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Volume 454: debated on Tuesday 12 December 2006

The Secretary of State was asked—

Climate Change

1. What discussions he has had with the Secretary of State for Environment, Food and Rural Affairs on climate change issues relating to Scotland. (104866)

I have regular discussions with my right hon. Friend the Secretary of State for Environment, Food and Rural Affairs on a range of issues.

My right hon. Friend will be aware of the comments made this week by the Secretary of State for Environment, Food and Rural Affairs on climate change, explaining that it is the major challenge facing the world today and that the United Kingdom has to play its part both domestically and internationally. Does he agree that, rather than pulling up the drawbridge and cold-shouldering the European Union, as the Conservatives wish to do, or spending many months fruitlessly renegotiating its way back into the European Union, as would happen if the Scottish National party were to lead us, Scotland should play its full part as an integral part of the United Kingdom in leading change in Europe that will make a real difference to climate change for our citizens?

I find myself in complete agreement with my hon. Friend. The European Union—now 25, soon to be 27, members—can make a significant contribution to tackling climate change. The Kyoto protocol and the process that was taken forward evidences the leadership role by the European Union. It is therefore incongruous that the principal Opposition party spends its time trying to disentangle itself from a principal party in the European Parliament, and that one of the main Opposition parties in the Scottish Parliament is so confused that it seems to support independence in the European Union, but wants to secede from the one Union that has been more successful than any other over the last 300 years: the United Kingdom.

Scotland is leading the way for the UK in tackling climate change: for example, by means of more ambitious targets for renewable energy generation of 40 per cent. by 2020, which we are on course to exceed. Does the Minister agree that the Department for Environment, Food and Rural Affairs, and other Departments, can learn from the Scottish example and that, in Scotland, we can and should go further and meet 100 per cent. of Scotland’s electricity needs from renewable sources by 2050?

The starting point is somewhat different. The foresight shown by predecessors in my office as Secretary of State for Scotland has resulted in a far greater element of hydro power being generated in Scotland than south of the border. I am proud that, historically, the Labour party has been supportive of those kinds of environmentally friendly power-generating initiatives in Scotland, and I am glad to say that the Scottish Executive, led by the Labour party, have once again shown a leadership role in showing that we can be a world centre for renewables in years to come.

Both England and Scotland should work together on the issue. Does my right hon. Friend agree that the proposal for a zero-carbon building target for new buildings within 10 years in England and Wales could usefully be adopted by the Scottish Executive, as well, and will he urge his colleagues in the Executive to follow that example?

My hon. Friend is absolutely right that we are stronger together and weaker apart when confronting the challenge of climate change and he is also right to recognise the visionary statement that was made last week about carbon-free homes. I am sure that the Scottish Executive will give the matter consideration, given their continued determination to lead on the issue in Scotland.

Is the Secretary of State aware of the report from the Marine Climate Change Impacts Partnership, which concludes that cod has moved northwards in the North sea as a result of sea warming changing the distribution of plankton, a point made by Scottish fishermen over several years? Given that the Fisheries Council is due to meet next week, will he for once stand up for this important Scottish industry and press his colleagues in DEFRA to oppose any further quota cuts until that new evidence is fully taken into account?

I am aware of the review of the cod recovery plan, but the approach taken by the hon. Gentleman’s party would prejudice the ability to get the outcome that is in the interests of Scottish fishermen. The nationalists simply cannot answer the question of how they would get into the European Union after independence, given their position on the common fisheries policy. That would leave Scottish fishermen high and dry.

Will my right hon. Friend congratulate Caledonian Paper in my constituency on the announcement that it made last week of an investment of some £58 million for a new power generation plant? Will he urge other industries in my constituency and elsewhere to do likewise so that what is happening with its carbon tonnage, which will be reduced from 90,000 tonnes per annum to 15,000 tonnes once the new plant is on stream, will be repeated elsewhere?

I am happy to join my hon. Friend in paying tribute to Caledonian Paper, which has shown real foresight with that innovative investment. I know from having visited his constituency with him that he takes a close interest not just in environmental issues, but in the economic development needs of that part of Scotland. I pay tribute to him for his tireless efforts on behalf of his constituents and local companies.

Highlands and Islands Enterprise

I met the chairman and chief executive of Highlands and Islands Enterprise on 29 November and, among other matters, discussed the strong economic performance of the region.

I thank the Minister for that reply. Will he take this opportunity to reaffirm the Government’s wholehearted commitment to seeing university status granted to the university of the Highlands and Islands Millennium institute? Will he also confirm that he and his colleagues are taking each and every opportunity to stress to all the UK bodies involved, especially the Quality Assurance Agency for Higher Education, the need to make as rapid and realistic progress as is achievable, according to the set timetable, given the overwhelming social, economic and cultural importance of such a development to not only the highlands and islands, but Scotland and, indeed, the UK as a whole?

I am well aware of the importance of the establishment of the university of the highlands and islands. The matter has been raised in discussions that I have had with Highlands and Islands Enterprise and conversations that I had when I visited the highlands and islands. I am aware of the exciting prospects for the university that were raised at the dinner that the right hon. Gentleman kindly hosted with the chief executive and chair of Highlands and Islands Enterprise—[Interruption.] I do not think that the right hon. Gentleman paid for the dinner; he just hosted it—another failed Lib Dem spending promise.

I am aware that the various institutions in the proposed university have received a good report on the quality of education that they are providing, although some governance matters need to be sorted out. I am convinced that they can be sorted and that we will see the establishment of a university in the highlands and islands that will not only play a tremendous part in the economic regeneration of the area, but encourage people to move to the area to study and then stay there.

I am sure that the Minister is aware that the Scottish Affairs Committee is in the highlands and islands as part of our inquiry into poverty. Yesterday, I met representatives of Highlands and Islands Enterprise, other stakeholders and members of the public. The overriding concern expressed by local communities is about the Government’s plans to butcher the rural post office network. Will the Minister and the Secretary of State, at this late hour, make representations to the Department of Trade and Industry to save this valued and essential service?

I am aware that the Scottish Affairs Committee is in the highlands and islands today, although I was not aware that the hon. Gentleman had mastered the art of bilocation by managing to be here at the same time. As I have said at the Dispatch Box almost every month for the past 18 months, the Government accept the need to continue to sustain a viable post office network throughout the country. That is why we are investing £2 billion to ensure that the post office can compete in the modern world. However, there are problems. When the rural network loses £150 million a year and there are 800 post offices throughout the UK with four or fewer customers a day, with each transaction costing the taxpayer £17, that is an unsustainable state of affairs. My right hon. Friend the Secretary of State for Trade and Industry will make a statement in due course and set out the way forward. We want to continue to have a viable and sustainable post office network, but some difficult decisions will have to be taken.

The Minister will doubtless be aware of the great commitment that Highlands and Islands Enterprise has demonstrated towards the development of marine renewables. In that regard, however, will the Minister speak to his colleagues in the Department of Trade and Industry about the way in which its marine renewable fund operates? The creation of the fund was welcome, but those who are involved in research and development tell me that because of the way in which it was set up, it is virtually impossible to get money out of it. Will the Minister take up that point in his discussions with his DTI colleagues?

I am happy to look into the matter on the hon. Gentleman’s behalf, although I do not accept the assertion that it is virtually impossible to get money out of the fund. However, it is important that organisations with good proposals are able to access that funding. I am sure that he would want to pay tribute to the funding that the UK has given to the maritime research centre that is based in his constituency, which has done a lot of work to ensure that we will be in a position very soon to get more of our energy from wave and tidal sources. We are not there yet, which is why the investment is needed, but I will examine the point that the hon. Gentleman makes.

Cross-border Issues

3. What recent discussions he has had with the First Minister on the effect of cross-border patient flows on hospital waiting times. (104870)

My right hon. Friend the Secretary of State regularly meets the First Minister to discuss a wide range of issues. As I advised the hon. Gentleman during Scottish questions last month, however, cross-border health issues are primarily for the Department of Health and the Scottish Executive.

Do Scottish patients waiting for an operation at an English hospital have the same priority at that hospital as English patients? Does the Minister know how many Scottish patients have been waiting more than six months for an NHS operation?

I am not sure whether the hon. Gentleman is referring to people waiting for operations who happen to be Scottish, but who live in England.

The hon. Gentleman is talking about cross-patient waiting—[Interruption.] They were very cross patients under the Conservatives, but waiting times have come down under Labour. Agreements are made between the Scottish health service and health authorities in England and Wales, primarily in the border areas. However, in Scotland, as in England, waiting times and waiting lists for operations are falling. Thanks to the investment that the Government have put in, the number of deaths from cancer, heart attacks and strokes—the main killer diseases in Scotland’s history—has come down in recent times. Unfortunately, the hon. Gentleman’s party opposed all that investment.

As my hon. Friend the Under-Secretary of State for Scotland has just made clear, I discuss a wide range of matters with the First Minister on a regular basis.

I am grateful to the Secretary of State for that full response, but given his current sabbatical to run the increasingly desperate and hysterical Labour campaign for the Holyrood elections, I wonder that he has any time to touch on what is supposed to be his real brief. Does he agree that, given the stagnation of the rail and road network, both cross-border and, more particularly, in England, the House deserves and requires a full-time Secretary of State, not one giving his orders in Bute house to the Scottish First Minister?

Where do I begin? First, on part-time attendance, I note the absence of the Scarlet Pimpernel from the Benches opposite. I resist absolutely any suggestion that I am obliged to make hysterical attacks—I simply tell the truth about the Scottish National party’s policies. I pointed out that the SNP leader was 51, but I supposed that if there was independence, under the SNP’s figures, he would be about 27. On the hon. Gentleman’s substantive point about whether the rail industry is stagnating, it may have passed his notice that we have the fastest growing passenger railway in Europe, that more than 1 billion passengers a year now use the railways, and that we are committing record and sustained levels of investment. Once again, the SNP needs to do its homework.

My right hon. Friend will be aware of the importance of the Glasgow airport rail link, not only to the local economy but to tourism. Has an assessment been carried out on what the effect would be of the SNP’s policy of opposing that investment?

The reinstatement of the ferry service between Campeltown and Ballycastle would be a great encouragement to tourism and would improve business links between Scotland and Northern Ireland. The Scottish Executive are prepared to back the ferry with hard cash, but the Government here in Westminster are not. Will the Secretary of State please have a word with his colleagues in the Northern Ireland Office, and convince them of the benefit that reinstating that ferry service would bring to both Scotland and Northern Ireland?

I am certainly always happy to discuss with my colleagues any transport issues that are within the remit of the British Government, but may I suggest that the hon. Gentleman has a word with the Liberal Democrat Transport Minister in Scotland, too?

Senior businessmen in my constituency are concerned about the possible currency in an independent Scotland. It will not be the pound, and it will not be the euro. If the SNP lost a referendum on the euro, it would have to introduce the Scottish bawbee. At what part of the cross-border road will we have to change currency?

Order. These questions must be closely related, but they are not. I hope that Mr. Mundell will manage better.

Thank you, Mr. Speaker. Is it not the case that Sir Rod Eddington has effectively ruled out a high-speed rail link between Scotland and London, saying that a high-speed rail link

“between two cities would not offer the economy…new”


“or trading opportunities, if those cities were already a day-trip away from each other by existing rail…links”?

Does the Secretary of State agree with that statement?

The Government have not yet reached a final view on high-speed rail links connecting the north and south of the country. We will of course give serious consideration to Sir Rod Eddington’s report. He has commented on the high-speed rail link, among other modes of transport, and that will inform my Department’s work as we move forward on the issue.

Can the Secretary of State comment on the absence of discussions between Northern Ireland Ministers, those in his Ministry, as Secretary of State for Scotland, and those in the Department for Transport, which is the other portfolio that he holds, to deal with the parlous state of the road between the English-Scottish border and the ports from which ferries go to Northern Ireland? Is it not important that there is discussion between the three Ministries about improving the road from Stranraer to Gretna, in the interests of the United Kingdom, and the important commercial life of Northern Ireland? May we have those discussions?

My hon. Friend the Under-Secretary was just reminding me of the scale of investment in the roads network in Northern Ireland. Of course, we maintain a dialogue with the Scottish Executive looking at issues such as the one that my hon. Friend described, which impacts on the locality and more widely. Those discussions would be infinitely more difficult if we were dealing with foreign Governments.

Property Tax

Local taxes, such as council tax and non-domestic rates, to fund local authority expenditure are matters for the Scottish Executive.

The Minister will know that many elderly people live on modest retirement incomes, but the value of their properties has increased substantially over the years. What discussions has he had with his colleagues in the Department for Work and Pensions about the likely impact of a property tax on people on limited or low incomes?

As I said in my main answer to the hon. Lady, any decision to change the basis of local taxation in Scotland is a matter for the Scottish Executive, but my colleagues in the Executive are not attracted to proposals for a local property tax. The best thing that we can do for pensioners and people on low and modest incomes is to ensure that they receive the help and support that they require through pension credit and above-inflation increases in the state pension. I urge the House to compare that with the 18 years of Conservative rule, when the basic state pension rose in value only once.

My hon. Friend will be aware that in discussions about local council funding, some people have proposed replacing property tax with local income tax. What assessment has he made of the impact that that would have on Scotland and on individuals who live there?

The impact on hard-working two-income families would be devastating if we adopted a local income tax. The Burt report, which was published recently, said that to make the same amount of money as the council tax, local income tax would have to be set at 6.9 per cent. I understand that the Scottish National party would cap it at 3 per cent., which would leave a black hole in local finances of £1 billion. That would mean massive Government tax hikes and borrowing or massive cuts in spending in local authority areas. Once again, it would be the hard-working families—

I think that it can be said that my party has learned from bitter experience that there is no easy answer to financing local government in Scotland. However, the answer is definitely not a local income tax or a property tax, which would result in working families paying thousands of pounds more in tax. As ever, the First Minister has prevaricated on the matter, but given the expectation that the Lyons report will recommend the introduction of a property tax for England and Wales—such a tax is to be introduced in Northern Ireland—is not the reality that a property tax is a fait accompli if Labour is returned to power in the Scottish Parliament elections?

The hon. Gentleman is quite right that the answer is not a property tax or a local income tax. However, neither is the answer introducing a poll tax, which was his party’s last attempt to solve the problem and which was overwhelmingly rejected by the people of Scotland. We have clearly said that we are not going to introduce a property tax nor will we introduce a local income tax, which would cost a fortune to fund, with 32 different rates across Scotland and all the administrative nightmares that that would involve. Most of all, it would clobber hard-working two-income families the length and breadth of Scotland who would be up to £1,000 worse off.


6. What progress has been made towards achieving full employment in Scotland; and if he will make a statement. (104873)

Scotland continues to benefit from the Government’s commitment to achieving full employment. The latest labour market data show the highest number of people employed in Scotland since records began. Total employment is up by more than 200,000 since 1997, and the employment rate in Scotland exceeds that of both the wider UK and almost all countries in the European Union.

I am very grateful to the Minister for his answer and, indeed, for the huge amount of work that has been done to achieve those figures and to tackle the reality of unemployment for the people whom it affects. Last Friday, my hon. Friend the Member for Central Ayrshire (Mr. Donohoe) and I attended the opening of offices in my constituency for the Irvine Bay Regeneration Company, which hopes to turn the tide. There has been a 25 per cent. increase in employment in my constituency since 1997, but a huge amount still needs to be done to regenerate the area. Does my right hon. Friend welcome—

I am well aware of the important work that the Irvine Bay company anticipates undertaking, given that that was an area of Scotland devastated by two recessions in as many decades under the Conservatives. As regards traditional manufacturing, I am sure my hon. Friend will welcome the comments of Dr. Peter Hughes, the chief executive of Scottish Engineering, who said on 1 December:

“Our industry is feeling a higher level of optimism than for some time”.

As my hon. Friend recognises, however, the challenge is not just in manufacturing, but in services, so I am sure she will also welcome the words of the RBS Group chief economist Andrew McLaughlin, who only yesterday noted that

“growth of Scottish private sector output remained robust and broad based across both manufacturing and service sectors in November.”

Those are welcome signs of continued and sustained economic growth not just in Ayrshire, but right across Scotland.

As the Secretary of State knows, a major employer in Scotland is the Scotch whisky industry. What discussions has he had with the Venezuelan Government about the new trade barriers that that Government have introduced, which are having a substantial impact on Scottish exports to Latin America?

I am sure all hon. Members will be interested in the fact that the Scotch Whisky Association is having its annual reception this week at which there will be an opportunity for us to meet its representatives. Since assuming the office of Secretary of State for Scotland, I have of course met the Scotch Whisky Association. With reference to the hon. Gentleman’s particular point about Venezuela, in a previous role as Trade Minister I made representations on behalf of the Scottish whisky industry to the Indian Government and to other Governments about the need for trade barriers to come down. That argues for the effective link-up between the Scotland Office and the Foreign and Commonwealth Office, which would be imperilled by a break-up of the United Kingdom and the loss of national influence that the United Kingdom brings.

Oil/Gas Industry

When my right hon. Friend met representatives of the oil and gas industry, did he discuss with them their tax liability over the next 30 years? It is unlikely that he did, as neither he nor I nor the oil industry knows what the oil price is likely to be next week, never mind over the next 30 years, but I am told that there are some people who think that one can run a country on the basis of the oil income.

I find myself in agreement with my hon. Friend. I met the chairman of Shell in the UK last week and made it clear how inherently difficult it is to try to predict the oil price looking to the future. One need only look at the significant drop in the price of Brent crude in recent months to evidence the fact that it would be the height of irresponsibility to try to build an economic policy on as volatile a commodity as oil.

I draw the attention of the House to my entries in the Register of Members’ Interests related to the oil and gas industry. The price of oil into the future is obviously unknown, but what can be less unknown is Government policy. The Government can give a clear indication of the framework in which investors will operate—both the tax and regulatory regime. What message has the right hon. Gentleman given to the industry about his Government’s desire for a long-term strategy to ensure maximum recovery of oil and gas from the North sea?

The meeting that I had with Shell was the latest meeting that I have had with representatives of the oil interests in the United Kingdom. Of course we want to see a long-term productive future for the UK continental shelf, and for the North sea basin in particular. That is why, through the PILOT mechanism, my hon. Friend the Under-Secretary and I have been working week in, week out, month in, month out to ensure that there is a sustained engagement with our Department, the Department of Trade and Industry and the Treasury. On that basis, I believe we can look forward with real optimism to the years ahead for the North sea.

With reference to the fluctuating oil price, has my right hon. Friend had time to look at the GERS figures that were published yesterday, and what conclusion does he draw from them?

The figures confirm, as The Scotsman made clear on its front page today, that there is a black hole in the Scottish National party’s economics. Oil has a significant contribution to make, but it cannot fill the black hole created by the public expenditure commitments that the nationalists would be determined to make.

Act of Union

As I informed the House on 7 November, the Chancellor and I will launch a commemorative £2 coin. There will be exhibitions in both Houses of Parliament and in the Scottish Parliament, and other activities are in preparation.

Apart from her gracious agreement to appear on the new £2 coin, what other activities and engagements does the Secretary of State plan for Her Majesty in the tricentenary celebrations?

With respect, it would be better to take that issue forward in discussions with the royal household rather than prejudging it with an answer today.

Would not one way of celebrating the Act of Union effectively next year be for Scotland to join England in its World cup bid for 2018? That would allow the two countries to show joint sporting endeavour, and Scotland would finally be allowed by the Chancellor of the Exchequer to bid for the World cup with England.

The hon. Gentleman may be aware that FIFA does not encourage joint bids. I will disappoint him, if he wants to argue for a joint United Kingdom football team, because I have supported Scotland too often and with enough disappointment in the past to be deeply unconvinced by that particular argument.