Scotland Bill — House of Lords, 2016-02-22
Topic: Macroeconomics
Michael Bruce Forsyth (Conservative, Centre-right): I do love the noble and learned Lord, Lord McCluskey, as a politician making these penetrating points. He is absolutely right; it is real. I am relying on what I read in the newspapers, but that is what they are asking for welfare, behind closed doors. They would rather spend the money on superannuated civil servants, just for the sake of saying, "This is being done in Scotland". The money is the issue By the way, why is the Secretary of State not doing these negotiations? I was going to ring him up last week to talk to him and he was in Africa on Friday while these negotiations were going on. They are being run by the Treasury. If you are in a spending department like Scotland, the very last thing you want is the Treasury running your negotiations. Unusually, the Treasury appears to be being very generous. It is suggesting that the Barnett formula, which gives Scotland 10% of any increase in expenditure in England, should be extended to income tax and that Scotland should get, as of right, 10% of any increase of income tax that is raised in England. How is that going to go down in England? While the Scottish nationalist Government—who want to put up the top rates of tax—force all these top-rate taxpayers to move south and reduce the size of the tax base, the English are expected to send them a cheque to compensate them for the loss of revenue resulting from people moving out of Scotland. They run the benefit system for the disabled and unemployed. If they fail to get people back into jobs or to provide the support, England has to pick up the cost because those benefits are based on performance. No wonder they cannot reach agreement on no detriment or a fiscal framework. This is an argument about having a cake and eating it As the noble and learned Lord pointed out, if it agrees the fiscal framework, the SNP is now faced with the horrible prospect of going into a Scottish election and saying either, "We are going to have a bit more independence but we are going to have to make cuts in public services and put up taxes", or, "We could not get these terrible people at Westminster to give Scotland a fair deal". The truth is that there were years of lies when people said that Scotland got a bad deal out of the union and that the Barnett formula was unfair: those same critics now cling to that formula like a life-raft. All those people said that Scotland would be better off if it had more powers. By the way, that is not everyone in the Labour Party or elsewhere. All those people turned a deaf ear when people like Gordon Brown and the noble Lord, Lord Darling, who is in his place, warned that if you move to a system which is completely dependent on income tax—an idea which was, incidentally, produced by the Tories to overstep the Labour Party and the Liberals, but was not thought through—you create a situation where you are dependent on a lower tax base and there is no real electoral connection with defence and other UK-based expenditure. Throw in English votes for English laws and you are damaging the United Kingdom The fiscal framework, and how it is agreed, is central to whether or not we get a glue, a cement—a fair and balanced system. That is why the Bill should not become an Act and come into force until both Houses have had an opportunity to discuss it openly and fairly, with people in Scotland—who are entitled to fair dealing—seeing what the realities are and being able to make their choice. It is utterly wrong to go into an election pretending it will be all right on the night. If, at the end of the day, the SNP is able to say, "We got a fantastic deal out of Mr Greg Hands. We got extra money over and above Barnett. Vote for us again", when what matters is long-term future stability, I do not know how long that deal will last; I do not know how it will operate. The Barnett committee, which I served on, and to which the noble and learned Lord, Lord McCluskey, has referred, suggested that, because there is a gap, there should be a 10-year transitional relief and we should move to a needs-based system of funding. I do not know whether that is being proposed or not, but it is essential that we have the opportunity to discuss it Why would my noble friend not agree to Amendment 79H, which prevents the commencement of the Bill until we have agreement? What possible reason could he have? The noble Lord, Lord McAvoy, will say that it will be misinterpreted in Scotland and we will be presented as wrecking the Bill. I say to him that it will be proceeding in parallel with the consideration by the Scottish Parliament which is, quite rightly, insisting that it should look at the Bill in the context of the fiscal framework. What is wrong with us proceeding in parallel with it and having a proper debate on both sides of the border? I beg to move.