David Steel: Accountability on spending is the core issue

The fundamental conclusion of the Steel Commission, in its 2006 final report, was that the Scottish Parliament should raise as much as was practical of its own spending. Indeed, as far back as 2003 I said in my Donald Dewar Lecture: “Frankly no self-respecting parliament should expect to exist permanently on 100 per cent handouts determined by another parliament, nor should it be responsible for massive public expenditure without any responsibility for raising revenue in a manner accountable to its electorate.” This was a view I held during my time with the Constitutional Convention, which I co-chaired, held during my term as the first Presiding Officer of the Scottish Parliament, and hold now.

The Scottish Parliament is a unique institution in the world. For its procedures and quality of its work it is now one of the strongest democratic institutions anywhere. Rightly, Scotland can be proud. But with regard to powers to raise revenue, it is one of the weakest. This now is the biggest question to address for those of us seeking a stable, long-term, mature relationship between Holyrood and Westminster within the UK. It is a question about having the parliament properly answerable to the people of Scotland.

In the first term of the parliament I presided over budget debates concerned solely about how a budget cake was decided. Naturally, lobbying had taken place over what spending area had priority, but few speeches made reference to accounting to the people who provided the tax money in the first place. The parliament had, and continues to have, a democratic deficit at the heart of its financial deliberations.

If there needed to be an example of how debate and accountability on how money is raised to pay for what is spent, we just need to consider last week’s UK Budget. The government sought to present a case, yet the public seemed less impressed with the details. This is what an alive, vibrant parliament in Edinburgh needs in its budget discussions.

We see too much of the headline-grabbing complaints of grievance between Holyrood and Westminster over the level of the block grant handout and not enough questions to MSPs on accountability for decisions they make on our behalf.

The Scotland Bill is now nearly through Westminster and we should see it on the statute book in good order. I do not believe this will be the closing chapter in the debate on the appropriate powers of the Scottish Parliament. Rather it enables, through its technical measures, the groundwork to be laid for further revenue powers to allow the parliament to meet its financial needs.

With the launch of the Devolution Plus campaign there is now a more detailed model of how the appropriate powers can be secured for the Scottish Parliament. It also has the opportunity to deliver the common ground between the parties that do not support independence.

Its principle bares a striking similarity to the one I outlined in 2003, and its cross-party/non-party ethos follows well in the tradition of securing constitutional change in Scotland. It is therefore a campaign that I support.

Devolution Plus also is a positive message, and I have been impressed at its focus on seeking a strong, positive relationship between institutions based on trust, openness and accountability. This seems to be to be a solid foundation to bring parties and politicians – Home Rule liberals like myself, social democrats or conservatives – together with people outside parties to secure a positive case for reform.

The establishment of the commissions on Home Rule by Willie Rennie, and further devolution by Johann Lamont and the “Friends on the Union” grouping established by Ruth Davidson shows the Liberal Democrats, Labour and Conservatives are engaged in this area. But all parties opposed to independence will need to come together.

I believe strongly that there will need to be a deliverable alternative to independence that commands public support and financial credibility. This is why I have been impressed by the Devolution Plus group’s mature approach, as they have done much of this work.

I am not surprised at this given the support from Tory Alex Fergusson, Lib Dem Tavish Scott and Labour’s Duncan McNeil – all highly respected MSPs – and the leadership of Jeremy Purvis, my former MSP colleague in the Borders.

In autumn last year I visited Canada and spoke to Toronto University on the referendums and was able to look back at the constitutional debate in our country and Canada. With the knowledge from my frequent visits to that country, stretching over decades, I am in no doubt that a decentralised, open, progressive constitution is best. It is also worth noting that in the two previous referendums in Quebec, the people of the province rejected independence because they saw a positive case for the federation put forward by political parties, the federal government and others.

There are still too many unanswered questions over what purports to be the independence proposition for Scotland, not least on finance, currency and financial accountability. It seems that with the lack of consistent arguments for what an independent Scotland would mean, the willingness of the non-independence parties to look at further powers and the creation of the Devolution Plus group to help bring this together, we have the beginnings of a very strong and positive alternative to independence.

• Lord Steel of Aikwood is a Liberal Democrat peer and former Liberal party leader. He co-chaired the Constitutional Convention and was convener of the Scottish Lib Dems’ Steel Commission on Home Rule.