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House of Lords

Wednesday 24 February 2016

3 pm

Prayers—read by the Lord Bishop of Bristol.

Pensions: British Citizens Overseas


3.07 pm

Asked by Baroness Benjamin

To ask Her Majesty’s Government what assessment they have made of the impact of the frozen pensions policy on the choices of people who would like to move abroad or stay overseas during their retirement years.

The Minister of State, Department for Work and Pensions (Baroness Altmann) (Con): My Lords, the Government have a clear position which has remained consistent for around 70 years: UK state pensions are payable worldwide and uprated abroad only where we have a legal requirement to do so. The Government have made no assessment of the impact of this policy on pensioners’ choices of residence.

Baroness Benjamin (LD): My Lords, I thank the Minister for that Answer. Last November, the right honourable Oliver Letwin met with an international consortium of British pensioners and the chair of the All-Party Group on Frozen British Pensions and he committed that the Government would examine the case for partial uprating by commissioning cross-departmental research into the likely costs and savings—which was great news. Will the Minister please give an update on that work? Will we see the outcome before the Government bring in partial uprating regulations that freeze overseas pensions yet again for another year, continuing this injustice?

Baroness Altmann: My Lords, the Department for Work and Pensions has not made any estimates of the costs of this uprating. External sources have suggested that the costs of partial uprating are estimated at around £200 million a year by 2020.

Baroness Hooper (Con): My Lords, can my noble friend tell us what will happen to the some 400,000 pensioners living in European Union countries should the UK vote to leave the European Union? Will their pensions be frozen, either partially or totally?

Baroness Altmann: The issue of what will happen if this country leaves the European Union has not yet been decided, but if there are reciprocal agreements and legal obligations to uprate, pensions will be uprated.

Lord Morris of Handsworth (Lab): My Lords, will the Minister assure the House that those members of the Gurkha regiment who are entitled to a pension are in receipt of their entitlement?

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Baroness Altmann: My Lords, I have no information at this point on specific measures for the Gurkhas, but I will write to the noble Lord on that matter.

Lord Swinfen (Con): My Lords, what is the estimated saving to Her Majesty’s Government of pensioners living abroad not using the National Health Service and other government services?

Baroness Altmann: The speculated potential savings, were people to move back to this country, have not been costed, but the costs of full uprating for the state pension in countries where it is currently not uprated would be more than £500 million a year.

Baroness Smith of Basildon (Lab): My Lords, because of accelerated equalisation, many women who had,

“made careful financial plans to ensure their small savings could last them until state pension age … now find that they will be left for up to two years with nothing to live on - despite doing what the Government urges everyone to do and plan ahead for their future”.

Those are not my words. Does the Minister still agree with the comments that I took off her personal website today, and can she tell the House what she and other Ministers are doing to alleviate that situation?

Baroness Altmann: My Lords, the maximum increase that any woman will face as a result of the 2011 Act changes was reduced from two years to 18 months.

Lord Howell of Guildford (Con): My Lords, I see that the International Consortium of British Pensioners estimates the partial uprating—uprating from the present rates received—as £31.5 million. The Minister just gave a figure of £200 million. Can she explain the difference between the two?

Baroness Altmann: The figures that I have been given from outside estimates are that the cost would be around £200 million a year by 2020. It is possible that the noble Lord is citing something for one year only.

Lord Harris of Haringey (Lab): My Lords, I do not think that the Minister has fully answered two questions that have been put to her. The first was by the noble Baroness, Lady Benjamin, who specifically asked about a commitment made on behalf of the Government by Oliver Letwin. Will she tell us the status of that commitment now? The second question was from my noble friend the Leader of the Opposition, who specifically asked about statements on the Minister’s own personal website. Does she resile from the statements on her own website?

Baroness Altmann: I have no information about any work that is going on in other departments. I can only report that in the Department for Work and Pensions no estimates are being made about the costs of uprating frozen pensions.

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Baroness Gardner of Parkes (Con): Is the Minister able to tell us how many countries pay from their own funds? For example, I understand that Australia ups the pension of anyone from the UK living in Australia, and the Australian people pay whatever would have been the extra. I think the same thing applies in the United States. Can she tell us how many countries adopt that policy and also say whether there has been any estimate of what it would cost if all those pensioners living overseas came back and used everything here instead of abroad?

Baroness Altmann: My noble friend referred to Australia, which is an interesting example of one of the potential issues with uprating. The Australian pension system is means tested. Therefore, the estimate is that over 25% of any payment made to uprate overseas state pensions in Australia would merely go to the Australian Treasury.

Lord Kinnock (Lab): “Three times for a Welshman”, my Lords. May I ask for a third time: does the Minister resile from the statements that she made on her own website?

Baroness Altmann: My Lords, the statement on my website referred to the position before the 2011 Act when women were facing up to two extra years. That was brought down during the 2011 Act to 18 months.

National Health Service: Workforce Race Equality Standard


3.13 pm

Asked by Baroness Hussein-Ece

To ask Her Majesty’s Government what progress has been made to improve race equality at senior management and board level in the National Health Service since the introduction of the National Health Service Workforce Race Equality Standard.

The Parliamentary Under-Secretary of State, Department of Health (Lord Prior of Brampton) (Con): My Lords, It is outrageous that we have so few people from BME backgrounds in senior management and on NHS boards. We need to take action to improve the experiences of BME staff and their representation.

NHS Trusts submitted their baseline data against the workforce race equality standard indicators in July 2015, and NHS England will publish an analysis of those data in April. Reports will then be published annually, outlining the progress that NHS organisations are making.

Baroness Hussein-Ece (LD): I thank the noble Lord for that reply. Can he say why, since the report by Roger Kline on the,

“snowy white peaks of the NHS”,

progress in ensuring that senior management and trust boards are more equal has been so disappointing? It does not reflect the diverse workforce and local

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populations. Will he ensure that trusts walk the walk and use NHS Executive Search rather than commercial recruitment agencies which all too often, apart from a few exceptions, present all-white shortlists, normally with no people with disabilities, drawn from a very narrow pool for senior positions at enormous financial cost to the health service?

Lord Prior of Brampton: My Lords, I shall give the House a few figures. Some 22% of all staff in the NHS are from BME or minority ethnic backgrounds, 28% of all doctors and 40% of hospital doctors. Yet only 3% of medical directors are from BME backgrounds and 7% are in senior management roles. We have two chief executives and six chairmen from BME backgrounds out of 250 trusts. So the performance across the NHS is, as the noble Baroness has mentioned, absolutely terrible and we have to take some serious action to change it. The noble Baroness has given one example but I think that there are many others. The NHS Workforce Race Equality Standard is a new initiative which, by introducing some transparency into the health service, will improve matters.

Lord Patel of Bradford (Lab): My Lords, I congratulate the noble Lord because I know that, as chair of the WRES committee, he is very committed to this issue. But does he agree that the targets set will be incredibly difficult to meet in the space of a couple of years? It will mean making changes to tackle the huge inequality that has existed in the NHS for a number of years. I suggest that one way of achieving this is to ask CQC inspectors, when they carry out their inspections, to target specifically the WRES and look for action plans that show improvement year on year. If the improvement is not there, no trust should be getting a “good” on the CQC’s well-led domain without addressing this specific issue.

Lord Prior of Brampton: My Lords, the whole purpose of the WRES is to shine a light on the performance of each trust in the country. The CQC will be including it in its well-led domain from March of this year and has already begun to incorporate it into its inspection processes. As the noble Lord knows, in Bradford where he is the chairman of a trust, we have a huge amount of progress to make.

Baroness Walmsley (LD): My Lords, what is being done to ensure fair career progression further down the ladder? Unless we get people moving up, we will never have BME medical directors. Further, is he prepared to comment on diversity among the personnel in the recruitment agencies themselves that work for the NHS?

Lord Prior of Brampton: My Lords, the noble Baroness makes a good point. In a way the WRES focuses very much on the more senior grades in the NHS, but we need to focus on progression from band 4 into 5 and 6 as well. It is an important point that needs to be taken on board. As far as recruitment is concerned, it is very important that we have people from BME backgrounds on the recruitment panels. Getting the

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right people is crucial, and if that means going to external recruitment agencies when we have to, we should not rule that out.

Lord Tebbit (Con): My Lords, can my noble friend say whether or not appointments in the National Health Service will continue to be made on the basis of the ability to undertake the duties of that post?

Lord Prior of Brampton: My Lords, the ability to undertake the duties of a post is absolutely fundamental. The tragedy is that so few people from BME backgrounds are encouraged to put their names forward. It is more important that we get the actual recruitment process right.

Lord Hunt of Kings Heath (Lab): My Lords, the Minister should be commended on his approach to this issue. Has he seen the survey undertaken in 2015 which shows that when looking at the national bodies of the NHS such as NHS Executive Search, Monitor and the NHS Trust Development Authority, none of their boards had any BME representation at all? Given that those appointments are made by Ministers, can the Minister tell us what they are doing to rectify that?

Lord Prior of Brampton: My Lords, I am not sure that the noble Lord is quite right. I can certainly think of two people from BME backgrounds on the board of NHS England. We can influence this, but it is important that the appointment process is independent of political bias. We have to rely on the chairs and the boards of these arm’s-length bodies to make those appointments.

The Earl of Listowel (CB): My Lords, I am stretching the point rather, but given the increasing awareness that not only the education needs but the health needs of looked-after children and care leavers have been neglected in the past, might the Minister consider looking at how many care leavers and care-experienced adults are represented at senior levels of governance in the health service to ensure that these young people and adults get better support in the future?

Lord Prior of Brampton: I think we are probably straying quite a long way from the Question, but I will certainly consider what the noble Earl said.

Baroness Howells of St Davids (Lab): My Lords, I would like to put this on record so that some of the answers to the Question do not keep coming up. No self-respecting person, black or white, will accept a job that they are not capable of. No person who served the National Health Service from any Caribbean country has ever been sacked because of lack of ability. They have suffered racism, but they contributed immeasurably in the days when there were very few white people entering the service. When the Queen gave out her medals to mark the 60th year of her reign, the black community was left out. I appealed on their behalf and they were given medals. There were articles in the newspapers that showed that most of the women who went into the health service as nurses were overqualified.

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Lord Prior of Brampton: My Lords, I agree entirely with the noble Baroness’s sentiments. If it was not for the huge number of people with black and minority ethnic backgrounds, the NHS would fall over tomorrow.

Sport: Doping and Illegal Gambling


3.22 pm

Asked by Lord Addington

To ask Her Majesty’s Government what steps they are taking to protect the integrity of sporting events from both doping and illegal gambling domestically and internationally.

The Earl of Courtown (Con): My Lords, the Government are fully committed to protecting the integrity of sporting events at all levels. This was reflected in the Government’s recently published sport strategy. By working closely with bodies such as UK Anti-Doping and the Gambling Commission, not only are we taking steps to protect integrity within the United Kingdom, we are playing our part in tackling these threats through co-ordinated international efforts.

Lord Addington (LD): I thank the noble Earl for that Answer. Will he give me a commitment that, in the light of the recent sports policy, which suggests that the whole of government should come behind sport, all the British sporting bodies, particularly those that receive government funds, will make sure that they internally have the highest levels of integrity possible? Without a good example, our hand to correct these problems in the wider world will be greatly weakened.

The Earl of Courtown: My Lords, the noble Lord makes a very good point, but, through the different sport groups’ respective international federations, our national governing bodies of sport are required to be compliant with the World Anti-Doping Code. In addition, UK Anti-Doping is responsible for ensuring that all the UK governing bodies are compliant with the code and Her Majesty’s Government’s national anti-doping policy.

Lord Stevenson of Balmacara (Lab): My Lords, cheating, by whatever means, has no place in sport, partly because the casualties are mainly the clean sportsmen and sportswomen. Cheating is inimical to the very essence of sport and its philosophy of team spirit, honesty and loyalty. However, cheating is not illegal in the UK. Why is this the case? Last year the Government said that they would consider and review the situation. What is the current position?

The Earl of Courtown: My Lords, the noble Lord refers to criminalisation of doping in sport. As he mentioned, a review has been in progress and it has just been finally put together. One must also remember, however, that criminalisation of doping is not a panacea

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that will suddenly make all doping disappear. The noble Lord will no doubt be aware that France, for example, where criminalisation does take place, is on the watch list of countries that have had problems in the past.

Lord Holmes of Richmond (Con): Does my noble friend agree that UK Anti-Doping is doing excellent work to ensure that the Great British teams that compete in this summer’s Olympic and Paralympic Games in Rio will be not just successful teams but clean teams?

The Earl of Courtown: My Lords, I could not agree more. My noble friend makes a very good point. UK Anti-Doping’s “100% me” education programme has just celebrated its 10th anniversary. This has had workshops tailored to each stage of an athlete’s pathway, right from grass roots up to the top professional level.

Lord Foster of Bath (LD): My Lords, our country’s Sport and Sports Betting Integrity Action Plan calls for international co-operation. Only last night, Transparency International published its excellent report, Global Corruption Report: Sport. Among its many recommendations, it says that one way forward would be for countries to sign up to the Council of Europe’s Convention on the Manipulation of Sports Competitions. Many other European countries have already signed. Will the Minister explain why this country has not and when it is likely to do so?

The Earl of Courtown: My Lords, I am grateful to the noble Lord for raising this point. Her Majesty’s Government are committed to combating match fixing. The recently published sports strategy set this out. We will sign and ratify the Council of Europe’s match-fixing convention and, in so doing, will review the existing legislation framework. My right honourable friend the Prime Minister is hosting an international anti-corruption summit later this year, at which sport will play a key part.

Lord Naseby (Con): Is my noble friend aware that many of the leading clubs in the United Kingdom, such as the All England club for tennis and the MCC for cricket—I declare a hurried interest in both—have worked on this for years and continue to do so, but the change in the market is the increase in betting on specific, very short-term instances. Has the time not come for Her Majesty’s Government to call in the betting industry to make sure that these are absolutely genuine bets and not, frankly, fixed bets?

The Earl of Courtown: My Lords, my noble friend makes a good point, especially relating to gambling. We keep this situation under continual review. There have been questions over whether Section 42 of the Gambling Act is sufficient for our needs. A review by the last Government found it to be effective. Only two months ago, somebody was prosecuted under Section 42.

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Lord Lea of Crondall (Lab): My Lords, is it not obvious that this is a global question that needs a solution on a global basis by some sort of global regulatory body?

The Earl of Courtown: My Lords, there is a global body: WADA. The noble Lord will be very glad to hear that it pays a lot of attention to what we do over here.

Lord Smith of Hindhead (Con): My Lords, the illegal gambling industry was estimated in 2013 to be worth upwards of £320 billion worldwide. Last year, receipts to Her Majesty’s Treasury from betting and gaming in the UK just exceeded £2 billion. Has an estimate ever been made of how much revenue is lost to the Treasury each year from illegal gambling in the UK?

The Earl of Courtown: My noble friend makes a very good point relating to illegal gambling. I missed the first part of his question, but I will write to him about the second part, in particular, because I do not have that information to hand.

Local Authorities: Fossil Fuel Holdings


3.29 pm

Asked by Baroness Miller of Chilthorne Domer

To ask Her Majesty’s Government why on 17 February they changed the guidance to local authorities regarding procurement of, and investment in, fossil fuel holdings.

The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Baroness Williams of Trafford) (Con): My Lords, on 17 February the Government published new procurement guidance for public authorities reminding them of existing policy that has been in place for many years under successive Governments. The guidance makes it clear that boycotts in public procurement are inappropriate, other than where formal legal sanctions, embargos and restrictions have been put in place by the UK Government. It does not mention procurement of, or investment in, fossil fuels or any other specific type of holding. Guidance on local government pension investments is a separate matter. The Government will be issuing guidance in due course on social, environmental and ethical considerations in council pension investment decisions.

Baroness Miller of Chilthorne Domer (LD): I thank the Minister for making that plain, but the diktat—or should I say the reminder?—from the Cabinet Office on 17 February has made local authorities very nervous about the new regulations coming into force. Will she champion the role of local democracy in investment and confirm that—subject to the administrating authorities publishing their social, environmental and corporate governance policies, and subject to a decent

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return on investment for the people whose pensions they are responsible for—they will be free to divest or invest as they see fit?

Baroness Williams of Trafford: My Lords, there may have been some confusion in the press over the difference between the pension investment guidance and the procurement guidance. There will shortly be guidance on pension investment, but I think what has made local authorities slightly uneasy is the slight confusion in the press. On divestment from pension funds, it is the first duty of a pension fund to provide the best returns for investors, as I said yesterday at the Dispatch Box.

Lord Beecham (Lab): My Lords, is the Minister aware that the Government have long since abandoned their pretensions to be the greenest Government ever? What business do a Government of self-proclaimed localists—for whom ethics appears to be a county in the south-east of England—have in instructing local authorities or their pension funds as to what fuel they should buy or invest in? Is there any area of local government responsibility that they are prepared to leave to the discretion of democratically elected councils?

Baroness Williams of Trafford: My Lords, this is subject to consultation. The Government are not directing local authorities to do anything other than maximise the returns on investments and provide best value from procurement.

Baroness Jones of Moulsecoomb (GP): My Lords, is the Minister aware that, in the past five years, the value of four of the biggest coal companies in the United States has fallen by 99.6% and that many firms have gone out of business? Is it perhaps time for the Government to give local authorities constructive advice on how to divest themselves of fossil fuel holdings that could well crash in the next few years?

Baroness Williams of Trafford: My Lords, at the risk of repeating myself—I have said this several times over the last couple of days—if a local authority invests in a company whose share price is dropping significantly, it might be wise, in order to maximise the return for its investors, to invest in another company whose share price is increasing. That is a decision for it to make about its pension funds.

Baroness Kramer (LD): My Lords, is the Minister aware that many pension funds regard it as their responsibility to have the best long-term returns, and therefore see sustainability of investments as absolutely key? She seems to be recommending that they go with short-term behaviour in the marketplace—behaviour that the Chancellor is frantically trying to change and which responsible pension funds have long since rejected, which is why many have ethical standards in their investment decisions.

Baroness Williams of Trafford: My Lords, local authorities should make decisions based on long-term and short-term investments in their portfolio and should keep an eye on both to ensure the best performance of those pension funds.

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Lord Lawson of Blaby (Con): My Lords, may I thank my noble friend for saying quite clearly that trustees of pension funds have a single duty, which is to do what is best for the pensioners for whom they are responsible? The political considerations paraded today are neither here nor there. This is a complicated issue and scene, and it is for the pension fund trustees to do what is best for their pensioners.

Baroness Williams of Trafford: My noble friend is absolutely right. I am glad that he said it is complicated because, as a humble junior Minister, I find it quite complicated. Maximising the returns for the investors is the prime responsibility of any pension fund.

Baroness Janke (LD): My Lords, is the Minister aware that many local authorities, while getting a good return on pension funds, disinvest from industries such as the tobacco industry where they have policies on pursuing smoking cessation and good health, which smoking clearly threatens? If she is clarifying what she says is a confusing situation, will she make it clear what counts as being political? Is it investing in renewables? Is it disinvesting from tobacco? Is it in fact obeying government instructions, or is the local authority given some licence to make its own judgments?

Baroness Williams of Trafford: My Lords, what is confusing is to confuse the issue of procurement with that of pension fund investment. I think that is where the confusion started. It has not been helped by the media. That is why I was trying to clarify the two aspects of the Question. Local authorities will have all sorts of things to consider when making their pension investments. They will have an obligation to public health. They will have an obligation to help people cut down on excessive alcohol consumption, take more exercise, use less petrol and perhaps walk their children to school, but that does not take away from the prime purpose for which pension funds are designed, which is to maximise the returns for their investors.

Baroness McIntosh of Pickering (Con): My Lords, does my noble friend agree that nothing could be less complicated but more important than maintaining the beauty of North Yorkshire, including the moors, for future generations to enjoy? Should it not be for the people of North Yorkshire, rather than pension funds based in London, to decide on the future of that beautiful county?

Baroness Williams of Trafford: My Lords, the people of North Yorkshire elect the local authorities of North Yorkshire, which will then make decisions on the pension funds of North Yorkshire. Actually, from start to finish, it is a democratic process.

European Union Referendum (Conduct) Regulations 2016

Motion to Approve

3.37 pm

Moved by Lord Bridges of Headley

That the draft regulations laid before the House on 25 January be approved.

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Relevant document: 24th Report from the Secondary Legislation Scrutiny Committee. Considered in Grand Committee on 22 February.

Motion agreed.

National Assembly for Wales (Representation of the People) (Amendment) Order 2016

Police and Crime Commissioner Elections (Amendment) Order 2016

National Assembly for Wales (Representation of the People) (Amendment) (No. 2) Order 2016

Motions to Approve

3.37 pm

Moved by Baroness Chisholm of Owlpen

That the draft orders laid before the House on 17 December 2015 and 27 January be approved.

Considered in Grand Committee on 22 February.

Motions agreed.

Pharmacy (Premises Standards, Information Obligations, etc.) Order 2016

Motion to Approve

3.37 pm

Moved by Lord Prior of Brampton

That the draft order laid before the House on 21 January be approved.

Considered in Grand Committee on 22 February.

Motion agreed.

State Pension (Amendment) Regulations 2016

Social Security Benefits Up-rating Order 2016

Motions to Approve

3.38 pm

Moved by Baroness Altmann

That the draft regulations and draft order laid before the House on 18 and 25 January be approved.

Considered in Grand Committee on 22 February.

Motions agreed.

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Scotland’s Fiscal Framework


3.38 pm

The Parliamentary Under-Secretary of State, Scotland Office (Lord Dunlop) (Con): My Lords, with the leave of the House I will now repeat a Statement made in the other place by my right honourable friend the Secretary of State for Scotland. The Statement is as follows.

“Mr Speaker, with permission I would like to make a Statement about the new fiscal framework for Scotland, which was agreed yesterday by the United Kingdom and Scottish Governments.

I begin by paying tribute to everyone who has worked so hard to arrive at this point: my right honourable friend the Chief Secretary and the Deputy First Minister, John Swinney, who have led these negotiations with skill, and the dedicated teams of officials from Her Majesty’s Treasury and the Scottish Government who have worked tirelessly on behalf of their respective Governments. They can all be proud of what has been achieved and the service they have given.

This is a truly historic deal that will pave the way for the Scottish Parliament to become one of the most powerful and accountable devolved parliaments in the world. We have respected all the principles set out in the cross-party Smith agreement and delivered a deal that is fair for Scotland and fair for the whole United Kingdom. As the noble Lord, Lord Smith, himself said yesterday evening:

‘When the Smith Agreement was passed to the Prime Minister and First Minister, both gave their word that they would deliver it into law - they have met that promise in full’.

Scotland’s two Governments will give more details in the coming days, but I would like to set out a few key elements of the deal.

The Scottish Government will retain all the revenue from the taxes that are being devolved or assigned, including around £12 billion of income tax and around £5 billion of VAT. The block grant to the Scottish Government will be adjusted to reflect the devolution and assignment of further taxes and the devolution of further spending responsibilities. We have kept our commitment to retain the Barnett formula, extending this to cover areas of devolved welfare. For tax, we will use the UK Government’s preferred funding model. Under this model, the Scottish Government hold all Scotland-specific risks in relation to devolved and assigned taxes, just like they do for devolved spending under the Barnett formula. That is fair to Scotland and fair to the rest of the UK.

However, for a transitional period covering the next Scottish Parliament, the Governments have agreed to share these Scotland-specific risks as the powers are implemented. Specifically, the Scottish Government will hold the economic risks while the UK Government will hold the population risks. So the Scottish Government will not receive a penny less than Barnett funding over the course of the spending review simply due to different population growth. By the end of 2021, a review of the framework will be informed by an independent report so that we can ensure we are continuing to deliver

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Smith in full, with the Scottish Government responsible for the full range of opportunities and risks associated with their new responsibilities.

We have also agreed that the Scottish Government will have additional new borrowing powers. This will ensure that the Scottish Government can manage their budget effectively and invest up to £3 billion in vital infrastructure. In line with the recommendation of the Smith agreement, we will provide the Scottish Government with a £200 million share to set up the new powers that they will control.

The Government have delivered more powers to the Scottish people, ensuring that they will have one of the most powerful devolved parliaments in the world and the economic and national security that comes with being part of our United Kingdom. That is what we have agreed and what we have delivered in full. Now that we have agreed this historic devolution deal, the conversation must move on to how these new powers are to be used.

The Scottish Government will have extensive powers over tax, welfare and spending. They will have control over income tax and be able to change the rates and thresholds. They will be able to create new benefits. The permanence of the Scottish Parliament is also put beyond any doubt.

The people of Scotland voted for these new powers and deserve to hear how parties in Scotland will use them—new powers that, if used well, can grow Scotland’s economy and population, and bring greater opportunity and prosperity. Now that we have agreed this fiscal framework, I hope and trust that this House and the other place will welcome it while of course subjecting it to full scrutiny. I commend this Statement to the House”.

3.43 pm

Lord McAvoy (Lab): My Lords, I thank the Minister for repeating the Statement on the fiscal framework and for the pivotal role that he has played in bringing about yesterday’s arrangement. First, we welcome unequivocally the news that an agreement has been reached on the fiscal framework. Thanks should rightly be extended to both Governments, the Deputy First Minister, the Chief Secretary to the Treasury and the Secretary of State for Scotland, as well as for a late intervention by the Chancellor. We congratulate and thank them all on working so hard to secure an arrangement, along with the officials of both Governments.

Yesterday’s agreement marks the removal of the final obstacle to the transfer of significant and substantial new powers to Scotland. As the Minister has already indicated, the noble Lord, Lord Smith, has said that the agreement,

“sees the recommendations of the Smith Commission delivered in full”.

In his Statement, the Secretary of State committed himself to publishing details of the agreement by the end of the week. Given that your Lordships’ House will be debating the fiscal and welfare elements of the Scotland Bill on Monday, we very much welcome this commitment. On that point, can the Minister briefly say whether he has an update on whether Committee rules will be applied for the final day on Report, as was suggested in Committee on Monday?

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My honourable friend the shadow Secretary of State has, from the outset, called for greater transparency on the way these deals are negotiated. What this process highlights is that future intergovernmental relationships must be improved to make these powers work for Scotland. We all know that the major stumbling block was the indexation method used for the block grant adjustment. Under the compromise reached, there will be a five-year transitional period, which will cover the full term of a Scottish Parliament. Towards the end of this period, an independent review and recommendation will be published that will form the basis of a more permanent solution. We all hope and demand that agreement is reached. We would also welcome any further clarity that the Minister can provide on the transitional period. The Secretary of State has said that the new income tax powers will be available by April 2017, but the Deputy First Minister seems to have cast some doubt on that.

In the remainder of my reply, I will focus on the review. I welcome the fact that it will be fully independent, but can the Minister answer some very specific questions at this stage? How will the review body be chosen? Can he confirm that it will be done in a spirit of consensus with the full agreement of both Governments? What criteria will be used to determine its independence? This independent review is a guarantor for the United Kingdom and Scotland of the fairness of the final agreement and should assuage any doubts or problems about accepting it.

I close by saying once again how welcome this agreement is, and I hope that Monday will give us an opportunity to look at the issues in more detail. The priority for us now is to facilitate the passage of the Scotland Bill. It will be a historic date, and I believe it is now up to your Lordships’ House to deliver the Scotland Bill without delay.

Lord Stephen (LD): My Lords, I thank the Minister for his Statement. It is certainly very good news that an agreement has been reached between the UK Government and Scottish Government on the fiscal framework. This agreement should allow the Scotland Bill to reach the statute book ahead of the Scottish Parliament elections and will introduce a very powerful range of new policy-making and tax powers to Scotland, which have been long supported by the Liberal Democrats on the journey to home rule. All of this delivers on the vow made by the UK party leaders and implements in full the recommendations of the all-party Smith commission.

However, I am sure there will be concern from all sides of this Chamber that we have not yet seen the full, detailed fiscal framework. Some of the arguments from the negotiations—which were of course all conducted very firmly behind closed doors, underneath the veil of secrecy—are still being repeated, most notably by the Scottish First Minister and others on her side of the argument. Nicola Sturgeon claims to have been fighting to defend the Scottish Government from cuts over a five-year period—first, she said of £10 billion, then £7 billion, then £3 billion and then, finally, £2.5 billion. She now claims that this threat—we will never know how real and present a threat it ever was—no longer exists.

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What is certain is that under an independent Scotland, or if there was full fiscal autonomy, the cuts that Scotland would now be facing would be £10 billion—not over a five-year period, but each and every year. There would be no safety net or protection from the UK Government under independence. That would mean a cut over five years not of £10 billion, £7 billion, £3 billion or £2.5 billion, but of £50 billion under independence or full fiscal autonomy. What is also certain is that the Scottish Government have accepted the Treasury model for calculating the grant adjustment for each of the first five years.

It is worth quoting Brian Taylor, the BBC’s political editor in Scotland. He asks “who has given ground” in the negotiations and states:

“The Scottish government has had to compromise. They have gained less than they wanted in terms of cash to assist the implementation of the new powers, including welfare powers. They have been obliged to concede that there will be independent scrutiny of Scotland’s fiscal position in the run up to the proposed review which will take place in six years time ... the Scottish government has accepted that it will be, technically, the Treasury model which is used for operating the fiscal framework … Already Liberal Democrats are saying that is an error by Scottish ministers - that it will be difficult to escape the Treasury model, even the reformed version, once it is in place. That it might, in short, prove costly in the longer term”.

So it is clear that this is not the beginning of the end, nor even the end of the beginning. Rather, it all remains to be fought once again in 2021. It is inconceivable that the SNP will not use the opportunity for further grievance and battling with the UK Government.

The political editor of the Courier wrote this morning:

“One dampener to put on this otherwise joyous occasion is the question of what happens in five years when we revisit the terms of the deal? Will we be locked in some kind of 2016 battle re-enactment? Will it be even bloodier if one side decides it doesn’t like the now-agreed system? It’s possible the battles have just begun”.

I trust that the Minister agrees that we should now grasp the opportunity to establish a federal fiscal commission to look independently and objectively at the issues of financing not only Scotland but other parts of the United Kingdom in a fair and well-informed way. We do not have to wait until 2021.

The spin of one Government against the other in these negotiations has not been helpful, and it will, I predict, be repeated in 2021. However, the Minister is right: the big issue is now delivering the new powers and for Scotland to make proper use of them.

In conclusion, and crucial to this Chamber, I hope that the Minister can give us a cast-iron assurance that the detail of the fiscal framework will be published in time for proper scrutiny ahead of Report next Monday. I suspect that he will readily give us such a reassurance, as he is acutely aware of the strength of feeling on this issue on all sides of the Chamber. He has also been very directly involved in the negotiations and has put a considerable amount of his own acumen and effort into reaching resolution. He has also put a great deal of effort into dealing with the representations and frustrations of the Members of this House, which have also been considerable. For all of that, he should be considerably thanked.

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Lord Dunlop: My Lords, I thank the noble Lords, Lord McAvoy and Lord Stephen, for their support and their response to the Statement. This deal provides an opportunity to move the debate in Scotland on from process to policy, as the Secretary of State for Scotland said in the House of Commons earlier. The noble Lord, Lord McAvoy, talked about the rules for Report, and that is a matter to be discussed through the usual channels.

Turning directly to the point about time to scrutinise the deal, again, as the Secretary of State made clear to the House of Commons, my strong expectation is that the agreement will be published tomorrow and available to noble Lords. I will write to all Peers making it available to them. I also take this opportunity to offer an all-Peers briefing tomorrow with the Treasury.

The issue of intergovernmental relations was raised. I know that this is a matter of great interest; the Constitution Committee has issued a report on it. The noble Lord, Lord Smith, said:

“There should be no doubt that this was a highly complex package of measures to agree. It is difficult to imagine a bigger test of inter-governmental relationships … This provides an excellent basis for constructive engagement between the governments long into the future”.

That is what gives me hope that it will be possible to reach agreement when we come to the review in five years’ time. We must use the time in between to build those intergovernmental working relationships. The fact that this review will be informed by an independent report will help in that process. To address directly what the noble Lord, Lord McAvoy, asked, this will be a review without prejudice and a review by agreement, and it will not be imposed.

The noble Lord, Lord Stephen, talked about full fiscal autonomy, and I have to say that I look forward to the day when the SNP tries to reconcile the no-detriment principle with separation.

3.55 pm

Lord Forsyth of Drumlean (Con): My Lords, I thank the Minister for enabling us to have the fiscal framework before we complete consideration of the Bill. To paraphrase Robert Burns, now that the First Minister, Nicola Sturgeon, has been bought and sold with English gold, could my noble friend give an assurance that the same generosity that has been given to Scotland will be applied to England, to the English regions, to Northern Ireland and to Wales? In particular, could he confirm the briefing that was given to the Times by a “Treasury insider” that, had this settlement been in place since 1999, Scotland would have got all the money from Barnett—that is, 20% more per head than in England—plus an additional £6 billion? If so, surely the rest of the United Kingdom is entitled to be treated with similar generosity.

When the Minister says that this is a transitional arrangement for five years that will be subject to agreement, is not another way of putting that there will be a veto on the part of the Scottish Government to prevent any change? Does he really think that this delivers a deal that is fair to all parts of the United Kingdom?

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Lord Dunlop: On that last point, absolutely I believe that this is a deal that is fair to all parts of the United Kingdom. That is what the Smith agreement was all about—being fair to Scotland and fair to the UK as a whole. That is what this deal delivers.

To address directly the first of the two points that the noble Lord raises—and this was a point that came up in the House of Commons—on the cost of the deal to England, Wales and Northern Ireland, there is no additional cost to the taxpayers of England, Wales and Northern Ireland. This deal produces the same outcome as Barnett set out in the comprehensive spending review. There is no adverse impact on UK taxpayers.

On the noble Lord’s other issue—I forget what it was; oh yes, it was the point about transition—the Scotland Bill, that delivers the Smith agreement, is a significant act of devolution. It represents a new world and an opportunity for a new politics in Scotland, one in which blame can no longer be heaped at Westminster’s door. It is absolutely right to have a review on how the far-reaching arrangements are working in practice to ensure that, as my right honourable friend says, they are fair, transparent and effective in line with the Smith agreement.

Lord Foulkes of Cumnock (Lab): While I join in the welcome given to the Statement and the agreement, is the Minister aware that at this very moment HMRC offices in Scotland are being closed and thousands of people put on the dole? Is not this a stupid thing to do at a time when there are going to be more responsibilities on revenue and customs in Scotland?

Lord Dunlop: I assure the noble Lord that we are very confident that the delivery of these powers will go ahead as intended.

Lord Selkirk of Douglas (Con): In view of the fact that I asked the second Question yesterday, I feel entitled to give the Minister warm congratulations on his part in securing this agreement on the fiscal framework. Does not this pave the way for the debate in Scotland to move forwards and focus fully on how the new and extensive powers should be used?

Lord Dunlop: I thank my noble friend for his words. We are months away from elections to the Holyrood Parliament and, as I said earlier, the deal opens the way to make sure that that debate is on the right terms—about how each of the political parties competing in that election will use those powers, and not the perpetual debate about what those powers are.

Lord McCluskey (CB): At the risk of mixing my metaphors, although they will be well understood by all Members of this House, have we not, for the duration of this Bill, been burying our heads, ostrich-like, in the sand, while turning a blind eye to the elephant in the room? Did we awaken yesterday from our slumber to kick a hornets’ nest into the long grass where we hope that the English will not notice it and the Welsh will be ignored? I shall translate that for those who have not followed this debate. The elephant in the

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room is, of course, the Barnett formula. The hornets’ nest is also the Barnett formula because if anyone disturbs the Barnett formula, the hornets will fly out. The blind eye is the decision by tame Scottish politicians, supported by the UK Government, to continue Barnett without discussion of its inequities or its notorious unfairness, particularly to Wales. The long grass is the five or six-year period. The question simply is this: will the documents to be published now or in the next five years show clearly the extent to which the rest of the UK is contributing towards this expenditure by the Scottish Government?

Lord Dunlop: As I said earlier in answer to another question, there is no additional cost to taxpayers in other parts of the United Kingdom. We have had many debates in this House about the Barnett formula. There are many former Secretaries of State who, when they had the opportunity to get rid of the Barnett formula, did not do so. Indeed, some of those Secretaries of State take great pride in arguing for more resources for Scotland. They were very effective at doing it, and I pay tribute to them for that. However, when proposing a move away from the Barnett formula, with the idea that there is some easy solution that would do away with the hard negotiation that is required with the Scottish Government, I am at a loss to know why we would expect the SNP to fight Scotland’s corner any less strongly than former Secretaries of State did.

Lord McConnell of Glenscorrodale (Lab): My Lords, given that the Prime Minister was able to publish the details of a far more complicated deal with the European Union when he made his Statement to the House of Commons on Monday, why is the full fiscal framework not in front of this House this afternoon? I do not understand why in the light of that the Government cannot be more specific about what will happen in five years’ time if agreement is not reached on this independent review. What will be the status quo at that time should an agreement not be reached?

Lord Dunlop: As I said, today is the final day of the Scottish Budget. That is why we do not have the fully published document today. There are a few minor technical and implementation issues from the agreement that need to be finalised. However, I have given a commitment to the House, and my strong expectation is that that agreement will be published tomorrow.

Lord Tebbit (Con): My Lords, will there be anywhere a cash limit upon the amount of money which English taxpayers will be required by this agreement to pass across the border for the benefit of Scottish consumers?

Lord Dunlop: I can only repeat what I said earlier: there is no additional cost to the taxpayers of England, Wales and Northern Ireland.

Lord Beith (LD): My Lords, while there is general support in the north-east of England for Scottish devolution and its progress to date, does the Minister recognise that there will be real resentment if it becomes apparent over time that there is substantially more

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money available for public services on the Scottish side of the border than on the English side and that that resentment will undermine English support for the maintenance of the United Kingdom, which would be very unwelcome if it happened?

Lord Dunlop: I absolutely understand what the noble Lord is saying. That is why we have sought a deal that is fair to Scotland and to the rest of the UK.

Lord Lang of Monkton (Con): My Lords, I compliment my noble friend on his modesty on leaving out of the Statement the one line in which the Secretary of State for Scotland in another place complimented him on his invaluable contribution to these matters. I welcome the fact that the conclusion of the negotiations has been reached, at least to the extent that it now enables the legislation to pass into law once it has finished its progress through this House and, at long last, bring the Scottish Government to a degree of accountability for their actions before the Scottish people. My noble friend referred to the review to take place in five years’ time. Can he confirm that when that review is produced by this independent body, it will be implemented without any further interruption or interference by either the Scottish Government or the UK Government?

Lord Dunlop: Once the review is complete, it will be for the two Governments to reach an agreement. However, I need to say to my noble friend that this is a very significant act of devolution. In future, more than 50% of the Scottish budget will be financed from taxes that are raised in Scotland, and that is a major development.

Lord Anderson of Swansea (Lab): My Lords, with the current concentration on Scotland, there is a danger that Wales will be sidelined. Perhaps we too should have had a referendum. Is the Minister aware that Cardiff University has just produced research for the Welsh Government suggesting that Wales will lose out massively as a result of the Chancellor’s personal tax allowance changes? Will we be compensated for that?

Lord Dunlop: Obviously discussions are going on between the UK Government and the Welsh Government about the fiscal arrangements for Wales. I am sure, as this deal has been successfully concluded, that they will be successfully concluded as well.

Lord Higgins (Con): My Lords, the Statement concludes by saying that the fiscal framework should be subject to full scrutiny. How is that to be achieved in your Lordships’ House when the Scotland Bill has already reached Report stage and we will be operating under the restrictions that we always do on Report and at Third Reading? Should those restrictions not be removed, given the situation that we are now in? Secondly, the perpetuation of the Barnett formula means that the injustice between England and Scotland is going to be perpetuated as well. That cannot possibly be regarded as fair.

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Lord Dunlop: I think I have covered the rules of Report in an earlier answer. As I say, with the funding arrangements we have sought to strike a balance that enables these powers to be transferred to the Scottish Parliament while respecting the “taxpayer fairness” principle that applies across the rest of the UK.

Baroness Janke (LD): My Lords, in the light of what others have said, along with the fact that the Barnett formula is seen to be extremely unjust and unfair to other parts of the UK, will an analysis be produced of the impact of the new fiscal arrangements in Scotland on the other parts of the UK? Many local authorities are now suffering such dire cuts that public services are in severe danger of being lost in many parts of England, to my knowledge. With this announcement, there ought be a proper analysis of what impact it will have on local services in England and the rest of the UK.

Lord Dunlop: The review will look at how the funding arrangement is operating against the Smith agreement. I remind the House, because this is often forgotten, that the Smith agreement says that it should,

“aim to bring about a durable but responsive democratic constitutional settlement, which maintains Scotland’s place in the UK and enhances mutual cooperation and partnership working”,

and should,

“not cause detriment to the UK as a whole nor to any of its constituent parts”.

That is something that the review in five years’ time is going to have to take into account.

Baroness O'Neill of Bengarve (CB): My Lords—

Baroness Goldie (Con): My Lords—

The Lord Privy Seal (Baroness Stowell of Beeston) (Con): My Lords, it is the turn of the Cross-Benches, and then I suggest that we go to my noble friend Lady Goldie.

Baroness O'Neill of Bengarve (CB): My Lords, is the implication of this agreement that the Barnett formula is, as it were, the acquis communautaire which provides the baseline against which fairness is judged?

Lord Dunlop: During this transitional period, the protection that is put in place ensures that what was the case with regard to the numbers in the comprehensive spending review will be delivered over this period.

Baroness Goldie (Con): My Lords, I, too, commend my noble friend Lord Dunlop for his perseverance, stoicism and patience in bringing these important negotiations to a conclusion. Does he consider that the real clout to be delivered to Scottish politics by the Bill and this fiscal framework agreement is to relish the prospect of a very reluctant SNP Government being compelled to accept fiscal and economic responsibility for their political decision-making, and that one of the most important components of any review will not be what happens in this place, the other

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place or in the Scottish Parliament but will be the views and expressions of the Scottish electorate, who may be suffering from the impost of some of the Scottish Government’s policies?

Lord Dunlop: I very much agree with my noble friend. The whole purpose behind this is that the Scottish Government should be held fiscally accountable for the decisions they take so that they should be able to reap the rewards of the good decisions they take and bear the risks and costs of their bad decisions.

Lord Elder (Lab): My Lords, on that last point, the Calman commission, of which I was a member, tried to find a way to ensure that the success of the economy in Scotland led to an increase of government funds and tried to tie in revenue for the Scottish Government to the success of the Scottish economy. The Statement appears to be saying that whatever goes on in the background, it is all down to Barnett and that however the numbers are made up, it ends up being Barnett. In what substantive terms is that a change?

Lord Dunlop: As the Statement made clear, if the Scottish economy grows more slowly than the UK economy as a whole, that risk will be borne by the Scottish Government.

Lord Kirkwood of Kirkhope (LD): My Lords, can the Minister help us by expanding a little on set-up costs; he mentioned a figure of £200 million. Would that apply to the departmental expenditure limit from the DWP on the costs of the administration of the new social security powers that will be available to the Scottish Government in the future?

Lord Dunlop: The figure I mentioned is a one-off implementation cost to transfer the powers over and the systems that go with them. It is not an ongoing cost.

Lord Elton (Con): My Lords, I leave policy to others better qualified than myself, but process is important. So that my noble friend shall not forget the intense interest on this and other sides of the House in that process and the ability of this House to scrutinise what will be put before it, I remind him that a simple procedure and a way of satisfying that would be to take parts of the Bill in the same order as they were in Committee, and that when we get to Parts 2 and 3, the Bill should be recommitted to Committee for those two parts.

Lord Dunlop: I thank my noble friend but I cannot commit to what he asks. We have already moved a Motion to consider on Report the Bill in the same order in which we considered it in Committee, which was precisely to allow time for this agreement to be reached and published, and to allow your Lordships’ House to scrutinise it.

Lord Berkeley (Lab): My Lords, in answer to a previous question the Minister rather proudly announced that 50% of the revenue under the new arrangement

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would come from the Scottish taxpayer. Does that mean that the rest of the revenue will come as a subsidy from the UK Government?

Lord Dunlop: No. It has always been the case—right from the start of these discussions—that a block grant would continue. However, we are providing for more of the budget to be financed from the tax revenues raised in Scotland.

Lord Sutherland of Houndwood (CB): My Lords, I live on the other side of the border from my noble colleague Lord Beith but not far from the border. I share his perception from that side of the border of the impact of not talking about Barnett. Will the review’s terms of reference include looking at the consequences of retaining the Barnett formula?

Lord Dunlop: As I said earlier, this is an open review and it does not establish a default position. It will be for the Governments to set the terms of reference and the remit, and those will be decided in due course.

Scotland Bill

Report (1st Day)

4.15 pm

Clause 1: Permanence of the Scottish Parliament and Scottish Government

Amendment 1

Moved by Lord Forsyth of Drumlean

1: Clause 1, page 1, line 9, after “are” insert “recognised as”

Lord Forsyth of Drumlean (Con): My Lords, we had quite a good discussion about this in Committee. This amendment, together with Amendments 4 and 5 in my name, is centred on the question of the extent to which we wish to maintain the sovereignty of this United Kingdom Parliament and the extent to which we wish to litter our legislation with declaratory statements that have no meaning whatever in order to make political capital on the part of the Government or someone else.

Regarding the Statement delivered a few moments ago, at first I thought that my noble friend had misread it when he referred to “Scotland’s two Governments”. Scotland has a United Kingdom Government and a devolved Scottish Government, but this use of language, which is designed to appease the separatists, is now being included in our legislation. Amendment 1 would simply put back into the Bill the original drafting that the Government presented to the House of Commons. The wording proposed in my amendment was perfectly satisfactory to the Government because it reflected the Government’s position, but the wording was changed to meet an amendment put forward by, I think, the Scottish nationalists.

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There is a great irony here. My amendment is about the authority and nature of the United Kingdom’s constitutional arrangements. I—perhaps rather naively—thought that the Scottish nationalists were in favour of breaking up those arrangements, and I did not really understand why a Conservative and unionist Government would wish to help them in that process. At present, line 9 on page 1 of the Bill reads:

“The Scottish Parliament and the Scottish Government are a permanent part of the United Kingdom’s constitutional arrangements”.

My amendment would simply put back the words “recognised as” so that the Bill read, “The Scottish Parliament and the Scottish Government are recognised as a permanent part of the United Kingdom’s constitutional arrangements”. If the words “recognised as” are included, that implies that there is another body that recognises that—that body being the United Kingdom Parliament. However, the statement currently in the Bill as amended by the nationalists in the other place flies in the face of our constitutional tradition that no Parliament can bind its successors. It also flies in the face of the Government’s own rule that legislation should not be used for declaratory purposes.

We had indeed a very long debate about this in Committee, but I have looked in vain for any amendments from the Government to address any of the arguments that were put forward. The Constitution Committee produced a very serious report. The noble and learned Lord, Lord Hope of Craighead, spoke at great length. There were a number of contributions, but all of them have been ignored. They have all been ignored because the Government’s mantra is, “We have to implement what the Smith commission report indicated and there can be no departure from it”. But, of course, this clause is a departure from the commission’s proposals.

My Amendment 4 provides that, on page 1, line 17, we should leave out “Scotland” and insert “the United Kingdom”. As currently drafted, the Bill provides:

“In view of that commitment it is declared that the Scottish Parliament and the Scottish Government are not to be abolished except on the basis of a decision of the people of Scotland voting in a referendum”.

My amendment would make it a decision of the people of the United Kingdom voting in a referendum, because we are still a United Kingdom and, indeed, the Scottish people have only very recently voted overwhelmingly to achieve that.

I thought that my noble friend would accept my amendment in Committee—I realised that he would have to go away and think about it—but perhaps he will now accept my Amendment 5, which provides:

“Nothing in this section alters the sovereignty of the United Kingdom Parliament”.

What has become of us that a Conservative and unionist Government are making declaratory legislation on the face of a Bill but are not prepared to accept as an amendment the words:

“Nothing in this section alters the sovereignty of the United Kingdom Parliament”?

No doubt there will be an opportunity for us to discuss the fiscal framework when we get the fiscal framework, but, looking at the Statement that has

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been made, where we have given the Scottish Parliament a veto on the terms by which it is financed—we have given that away—I have to say to my noble friend that we appear to be engaged in a long-term process of appeasement which undermines the authority of the United Kingdom Parliament. These amendments are an attempt, in at least a declaratory form, to set the record straight. I beg to move.

Lord Hope of Craighead (CB): My Lords, I am as disappointed as the noble Lord, Lord Forsyth, that some of the points that were raised—indeed, all the points that were raised—in Committee on Clause 1 have met with no response from the Government by way of amendment. My amendment in this group is Amendment 2, which is directed to the wording of the new Section 63A(3). I am repeating points that I made in Committee which were designed to achieve greater clarity. In some respects, the need for greater clarity is revealed by the amendment that the noble Lord, Lord Cormack, has tabled and, indeed, by the comments of the noble Lord, Lord Forsyth, just a moment ago.

There were two particular points in new subsection (3) to which I drew attention last time and to which I draw attention yet again. The first is the phrase,

“a decision of the people of Scotland”.

The first question is: what kind of decision? What majority, if any? Is it to be by simple majority or something else? Merely to use the phrase “a decision” does not tell us what the mechanism is to be to record that decision in a way that would have effect. The second is the phrase, “the people of Scotland”. Is the referendum to be confined to people who are in Scotland, or are any people who can claim they are of Scotland to be allowed to participate in the referendum?

My amendment seeks to clarify those matters by saying that the,

“referendum has been held in Scotland”;

and, secondly, that the decision is to be that of,

“a majority of those voting”—

in other words, a simple majority only.

Unless those points are tidied up and greater clarity is achieved, the uncertainty which I suggested lurked within the current wording of the subsection will remain. I hope very much that the Minister will feel able to reflect yet again on the need for clarity. It is a feature in various parts of the Bill that a great deal of clarity has been achieved. It is disappointing that, in the constitutional part of the Bill—Part 1, which has very great significance—the clarity which is present in other parts of the Bill is not being achieved. It is for that reason that I have come back yet again on Report with the points that I made earlier, in the hope that they will still receive attention.

Lord Cormack (Con): My Lords, Amendment 3 is in my name. I moved a similar amendment in Committee and expressed the hope, as did the noble and learned Lord, Lord Hope, and my noble friend Lord Forsyth of Drumlean, that there would be some response from the Government. I do not think any one of us is suggesting that our individual solutions are perfect, but clarity is certainly needed. We need to reflect,

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particularly this afternoon, having heard a Statement, to which we will doubtless return on Monday, that is fraught with danger for the future of the United Kingdom. It is tremendously important in that context that the supremacy of the United Kingdom Parliament should be specifically acknowledged in one way or another.

Where I differ from the noble and learned Lord, Lord Hope, is that I do not want the ultimate decision to be made in a referendum, if it comes—I hope it will not, but it might—to the abolition of the Scottish Parliament. The Scottish Parliament was the creation of the United Kingdom Parliament. If it is to be abolished at any time—I reiterate my hope and belief that it will not be—it is crucial that the final word should be with the United Kingdom Parliament.

It may well be that part of such a process would be a referendum. I do not particularly like referenda, but they are now part of our constitutional system and, like them or not, we all have to accept that. But I believe fundamentally in parliamentary democracy. Therefore, it is crucial that the ultimate decision should be made in Parliament and should be made in the elected House. Of course your Lordships’ House should have a constructive part to play. Of course it should scrutinise any legislation that is placed before Parliament. But ultimately, this should be the decision of the elected House.

I am conscious that small majorities can sometimes provoke great wrath and dissension, so I have made a suggestion in my amendment and it is here for noble Lords to see. There would have to be,

“a two-thirds majority in a vote of the House of Commons in which 75 per cent of the members elected by Scottish constituencies voted for abolition”.

I do not put that before noble Lords as the ultimate panacea, but something along those lines would go a long way to reassure those of us who are concerned for the long-term future of the United Kingdom. I am sure that everyone in your Lordships’ House at least shares that concern. I made similar points in Committee and expressed the hope that the Minister would reflect and that we would see the results of his reflection when we came to Report, but there is no sign of that. It is a great pity, because if we truly believe in the United Kingdom, it follows, as night follows day, that we believe in the supremacy of the United Kingdom Parliament. There has to be something in this Bill, either along the lines of the amendment moved by my noble friend Lord Forsyth or of mine, as well as taking up some of the points made by the noble and learned Lord, Lord Hope. It is just not good enough to leave the Bill as it is.

In all that has been going on over the past few months, there is an element of the paying of Danegeld. Those who pay Danegeld rarely get value for money, and I think we should bear that carefully in mind.

4.30 pm

Lord Norton of Louth (Con): My Lords, I have added my name to Amendment 2, with that of the noble and learned Lord, Lord Hope of Craighead. It seeks to amend the clause without affecting subsections (1) and (2). I have also tabled Amendment 6, which goes

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further and replaces the existing clause with a new clause. This seeks to address concerns raised not only by me but by other noble Lords in Committee.

The justification for Clause 1, reiterated by my noble and learned friend Lord Keen in Committee, as we have heard again this afternoon, is that it delivers on the terms of the Smith commission report. That, I submit, is not a solid defence for two reasons. First, I suggest that it is ultra vires. It falls outside the terms of reference of the commission and does not devolve further powers to the Scottish Parliament. Is my noble and learned friend arguing that the Government’s commitment to implement the commission recommendations encompassed whatever it recommended, regardless of the commission’s terms of reference? If we are to proceed with this clause, we have to do so on the basis of the Minister conceding that the Government, in making such a commitment, were acting irresponsibly.

Secondly, the recommendation does not lend itself to a legislative proposition and therefore should not find embodiment in a Bill. There are other ways to achieve it. As I have emphasised, the Cabinet Office Guide to Making Legislation states that Bills should contain only legislative propositions. Subsection (1), as the Minister has conceded, is a political statement. In respect of the guidance, he argued in Committee that one could have exceptions to such generalities. He offered an example that could be described as germane to the issue, but it is more than 300 years old and thus predates Cabinet Office guidance.

The defence that the Government are following precisely the Smith commission recommendations is undermined by subsection (3), which qualifies subsection (1)—the Minister conceded in Committee that it injects an element of conditionality—and is the product of the Government’s own thinking on the matter. The Minister thinks that subsection (3) reinforces rather than undermines the commitment in subsection (1), but the key point is that the Government are prepared to depart from the precise recommendations of the Smith commission.

The clause is inherently problematic. There are two fundamental problems, one raised by several noble Lords in Committee and the other touched on, especially by my noble friend Lord Lothian. The clause states that the Scottish Parliament is permanent and will not be abolished unless there is a referendum in Scotland. In so doing, as was made clear in Committee, it raises questions about sovereignty. Does the clause provide an element of entrenchment? If not, and the Minister emphasised in Committee that,

“this Parliament is sovereign, and it cannot disclaim that sovereignty”,—[

Official Report

, 8/12/15; col. 1470.]

what is the point of the exercise? In effect, my noble and learned friend was saying that it is a political statement and the provision can be changed by Parliament. In other words, permanence cannot be guaranteed. If that is the case, the clause offers a misleading statement. If it is not the case, it undermines or calls into question the doctrine of parliamentary sovereignty. That point was made strongly in Committee by my noble friends Lord Lothian and Lord Forsyth of Drumlean.

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The other core problem was embodied in the comments of my noble friend Lord Lothian when he said that,

“the legislation would set a whole lot of other constitutional hares running”.—[

Official Report

, 8/12/15; col. 1452.]

What are the implications for other legislative or quasi-legislative bodies established by statute? If not declared to be permanent, what is their status? Are they to be deemed any less permanent than the Scottish Parliament? My noble and learned friend did not address this in Committee. We cannot view the clause in isolation.

If we are to proceed with this clause, as the Government appear determined to do, we should at least seek to render it less problematic than it is with the present wording. The noble and learned Lord, Lord Hope of Craighead, made the point that the word “permanent” was, as he put it, perhaps not very cleverly chosen. There may be a way to soften it to render it compatible with well-understood constitutional principles.

The way to achieve this was suggested by the noble Lord, Lord Kerr of Kinlochard. I took his suggestion in framing my proposed new clause. Section 1(1) of the Scotland Act 1998 established the Scottish Parliament and Section 44 established the Scottish Executive. My amendment would provide that those provisions shall not be repealed without a referendum of electors in Scotland, with the electorate being the same as that provided in the Referendums (Scotland and Wales) Act 1997. Given that there was a referendum in 1998 on establishing the Scottish Parliament, this would provide that another referendum would be necessary before it is abolished.

The advantage of the proposed new clause is that it avoids the constitutional problems generated by the existing clause. It embodies no political statement but is confined to a provision of law—this does change the law—and is based on the continued existence and permanence of the Scottish Parliament. I made the point before that no one doubts that the Scottish Parliament is permanent. I noticed when my noble friend Lord Dunlop repeated the Statement that his words at the Dispatch Box were to the effect that the permanence of the Scottish Parliament will be put beyond doubt. I noted that in the copy of the Statement from the Printed Paper Office the words appear:

“And the permanence of the Scottish Parliament is beyond doubt”.

There is an important point there. What I put forward in my new clause achieves what the Government seek to achieve, but without the problems identified by Members across the House in Committee.

As the noble and learned Lord, Lord Wallace of Tankerness, said in Committee, we are dealing with hypothetical issues. We understand the political reality. I recall the occasion when the late noble and learned Lord Simon of Glaisdale opposed a provision designed for the avoidance of doubt on the grounds that there was no doubt in the first place to be avoided. I feel that we are in a similar situation: there is no doubt that the Scottish Parliament is permanent. The Smith commission has gone beyond its terms of reference to propose something that causes more problems than it solves. The Government may have issued a blank cheque to a third party, but, as I said at an earlier stage, it is not our job to cash it without question.

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Lord Wallace of Tankerness (LD): My Lords, as the noble and learned Lord, Lord Hope of Craighead, indicated, we had a very lengthy debate on the issues in Clause 1 in Committee. He is right to point out that the wording in the Bill, as amended in the House of Commons, is not particularly felicitous and leaves open some questions of interpretation. But, as the noble Lord, Lord Norton of Louth, indicated, as I said in Committee we are to some extent dealing with a hypothetical position. The real situation is that it is a political reality.

Of the various amendments, I find the amendment in the name of the noble Lord, Lord Norton of Louth, probably the most logical. The problem I have with Amendment 2, in the name of the noble and learned Lord, Lord Hope of Craighead, is that there are two conditions for a repeal: that,

“the Scottish Parliament has consented to the proposed repeal; and … a referendum … in Scotland on the proposed repeal”,

has a majority voting for it. The problem there is that you get the majority voting for it, then you ask the people in the body that you are about to repeal to consent to it, too. It may have received the majority among the people of Scotland because they want to get rid of it, but the people already there have a vested interest in hanging on to it. Therefore, I do not think that that is a particularly satisfactory situation.

I say to the noble Lord, Lord Forsyth, on his amendment that states:

“Nothing in this section alters the sovereignty of the United Kingdom Parliament”,

that that position is made perfectly clear in Section 28(7) of the Scotland Act 1998.

As I said, at the end of the day this is a matter of political reality. The Smith commission gave the parliamentary draftsmen a rather daunting challenge. Paragraph 21 of the commission’s report said:

“UK legislation will state that the Scottish Parliament and Scottish Government are permanent institutions”.

Therefore, it is almost necessary that there is some element of a declaratory nature in here. The sovereignty of Parliament is such that the Bill could be repealed, as any other Bill could be. That is why, at the end of the day, it does boil down to political reality.

As I said in Committee, in the Scottish Constitutional Convention that sat in the early 1990s we wrestled at great length with how to entrench any Scottish Parliament that was established. We looked at various possibilities, including some declaratory statements, but never quite managed to work out how we could do it. In the end, it was a referendum. My party opposed it at the time, but in retrospect the 1997 referendum gave the Scottish Parliament that legitimacy and has made it, de facto, a permanent part of our constitution. That is why, in the political situation we now have, it will be a political reality.

If the circumstances were such that the people of Scotland no longer wished for a Scottish Parliament then the political reality would kick in, and no matter what we put in this statute, that political reality would come to pass. That is why it is important that we try to get clarity in legislation as best we can. At the end of the day, this is a political matter, and I do not believe that it ever will arise, but if it did arise, a political solution would be found.

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Lord McCluskey (CB): My Lords, I have simply one question to ask the Minister at this stage. Given the failure of the Government to respond positively to the submissions that were cogently advanced both in Committee and here today—the same, by the way, applies to many of the other amendments we discussed in Committee—is there some kind of agreement or understanding between the UK Government and the Scottish Government, perhaps as part of the fiscal agreement deal, to the effect that the Government will not allow any material amendment of the Bill in the course of these or subsequent proceedings? If not, I fail to understand how the Government have not advanced certain amendments which reflect the debate and the Government’s response in Committee to those amendments. I will refer to those particularly when we come to them.

Lord Empey (UUP): My Lords, if I may follow the point just made by the noble Lord, Lord McCluskey, I said in Committee that I believed the outcome of the Smith commission had the status of a treaty. I did not say that in any negative fashion, but I have seen all this before. Once these deals are done, we are going through the motions here. There is a political imperative: all the Front Benches signed up to whatever happened a week or 10 days before the referendum. What we have before us is the same procedure that flows from Europe, goes into the mixer in Whitehall and comes out as Smith-plus. That is where we are. It does not matter what the merits are of the amendments of the noble Lords, Lord Norton of Louth, and Lord Forsyth, or of any other noble Lord. The political decision has been taken and the Front Benches are paralysed, because they have reached a position, for political reasons. We know it, all noble Lords know it; the dogs in the street know it. That is where we are.

Lord Forsyth of Drumlean: Is the noble Lord suggesting that we are all wasting our time?

Lord Empey: Perish the thought of such an outrageous consideration, but I suspect that the Government will be impervious to our arguments, if I might put it that way. The reason is that a political decision has been taken. We all know that. I happen to think that the Front Benches are wrong. I have had many years of experience of dealing with nationalism. It is a perfectly legitimate aspiration, in Wales, in Scotland, in Ireland or anywhere. There is nothing wrong with it. It is part of our national life. However, it is a fundamental mistake to believe that if you give folk the power, they will make such a mess of it that the people will be relieved to get rid of it when the time comes. That is not going to happen.

I think the noble Lord, Lord Cormack, referred to the Danegeld. We have been doing this in Ireland for years—decades—and all it has done is grow, sustain and feed the forces that are anti-British. We will have later amendments where the very word “British” is the issue, irrespective of the substance of the matter we are debating. Therefore, I understand where the Minister is at. He is a very articulate and capable Minister but he has a concrete block and there is nothing he can do with it except present it to us and, sooner or later, it will be nodded through.

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4.45 pm

I understand the politics of this. I understand that an arrangement was entered into by the three main party leaders in September 2014. I regret that that happened, but it has happened. I also recall receiving an answer from the noble and learned Lord, Lord Wallace of Tankerness, in his role as Advocate-General, when I asked him about the sovereignty issue and which Parliament was superior. Of course, he said that ultimately, the United Kingdom Parliament was the superior body.

We have already heard that an agreement on the fiscal framework will have to be reached between the two Administrations, as we call them. Nomenclature is a big deal because the phrase “UK Government” now has to be used in everything. That creeps in and we have had it in our part of the world for many years. All these things are a creeping barrage, and they go on. We have decided to allow them to go on in the hope that the fire will pass over, and we will come out of our bunkers and hope that nationalism will have burnt itself out and destroyed itself. However, I argue that we are feeding the flames. However meritorious and important it is to draw attention to these things and to put them on the record, I argue that the status of the Smith commission report is not that of just any report; it has the status, effectively, of a treaty. That is a very dangerous position for us to be in, but it is where I believe we are. I hope the Minister will be able to shoot down my arguments one by one and convince us all that this is a complete mirage and a misunderstanding.

Lord Lang of Monkton (Con): My Lords, I certainly agree with the noble Lord, Lord Empey, that there is a lot of imperviosity in the air today. He talks of feeding the flames. That is a phrase I and a number of colleagues have used many times over the last few years, certainly every time legislation affecting Scotland has come before the House. However, I make no apology for speaking very briefly in support of Amendment 1. Indeed, I support all the amendments in this group, with the possible exception of Amendment 3, proposed by my noble friend Lord Cormack. I sympathise with his sentiments but it is so palpably obvious that what he would like to achieve is outwith the terms of the Smith commission report, which is our sacred text, that it is highly unlikely it would make any progress.

In constitutional terms we should not forget that this is a shameful piece of legislation and has a shameful origin. The Constitution Committee was deeply critical of that fact. It was born out of panic and its contents decided by an arbitrary political cabal. Parliament’s role was blindly and blandly simply to pass it through into law. Clearly, my noble friends on the Front Bench have been given instructions not to yield an inch on any matter—not even a willingness to take things away and consider. “Get it through on all counts, unamended; don’t give anything away”. That is the sort of thing the Treasury says to other people, although in the last 24 hours we have noticed that it is sometimes a little bit inclined to breach its own rules—not always in the right way. Therefore, I think it is right to revisit this issue, however briefly, particularly because when we debated it very fully in Committee, I was pleasantly

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surprised to find that the noble and learned Lords, Lord Mackay of Clashfern, Lord Hope of Craighead, and Lord McCluskey, and other distinguished lawyers and constitutional experts, including my noble friend Lord Norton of Louth, all came in behind the proposition that it was dangerous to legislate in a meaningless and declaratory way; indeed, that goes against the Government’s own guidelines on drafting legislation.

The point is that Clauses 1 and 2, which we are debating amendments to, change nothing in law. They are essentially meaningless. They are declaratory. But they could sow a seed and some Scottish judge at some time in the future could build a case over these now justiciable matters. The implications for Scotland, and indeed for parliamentary sovereignty, would be very considerable indeed.

My noble friend Lord Dunlop and my noble and learned friend Lord Keen of Elie are curiously reluctant even to consider what was said then. At one level, the clauses change nothing because they are declaratory. In a sense they are meaningless, but their very meaninglessness carries a meaning of sorts and carries implications and uncertainties. Indeed, I wonder why the Scottish Government were so keen to have the changes made to which our Government gave way so readily in another place. It is still not too late to think again, and I remain ever hopeful that the Front Bench will relent.

Lord McAvoy (Lab): My Lords, for the removal of any doubt, I do not support any amendments in this group. But I am pleased to be given the chance to try again to pronounce the name of the noble Lord, Lord Louth of Norton—I have done it again—the noble Lord, Lord Norton of Louth, because he is a profound constitutional expert and he has my total admiration and respect, and I apologise for the mix-up.

The original draft of Clause 1 conveyed the permanency of the Scottish Parliament and the Scottish Government as institutions but our amendments put their permanency beyond any doubt and put the decision of whether they should be permanent in the hands of the Scottish people. We do not want any change to this aspect of the Bill. It is with some trepidation that I enter this debate, with so many constitutional experts, lawyers and esteemed legal people, but there we are; I might bring the perspective of an ordinary Scottish person without having all those grand titles—which are all deserved, I hasten to add.

I do not think we should spend too long on this aspect of the Bill. We support the Scottish people having the final say on any of these matters. Without going too much into the history of things, in 1707 Scotland entered the United Kingdom as a full country. It did not sacrifice totally its right to have its own say. We entered as an equal partner. I think we have played our part, pro rata, on an equal basis. I believe strongly that that should be the case. The sovereignty of the Scottish people should be recognised. It is not a coincidence that one of our monarchs in Scotland, Mary, Queen of Scots, was not known as the Queen of Scotland. Of course, her final legacy was that every monarch of Scotland and the United Kingdom since her death has been her direct descendant. That is

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totally in tune with the Scottish people. The Scottish people should have the say. I am sorry to say it but particularly the amendment tabled by the noble Lord, Lord Cormack, to take everything away from the Scottish people is just not acceptable or realistic. Realpolitik has been mentioned and that is absolutely right.

I do not want to feed the flames but I say to the noble Lord, Lord Empey, that he could have been a bit more careful with his words, bearing in mind the history of Northern Ireland. My party and I—and, I believe, the Government—are not feeding any flames. I believe in the merits of what we have here, not just as expediency or something passed down from on high. I believe firmly in it and if any of these amendments are pressed, we will be voting against them.

The Advocate-General for Scotland (Lord Keen of Elie) (Con): My Lords, perhaps I may begin with a material concession. When the noble Lord, Lord Empey, referred to a capable Minister on the Front Bench he was clearly referring to my noble friend Lord Dunlop.

I thank noble Lords for their careful and detailed consideration of Clause 1, which expresses in law the understood position that the Scottish Parliament and the Scottish Government are a permanent part of the United Kingdom’s constitutional arrangements. I will endeavour to respond to each of the points made and, in doing so, I thought that it would be helpful to reflect on the adjustments made to this clause during the Bill’s passage through Parliament.

The Smith commission said that the United Kingdom’s legislation,

“will state that the Scottish Parliament and Scottish Government are permanent institutions”.

In the draft legislation which the Government published in January 2015, the Scottish Parliament and the Scottish Government were recognised as permanent parts of the United Kingdom’s constitutional arrangements. At that stage, the clause did not contain a provision on a referendum. This drafting was retained when the Bill was introduced to Parliament in May 2015. Detailed feedback was then received on the clause during the Bill’s passage through the other place and from others such as the Scottish Parliament’s Devolution (Further Powers) Committee. The Government reflected carefully on this feedback and on 18 September, the Prime Minister announced the Government’s intention to include a referendum provision in the clause to strengthen the provision and underline our commitment to the Scottish Parliament and the Scottish Government. Following refinement of the drafting, the clause as it now appears was inserted into the Bill on Report in the other place.

I pause to observe in response to the observations of the noble and learned Lord, Lord McCluskey, that I am not aware of any understanding between the United Kingdom Government and the Scottish Government to the effect that no amendment will be allowed to the provisions of Clause 1 or to any other part of the Bill. The clause was also subject to substantial debate during our Committee in December.

I turn to Amendment 2, tabled by the noble and learned Lord, Lord Hope of Craighead, and the noble Lord, Lord Norton of Louth. This amendment considers the specific wording of subsection (3) of the new

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section in Clause 1. Following our deliberations in Committee we have reflected carefully on this amendment, which I believe seeks to clarify details of the operation of such a referendum. None the less, our view remains that the current wording of the clause delivers the outcome needed effectively, as it reflects that in 2014 the people of Scotland voted to remain in the United Kingdom and that that would mean a commitment to two Parliaments. New subsection (3) ensures that if the Scottish Parliament and Scottish Government were ever to be abolished, which of course is a scenario that no one is envisaging, the people of Scotland would need to vote in a referendum to that effect.

The noble Lord, Lord Cormack, spoke to Amendment 3, which would replace the requirement for a decision of the people of Scotland in a referendum with a requirement for a two-thirds majority in a vote of the House of Commons, in which 75% of Scottish Members of Parliament voted in favour. I am grateful to the noble Lord for the points he has made and recognise his desire to underline the centrality of this Parliament in determining the constitutional arrangements of the United Kingdom. However, it remains our view that it is right to include provision for a referendum of the people of Scotland in the clause to strengthen the political statement, and to underline the commitment of this Parliament and this Government to the Scottish Parliament and the Scottish Government.

The referendum provision rightly reflects the importance of the people of Scotland in determining Scotland’s constitutional future. In the referendum in 1997, the people of Scotland overwhelmingly supported the creation of a Scottish Parliament. In the independence referendum in 2014, they reaffirmed that they wanted to have two Parliaments by voting to remain within the United Kingdom.

5 pm

Although the abolition of the Scottish Parliament and Government has never been envisaged, it is right that if it were ever to be, it should be on the basis of a decision of the people of Scotland. It is important to be clear there are no circumstances in which the abolition of the Scottish Parliament and Scottish Government is envisaged. People in Scotland voted for two Parliaments, and that is what they shall have. However, in responding to these points, I would state that, in this entirely hypothetical circumstance, this Parliament would of course play its full and proper role, just as it did in the establishment of the Scottish Parliament in 1998. That was of course a matter that we addressed in some detail in Committee.

Amendment 6, tabled by the noble Lord, Lord Norton of Louth, would replace Clause 1 in the Bill with a new clause which would provide for a referendum before the Scottish Parliament and Government could be abolished and define those eligible to vote in such a referendum as those entitled to vote in local government elections in Scotland. As a number of noble Lords noted during our debate in Committee, we are dealing in entirely hypothetical circumstances. Such a referendum is not envisaged, but in those hypothetical circumstances, the precise detail of such a referendum would of course have to be determined, as is the case with any referendum, if such a scenario were ever to occur.

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The proposed new clause also seeks to acknowledge concerns raised by some noble Lords in Committee with regard to the wording and effect of the clause. It states that the sections of the Scotland Act 1998 establishing the Scottish Parliament and Scottish Government will not be repealed unless electors in Scotland vote for this in a referendum, and does not directly reference the permanence of the Scottish Parliament. We have carefully reflected on these points since Committee, and our view remains that the clause as drafted is appropriate. The Smith commission said:

“UK legislation will state that the Scottish Parliament and Scottish Government are permanent institutions”.

We consider it important that the clause reflects the language of the Smith agreement, in order to underline the political statement being made. I emphasise, as has been acknowledged by your Lordships, that it is a political statement. The purpose of the clause is to reflect in legislation the political understanding which already exists. It is our view that Clause 1, as drafted, benefits from this straightforward, unambiguous statement, in keeping with Section 1 of the Scotland Act 1998, which states:

“There shall be a Scottish Parliament.”

Lord McCluskey: Before the Minister moves on, may I ask just one question? In the earlier debate, I asked whether the words “the people of Scotland” included Andy Murray, the tennis player, and he could not answer. The noble Lord, Lord Norton of Louth, has suggested a simple amendment that would make it clear that the persons entitled to vote are not the people of Scotland—which is a slightly meaningless phrase—but those entitled to vote as electors in a local government election in Scotland. What is wrong with accepting that?

Lord Keen of Elie: As I indicated, we are dealing with an entirely hypothetical situation. Should that situation ever materialise, the terms of the referendum to be held would be determined according to the circumstances in place at that time. It would not be appropriate to anticipate the circumstances of such a referendum, which might be many millennia in the future. It is therefore left open in these terms.

I turn to the amendments moved by my noble friend Lord Forsyth of Drumlean. The points he has raised in them are those he made in Committee in December, and I assure him that we have continued to reflect carefully on the points made at that time. My noble friend has focused on whether Clause 1 impinges on the sovereignty of this Parliament. I thank him for his consideration of this point but must respectfully disagree that there is any question that it does. Constitutionally, the United Kingdom Parliament cannot bind a successor Parliament: the sovereignty of Parliament remains. The purpose of paragraph 21 of the Smith commission agreement, and of Clause 1 in the Bill, is not to change the constitutional position but to reflect in legislation the political understanding that already exists. The clause thus delivers the Smith commission agreement while respecting the United Kingdom’s constitutional arrangements.

Amendment 1 would reinsert the words “recognised as”, which were removed from Clause 1 by government amendment on Report in the other place. The Government

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have been quite clear throughout that there has never been any question that the Scottish Parliament and Scottish Government are anything other than permanent. However, we have listened to feedback on the clause, and it was felt appropriate to amend the clause to take account of the observations made. The criticism levelled at the clause was that the provision was weak. The Government have strengthened the provision to demonstrate the commitment of the United Kingdom Parliament and Government to the Scottish Parliament and to the Scottish Government.

Amendment 4, tabled by my noble friend, provides that the abolition of the Scottish Parliament and Government would have to be agreed by United Kingdom-wide referendum. The referendum provision in Clause 1 rightly reflects the importance of the people of Scotland in determining the existence of the Scottish Parliament. It is important to be clear that there are no circumstances under which the abolition of the Scottish Parliament and Scottish Government is envisaged. However, in responding to the points raised by my noble friend, I state that, in that entirely hypothetical circumstance, this Parliament would of course play its full and proper role, as I mentioned previously.

Amendment 5 would state in the Bill that Clause 1 does not limit the sovereignty of the United Kingdom Parliament. Again, I hope I have already sufficiently addressed that point. Clearly, the sovereignty of this Parliament remains, and is unhindered by the provisions. I therefore urge noble Lords not to press their amendments.

Lord Hope of Craighead: Before the Minister sits down, I wonder whether he can help me on one point. I made it clear in Committee that the amendments I proposed to this part of the Bill were based on recommendations of the Scottish Government, which were made plain in June last year. The wording of the amendments is not my creation; it comes from Edinburgh, from people who were studying the Bill and trying as best they could to clarify the points they thought needed clarification.

The noble and learned Lord, Lord McCluskey, has drawn attention yet again to the obscurity of the phrase, “the people of Scotland”. One of the virtues—it may be small, but it is there—of my amendment is that it makes clear that it is a referendum of the people in Scotland. I simply cannot understand why the Minister is not prepared to make some concession to clarify that matter. To go back to what the noble Lord, Lord Empey, said, I should have thought that the Government would take on board collaboration between the two Governments to try to improve the Bill and achieve as much clarity as possible. I really am mystified why the Minister is so stubborn and will not accept the need for some further clarity.

Lord Keen of Elie: I am obliged to the noble and learned Lord, Lord Hope of Craighead. It determines clearly and unambiguously that there can be no question of any unseen, secret understanding between the United Kingdom Government and the Scottish Government

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when his proposals in the amendments have their source in Scotland, with the Scottish Government. That perhaps puts that in its place.

On the question of the referendum, I reiterate the point that I made earlier: this is a wholly hypothetical situation.

Lord Forsyth of Drumlean: Will my noble and learned friend deal with the point about the people of Scotland, as opposed to the people in Scotland?

Lord Keen of Elie: I am obliged to my noble friend for reminding me of the question. As I said earlier, we are dealing with a wholly hypothetical situation. It is not envisaged that this will ever arise, but in the event that it does, the question of who will be engaged in the referendum and the manner in which it will be conducted will be determined at that time according to the circumstances that exist at that time, rather than by some predetermination, perhaps millennia earlier. That remains the Government’s position on that point.

Lord Forsyth of Drumlean: My Lords, I have come to the view that the noble Lord, Lord Empey, tactfully suggested—that we are actually wasting our time. I beg leave to withdraw the amendment.

Amendment 1 withdrawn.

Amendments 2 to 6 not moved.

Clause 2: The Sewel convention

Amendment 7

Moved by Lord Hope of Craighead

7: Clause 2, page 2, leave out lines 5 to 7 and insert—

“(8) But the Parliament of the United Kingdom may not pass any measure applying to Scotland that makes provision about a devolved matter without the consent of the Scottish Parliament.

(9) A provision is about a devolved matter if the provision—

(a) applies to Scotland and does not relate to reserved matters,

(b) modifies the legislative competence of the Scottish Parliament, or

(c) modifies the functions of any member of the Scottish Government.

(10) In subsection (8), “measure” includes any Act, whether a public general Act, a local and personal Act or a private Act, and any statutory or other instrument made under an enactment.”

Lord Hope of Craighead: We return to Clause 2, and to a problem that cannot be dismissed as purely hypothetical. We are dealing with something of day-to-day significance—the Sewel convention, and what should be done about it, in view of what was said about it by the Smith commission. The amendment that I propose is virtually the same as that which I proposed in Committee, though somewhat simplified. As I said a moment or two ago, its source is a paper provided by the Scottish Government last June. Therefore, it is something that I would have thought that the Minister would wish to take seriously.

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I go back to what the noble Lord, Lord Lang of Monkton, described as a sacred text. What one finds as a source for this discussion is in the heading to Pillar 1 in the Smith commission report:

“Providing for a durable but responsive constitutional settlement for the governance of Scotland”.

Paragraph 22, as I think we all know, says:

“The Sewel Convention will be put on a statutory footing”.

The adjective “statutory” is the foundation for the point that I made last time and seek to make again.

I reiterate the point that I made in Committee about the dangers of lack of clarity and certainty in responding to the recommendation of the Smith commission. We are talking about legislation—not hypothetical legislation but something that may occur in reality, relatively early, in the near future. One problem with legislation that may be open to scrutiny or criticism on its failure to be compatible with some standard or another is that, so long as that argument hangs in the air, it gives rise to uncertainty. It is right to remind the noble and learned Lord that, when the Scotland Act 1998 was being framed, it made special provision for what was to be done in the event of a challenge being made on the possible incompatibility of the legislation with convention rights. The mechanism was to allow these matters to be referred to the Privy Council for scrutiny before the measure became an enactment. I do not think that we have ever seen that happen with regard to Scots legislation, but there have been two or possibly three cases from the National Assembly for Wales, where challenges have been made, and been referred to the Privy Council for resolution. That has the great advantage of putting beyond doubt the uncertainty that was created by the challenge, because one then has a decision of the Supreme Court to resolve the issue.

The problem with the Sewel convention, if it is put into statute at all, is that it raises the question of what it is—how far it reaches and what it covers—and, of course, there is the question of whether it will always apply or, as we find in the clause as it is at the moment, will apply “normally”, which begs the question of what is or is not normal. The virtue of the wording that the Scottish Government put forward is that it attempted to put the Smith commission recommendation into the form of a statutory provision that could then stand on its own feet and, it was hoped, resolve these issues. The formula that we see in Amendment 7 does not include the word “normally”; it also attempts to explain the reach of the Sewel convention as it is now, which is no doubt wider than Lord Sewel thought it was when he devised the reach of it in 1998. As it has grown, it now covers the legislative competence of the Scottish Parliament and the functions of members of the Scottish Government, as Amendment 10, in the name of the noble and learned Lord, Lord Wallace, appears to recognise as well.

5.15 pm

Without going over in great detail the ground I covered in my speech in Committee, the defect of the present wording is that it does not address the Smith Commission in the way in which it was asked to address it by putting the convention on to a statutory

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footing. It seeks to retain the convention as a convention and by introducing the word “normally” it creates uncertainty about when it should and should not apply and does not really attempt to address what the Sewel convention really means.

The formula I am putting forward, which I repeat, yet again, is the product of thinking in Edinburgh, does not use the word “convention” or mention the name of Lord Sewel, because that is no longer necessary, but simply reproduces what is currently understood to be the reach of the convention in statutory language. That is its great virtue. There is an enormous advantage in adopting that language and avoiding the uncertainties to which I referred which will hang over legislation and be extremely unfortunate if one is seeking to give effect to legislation, particularly that which may involve the expenditure of money, which possibly might have to be recovered if the legislation is struck down.

Of course, that raises the question of whether the provision in Clause 2 is justiciable. There is great virtue in Amendment 12 which the noble and learned Lord, Lord McCluskey, is putting forward. Indeed, the noble and learned Lord, Lord Wallace of Tankerness, is making the same point in Amendment 13 which at least states that the issue is not be questioned in a court of law. As it is, that question is unanswered in the Bill. The answer might be that the Minister can say that it is not justiciable, but I respectfully suggest that that is not a sufficient answer. The court will be asked to examine this if it remains in its present state, the judges will have to consider what it means and what its effect is, and there will be people who, for all sorts of reasons, may wish to take advantage of the uncertainty that the present clause demonstrates.

There are great dangers here. They cannot be dismissed as hypothesis—they are a reality that the Government have to face up to. In the interests of responsible government and, if I may say so, harmony between Edinburgh and this House, it would be wise to give further very serious consideration to the formula which I am putting forward in order to resolve these problems. I beg to move.

The Deputy Speaker (Baroness Fookes) (Con): My Lords, if Amendment 7 is agreed, I cannot call Amendments 8 to 12 inclusive by reason of pre-emption.

Lord Cormack: My Lords, I hope the occupant of the Woolsack will not to have to do that because I very much hope that the Minister will accept the irrefutable logic of the amendment moved by the noble and learned Lord, Lord Hope. My amendment 8 is very simple. I am most grateful to the noble and learned Lord, Lord McCluskey, for adding his name to it. When we debated similar issues in Committee the noble Lord, Lord Stephen, indicated that he supported this amendment. He has now got a rather ingenious substitute; he just puts quotation marks around “normally”.

It is very important that the Minister should heed the wise words of the noble and learned Lord, Lord Hope. We want clarity in this measure. In the previous debate, the noble Lord, Lord Empey, made an extraordinarily effective but rather cynical speech. I was tempted to

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get up, as my noble friend Lord Forsyth of Drumlean did, and say we are wasting our time. It really is a very unsatisfactory way to legislate that an extra-parliamentary body, with a prior commitment from leaders of parties to give it a blank cheque, then in effect tells Parliament what to do. From a constitutional point of view, it is an outrage that that should happen. In saying that, I am not making any personal political criticism of the noble Lord who presided over the commission or of any members of it, but for it to be given that unfettered power and then to come to Parliament with a Bill that is not really going to be changed at all is deeply unsatisfactory.

If the Minister cannot accept the admirable amendment from the noble and learned Lord, Lord Hope, I hope that at the very least he will accept that the word “normally” is fraught with all sorts of dangers. The question of what is normal and what is abnormal is justiciable and will be taken to the courts, so why have it in at all? Taking out that word and perhaps coming back at Third Reading with a slight extra clarification—even to substitute such words as “in the most exceptional circumstances”—would be better than just having “normally”. I honestly do not think that by accepting this amendment, or undertaking to come back at Third Reading with something similar, the Minister would be selling anyone down the river at all. It would not alter the thrust or the purpose of the Bill. Many of us find the Bill troubling and unsatisfactory but we in your Lordships’ House have a duty to try to improve, and this would be a very modest improvement. I commend it to the Minister.

Lord McCluskey: My Lords, I need not repeat the arguments that the noble Lord, Lord Cormack, has put forward again so clearly. We need say nothing more about “normally” except that we were anxious to help to improve the Bill. This was not anti the Government or anti the Scottish Administration.

My second point relates to Amendment 12 in this group, which is to do with the question of justiciability. For the reasons that have been advanced at some length, so I need not repeat them, the noble and learned Lord, Lord Hope, and I are agreed that this word is justiciable. It would be very foolish of the Minister to reject the advice of a man as distinguished in the law as the noble and learned Lord. The word “normally” is bound to appear before a court. If the UK Government decide to legislate on a matter that is devolved and say, “This is not a normal situation”, and some person, whether in the Scottish Government or affected by the legislation, says, “No, it is not”, and it goes to court, the court cannot say, “We’re not going to resolve this matter”—it must answer the question. So to say that it is justiciable is exactly right, and it is wrong for the Minister to ignore that. The Minister kindly suggested that he and I should meet, and we did, but I am afraid that we simply agreed to differ on the issue of justiciability.

I should mention one other point that does not arise out of these two amendments precisely, which is that this is to do with the Sewel convention. I hope that the noble Lord, Lord Norton of Louth, will permit me to quote what he said in Committee on

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8 December. In response to the argument that the Smith commission stated that:

“The Sewel Convention will be put on a statutory footing”,

he said, referring to the noble and learned Lord speaking from the Front Bench:

“Surely on his own argument the Government will have to withdraw Clause 2, not only on the grounds of what constitutes a statutory footing but because it embodies the words of Lord Sewel, which he spoke when the Scotland Bill was before Parliament, and not the convention as understood at the time the commission produced its report”.

The noble and learned Lord rejected that, saying:

“I do not accept that, because it appears that what is understood by the Sewel convention is the expression of that convention by Lord Sewel during the passage of the Scotland Act 1998 through Parliament”.—[Official Report, 8/12/15; cols. 1506-07.]

I must confess that it astonished me to hear that. Can the Minister make it clear whether the Government stick by that statement at col. 1507, which was repeated in response to the noble Duke, the Duke of Montrose? In due course I hope to move Amendment 12.

Lord Stephen (LD): My Lords, I make it clear at the outset that we support the wording provided in his amendment by the noble and learned Lord, Lord Hope. Indeed, we agree very much with the noble Lord, Lord Cormack, that the word “normally” seems at best unhelpful in legislation.

Our first two amendments, Amendments 9 and 10, provide for the consent of the Scottish Parliament to be required when UK legislation makes or attempts to make any alteration to the legislative competence of the Scottish Parliament or the executive competence of the Scottish Government—Scottish Ministers. The amendments would ensure that the current convention is fully reflected in the way it has been understood and applied in practice.

The part of the convention currently covered by Clause 2 is effectively only half of the convention. It is to apply when UK legislation makes provision for issues which are within the legislative of the Scottish Parliament. As has been stated, Clause 2 reflects almost exactly the words used by Lord Sewel in the House of Lords during the passage of the Scotland Act on 21 July 1998, when he said that,

“we would expect a convention to be established that Westminster would not normally legislate with regard to devolved matters in Scotland without the consent of the Scottish parliament”.—[

Official Report

, 21/7/1998; col. 791.]

These comments in this Chamber effectively recommended the establishment of a convention but it has operated more widely than he indicated or anticipated. We should not blindly follow his words in 1998 rather than the convention as it works now. The constitutional practice of putting forward a legislative consent Motion where the legislative competence is being affected, amended or altered was applied, for example, to the Scotland Act 2012, and there are good constitutional reasons for both elements of the convention to be safeguarded. That should be the correct constitutional approach to the Scottish Parliament. Legislation which without consent reduced the scope of the Scottish Parliament’s legislative competence, would be just as controversial, and perhaps more so, than UK legislation which encroached on matters within its competence.

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How long has the convention operated in this way? Since 1999, the convention has been understood to require the consent of the Scottish Parliament when UK legislation will alter the legislative competence of the Scottish Parliament or the executive competence of Scottish Ministers. This was exactly how it was expressed in the memorandum of understanding that was agreed between the UK Government and Scottish Ministers back in 1999. It is also reflected in Devolution Guidance Note 10, which was issued by the Department of Constitutional Affairs back in 1999 and gives information as to how the UK Government operate the convention in practice—and that is how it has been operated.

5.30 pm

The Smith commission recommended that the convention should be put on a statutory footing. Do we think that the Smith commission had in mind the words of Lord Sewel in 1998 in this Chamber, or do we think it had in mind the convention as it has operated every day of every month of every year between the Scottish Parliament and Scottish Ministers and the UK Government and UK Ministers since 1999? I think the answer is very obvious, and it is bizarre that the approach taken in the legislation by Ministers in Committee has been supported and defended in the way that it has. It would be so easy to make this change and to introduce the amendment put forward by the noble and learned Lord, Lord Hope. It would change nothing; it would simply reinforce and strengthen the convention as has been requested by the Smith commission.

The other amendment that we have put forward, Amendment 13, is designed to prevent Clause 2 being subject to litigation in the courts, which has also been touched upon. During the debate on 8 December last year there was a very healthy and informative exchange between the noble and learned Lords, Lord McCluskey, Lord Hope and the Advocate-General—all of them learned, so I will not try to rank them—as to the extent that Clause 2 could give rise to court action concerning UK Parliament legislation that had been passed with or without the consent of the Scottish Parliament. Clause 2 creates uncertainty as to whether or not it is justiciable. There would be a real risk of an attempt to challenge the validity of future UK legislation on the basis that the legislation does not comply with Clause 2, and we recognise that risk. There may be a variety of views as to how the courts would answer any such challenges that might be made. However, the advice that we received from the Law Society of Scotland is clear: first, that it is undesirable that Clause 2 should give rise to legal uncertainty of this kind from the outset; and secondly, that to avoid legal uncertainty it is important that an express provision be made, to put beyond doubt that the provision currently inserted by Clause 2 is not intended to have its application subjected to the jurisdiction of the courts.

Our amendment follows exactly the wording of the Parliament Act 1911. I believe it is worthy of careful consideration and, indeed, of implementation. I hope that the Minister will on this occasion respond positively to these constructive suggestions on these matters.

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Lord Forsyth of Drumlean: My Lords, I would like to speak briefly to my Amendment 11, which would delete the words,

“without the consent of the Scottish Parliament”.

The noble and learned Lord, Lord Hope of Craighead, has, in Amendment 7, tabled an amendment which I think came from the Scottish Government. I have to say that I do not particularly like that amendment, which is supported by my noble friend Lord Norton of Louth, because what it sets out is what has actually happened by grandmother’s footsteps over the years, as the noble Lord has just pointed out.

The original basis of the Sewel convention was as a kind of courtesy. It was a convention that we would not normally do something without telling, asking or consulting the Scottish Parliament first. However, it has been turned into a veto for the Scottish Parliament on legislation that affects devolved matters. That is a huge change from what was intended at the time of the passage of the original Scotland Bill in 1998. I am clinging to the past with my amendment. I thought that the convention had gradually been changed into something far greater and therefore my amendment seeks to take out,

“without the consent of the Scottish Parliament”.

I also support the amendment in the name of my noble friend Lord Cormack, which would leave out “normally”. I know that the Minister is a very successful advocate and a very important Scottish lawyer but perhaps I may give him a little bit of advice based on my experience as Secretary of State. When the noble and learned Lord, Lord Hope of Craighead, was the Lord President of the Court of Session and the noble and learned Lord, Lord McCluskey, had a distinguished career as a Scottish judge, both of them gave me quite a hammering on occasion. I discovered that if I got into a fight with them, I usually lost. I am not a lawyer but it seems as clear as night follows day that the word “normally” is going to be a problem. We had a long debate about this in Committee and I cannot for the life of me understand why the Minister has not brought forward amendments to deal with it.

Lord McCluskey: Has the noble Lord thought of suggesting to the Minister that perhaps he could take an informal word from the noble and learned Lord, Lord Mackay of Clashfern, who also had a rather distinguished career in the law?

Lord Forsyth of Drumlean: Indeed, and there is another voice in support of the amendment tabled in the name of my noble friend Lord Cormack and supported by the noble and learned Lord, Lord McCluskey. It is incomprehensible why the word “normally” should be included.

The noble Lord, Lord Stephen, is quite right. What was the Sewel convention has changed into something else. It is a veto, and that is almost certainly what the Smith commission was thinking of. The noble Lord is absolutely right about that. Amendment 7 moved by the noble and learned Lord, Lord Hope, would in effect give legislative effect to what has come to be the practice. Putting into statute what Lord Sewel, back in 1998, said by way of explanation of how the relationship

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between the two Parliaments would operate is a complete nonsense—a point made over and over again in Committee.

I am hoping to cast a fly here and catch those on the Opposition Front Bench. The great mantra that we have had from them over and over again is that we absolutely have to be true to the Smith commission and make sure that its recommendations are implemented. Amendment 7 would provide for that. So are the Opposition Front Bench going to speak against an amendment whose effect would be to deliver the Smith commission proposals—something that the noble Lord, Lord McAvoy, said he would never do? I look forward to hearing the response from that Bench. It is clear that Amendment 7 would deliver what the Smith commission is proposing. I do not like it because I would prefer this Parliament to be free to pass legislation, consulting the Scottish Parliament in a courteous way but not giving it a veto, which is what I think the Smith commission was seeking to do. I am utterly opposed to leaving in the Bill the word “normally”, which would almost certainly result in the courts being dragged into a dispute between this Parliament and the Scottish Parliament, and that would be thoroughly undesirable.

For all those reasons, I think I am inclined not to press my Amendment 11 when the time comes, but to switch sides and support the noble and learned Lord, Lord Hope of Craighead, and my noble friend Lord Norton of Louth—who is undoubtedly constitutionally correct—and to support my noble friend Lord Cormack in taking out this word “normally”. There are two words that I would like to take out of the Bill: one is “normally”, and the other is “Sewel”. I tried to do that in Committee and actually got past the clerks an amendment which deleted “Sewel”; but unfortunately, due to the intervention of noble Lords opposite, who argued that it was not really terribly good to alter the name of a clause in that way, I was not able to press it again at this stage in the consideration of the Bill. I think it was the noble Lord, Lord Stephen, who was responsible for that.

I say to my noble friend that the great advantage of accepting Amendment 7 is that we would get rid of “normally” and we would get rid of “Sewel”; and we would have something that is absolutely clear in statute and delivers the Smith commission proposals—which, we keep being told, is what this Bill is all about.

Lord Norton of Louth: My Lords, I have added my name to Amendment 7 in the name of the noble and learned Lord, Lord Hope of Craighead, as has already been mentioned.

As has been stressed, this clause is supposed to embody the Sewel convention. Let us be clear as to what a convention is. We are talking about a convention of the constitution. A convention is a non-legal rule of behaviour that is considered binding by those who are covered by it and is justified by being, as David Feldman put it, “right behaviour”. There is a moral imperative, and compliance with the rule is invariable. Invariable practice, lacking a moral base, does not establish a convention. Usual practice, as distinct from invariable practice, does not establish a convention.

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Conventions develop: a precedent is set and followed and a practice is established from which there is no deviation. In addressing this House in 1998, Lord Sewel recognised that a convention is something that developed. However, his use of the word “normally” meant that what he had in mind was not and could not be a convention. What has developed is a practice, and one that has extended beyond what he said.

Clause 2, as it stands, makes no sense. Conventions may be transposed into statute, but once in statute the convention has gone; it has been superseded by statute. We saw a recent example with the convention governing votes of confidence in the House of Commons. That has been superseded by Section 2 of the Fixed-term Parliaments Act. There is no longer a convention. What we have with Clause 2 is the inclusion of the words of Lord Sewel in a form that does not constitute a convention but with the Government believing that it is a convention and seeking to maintain it as a convention even though enshrined in statute. I was going to say that I hope that that makes sense, but of course it does not make sense. This clause is nonsense.

The Government cannot justify it on the grounds that it implements a recommendation of the Smith commission, because it does not—that point has already been stressed. The Smith commission recommended putting the Sewel convention on a statutory basis. There is a Sewel convention, as we have heard, but it is different from what Lord Sewel enunciated in 1998. Putting the words of Lord Sewel on the face of the Bill does not put the Sewel convention in statute. Indeed, the clause as it stands narrows and undermines the convention. It narrows it by omitting a practice that has developed and been pursued on a continuous basis, and it undermines it by removing the essential feature that established it as a convention. A convention, by definition, establishes the rule of behaviour that is taken as binding by those who engage in that behaviour. What Clause 2 permits, in effect, is the Government to say, “We are bound by, this except when we decide not to be bound by this”. What is in the clause is not a convention: it is a declaration of good behaviour.

5.45 pm

The problems with this clause have been recognised by the Scottish Government. When the Constitution Committee visited Holyrood as part of its current inquiry it was told by the Scottish Minister, Fiona Hyslop, that the provisions of the Bill may weaken what has been the operation of the Sewel convention. She was accompanied by an official, Ken Thomson, who said, “You need to enact the convention rather than the quotation”. In short, they were clearly alert to the failings of this clause. They recognised that the clause does not encompass measures that alter the legislative competence of the Scottish Parliament or the executive competence of Scottish Ministers. The Sewel convention does encompass such measures. As the Law Society of Scotland put it in its briefing to us:

“Far from implementing what the Smith commission recommended, this clause would shrink what is currently meant by the Sewel convention”.

If the Government are serious about putting the recommendations of the Smith commission into statute, let them do so. There is at present a Sewel convention,

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which appears to be working without controversy, but if there is a commitment to transpose it to statute, let us make sure that it is done properly and that we are not left with a ridiculous clause that is neither fish nor fowl. You cannot have a convention and a statute. You can have one or the other. Either Clause 2 is replaced or it is dropped. If left as it is, it will be a public demonstration of how not to legislate.

Lord Thomas of Gresford (LD): My Lords, I may be the only person present in the Chamber who was here when Lord Sewel issued these words. Maybe the noble and learned Lord, Lord Mackay of Drumadoon, and the noble Duke, the Duke of Montrose, were there at the same time. As I recall, we were debating these matters late into the night, and at 1 am or 2 am, when we came to Scottish and Welsh matters, there was a blockage. The words that Lord Sewel spoke were a very welcome resolution of a particular problem that had arisen. I recall afterwards that when it was referred to as the Sewel convention we used to rib Lord Sewel that he had unwittingly added his name to something that seemed to have become a great constitutional principle.

I intervene in this debate to refer to the problems in Wales as illustrative of the problems that your Lordships face. We have had three trips to the Supreme Court between the Welsh Assembly and the Wales Office in a very short period of time because we have not had the ability to pass primary legislation until quite recently. Legislative competence is always at our fingertips in Wales. We talk about it all the time. Indeed, the Welsh Labour Government talk about it all the time in holding up the consideration of the current draft Wales Bill. This issue seems to require either a mechanism that resolves the problems or something that is absolutely solid and certain in this particular piece of legislation.

Those who served as my colleagues during the coalition Government in the Wales Office tell me that legislative competence was a weekly discussion and deals were done between the Wales Office and Cardiff in order to solve where the parameters were. Of course we do not have reserve powers devolution in Wales; it is rather different from Scotland. We have been rather envious that Scotland has not so far had to go to the Supreme Court to sort things out in this way. It seems to me, in following my noble friends, that the way it is expressed in the Bill is such that Scottish lawyers will become very wealthy in their trips to the Supreme Court to sort things out. At the moment I am trying to work on a mechanism in Wales that will resolve these difficulties if that cannot be done between Governments in a simple way, not the way that has been arrived at so far. So, go carefully: canny down the brae, as they say, when it comes to consideration of this particular part.

Lord Mackay of Clashfern (Con): My Lords, some time ago I indicated to the noble and learned Lord, Lord McCluskey, that I support his approach to this clause. It is vitally important to consider the question of whether it is intended that the clause, whatever its terms, should be subject to decision by a court of law. The situation so far as Wales is concerned—and I think it would be true for the Scottish Parliament—is that in

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some cases its powers are subject to judicial scrutiny. The Parliament of the United Kingdom is not of that kind. It has never had its principal functions subject to judicial scrutiny. If a term is put into this Bill, which will then become an Act, that determines when the United Kingdom Parliament can act, that will be a complete innovation. It does not matter what the terms are, however precise and well drafted, I cannot see how that could be excluded unless provision is made in the Bill which states that the decision on this point is to be a matter for the United Kingdom Parliament. This I regard as an extremely serious point which the Government have to decide.

It is not a question of agreeing with the Scottish nationalists. The amendment tabled by the noble and learned Lord, Lord Hope, seems to be in accordance with what they would like to see; that is, the furthest stretch of the convention, which is called the Sewel convention for various reasons, amounting to what is really a complete ban. That is what I think the amendment of the noble and learned Lord, Lord Hope, does, but that does not cut out by itself the idea that a court of law could determine whether the United Kingdom Parliament had acted lawfully in making an Act which could affect Scotland. That is why I strongly support Amendment 12 tabled by the noble and learned Lord, Lord McCluskey. That concept must be put into this clause at some point in order that the matter be not justiciable.

Lord Forsyth of Drumlean: Does my noble and learned friend think that Amendment 7, which he says stretches the convention as far it goes, sets out what has actually become the convention now or does he think it has gone beyond that?

Lord Mackay of Clashfern: What has become the convention now seems to be government papers. As far as I am concerned, I had not heard of them until this discussion. It is certainly not a convention of the Houses of Parliament in the sense that they are narrated in that context. But I am not so concerned about the precise terms in which this finishes up. What I am very concerned about is that it should not be subject to a judicial decision. The Parliament of the United Kingdom has never been subject, certainly in the present situation, to the courts of law and I think that it would be a tremendous mistake to make provision in a Bill which could only have that effect.

Lord McCluskey: Do I understand the noble and learned Lord correctly that, without choosing between them, there are two ways to solve the problem he considers to be so important? One is to do what the noble Lord, Lord Cormack, has suggested—delete the word “normally”—and the other would be to adopt either Amendment 12 or Amendment 13, which provide specifically that the matter shall not be justiciable.

Lord Mackay of Clashfern: I do not regard them as alternatives; rather that Amendment 12 tabled by the noble and learned Lord, Lord McCluskey, is absolutely essential. The other form of wording, that it,

“shall not be questioned in any court of law”,