Scotland Bill — House of Lords, 2015-11-24
Topic: Macroeconomics
James Gordon (Labour, Centre-left): If the noble Lord waits until the end of my speech he will find that on this, as on so many other things, we are totally of one mind. The problem is that we had a very narrow escape last year. The fall in the oil price is not the fault of the SNP but had the vote gone 10% the other way we would have been landed in a situation where Scotland would be heading for bankruptcy very quickly. We lost our independence through bankruptcy way back in 1707 and the Darien scheme and we could well have been returned to it. It is vital that we put a cost on things Everyone has concentrated on the no vote and whether the vow mattered. I am rather more interested in the 45% of my fellow countrymen who voted for independence on a false prospectus because this document—the White Paper—which I imagine every Scot read cover to cover before using it as a very convenient doorstop, predicated oil revenues in 2016-17 of £6.8 billion. The oil revenues are of course a lot smaller. They then sneaked out a document without any ministerial statement, published in Oil and Gas Analytical Bulletin two hours before the Parliament closed for the summer recess, predicating oil revenues of £0.6 billion in 2016-17. That is a hole of very nearly £6 billion and compared to the proportionate effect of anything that George Osborne has in mind in welfare, it is six times worse than anything George Osborne is thinking about. We are heading for super austerity in Scotland if we are going to balance the books. It amazes me that my fellow countrymen are not constantly quizzing the SNP saying, "What taxes are you going to raise or what services are you going to cut to bring the books into balance?" They need not exactly balance—I fully accept that you can borrow—but you cannot go on borrowing for ever and ever It is very important that we put price tags on things, and there is a price tag I invite the Minister to consider. There was an amendment in the House of Commons asking for the Government to appoint a body, including representatives nominated by the Scottish Parliament, to estimate the effect of full fiscal autonomy. I think it should be possible to do that. It was voted against by the Government on the premise—mistaken, in my view—that we have done the sums already and we all know that. The trouble is that the Scottish people do not believe you. It is a tragedy and it is very unfair but I am afraid it is true. We need something that people believe in. The SNP rejected it because they did not think that anything appointed by the Conservative Government would be impartial because they are against full fiscal autonomy Now I am fairly certain that full fiscal autonomy is a disaster and I agree with the noble Lord, Lord Forsyth. I think the SNP feel it is a disaster as well but do you think they are going to admit it is a disaster? If full fiscal autonomy is a disaster then full independence, which goes one step further, is even worse. The SNP is unlikely to do that. It is more likely to pick holes in the way that the sums were calculated. That is why the report of the committee chaired by the noble Lord, Lord Hollick, is so important and that it is so important that we debate it Reference has been made, particularly by the noble Lord, Lord McCluskey, to the absence of the SNP. It is not our fault that it is not here: it has been given ample opportunity to have representatives here. It is very important that we hear the SNP viewpoint on what methodology is used to calculate the reduction in the block grant. I am quite prepared to take representations from the SNP and put them forward as amendments on the block grant here, if only to give them an airing. However, who knows? I might even agree with them. Nobody knows, because we do not know what the block grant reduction system will look like. It is very important that we get adequate information on that Likewise, we must make sure what the fiscal framework actually means. It is very complicated, and I entirely respect and do not mock the idea of it being negotiated behind closed doors. That is perfectly sensible. I think that we will have to wait for a complete package before either party wants to admit what they are negotiating on, because there will be trade-offs and compromises. I do not regard compromise as a dirty word in politics; it is what politics is all about. I am quite happy to wait until the conclusion of the process, but the parties must be told that there is no deal without the process being complete. Why should it be singularly the Scottish Parliament which can reject this purely on the grounds of the fiscal framework being wrong? There was an interesting article last week, just before the committee of the noble Lord, Lord Hollick, reported, from Anton Muscatelli, the principal of Glasgow University. He said that, depending on which system is chosen, there could be a disastrous effect on the block grant. That was echoed by the committee in its report. To be honest, my concern is that whatever system is chosen, there will be a bad deal for Scotland, because the economics of independence, or of much more devolution, do not work. It is better to have a system where we spread risk throughout the entire United Kingdom I fully accept that the Scottish Parliament is elected; I am not. If its Members choose to go for that deal, that is entirely up to them and I will respect that decision—I will not leave Scotland as a result, or anything like that—but they must tell the Scottish people first. It is all very well accepting a bad deal if you think you will feel better about it because you are independent and doing it yourself. That is fine—I fully respect that—but to deceive the Scottish people would be totally wrong. So there is quite a lot we could go for here, but it is very important that we nail in advance any suggestion that the Treasury is choosing unfavourable methods of calculation—otherwise, the SNP will blame that for the breakdown of negotiations.