Scotland Bill

My Lords, I should apologise as an English Member intervening to this extent in a Scottish debate. I must also apologise that I was unable to be present when my amendment was debated in Committee. I thank the noble Lord, Lord Forsyth, for so ably speaking to it on my behalf. It was much appreciated, as were the other speeches in the debate, although not all of them were ones with which I would agree, as I will point out in a few moments. I want to make clear that this amendment is based entirely on the report by this House's Select Committee on the Barnett Formula. That select committee is probably the best thing I ever did in this House. Not only was its membership cross-party and cross-non-party but it was chaired by my noble friend Lord Richard, a former Labour Leader of your Lordships' House. It had distinguished members such as the noble Lord, Lord Lawson of Blaby, who was a Chancellor of the Exchequer; two former Secretaries of State, Lord Lang and Lord Forsyth; many noble friends and former Ministers; and senior Lib Dems and Cross-Benchers. After a year's discussion and evidence-taking, they came up with a powerful report, which made strong recommendations which are entirely the basis for my amendment. The issue is about the fairness of allocating expenditure between England, Northern Ireland, Wales and Scotland. I am moving the amendment on a Bill about Scotland but if it is accepted, as I hope, it would affect the money going to the other parts of the United Kingdom as well. It is bound to do. I am glad to see my noble friend Lord Richard come in. I have just referred to his chairmanship of the committee which formed the basis for this amendment, and am glad to see him in his place. The amendment is based on the select committee's report and requires need to be taken care of. In other words, instead of the block grant changing each year based on population, it would be based on need. I hope that nobody could oppose need when talking about this matter, although I gather, sadly from some notes that I have received, that my own Front Bench is going to oppose the needs basis rather than the population basis. I hope that it is not the case and that it has been badly drafted, but if it is not it would be disgraceful. I know that there have been reports that the Barnett formula was once referred to by Alex Salmond, the present leader in Scotland, as the Barnett squeeze. He reckons it is all perfectly reasonable and fair to Scotland. Following a report by some research body recently, I saw a headline that said, ““Scots rejoice as subsidy junkie myth laid to rest””. That report was based on the annual changes but, as the select committee pointed out in its report, it is not just the annual changes that are wrong; it is the baseline. Those former Secretaries of State who have told me in the past that the formula would eventually make things right really meant that it would bring things back to the baseline. However, the baseline is wrong. The select committee pointed out clearly that it was the major cause of the difference between the two and the difference is enormous. The most recent figures for identifiable expenditure show that in England the amount is £8,588 per head and in Scotland it is £10,212 per head. Those figures deal with expenditure, not need, but if you look at that difference you will surely judge that it will not be easy to find that there is need there rather than population, or whatever cause. The baseline has been wrong over the many years that this grant has been going. This amendment would not be needed if by any chance, even knowing the facts of the economic and financial situation, the Scottish people were so foolish as to vote in a referendum for independence, which I do not believe for a moment they would be. I hope and believe that all parties in your Lordships' House will strongly support the United Kingdom remaining united. The facts to be put before the Scottish people are very clear but, if by any chance there were to be independence, the only good thing about it would be that we would no longer need a formula. However, I hope and believe that it will not happen. One comes to the other proposition which I gather the Government of Scotland propose to put to the Scottish people. It has become known as devo-max. If it were to be put to the Scottish people, it could not be put in detail. It would be a pig in a poke because they would not know the outcome of devo-max when voting. They could not, because whoever won the election in Scotland after 2015 would have to negotiate with the Treasury. The best of luck to them in negotiating those financial arrangements. Whatever they negotiated, they would almost certainly still need some kind of allocation of grant. That allocation should be made on the basis of need, which is the background of my amendment. The amendment would do what cannot be done by any Government: it would set up an independent commission to decide what need is. It would not be too difficult, as the Select Committee pointed out very clearly. I believe that is what should happen. In 2010, I put a Question to the Minister—I nearly said my noble friend, as I have put so many Questions to him—asking, "““what is their case for maintaining the Barnett formula””." It is worth repeating his reply: "““As set out in the coalition's programme for government, the Government recognise the concerns expressed on the system of devolved funding. However at this present time the priority must be to reduce the budget deficit and therefore any decisions to change the current system must await the stabilisation of the public finances””.—[Official Report, 2/11/10; col. WA 380.]" This amendment would implement the changes in 2015-16, well after the coalition Government's plans to stabilise the economy, so I assume that the Minister will say that the present Government now agree with this amendment because I do not see how they could object to it. He has told me so many times that the Government are on target to achieve stability in 2015. I do not believe that they are, but that is another matter. That is the Government's policy. In those circumstances, I do not see how the Government or anybody else can really object to this amendment. I have gone on too long, I know; I want to get this finished as much as anybody. The noble Lord and others said, in opposing this amendment, that it does not do everything, that it is not the right time, place or pace for this amendment, and in any case it is an administrative measure that does not need legislation. The noble Lord is quite right on that, of course. I recently checked with my then Private Secretary, who went on to more famous things such as being Private Secretary to the Prime Minister because she had heard how good a man he was; he later became the head of the ONS, where he has done a first-class job. He confirmed that when I introduced it I never even asked the Cabinet, never mind Parliament; I just did it as a convenience, thinking that it would not last too long. It became known as a formula because the Thatcher and Major Governments kept it going for 18 years. When I published my book Inside the Treasury in 1982, I never even referred to it, for the obvious reason that it was not a formula then; it became one later. Nobody needs to worry about opposing this amendment because it would upset the Scots and therefore could cost votes. The Thatcher and Major Governments turned it into a formula and at the next election in 1997 proceeded to lose every single seat in both Scotland and Wales. I take the credit for that, of course. The plain fact is that there is little case for opposing this amendment. If it is not necessary, or it should not be in this Bill, it will not do any harm. We should do it now and bring pressure to bear on future Governments, which I hope will not be the same one as now after 2015. I beg to move.