part of the Liberal Democrats--and the noble Lord, Lord Watson, is at one with them--to think in terms of geography rather than history. I believe that under the national curriculum one

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cannot study both, so that is their choice. I should have thought that in debating devolution for Scotland the first thing to consider is how the Union came about and why.

We heard notable misrepresentation, not for the first time in this House, from the noble Earl, Lord Mar and Kellie. I am sorry that he is not in his place, but his speech is available for us all to read. What happened was indeed part of a European process: the creation out of the scattered authorities, principalities, counties, kingdoms, states and cities, of the beginnings of the modern state. Often this was, as in our case, the prelude to dynastic union. The Union of the Crowns in the beginning of the 17th century led, because of the repercussions of religious and political movements in both countries, to a considerable degree of interaction between their politics. Nevertheless they remained separate countries. It is no exaggeration to say that they remained separate nations.

I questioned the noble Lord, Lord Clinton-Davis, about the national minimum wage because I did not know to what nation the adjective "national" referred. He said that it would apply to Scotland. What is the nation? Is it a nation that embraces the English, the Scots and presumably the Welsh, or, as I would like to think, a United Kingdom which provides a constitution under which all three nations exist?

At the end of the 17th century there was a considerable problem for Scotland which was largely the product of English legislation. The exclusion of Scotland from the advantages of being within the Navigation Acts and the failure of the one major Scottish attempt to create a Scottish colonial empire was the impetus which led so many of the Scottish elite--and whether a few were bribed to go along is of no consequence--to think that they would be better off within that economic and imperial structure. At the same time, England, involved in the beginnings of its second Hundred Years War against France, was worried lest Scotland might prove to be a jumping off point for a French invasion. So there was a bargain: "You give us military security and we give you political, economic and commercial opportunities".

Most people would probably agree that the bargain worked. The noble Earl, Lord Perth, and other noble Lords have stated that the Scots took a very full part in the creation of the British Empire, in the manning of it and in the expansion of British commerce, industry and beliefs throughout much of the globe.

Therefore it is not surprising that for quite a long period, in spite of the differences within Scotland which were exploited in the two Jacobite rebellions, the issue was dormant. Then, towards the end of the 19th century, as nations became more self-conscious--and this applies to Ireland and Wales as much as to Scotland--people began to think that they should take greater charge of their own affairs because the original union was an imperfect one in the sense that Scotland retained very important aspects of its national being, its ecclesiastical establishment and its educational system. It began to be anomalous, as more legislation was required in the 19th century for that to be done in a Parliament in which the Scots themselves were necessarily a minority.

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However, people were dominated by the greater problem presented by Ireland. The noble Lord, Lord Steel, referred to Gladstone. As a former Gladstone Professor I am very sensitive about the way in which Mr. Gladstone is brought into debate. My impression is that Gladstone was never a great enthusiast for Scottish home rule. He seems to have been much less interested in rebellious Scots than the revolting Bulgars, but he made one very important contribution which the noble Lord, Lord Steel, might like to note. The noble Lord, Lord Steel, said that there is no answer to the West Lothian question. He is wrong: Gladstone had an answer. In the first Home Rule Bill for Ireland Gladstone suggested that Irish MPs should cease to sit at Westminster altogether. He referred to the fact that there were a lot of fish around Ireland and that they would like to make sure that they got it.

In the second Home Rule Bill he changed his mind and suggested that Irish MPs should sit at Westminster as well as in Dublin and that they should only take part in debates and decisions which concerned the Empire, foreign affairs or defence--the external field. We no longer have an Empire for the Scottish MPs to participate in running, but there are external considerations of defence and perhaps commerce and relations with the European Union which might suggest that we could look to Gladstone for a solution to that problem.

These issues and many others will no doubt be discussed as we proceed through the Bill. On the European theme I feel that sometimes in Scotland--and this applies more to the Scottish Nationalists than to the other parties--there is an assumption that it is for them to tell Europe how to treat them. If Scotland were to adopt the path of independence, as some of my noble friends feel is possible, they would not automatically become part of the European Union; they would have to join the queue somewhere between Slovakia and Cyprus. As we were told yesterday, that queue will be waiting around for a very long time.

If, as we all hope, Scotland remains part of the United Kingdom, clearly there must be some way in which Scottish Ministers can take part in delegations to consider issues in which Scotland has a particular reference. There should be far more detail in that part of the Bill.

We have a lot of work before us. I am told that it is the policy of my party to accept the decision of the Scots in their referendum, on democratic grounds. It is up to us to make it work. It reminds me of what Adam said to Eve after they were expelled from Paradise: "Of course, old girl, it was all your fault but we are going to make it work".

Lord Steel of Aikwood: My Lords, before the noble Lord finally sits down, he told us at the beginning that he was approaching this matter with an open mind. Perhaps I may tell him that we are all mightily relieved that he did not approach it with a closed mind.

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6.20 p.m.

The Earl of Balfour: My Lords, it is always fascinating for me to follow my noble friend Lord Beloff who made such a fascinating speech. However, my knowledge of history is nothing like as good as his.

I come right back to the present. Although we are informed in the preamble to the Scotland Bill that there will be no increase in overall public expenditure as a result of setting up the Scottish parliament, it will be an extra tier of government which is bound to be expensive. The estimated cost of establishing the Scottish parliament is about £55 million and the costs of the staff, MSPs' salaries and accommodation are expected to be a moderate £30 million.

It is estimated that about 200 staff will be required for the parliament. They will not be civil servants. Therefore, I wonder about their contracts of employment. Yet the Scottish executive will inherit responsibilities for the staff of the Scottish Office and other departments for which the Secretary of State for Scotland is currently responsible. Some increase in staff will be required over and above current staff numbers to deal with the new responsibilities currently falling to the Cabinet Office and to Her Majesty's Treasury. Yet in Schedule 5, most matters seem to be reserved matters.

The noble Lord, Lord Dean of Beswick, explained the expense involved to the people of Scotland even better than I can in his very good speech last evening at about 9.45 p.m. Whatever else may be said and done, it is not for us in this House to object to this Bill because it was voted for by a large majority in Scotland. Yet I am certain that many amendments and improvements will be required.

Equally, I feel that it should be recorded at this stage that the costs involved in setting up and running this parliament will come out of the Exchequer block grant to Scotland. That surely means that there will be less money for education, welfare, housing and so on because of the parliamentary costs. I fear also that before long, we in Scotland will lose our very important Cabinet representative--the Secretary of State for Scotland.

From my years as a Member of this House, I am convinced that the Treasury, guided by the Chancellor of the Exchequer, should be the only body to hold this country's purse strings. There are some good economic local authorities, health boards and so on. But equally, there are some that are inefficient and poorly managed. I know of a health board in Scotland which has managed to become overdrawn by £2 million. Unfortunately, it is extremely easy for any person or business to get into debt. But with present interest rates, it is extremely difficult to get out of it.

I am not satisfied that there is sufficient control and guidance in the Bill as drafted to help the parliament to budget for and manage carefully its affairs, particularly in its early life.

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6.24 p.m.

Viscount Astor: My Lords, I believe that this Bill will lead to the break-up of the United Kingdom. That is sad and it perhaps would not be the case had the Bill been better thought out.

We must all accept the results of the referendum, but we have a government for whom message is all and content is subordinate. Future referendums might just as well ask the question, "Do you want to feel better?". I am sure that if we had had a referendum in Scotland which said, "Do you like being governed from Westminster?", the answer would have been an overwhelming "No". I am equally sure that if the referendum had asked, "Do you like being governed at all?" the answer would probably again have been an overwhelming "No". That is often the nature of politics in Scotland.

I must declare an interest. I have a house on the Isle of Jura in Argyll which I regard as home. In my lifetime, I have been represented by two Conservative MPs, one of them my noble friend Lord Mackay of Ardbrecknish, a Scottish National Party MP, and now a Liberal Democrat MP. Thankfully, I have never been represented by an MP from the government side but who knows what may happen in another election?

I should like to look at three particular areas in the Bill--the muddled relationship there will be between the two parliaments and between Whitehall and the Scottish Office and the muddle over which responsibilities will be reserved and which will not.

The Government have fudged the West Lothian question. The SNP has announced that its six MPs will stand for the Scottish parliament. I do not know the view of the Labour Party or the Liberal Democrat Party. But Scotland will have a multitude of MPs. We shall have Euro MPs, Euro MPs who may be in the Scottish parliament, Westminster MPs, Westminster MPs who also sit in Scotland, Scottish MPs who represent a constituency and those who do not. Some will be very busy and some will have hardly anything to do. Some will have constituencies and some will not.

The electorate will be greatly affected by that. The people will be unclear as to whom they should go to for help and representation. They will be affected badly by the very concern which the government sought to address; namely, that devolution seeks to avoid people feeling disenfranchised. People will end up in that very situation. Taxes will be a problem if all the promises are to be kept. The only way to raise money after a 3p tax increase, which will raise £450 million, is through local taxes. That will not satisfy all the aspirations that there are at present in Scotland. I am sure, encouraged by the Scottish National Party, we shall find in Scotland a huge increase in rates. Tourism will be affected. Home owners will be penalised, especially holiday home owners. Indeed, a tourist tax has been proposed by Labour politicians in Scotland.

The White Paper stated that if the level of self-financed expenditure by Scottish local authorities rose steeply, the Treasury could then cut the block grant to Scotland. However, there is nothing explicit on the face of the Bill which provides for that. The only

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potential reference is in Clause 61 which provides for the Secretary of State to make annual payments into the Scottish Consolidated Fund. However, there is no indication as to the base-level, annual changes or frequency of those payments. Given the potential for finance to be the prime area of conflict between the Scottish parliament and Westminster, there is surely a need to specify the level of revenue which the Scottish parliament and local authorities can raise independently and by what means.

We have the situation where quangos will be split and put back together again. It is proposed that there will be "reserved matters", cross-border public bodies, devolved matters and Scottish public bodies. We are told that government departments will have a relationship based on "consultation, consent and co-operation". That is a recipe for confusion. I have never yet come across one government department which has agreed with any other, let alone in a situation where one would be from Scotland and the other from England.

I turn now to a specific area. The Labour Government want to control and keep a hold on broadcasting. I should have thought that this was an obvious candidate for Scottish control and the Scottish parliament. After all, broadcasting in Scotland is largely separate. Scotland has its own ITV regions, its own radio areas; and, indeed, the BBC is different in Scotland. Interestingly enough, Scotland has media empires which would never be allowed in England. The Mirror Group, which is the owner of the Daily Record and the Sunday Mail, also owns 20 per cent. of Scottish Media. Indeed, Scottish Media, publishes the Glasgow Herald, the Evening Times as well as owing STV and Grampian Television--a hold over Scotland which even surpasses Mr. Murdoch's hold over the media in this country.

The Scottish parliament as proposed will take over responsibility for the Scottish Arts Council and for Scottish Screen. But broadcasting, which is both an art form in its own right as well as being a major commissioner of the arts, is to be regarded as a purely UK matter. Could not some of the frequencies, whether or not they be national, be used more effectively for purposes more specific to Scottish needs, in co-operation with the ITC and the Radio Authority?

If we are to have a Scottish parliament, it ought to be able to deal with those regulatory issues. Under the Government's current proposals, if a Scot wants to start a Gaelic local television or radio station, permission will have to come from London. That does not seem to me to make any sense at all. We shall have to consider such issues very carefully in Committee. I shall certainly be putting forward some amendments. If we are to have a Scottish parliament, we on this side of the House want to make it work. I believe that broadcasting issues are something upon which the Scottish parliament should have a view.

Is there anything good in the Bill? I believe that it will destroy the base of power of the Labour Party in Scotland. I would rather not see that happen because, if it does, it could also mean the break-up of the Union. That would be a terrible price to pay. As my noble friend Lord Campbell of Croy said, further fundamental

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change is inevitable. The Scottish National Party would try to force through another referendum on independence. Faced with these proposals, it is the only logical position to take. I am concerned that this Bill will produce a parliament that does not work; that will fail to satisfy the aspirations of the Scots; and that, in many areas, will be resented by the English.

It could have been a better Bill, but the Government have neither properly acknowledged the West Lothian question nor offered any solutions. We face the danger of a federal United Kingdom. However, we have to deal with the Bill as it appears before us. We must seek to ensure that we attempt to improve the legislation as it goes through this House. We must also ensure that the Government address the serious issues which so far have not been given their proper due.

6.33 p.m.

Viscount Thurso: My Lords, I am not sure whether this is an interest, but I shall declare it in any event: I am most hopeful of being on the list for my party for the Highland region. I am, possibly, a little optimistic, but I hope to get into the Scottish parliament through that list. Batting, as it were, in 48th position out of 68, I shall not for a moment pretend that it is possible to deliver much in the way of an original thought or contribution. Therefore, perhaps I may confine my remarks to one rather personal observation and three specific points, which I shall raise at a later stage in the Bill's proceedings but which I should broadly like to mention tonight.

However, before I do so, I should like to say that, however many speakers we may have heard both today and yesterday, the quality of all of them has been very high. Indeed, I have enjoyed all of the interventions which I have either heard in the Chamber or which I have read in the Hansard report. We began with the noble Lord, Lord Sewel, who made an excellent exposition of the Bill's intentions. It seems to me that we have had marvellous moments of irony throughout the debate. One of them is the fact that, in this Government so dominated by ethnic Scots, it is an ethnic Englishman who introduces the Scotland Bill into your Lordships' House. Not for one moment do I doubt the commitment of the noble Lord, Lord Sewel, to Scotland. I know from personal exchanges with him that he is highly committed to the passage of the Bill and its objectives. Nevertheless, it is one of those nice little ironies that has arisen.

The noble Lord, Lord Mackay of Ardbrecknish, made his usual spirited canter through the subject. I noted that he has become a convert. That is wonderful. But, as my noble friend Lord Steel said, some convert! Nevertheless, it is nice to have the noble Lord on our side. I thought that my noble friend Lord Steel made a very constructive intervention, especially with regard to his experiences in Catalonia. Here I disagree with the noble Lord, Lord Beloff. As a Liberal Democrat, I always enjoy being teased by the noble Lord. However, as he said himself, he is firmly rooted in history and I like to look forward to the future. So I do not really mind what he says.

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There is another contribution to the debate that I feel I should mention; namely, that of the noble Lord, Lord Monro of Langholm, who let slip--that is the only way of putting it--that he could not tell the difference between a Liberal Democrat and a socialist. I find that quite extraordinary, because it is a pretty obvious and fundamental difference. I am sorry that the noble Lord is not in his place at present and I realise that now is not the time to discuss such matters. However, any time the noble Lord would like to discuss them, I am at his entire disposal.

When I returned home last night I sat down and reflected on what had been said in the debate and on what I might have to say today. While sitting there, I happened to look up at the wall and noticed two A4 portrait photographs. One of them was of my father and the other of my grandfather. As I looked at them I realised--and this, perhaps, is yet another moment of irony--that here was a true dynasty of people who believed wholly and totally in home rule. My grandfather has already been mentioned by my noble kinswoman Lady Linklater of Butterstone. Indeed, she quoted from a speech that he made in another place in 1932, parts of which I quoted in this House on 3rd July 1996 when we debated the constitution. He made a major contribution to the cause of promoting home rule for Scotland.

The portrait of my father is a wonderful photograph, which was taken about five years ago. It shows him looking relaxed and smiling as only he could. One of the major contributions that he made in your Lordships' House was his intervention in the proceedings on the Local Government etc. (Scotland) Act 1994 when he fought hard and long, but unfortunately without success, to prevent the creation of the unitary council in Inverness. Here I should like to refer to the speech made by the noble Lord, Lord Lang of Monkton. I do so because my father fought long and hard with him. During the debate yesterday the noble Lord said:

    "Devolution of power is not in itself an alien creed. To my Party it is a concept with which its philosophy is entirely comfortable. It is a means of defending individual liberty against centralisation and socialism, and it inspired many of our policies when in government".--[Official Report, 17/6/98; col. 1604.]

I have the greatest respect for the noble Lord, Lord Lang. I have respect for his ability, for his intelligence and for his integrity. I certainly respect his conviction. However, I totally disagree--even violently--with the whole tone of the noble Lord's intervention. I should like to refresh his memory. That part of his speech that I have just read to the House comes from someone who was a member of a government who were described to me earlier today as having been the most centralising governmental force since the Tudors.

I also remind the noble Lord that in centralising to Inverness all of the Highlands of Scotland, he created something which has been a complete disaster for Caithness, Sutherland, and the outer areas. However, it has worked for Inverness, as everyone said it would. All of the prophecies which my father made in your Lordships' House at the time of the passage of that

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legislation have come to pass. While I have great respect for the noble Lord, Lord Lang, I have seen how faulty his judgment is. I assume that his judgment in this case is equally faulty.

As I said, I feel as if my father and my grandfather are sitting on my shoulders as I address the question of home rule. It was they who toiled and did all the work but it is I who will enjoy the fruits of their labour. It is perhaps another irony that at the very moment when this hereditary dynasty of home rulers is to be extinguished--which I wholly support--what we all fought for should come to pass. But, more importantly, perhaps I was dipped in the font of home rule at birth. I am a "home ruler" by conviction. I wish to remind your Lordships of what I said in the debate of 3rd July 1996 because I believe that I expressed the matter then as well as I can. I said,

    "The majority of people in the country, if the discussions that I have had are anything to go by, seem to be largely apathetic towards all forms of government, both local and national, and have the feeling that they have little or no say in how they are governed. In short, the average person regards the process of government at all levels as failing to take account of their views and aspirations ... it is frustrating in that most citizens feel less and less able to participate, which has fostered a growing feeling of them and us--them who govern and us who suffer".--[Official Report, 3/7/96; col. 1529.]

I went on to explain how home rule is the beginning of the solution to that problem. Therefore I wholeheartedly welcome with open arms the thrust of this Bill. As I said, I am a "home ruler" by conviction.

I also said in that debate,

    "This great Parliament has been described as the mother of Parliaments. Mothers give birth. Let this great Parliament give birth to a child in Scotland. It will be as all children--ill-disciplined, gawky and awkward--but as it grows to adulthood it will become a worthy child, dutiful, respectful and honoured".--[Official Report, 3/7/96; col. 1531.]

We have the midwives on the Government Front Bench in the noble Lord, Lord Sewel, the noble and learned Lord, Lord Hardie, and the noble Baroness, Lady Ramsay of Cartvale. I wish them every success in bringing this baby out of the womb and into the world.

There are three specific points I wish to touch on. The first concerns Schedule 1 to the Bill which establishes constituencies. A theme I have mentioned in your Lordships' House on many occasions when talking of government, is the need to ensure that in areas of sparse population we look to geography and community as the guiding forces for constituencies and for local government as opposed to the number of people. I note that Orkney and Shetland--probably for those very reasons--are to be split into two constituencies. However, other constituencies which also cover large areas of land and are extremely difficult to get around, such as Caithness, Sutherland and Easter Ross, remain as one. When we discuss this matter in Committee I shall want to probe the Government's thinking on this matter and consider the possibility of reflecting on the size of constituencies.

My second point also relates to constituencies. I refer to a situation that worries me as it is a kind of catch-22 situation. Schedule 1 sets out the constituencies for the purposes of this Bill, but Clause 81 provides for changes

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to constituencies, applying the population formula for England to the new constituencies in the parliament in Scotland. The catch-22 seems to be that because we have representation now in Scotland we shall need less in England, and therefore the constituencies will be enlarged. But that in turn will reduce the number of MPs who will sit in Scotland. That is a complex clause and I may have misinterpreted it. If I have, that is marvellous.

The third point that concerns me relates to Clause 74 and tax-varying powers. We have the ability to raise or to reduce the basic rate by up to three percentage points. I am totally in favour of that. If we raise the tax by three percentage points because we wish to spend more money for whatever reason, we shall receive the complete Scottish block grant and our 3 per cent. But if on the other hand we decide that we would like to save for a rainy day, or we would like to be a little more generous to our citizens, and we reduce the tax by 1p, 2p or 3p, the only effect of that will be to return the money straight back to the central Treasury. That appears to me to guarantee that the tax will only ever be varied up rather than down. There is absolutely no point whatsoever in varying the tax down. When we discuss that matter in Committee, I shall wish to probe the Government's thinking in that regard.

I have spoken of my passion for home rule in Scotland. I have listened to the concerns of many noble Lords on the Conservative Benches. They are right to have some concerns. Any new venture is bound to be difficult. However, I approach this measure with a great sense of joy because I believe that Scotland is about to be liberated in the best possible way. For the first time since the Act of Union we shall become genuine, full members of the Union. We shall be able to take our place alongside England as equal partners with it. I believe this Bill will strengthen the Union. I have a great vision of Scotland free of shackles, able to do what it wishes to do and contributing fully to the Union. I believe that this Bill is a great step in that direction.

6.46 p.m.

Baroness Macleod of Borve: My Lords, this is an excellent Bill which is full of dreams for the future. Those dreams may, in the not too distant future, be turned into reality. I am grateful to noble Lords for their speeches this evening. The noble Lord, Lord Beloff, made a brilliant speech, although he had to admit that he was not a Scot. I do not think there was anything Scottish about his speech.

With my name it seems that I should take the opportunity to say a few words tonight. My words will be few as the hour is late. Although I am a quarter Scottish from my mother's side, the name "Borve" comes from the Outer Hebrides. There is a Borve on Skye, on Harris and on Lewis, which is halfway to Newfoundland. I want to state categorically--I hope no one will gainsay me--that there is no more beautiful place in the world than parts of Scotland. The people can be obstinate and they can be dour, but they can also be the most hospitable of hosts. My late husband and I fought the 1945 election in a constituency in the Outer Hebrides. The election was called when he was on

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leave. How thankful I am that he was not successful because in that day and age we seemed to spend our time in rowing boats going from one island to another, trying to secure the votes of the few people there. There were more sheep than people.

In my view, this Bill is tragic and, as far as I can make out, is not wanted by those who have had time to read it. It is tragic and unnecessary because for 300 years we have stood the test of time in a severe and changing world. The Government had to bring the Bill forward, as a result of--in my view very unwisely--including a promise in their manifesto that they would hold a referendum on this subject. Any of us who have been in politics in this country and who have been asked a question about the referendum by those involved know very well that nobody ever tells the truth; they very rarely say what they feel. We cannot go by a referendum.

Wales was made the subject of a referendum, and it is outstanding that the people of England were not given that assurance. Knowing the people of Scotland fairly well, I know that financial affairs will loom large in their thoughts and calculations when voting in the parliament. It was therefore interesting to read in yesterday's Hansard the report of the Minister's excellent speech (col. 1571), and his references to Clauses 61 to 68.

Much is made in the Bill of the judiciary, but more is made of the financial situation. That situation will be geared to the people of Scotland. However, from the results of the referendum and from other comments, they seem to think that we in England will match the enormous amount of money that we have given to the Scots in the past. I do not believe that that will come about. I believe that they will be asked to raise income through a tax of 3p, which will bring in £400 million, as and when they want to do so.

The judiciary is to have more members. They will certainly be required to administer what is looked upon as efficient and forward thinking. We are lucky to have the Lord Advocate in this House. He will have to create more judges, and that will be very welcome in Scotland. The Bill will need to be discussed clause by clause, until we in this Parliament are satisfied that it is the best that we can do for the country and for the people of Scotland.

I fought in the war with the Scottish, the Welsh, the Africans and the Australians. Like other noble Lords who work in this House, I fought for the "United" Kingdom. Long may she remain so.

6.53 p.m.

The Earl of Lauderdale: My Lords, I imagine other noble Lords will agree with me that the opportunity to be anywhere near the noble Baroness, Lady Macleod, whether socially or in the Chamber is in itself a privilege. I wish to take this opportunity of saying how much we all enormously appreciate the example that she sets of personal courage and charm beyond normal human expectation.

In the referendum I voted "Yes" to the first question and "No" to the second. I should have preferred a deliberative assembly. However, we have to take what

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we have been given. My belief was and has remained that a far better solution to Scottish aspirations, and to the problem of bringing Scottish local opinion to the notice of those who govern, would have been to re-vamp and upgrade the Convention of Scottish Local Authorities (COSLA). In my view that body is much nearer to the people than any MSP can ever be. It has tried and proven procedures which have worked over the years, and its members know all the snags.

The Holyrood parliament has yet to adopt its procedures after the Scottish Secretary has had a bevy of intellectuals, businessmen and others comb through the procedures of almost every constitution in the world to see what is both "modern" and "democratic".

When the Scottish parliament starts, it is vital that it is, and is seen to be, workable and workmanlike, and that its procedures are so effective that it can reach a common voice without an appalling amount of ordinary Scottish wrangling. Most noble Lords who live and work, or whose head offices and activities are, in Scotland will share my opinion, as they will if they have ever been exposed to sitting on the Scottish Grand Committee in the other place. That is a dour, hellish experience. One has to listen to fellow countrymen nitpicking on minor points of procedure for the sake of holding matters up.

My first fear is that the Scottish parliament will find that its procedures have not been seriously laid down in advance, that they have not been carefully thought out and worked out, as have our procedures here at Westminster through 500 years of experience. There will be new procedures of utterly diverse origin and they may very well not work at all. If that is so, and if the Holyrood parliament is seen to be in any way woolly or inconclusive, it will wreak enormous damage. That is one of several anxieties that I have.

The Bill before the House contains no procedure for a chamber for scrutiny. I was much taken by the suggestion put yesterday by the noble Lord, Lord Hughes, that in Scotland we might well adopt the Norwegian system whereby a number of MPs, or deputies, elect among themselves a body which is, as it were, corralled off and later treated as a senate with revising powers. When there is a clash between the two, they all vote together. I was interested to learn in the remarkable opening speech of the noble Baroness that the Norwegian procedure is common to several of the Scandinavian countries. I was unaware of that. It is an example of which we should take heed when the procedures of the Holyrood parliament are worked out and codified.

A second feature of this Bill alarms me. I refer to the fact that the constitutional requirement that the House of Commons should contain no fewer than 71 Scottish MPs is to be repealed. That is a disaster. At the end of the day the major things are still to be done here at Westminster; they will not be done in Edinburgh at any time.

That brings me to a nightmare that has haunted me of late. My nightmare is on two counts. The Holyrood parliament may well prove ineffective if it is a

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quarrelsome, argumentative assembly of people who argue half of the time about procedure, as has been the miserable experience of the Scottish Grand Committee. If the Holyrood parliament is even remotely like that, it will be a discredit and a disservice to all of us. It will never achieve any real business.

So there are two factors that concern me. There is to be no revising chamber under the Bill that is before us, and no procedure settled in advance, let alone based on the procedures of the former Scottish Estates or indeed on the experience of Westminster. To base procedures on what happens in America or anywhere else is quite extraordinarily irrelevant. There is no separation of powers here, and the American constitution is based on that. That constitution, though democratic, is no real guide to the kind of procedures that will be useful and worth while at Holyrood.

My fear about the Scottish parliament is not so much that it will be disruptive of the UK--and I shall come back to that in a moment--but that it will not be strong enough to do its job. We recently learnt that the Department of Trade and Industry in Whitehall had decided that Dounreay should be closed down.

Dounreay has been a terrific social success, establishing a great research establishment on the north coast of Scotland in what was almost a desert, with nothing but heather and sheep. It has made a vast difference to Scotland as a whole; it has brought bright and enterprising British people from all over the British Isles to work there. Very soon they fell in love--who wouldn't?--with the gorgeous girls of Caithness; they married and they brought up a new race of children in the north of Scotland, all thanks to Dounreay. For Whitehall to close that down is to close down a social experiment which has been of enormous benefit not only to Scotland but to Great Britain as a whole.

I have a second anxiety: that the Scottish parliament may not be strong enough to fight the Treasury should the Chancellor of the Exchequer proceed with plans which he has already announced heavily to tax the offshore industry. That industry was developed in the North Sea, based largely on Aberdeen, thanks to the work of Sir Maitland Mackie, the brother of the noble Lord, Lord Mackie of Benshie. The offshore industry has not only brought between 20,000 and 30,000 jobs to Scotland but it has developed all kinds of new technologies for deep sea drilling.

Now that the North Sea province is coming to an end, as all extractive industry does sooner or later, a new province is opening up in the Atlantic. Gas and oil are believed to exist 1,000 or 2,000 feet below the seabed in the Atlantic, beneath about 1,000 feet of stormy Atlantic sea. To drill down and explore those areas, let alone to develop them, will require an enormous assemblage of technology and economic resources. It will require some of the multinationals that we regard as big and independent to be as pygmies joining together to develop this enormous new frontier.

My fear is that if the Scottish parliament is not strong and effective enough to stand up to Whitehall, then punitive taxation of the offshore industry may well come

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about, and that would be a second big disaster looming. It is up to the Scottish parliament to fight both those dangers.

I said that I had a nightmare and it is in those two areas: that the Scottish parliament may not be strong or effective enough.

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