My Lords, I welcome the opportunity to participate in Committee on the Scotland Bill. I support the comments of the noble Baroness, Lady Quin, and the noble Lord, Lord Shipley. The noble Viscount, Lord Ridley, has also put his name to the amendment.
I support Amendment 73C, requiring the preparation of a report reviewing the impact of Parts 2 to 5 of the Bill on the areas adjoining Scotland, particularly Cumbria and the north-east of England. Having been born and bred in Northumberland, I naturally have a vested interest in its economic welfare, and I am concerned when I suspect that legislation such as this may indirectly, but perhaps significantly, disadvantage the north-east. I was a member of the Adonis review team, which was commissioned to look at the economy of the north-east of England. As a consequence, I am critically aware of the interdependencies between Scotland and the north-east of England.
According to the Scottish Government’s figures, which the noble Lord, Lord Shipley, has already cited, £1,200 more per capita of public expenditure is spent in Scotland than in England. The Bill will allow further investment in Scotland, which is good for Scotland—like my colleagues, I do not oppose the Bill—but the consequence could be that the gap becomes even wider, to the economic detriment of the north-east. This is serious in view of the fact that many of the social indicators, geographic challenges and historic dependence on heavy industries are very similar in the north-east of England to those in Scotland.
Not only does the north-east receive some of the lowest funding in England, it borders Scotland, which has the highest spend per capita in the United Kingdom due to the Barnett formula, which will have increased benefits as a consequence of the Bill. The current irrelevance of the Barnett formula has been widely recognised, even by Lord Barnett himself, who called it “grossly unfair” and called for it to be scrapped. It was deeply regrettable that the Prime Minister gave an undertaking at the time of the Scottish independence referendum not to review it. I believe that it should be reviewed and that it is now unavoidable and overdue, and that will become even more apparent if an economic report was prepared and published after one year, as we have suggested in this amendment.
I fully understand that the north-east is included in the northern powerhouse concept. As noble Lords know, we in the north-east have constantly to remind Whitehall that the northern region does not end in Manchester, York or Leeds. Even if the investment promised in the northern powerhouse materialises, it will not compensate for the shortfall in public expenditure. So the north-east is still expected to compete with both Scotland and much of England, despite receiving much lower public support. The noble Lord has mentioned the potential impact on the airport in Newcastle. One could not conceive of a situation where London Stansted was granted special favour over Heathrow—yet that is exactly what may happen between Edinburgh and Newcastle.
I expect the Minister to counter our arguments by referencing the devolution agreement for the north-east. This is very welcome and a huge step forward, but it does not compensate for the differential in funding between the north-east, Scotland and much of England. The north-east is proud of its history; it is making good progress in reducing unemployment and increasing economic growth, but it could contribute even more to the overall economy of the United Kingdom, given a more level playing field. For these reasons, I support this amendment, and I hope that it will be supported by the Minister.