A Liberal Democrat Motion on the Final Report of the Steel Commission

Speech by The Rt Hon Malcolm Bruce MP delivered to Scottish Liberal Democrat Conference on Sat 14th Oct 2006

In moving this motion, I believe it is timely to record the extent to which this party has shaped and continues to pioneer the future of Scotland and our relationship with the rest of the United Kingdom.

When I joined the party in 1962 we had but one MP in Scotland. We had a proud history with deep roots back to the great reformers Lloyd George, Keynes and Beveridge.

We were then passionate believers in Home Rule - a banner we have proudly carried for more than a century.

Liberals and the Liberal Democrats signed the Covenant and worked in the Campaign for a Scottish Assembly. In the dark days of Thatcherism when the Tories resiled from the declaration of Perth we joined forces with other progressive elements of Scottish Society to work in the Scottish Constitutional Convention.

The Government poured scorn on us and few in Scotland took the convention seriously. Yet the work that we did there effectively shaped the Scotland Act.

What might have been an assembly, elected by first past the post, with fewer powers than the Scottish Office became a Parliament, elected by PR with more powers.

And that outcome was substantially because we Lib Dems engaged and led the debate. The SNP, remember, walked away and have actually delivered nothing on policy or the constitution.

Funnily enough, when I was campaigning in Turriff I met an SNP voter and suggested that I and the Liberal Democrats had done more to deliver a Scottish Parliament than Alex Salmond or the SNP.

She asked what I meant. I explained about the convention. She said she didn't see the point of a Scottish Parliament. I then explained that the SNP were in favour of independence with our own army and air force and a seat at the UN. She said "That's completely mad>" Why do you vote SNP then. "Because I'm Scottish," she replied.

So it is the Liberal Democrats who deliver change. Devolution was not our objective but a step on the road to a federal United Kingdom.

Unlike the SNP who are unwilling to work with others to bring about change the Liberal Democrats have worked within the devolution settlement to show how we can deliver on policy.

We remain committed to federalism but have allowed devolution to bed in.

The Steel Commission is therefore our contribution to the next round of reform.

We have set out in some detail our proposals for more powers to the Scottish Parliament for a transfer of taxes.

But, more importantly, we have set out a proposal for how all those who want further transfer of powers can come together in a practical and democratic fashion.

Even the Attorney General Lord Goldsmith has recognised the need for a written constitution. The debate about terrorism and human rights underpins this. When a Tory leader can threaten to play ducks and drakes with our commitment to the European Convention on Human Rights, we need it. When Lord Tebbit and the Daily Mail threaten to cut Scotland loose from the Union we need it. Federalism requires it.

Within such a settlement, we need to determine the best level at which different powers should rest. The Steel Commission identifies the case for a further major transfer of powers to the Scottish Parliament.

The allocation of the revenue from taxes and the power to set and change taxes is essential for proper accountability. It is the essence of fiscal federalism.

It would also put into a fair and proper context the fiscal transfers that take place and their justification. Recommendation 18 makes the case for tax transparency to inform the debate.

The whole point of fiscal federalism is to increase the accountability of each tier of Government and to give each tier the instruments to deliver policy options that can improve performance and competitiveness. That is why local Government needs a similarly entrenched settlement.

Those who assume that transferring more tax powers to the Scottish Parliament will lead to higher taxes miss the pressure of competitiveness. It makes more sense for Scotland to expand its tax base rather than to tax its existing base harder.

That is why Liberal Democrats have cut business taxes and plan to go further. It may well make sense to cut other taxes if it stimulates investment and increases revenue.

There is no upswelling of mood that suggests people really want the divisive and disruptive effects of breaking up the union. Rather people want to improve the delivery of devolution.

A second constitutional convention would secure agreement at the highest level as did the first. Liberal Democrats led the first and we can do so even more effectively if there is a second.

If we win next year's election and Nicol Steven is Scotland's first minister we will establish a Second Constitutional Convention. The challenge to the SNP and the Tories is to say whether they will join it or do what they did the first time - boycott it and forfeit all influence over the shape of Scotland's future.

ENDS

Note: Malcolm Bruce was moving an motion on the Final Report of the Steel Commission at the Scottish Liberal Democrat conference, for further information see: http://www.scotlibdems.org.uk/conference/autumn06.shtml