My Lords, it is a pleasure to follow the noble Lord, Lord Norton, and to agree with him that we have perhaps got to the end of piecemeal devolution. It is time to look at the devolved legislatures as a whole. Perhaps a Welsh voice may be heard in this, although I have to tell your Lordships that my three sons, Andrew, Gavin and Jamie, were all entitled to Scottish passports under the SNP proposals, although curiously my three grandchildren, Angus, Finley and Murray, were not.
Immediately before the Scottish Referendum, the no campaign ran scared. The vow set out in that hallowed constitutional document referred to by the noble Lord, Lord Forsyth, the front page of the Daily Record, contained no pledge to maintain the Barnett formula. In the context of the SNP’s false complaint that the coalition Government intended to slash expenditure on the NHS, the vow was a pledge that the final say on how much was spent by the NHS in Scotland would be a matter for the Scottish Parliament—as, indeed, it already was. The words,
“because of the continuation of the Barnett allocation for resources and the powers of the Scottish Parliament to raise revenue”,
were added. That is the only reference to the Barnett formula in the vow.
On 28 September, on the BBC’s “Sunday Politics”, the Prime Minister said that the Barnett formula would become “less relevant over time” as Scotland’s block grant from Westminster would be cut in proportion to the extra tax-raising powers being devolved. Of course, in the days that followed, before the referendum, Alex Salmond said that the vow was a last-minute offering of nothing. After the referendum, as the noble Baroness, Lady Quin, pointed out, he described it as a trick, a deception and the crucial factor in swinging more than 10% of the votes. This claim was later dismissed as rubbish by Gordon Wilson, the former leader of the SNP, who said that the vow had had “zilch” influence on the result. That conclusion was later backed by all the independent polling evidence.
According to Professor Tomkins of Glasgow University, in his evidence to the Economic Affairs Committee, the Smith commission, of which he was a member, took it as a given that the Barnett formula would survive the process,
“because it was in the Vow, and the Smith Commission was meeting and working in the shadow of the Vow”.
I think we are all in the shadow of the vow in this debate and that is very unfortunate. The Smith report simply said of the Barnett formula, in paragraph 95.1, that,
“the block grant from the UK Government to Scotland will continue to be determined via the operation of the Barnett Formula”.
That is all it said. Of course, it was signed up to by the leaders of the political parties, who no doubt did not give their minds to the implications of it all.
The First Minister, Nicola Sturgeon, last week promised to block the Scotland Bill at Holyrood by refusing to introduce a Legislative Consent Motion unless the United Kingdom Treasury agrees a “satisfactory and fair” settlement to underpin the Bill. So, we have these
protracted talks on the fiscal framework. Her decision as to what is satisfactory and fair no doubt requires the maintenance of the Barnett formula, because it provides 20% more funding for public spending per capita in Scotland than the UK average.
Let us look at Wales. The Wales Act 2014 permitted the partial devolution of income tax to Wales, subject to the endorsement of the people of Wales in a referendum. The First Minister, Mr Carwyn Jones, has refused to hold that referendum until there is a “fair funding settlement” for Wales. By that he means the abolition of the Barnett formula and the introduction of a block grant based on need. He has also complained that as the devolution of income tax on earnings in Scotland does not require a referendum, Wales should not have to put up with one.
The noble Lord, Lord Kerr of Kinlochard, referred to the Select Committee on the Barnett Formula, chaired by the noble Lord, Lord Richard, which concluded that,
“the Barnett Formula should no longer be used to determine annual increases in the block grant for the United Kingdom’s devolved administrations”,
and:
“A new system which allocates resources to the devolved administrations based on an explicit assessment of their relative needs should be introduced”.
I think the noble Lord, Lord Forsyth, was a member of that committee and no doubt he signed up to that conclusion.
The need, therefore, for a constitutional convention to look at the constitutional arrangements for the devolved Administrations is essential. It has been referred to by my noble friend Lord Shipley, my noble and learned friend Lord Wallace of Tankerness, the noble Lord, Lord Foulkes, and others. There will be anomalies, particularly if a fiscal framework agreement for Scotland is based on the retention of the Barnett formula. Those anomalies may be overwhelming. Are we to have a different fiscal framework for Scotland, Wales and Northern Ireland and, as the noble Baroness, Lady Quin, would have it, for the north-east of England, should devolution ever come to those parts? Or are we to have a formula that makes sense wherever it is operated within the United Kingdom?
My late wife Nan came from the mining village of Fauldhouse in West Lothian—she had the answer to the question, as it happens. She would have called this a real stushie. But it can run and run. The Economic Affairs Committee has suggested a delay between Second Reading and Committee. I understand why but what it has failed to grasp is the political imperative of next May’s elections—elections that give the people of Wales and Scotland an opportunity to consider the record of their respective Governments and the outcomes of their policies. It is now to be turned into a wrangle over powers. It is very much in the interests of Labour in Wales and the SNP in Scotland to keep the pot boiling until those elections are over. I say to the noble Lord, Lord Forsyth, that the no-detriment principle is simple: it means whatever you want it to mean. I am sure the Mad Hatter would have approved of that definition.
The target of the Welsh Government in 1999 was to raise the level of the economic indicator of gross value added per capita in Wales from 73% of the UK average to 90%. The latest figures show that the level has declined to 72.2%. We remain bottom of the league. As the noble Baroness, Lady Liddell, pointed out in a passionate speech, the latest Scottish survey of literacy and numeracy finds that the education system, which was the pride of my mother-in-law, Dux of Bathgate Academy in her day, is in decline. Performance in reading dropped in primary schools between 2012 and 2014, and there is a dramatic decline in standards of numeracy. This is the Scottish education of which you were proud and the situation matches my feelings about the state of Welsh education. It is the records of these Governments that we should be attacking before the May elections, not which powers are being granted or what the fiscal framework should be.
The essential thing is that the Bill be subject to proper scrutiny in this House, but also that it be passed. If the SNP does not wish to exercise the powers this Bill presents to it on a plate, its demands for full fiscal autonomy will be hollow. The people of Scotland should not be diverted by wrangles over a fiscal framework, which is a smokescreen for the record of that Government, which fails Scotland as the Labour Government fails Wales.
Finally, I was delighted to hear the maiden speech of the noble Baroness, Lady McIntosh of Pickering. I hope we hear a lot more from her. I was completely impressed by the assertion of the value and the values of the United Kingdom by my noble friend Lord Campbell of Pittenweem. He calls for a new act of union and a federal United Kingdom. I have been asking for that since 1964.
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