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George Kerevan analysis of Scotland BillIT WAS the most important debate on Scotland in the House of Commons since the passing of the first devolution legislation in 1997. The third reading of the Scotland Bill on Tuesday night (June 21) was a star-studded occasion as befitted a major constitutional mile stone in the United Kingdom’s Mother of Parliaments.
 
To a packed Commons, Gordon Brown gave a statesmanlike speech extolling the need to extend fiscal powers to his native country. Alistair Darling, as befits an ex-Chancellor, gave a bravura explanation of the details of the new Bill. David Cameron and Nick Clegg added their weight to the proceedings to underline their support for the Union and this new development in partnership between the constituent nations of Great Britain. The tone of debate was the House of Commons at its best…

If only! In fact, the third reading of the Scotland Bill was a classic example of why Scotland – and the Union – is badly governed. Gordon Brown and Alistair Darling were conspicuous by their absence. Brown has hardly set foot in the Commons since Labour’s defeat last year. And of course, Scottish matters are beneath either Cameron or Clegg, whatever their pro forma defence of the Union.

Instead, we had a thin Commons with barely 40 members on the green benches at the peak of the debate. Most were Scottish MPs. There was full turnout from the SNP but only a scattering of Scottish Labour members. Lib Dems could be counted in single figures. The only important Coalition ministers to grace the debate were Tory David Gauke, the Exchequer Secretary and a rather silent Michael Moore, the Lib Dem Scottish Secretary. The one celebrity appearance was from Frank Field, the maverick Labour MP for Birkenhead in England.

The major speech of the night was a 42 minute star performance from Stewart Hosie, the SNP Treasury spokesperson. Indeed, much of the debate and questioning during the sitting focused on Hosie’s speech introducing the SNP amendments to the basic Coalition Bill transferring fresh tax and borrowing powers to Holyrood. If a Martian had wandered into the debate they would have assumed Hosie was the government minister and the entire Bill an SNP proposal.

Far from discussing the Coalition Bill, Labour, Tory and Lib Dem MPs spent the bulk of their time attacking Hosie and the SNP. It was not a detailed and forensic examination of the legislation proposed by the Coalition. Scottish Labour MPs (the few in the chamber) were the worst offenders, spending a miniscule time scrutinising the actual Tory-Lib Dem legislation and instead attacking the SNP over everything from minimum pricing for alcohol to the Edinburgh trams (which, in a bizarre intervention, were actually defended by Sheila Gilmore, the Labour MP for Edinburgh East).

In a confident, informed and occasionally humorous speech, Stewart Hosie argued the case for extending the original Calman Commission recommendations that lie at the heart of the Scotland Bill. Hosie made the case for devolving both corporation tax and excise duties to Holyrood in order to give the Scottish Parliament the fiscal levers to grow the economy.

Hosie argued: “The case for devolving corporation tax is clear, indeed there is cross party support in the Commons for these powers to be extended to
Northern Ireland. If corporation tax powers are good for Northern
Ireland they should be good for Scotland too.”

Hosie said his proposal to devolve corporation tax was not about independence or fiscal autonomy for Scotland, but a way of “making the Bill better” so the Scottish Government could concentrate on economic growth.

But his arguments fell on deaf ears, principally Scottish Labour ones. A coterie of Labour MPs – Ian Davidson (Glasgow South West), Mark Lazarowicz (Edinburgh North Leith) and Sheila Gilmore (Edinburgh East) kept up a barrage of interventions through the debate, challenging the SNP to say how it would fund a cut in corporation tax, if fiscal powers were transferred.

Strangely, such questions were never asked by Scottish Labour MPs when Gordon Brown and Alistair Darling cut corporation tax to attract foreign investment and promote economic growth. Mark Lazarowicz – one of Labour’s more intelligent and perceptive backbenchers – dismissed the idea of a corporation tax cut on the grounds it would only let RBS keep its profits. Clearly, Mark did not notice that RBS declared a loss last year.

Stewart Hosie was not put off his stride. Of course a Scottish Government that controlled corporation tax would be responsible for meeting any fiscal obligations that followed a tax cut. But he and the other SNP MPs hit back at Labour’s continuing negativity and inability to think out of the box to grow the economy – a key issue in the Inverclyde by-election.

(For the record, the way you deal with the immediate shortfall from a corporation tax cut is to announce you will phase it in starting in two or three years, and gradually phasing in thereafter. Gives confidence to business to increase investment and output, which arrives just as the tax cut kicks in. As a result, with deft management, the cut in the rate of tax coincides with a rise in overall tax receipts. This method has just been followed in Canada, which is enjoying a mini economic boom.)

Lib Dem and Labour MPs also spend an inordinate time rehashing the SNP proposal to introduce minimum pricing for alcohol. They used this as a pretext to oppose Stewart Hosie’s amendment to transfer excise duties to Scotland. Foremost in this verbal assault were Alan Reid, the Lib Dem MP for Argyll and Bute, and Ann McKechin, Labour’s Shadow Secretary of State for Scotland.

McKechin is a good performer and put her less capable colleagues to shame. But her interest focussed on attacking the SNP rather than strengthening the Tory-Lib Dem Bill, thus exposing Labour’s weakness as the official opposition at Westminster. Labour fought last year’s General Election, claiming it, not the SNP, had the weight to oppose Tory cuts. But judging by McKechin’s misplaced performance in this debate, all Scottish Labour is interested in is criticising the SNP Government at Holyrood, thus letting David Cameron and Nick Clegg off the hook at Westminster.

In fact, by attacking Hosie and the SNP rather than the Tories, McKechin soon tied herself in political knots. She quoted at length a study by the Centre for Public Policy in the Regions, purporting to show that Scottish devolution had done nothing to improve Scottish economic growth. Her point being that giving Scotland control of corporation tax was a red herring.

Quite what Donald Dewar (whom Labour revere as the “Father of the Nation” for introducing Scottish devolution) would have thought of McKechin effectively saying devolution is a waste of time when it comes to improving the Scottish economy, is open to question. Or Jack McConnell, who as First Minister said economic growth was his top priority.

McKechin also attacked the SNP over alcohol pricing only to be reminded that all the main medical bodies, the police and even Tesco support the idea. To his credit, Ian Davidson, Labour MP for Glasgow South West, admitted he was in favour of minimum pricing for alcohol. However, he defended Labour’s tortuous attempts to oppose the devolution of excise duties, by saying it would lead to smuggling and organised crime.

However, Davidson really let himself down with a series of belligerent interventions throughout the evening in which he referred to the amount of money being poured by the SNP into what he called “the black hole of Edinburgh”. Davidson seemed to be arguing that the SNP would use further tax powers to divert more and more financial resources from Glasgow to Edinburgh. His anti-Edinburgh animus eventually provoked another Labour MP, Mark Lazarowicz of Edinburgh North and Leith, to intervene and chide his parochial colleague.

Later in the proceedings, Davidson (who is chair of the Commons Scottish Affairs Select Committee) described the SNP as "neo-fascists".

As SNP MPs heckled him in the usual Commons manner, Davidson said: "I notice the way in which efforts have been made to shout me down. That's what's happened traditionally in Scotland when people challenge the nationalists. Those of us who want to challenge the narrow, neo-fascism of the nationalists..."

Stewart Hosie immediately raised a point of order with Commons Speaker, John Bercow, complaining: "That description is absurd and offensive and wrong in every single regard."

The wild card of the debate was a speech by veteran Labour MP Frank Field, from Birkenhead. Field is a thoughtful politician and a consummate parliamentary performer. He clearly charmed the Deputy Speaker, Dawn Primarolo, who accidentally refered to him as Frank.

Mr Field appologised for intervening in “a family row”, but he wanted to speak on “on behalf of the English”. He said this was the first time he had spoken in a Scottish debate but it would not be the last. He claimed Scotland was getting more than its fair share of public spending and that this would lead to “a sourness entering English politics”.

Field was actually quite amiable and obviously did not understand the ins and outs of Scottish finance – the last available official figures show Scotland pays in more to the Treasury than it gets back, a point both SNP and Scottish Labour MPS tried to point out to Mr Field. The worry is that if someone as thoughtful as Field is ignorant of Scottish issues, what are the real Commons backwoodsmen like?

As a debate, the third reading was disappointment. The best contribution was certainly Stewart Hosie. Angus McNeil, SNP MP for Na h-Eileanan an Iar, was sometimes a bit too angry to get his points across. Eilidh Whiteford, who replaced Alex Salmond as MP for Banff and Buchan, showed she could take on Labour’s Ann McKechin and score points. And no one really knew what Ian Stewart, Tory MP for Milton Keynes, was on about.

In the end, the Scotland Bill was given an unopposed third reading after the SNP amendments had been voted down by the three main Unionist parties.

SNP MP Pete Wishart said: "Is this the Bill that Scotland urgently requires? I have to say the answer to that is unfortunately no." He added that it "falls way short of the ambitions of the Scottish people".

George Kerevan is a Scottish economist and journalist

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