Scotland Bill

My Lords, I do not support the noble Lord's amendment. In case anyone should be in any doubt about this, I do not support a referendum on any aspect of this Bill because I do not think that it is appropriate for us to make any of the provisions of the Bill conditional on a referendum, either by the Scots, the whole of the UK or indeed the English. I shall perhaps have an opportunity to explain later that referendums are for extraordinary circumstances and this is not one of those sets of circumstances. Secondly, in this context, I would never support a referendum by the people of England in any event because, in my view, that would be a fundamental misunderstanding of the concept of devolution. Devolution depends on the relationship between the United Kingdom and Scotland and not between England and Scotland. I am not being pedantic; I could go on to say why England, and not Wales and Northern Ireland. The noble Lord nods so I am sure that he gets the point. This is a vehicle for him to have a wider and broader debate and I understand that. It is important that we do not repeatedly categorise these issues as issues between England and Scotland. This is about devolving power to a part of the United Kingdom and holding that part of the United Kingdom in the United Kingdom. We have done it to Northern Ireland and to Wales and we have done it substantially to London in many aspects of public policy. It is challenging and difficult for this Parliament and for people to understand because it is utterly asymmetric across the country, but, in my view, it is a celebration of the diversity of the United Kingdom. I know that there are those among us—the noble Lord, Lord Steel, is one of them—who would like to see a more federal structure where there was less of an asymmetry and much greater clarity. However, the reality is that many parts of the United Kingdom are not ready for that, as they have made clear to us, and it should not be imposed upon them. Ironically, in the history of devolution in Spain, that sort of structure was imposed on the Spaniards and those who were least interested in it made the most out of it. I say that in passing. So I do not support a referendum. I would certainly not support a referendum by only English voters. I turn to the no-detriment principle. I thank the noble Lord for raising this issue again. In the absence of my noble and learned friend Lord Davidson of Glen Clova, who is part of our Treasury team and is also a Scottish affairs spokesman, I have to deal with it. I was reluctant to engage myself in the debate the last time it came up, but got slightly frustrated with the misrepresentation of what I thought was the no-detriment principle. I stuck my nose into it, suggesting, indeed, that this letter be written, but it appears that the letter has just given those who wish to misrepresent the no-detriment principle even more ammunition to do it. The no-detriment principle in this context was first raised, as I understand it, in the Command Paper that accompanied the Bill. My understanding of the no-detriment principle is probably best expressed, interestingly enough, in a paragraph of the Holtham report. This may be entirely the wrong part of the Holtham report for the purpose of the agreement that has now incorporated this into mechanisms for the future between the Scottish Government and the UK Government, but it does what I want it to do. It is paragraph 5.2 of the substantial executive summary of the Holtham report. The executive summary is 72 pages long. I shudder to think what the whole report is like, and I certainly do not intend to spend a weekend between now and the Report stage reading it. If I have understood the Written Statement from the Secretary of State for Scotland, the principle of no-detriment is now to be qualified by reference to the Holtham report and the mechanism in it about budgets and block grants. If I have misunderstood that entirely then, at the risk of encouraging the same sort of pantomime that we saw earlier in another place, perhaps someone on the Front Benches could either nod or shake their head, but if I am right this encapsulates the no-detriment principle: "““Risks consequent on the actions of the Assembly Government should be borne by its budget and risks consequent on the action of the UK Government should be borne by UK budgets. Risks outside government control and arising from elsewhere should be pooled across the union””." It goes on to refer to how difficult that is to do. I accept that it is very difficult, but as I understand it, that is what lay behind the no-detriment principle. If Holtham is now to be incorporated into that agreement, then that may make it easier. If that is right, with all due respect to the noble Lords who have supported this interpretation, adjusting the block grant for Scotland in response to policy decisions made by the UK Government in no way undermines the accountability of the Scottish Parliament or the Scottish Government. They are accountable for what they do. The point about the no-detriment principle is that they should not be accountable to their electorate for what the UK Government do. We can call it what we like, but that is essentially what this is trying to achieve. I see the noble Lord moving in his seat. This is what I fear, of course, when I start to get into this area of complexity. Before I allow the noble Lord to intervene, perhaps I may remind the Committee that when we were discussing the developments before we started on the fifth day of Committee I said at the outset that it would be extremely helpful if, between now and the conclusion of the debates on the Bill, the Government set themselves the task of explaining where we are now in relation to this principle and how it works. It may be that the noble Lord, Lord Forsyth, will never be satisfied that accountability should be encapsulated only in the actions of the Scottish Parliament. He has a very distinctive view about the Bill and about the Parliament's relationship with the rest of the United Kingdom, which few of us share. However, some of us could be satisfied that there might be a way of expressing this with greater clarity than it has been, and perhaps also of incorporating it into part of the Bill before it is beyond amendment so that it becomes clearer than it is at present. It now appears that we have not only to read a Command Paper but be sufficiently familiar with the details of the negotiations between the Scottish and UK Governments and no doubt adept at finding our way around the full version of the Holtham report to understand how the no-detriment principle will work. I prefer the simple statement in paragraph 5.2. If that is what the Government are about, I support them. If they could find a way of making that clear in a way that we could refer to in future to ensure that that is what will happen when people adjust grants, I would support them even more. I look to the noble and learned Lord, who has not until now dealt with these financial provisions—neither have I—to reassure the House that in the near future there is a mechanism that will allow us to do that.