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However, I have some experience of what can happen with different tax rates and so forth. Certainly in the area of agriculture in Northern Ireland we had immense fun with that sort of thing. Can noble Lords imagine that going on between Scotland and England, with cattle carrying some subsidies and sheep carrying different ones, as happened on the island of Ireland? I see that my noble friend Lord Sanderson is beaming. When he had responsibility for agriculture in Scotland I am sure he would have liked to have those subsidies as well.

I conclude by thanking my noble friend Lord Forsyth for giving us the opportunity to celebrate what I believe has been an enormously successful union, and I am very proud to be a part of it—except possibly on some Saturdays. On certain sporting occasions I am tempted to cheer on the North Koreans at, say, Wembley. A noted politician once said that we in Scotland are “90-minute nationalists”. Once the game is over and the minor differences are gone, I am delighted, proud and very happy to serve in your Lordships’ House or elsewhere and to be friends with my colleagues all over the United Kingdom.

2.14 pm

Lord Teverson: My Lords, it seems to be par for the course to talk about one’s ancestry and pedigree in this House. I have great pride in the fact that I was born in Dagenham, which I suppose is best described as occupied Essex ever since Greater London took over that part of the world in the local government reforms of the 1970s. Because of that I have British citizenship. I also happen to have Irish citizenship, and of course European citizenship as well. But I

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want to move on to talk about one of the four Celtic nations that make up the United Kingdom of this union. It is where I moved to and participated in politics in the late 1980s and beginning of the 1990s: it is Cornwall. Cornwall is a nation, a duchy and, of course, a county as well. Its union with England goes back to the 10th century, but even after that it had a Stannary Parliament which to a degree still exists and has a little legal force, although it is not exactly a democratic organisation. Cornwall has its own language, which is recognised as a European minority language. I had the great privilege of representing Cornwall in the European Parliament during the 1990s.

When I first became involved in Cornwall, one of the great issues in the area was that of economic decline. In fact, like many of the other Celtic nations in the United Kingdom, it too had troubles with its traditional industries, those of fishing, farming and tin-mining. Many professionals and workers from that industry emigrated across the globe and throughout the empire in the 19th century, particularly to Canada and South Africa. That diaspora had a great reputation worldwide, and still does. Yet it was a time of great problems.

During the 1990s and into this century, through its own hard work and with the assistance of the European Commission and of Governments of both colours in terms of changing rules and boundaries and giving economic assistance, Cornwall has managed to move away from those difficulties and has become a successful part of the United Kingdom in terms of its economic performance. It has a combined university for the county, it boasts the Eden Project and, if one looks at the indicators that are probably being considered in Davos in terms of the height of economic attainment, Cornwall does now have a Jamie Oliver restaurant to add to its fame.

The point that has been made clear to me during the economic transformation that has started to really move forward over the past decade is that the concern, fear and resentment towards England I perceived when I began my political career—although it did not show itself in a strong movement towards regional independence—has, with increasing economic success, changed into a higher level of self-confidence within the community. With that increase in self-confidence there has been a change. No longer is there much of a drive for independence or growth in political parties like Mebyon Kernow or the Stannary Parliament. Rather, with increased self-confidence, Cornwall feels itself to be a much more equal partner with the rest of the south-west region and is able to hold its head high. No longer is there any of the inward and backward-looking behaviour that was the negative part of its great cultural and industrial heritage.

From experience of the fourth Celtic nation of the United Kingdom, we can learn two small lessons. The first is that with economic success and moving towards the right sort of governance, communities and nations have increased confidence in themselves and do not look to move on; they are happy to be partners within a broader political framework. Devolution has conferred on Scotland self-confidence

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and a sense of strengthened Scottish nationalism within the United Kingdom, which means that there is less likelihood of a split in the future.

If regional government and regional devolution are to have any chance of working in England, they need to relate to natural communities which see themselves as individual units. That is the case in Cornwall but it is not the case in many of the English regions that have been created bureaucratically but do not have public support. For devolution to move forward in England, which I believe is right, it has to have a democratic and popular mandate and its boundaries need to relate to natural communities; at the moment they do not.

2.20 pm

Viscount Trenchard: My Lords, I am most grateful to my noble friend Lord Forsyth of Drumlean for introducing this timely debate today and I wholly agree with everything he said in his excellent speech.

Although I have some Scottish antecedents, from both Aberdeenshire and the borders, I am predominantly English, although I have always considered myself more British than English. As an English Peer I feel most privileged to take part, especially as some 16 of the 28 Peers on the speakers list, or 17 if I include my noble friend Lord Jenkin, are in some sense or other Scottish.

Although I am not very Scottish, I have been a regular visitor to Scotland all my life. I have another rather tenuous connection with the subject of today’s debate in that I live in a house built by Sir Ralph Sadler, Queen Elizabeth’s ambassador to Scotland and sometime guardian of Mary, Queen of Scots. He was one of the architects of the Treaty of Leith, which laid the foundations for Scotland’s inheritance of the English throne mentioned by my noble friend Lord Forsyth.

I am not sure that I agree with the Chancellor of the Exchequer that,

My observation is that up and down the country there has been for some time now a greatly increased level of debate about these matters. I welcome the launch of the new £2 coin bearing the inscription, “United into one Kingdom”, but think that the Government should have done more to celebrate the anniversary of the Act of Union, and as the Chancellor said,

But he is trying to have it both ways because he goes on to say that we are,

It is, of course, a fact that England and Scotland are side by side but I believe that since the Act of Union we are one nation, comprising two peoples, or indeed three or four peoples, and that is what has made us stronger. The noble Lord, Lord Teverson, might wish to include the Cornish as an additional distinct people. But if we are to revert to being two nations or more, by definition we would be apart and, as the Chancellor says, weaker. I believe that Scotland’s

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contribution to the United Kingdom has been, and is, far bigger than one based on its proportion of the population of the country.

I lived in Japan for many years and noticed the many Scots among those who have built up and led the Asian operations of British businesses across all sectors. The Scottish contribution to our Armed Forces cannot be overstated, but I fear that the amalgamation of such great and proud regiments as the Black Watch and the Argyll and Sutherland Highlanders into a single amorphous infantry regiment called the Royal Regiment of Scotland will harm morale and regimental spirit, making a difficult recruiting situation even worse.

Frankly, it beggars belief that Mr Brown is attempting to wear the mantle of protector of the union. Amazingly, the Chancellor praises my noble friend Lady Thatcher for rightly defending the union even when not expedient to do so. But unlike the Chancellor, my noble friend did not choose to defend things depending on expediency—rather, it was on whether she believed in them.

Noble Lords will remember that the previous Government consistently opposed devolution of the kind that this Government have introduced, correctly predicting that it would weaken the union and increase pressure for separation. The constitutional vandalism wrought by this Government will have consequences which will be very difficult for their successors to sort out. Surely what the Government should have done to respond to growing demands for Scottish votes for Scottish laws was to introduce legislation providing that Members of Parliament representing Scottish constituencies would meet in Edinburgh on certain days to debate and decide devolved matters, and attend here at Westminster on other days to debate and decide reserved matters. Such a grand committee of Scottish Members of Parliament could even have been called the Scottish Parliament. Such a system would have been entirely logical because Members of Parliament for English constituencies would continue to meet here on the days when their Scottish colleagues met in Edinburgh to handle devolved business. I think that this is also what my noble friend Lord Lang of Monkton proposed. Support in Wales for devolution was only from one-quarter of the electorate, but if there was really a strong demand for Welsh votes for Welsh laws, a similar arrangement could be introduced for Wales.

I know that we are where we are but I believe that in the longer term we have two alternatives. One is to retain the form of a unitary state but respond to the demand for devolved decision-making in some way such as that which I have suggested. The other alternative is to correct the illogical asymmetry of the Government’s constitutional settlement, which is obviously not at all settled, by equalising the degree of devolution between Scotland, Wales and Northern Ireland and doing something similar for England involving the creation of an English Parliament.

The Chancellor claimed that,

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But the Trojan horse for separation is the Scottish Parliament itself in the form created by this Government. Those writers who the Chancellor claims are anti-unionist are simply recognising the political difficulty of adopting the first of the two alternatives that we face in solving the mess. They recognise that the second alternative, the creation of a symmetric federal system, is a much easier road to follow. However difficult it may seem and however many complications will need to be addressed, we should follow the more difficult road and preserve the unity of this great United Kingdom which has gained, and continues to gain, so much from its cultural richness and the special contributions of all its people.

It certainly appears that Scots are already seriously disillusioned with the Scottish Parliament in its present form, as only 49 per cent of the electorate bothered to vote at the 2003 elections. The noble Lord, Lord Steel of Aikwood, claimed that only 10 per cent of Scots are in favour of the abolition of the Scottish Parliament. However, I should be interested to know how Scots would respond to the question: would you support the reform of the Scottish Parliament so that it would in future consist of the Members of Parliament for Scottish constituencies meeting in Edinburgh to consider devolved matters?

I look forward to the speeches of other noble Lords and in particular to hearing how the noble and learned Lord the Lord Chancellor intends to deal with the West Lothian question, which really must now be addressed.

2.28 pm

The Earl of Caithness: My Lords, I too thank my noble friend Lord Forsyth of Drumlean for introducing this debate. However, I believe that it should have been a government Motion to celebrate 300 years of the union. I agree with my noble friend that it is very disappointing, but typical, that the Government have done so little to celebrate one of the great success stories of modern Europe.

There have always been, and always will be, friendship as well as tensions between Scotland and England, just as there are within Scotland and within England. Scotland is dominated by the central belt whereas in England it is London and the south-east that is the powerhouse. Opinions change over time and the pendulum swings between the advantages and disadvantages of any union between the two countries. John, Earl of Caithness in 1289 supported the proposed marriage of Margaret, the Maid of Norway and heiress to the crown of Scotland, to Prince Edward, heir to the throne of England. However, his son Magnus supported Robert the Bruce and signed the Declaration of Arbroath. Alexander, Earl of Caithness voted against the Treaty of Union in 1706, which was very unpopular throughout Scotland. He was the last surviving Peer of that old Scottish Parliament. Only six years after the Treaty of Union in 1713, the Earl of Findlater moved a Motion for a Bill to break the union which was defeated in this House by only four votes, all of them proxies.

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So restlessness on both sides is nothing new, but this time it is set against a very different background due to what has happened since the end of the last war. In Europe we are extremely fortunate that we have enjoyed such an unprecedented period of peace. One of the ingredients of the union from the English point of view was to bind together with the Scots against the French. When the present situation is taken for granted and there is no common enemy that is often the time when friends reassess and question their relationship. The empire has gone. When I was growing up I lived in Britain; that did not stop me shouting for Scotland at Murrayfield—whereas now the UK is just another European country. Many in Scotland believe that it has moved from being a partner in a global imperial enterprise to being a region in a member state and part of their resentment of the EU is a sense that it is part of their downgrading.

Then, of course, there is devolution. The West Lothian question has been well aired so I will not comment further on that. But I would like to pick up a point that my noble friend Lord Forsyth made. He told us that the Chancellor, Gordon Brown, said that English votes for English laws would be a Trojan horse for separation. That is not what he said in 1980. He wrote:

The Chancellor has clearly reneged on his beliefs.

We have heard that Scotland receives more from the taxpayer than some parts of England. On the other hand there is concern in Scotland that the English continue to have an attitude of arrogant superiority which was exemplified by William Attwood's pamphlet in 1704, The Superiority and Direct Dominion of the Imperial Crown of England over the Crown and Kingdom of Scotland.

So what of the future? There is no question that Scotland can be independent, even perhaps if it allows Orkney and Shetland to go back to Norway. There are smaller and less prosperous countries in Europe. The two questions the Scots have to determine are whether they would be better off or whether they would be better governed by being independent. If the evidence from the performance of the Scottish Executive is anything to go by, the answer to the second is probably no for those of us who live in the far north. I think that we did better under a Westminster Government than we would under a Scottish one dominated by the central belt. So far as local government is concerned, it will barely exist in Caithness from May, for the Scottish Executive have built on the disastrous reform that we made when in government with the creation of the Highland Council by centralising even more power in Inverness.

Will Scotland be better off? Again I have to answer no to that question on the evidence to date. From the perspective of Scotland as a nation, I believe that each of the constituent parts of the United Kingdom can exercise greater influence in the world and achieve

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more together than would ever be the case if they were separate nations. When it comes to the vital concerns of terrorism and defence, there is no doubt that sitting at the top table is very much in Scotland's interest. That is very important in all the international fora and particularly in the EU. It might well be that how we handle this within the union needs to be reassessed for there is a strong perception north of the Border that in our negotiations within Europe the Scottish voice is not being taken enough into account.

To the noble Earl, Lord Mar and Kellie, I would say that the reality of working in Brussels is being able to form a blocking minority when one's interests are jeopardised. From 1 January this year, 91 or more votes out of a total of 345 will be enough to block a proposal. At present the UK has 29 votes and thus only needs to ally with another 62. If Scotland was to be independent and accepted as a member of the EU, then it is likely to have only seven votes whereas England and Wales might well stay on 29 but at worst reduce to 27. It would be very much harder for Scotland to put together a blocking minority and it would stand a greater chance of having alien legislation forced upon it.

The other perspective of being better off is purely the cash one. An independent Scotland could choose one of two options. It could follow the Irish model which, as we have heard, has become good only by following a low-tax, deregulatory, free-market and pro-business agenda; or it could follow the Scandinavian model, which is what the Scottish Executive lean to, of high taxes and socialist intervention.

The main driver in the Scottish economy is the financial service sector, which contributes one-fifth to the gross value added. As a proportion of the total economy only the United States has a larger financial service share than Scotland. Since 1999 this sector’s GVA has averaged 3.1 per cent. However, only 20 per cent of its output is for the Scottish market; of the rest 90 percent is for the English consumer. Even with this success story the annual GVA in Scotland has been less than that of the UK in five out of the last seven years and on a par with it for the other two. It has never in this period exceeded the UK’s. This underlines the importance of the financial sector to the future prosperity of Scotland. Separation from England would pose a whole new challenge to it and London would become a powerful and aggressive competitor.

The question for the English is, do they really care? Whatever the Scots did to help create a prosperous union, an empire and more recently to protect our freedoms in the last century, is history. The Scots are increasingly seen as an expensive addition in an unequal treaty. Should there be independence for Scotland the political landscape of England would change hugely. The Labour Party would clearly be a loser but some would shed no tears over that. More worryingly there would be increased tensions between the affluent south-east and other areas. The arguments that are being deployed now about the Scots would resurface for another area of England.

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The Act of Union may not have merged England and Scotland into a single country but it has lasted 300 years and brought many benefits to both countries. There is no comparison to it anywhere in the world and it has been a very great achievement. It is now being questioned in a way not seen for hundreds of years. Devolution is but a slippery slope and has not been the success it was intended to be. It is unfinished business as more powers have been sought for the Scottish Executive. The logic of the next step, independence, is that it does not need positive argument. If the union is to persist it must be argued for now. It needs to work better and more fairly if we are to keep something as successful as this union, but I would rather try than let it go by default or lack of interest.

2.37 pm

Lord Maclennan of Rogart: My Lords, we draw towards the end of a most fascinating debate, in which personal and ancestral experience has been brought to bear on our deliberations in a quite unusual way. It is fascinating to me to follow my near neighbour the noble Earl, Lord Caithness, and to be able to agree with him at least in the general proposition that perceptions of the union have fluctuated since it was finally implemented on 1 May 1707, although the concept of union was a lot earlier than that.

I have to say in parenthesis that, despite my neighbourly outlook, I totally disagree with the noble Earl’s view about how the north highlands is being deprived of local government. I would attribute the blame squarely to the former Secretary of State for Scotland, the noble Lord, Lord Lang of Monkton, who set up the Highland Regional Council. But let me not be diverted into such byways, as they may be perceived.

The differences of opinion go back centuries. In the 16th century, we had two distinguished Scottish historians at the University of Paris. One was Hector Boece, who wrote the tendentious account of the history of Scotland that provided Shakespeare with the mythological account of the story of Macbeth on which he relied heavily. At the same, time there was a fascinating account of the history of the British Isles—or Greater Britain as it was called, albeit in Latin—written by one John Major, a unionist of his day, followed in some respects by his perhaps better-remembered successor of the same name.

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