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Volume 485: debated on Wednesday 10 December 2008

The Secretary of State was asked—

Calman Commission

The Calman commission was set up after a vote of the Scottish Parliament and supported by Labour, the Conservatives, the Liberal Democrats, trade unions and Scottish businesses. I welcome its interim report.

Does the Secretary of State think that the current system of funding is fair to the rest of the United Kingdom, especially the north-east of England?

I know that the hon. Gentleman has great affection and passion for the north-east of England, but the fact is that the funding settlement that has been established across the UK has been in place in a period during which Conservative and Labour Governments have been in power. The hon. Gentleman raises the type of issue that the Calman commission, through Anton Muscatelli’s work with his expert group, will be considering, and it would be wrong of me to second-guess that process at this time. That work has to continue.

I welcome the Calman report as a sound, thorough piece of evidential work. The evidence shows that in the financial crisis, with the loss of two of our dear banks in Scotland, Scotland on its own would not have been able to cope. [Interruption.] Is there not a case—[Interruption.] Is there not a case for looking at the evidence, working for devolution, and ensuring that we have good government in health, education and community care—all areas that are crying out for good policies, which the Administration in Scotland are not delivering?

My right hon. Friend is typically right on the money. In his chairmanship of the Select Committee on Treasury, he shows great expertise in these issues. Despite the SNP heckling and haranguing him, the fact is that the £37 billion investment by the UK taxpayer in the two Scottish-based banks is more than the entire budget of the Scottish Government. That shows yet again that in good times the Union of the United Kingdom helps to make us all more prosperous, and in more difficult times it makes us safer and stronger.

The Calman commission has not yet had time to consider the £1 billion of cuts announced by the UK Government, which will impact negatively on Scottish social services. With the Labour and Conservative parties working hand in hand in the Calman commission, is it not time for the Secretary of State to be honest about the Tory-type cuts that he is now in favour of?

Not at all, because in the recent pre-Budget report we saw an additional £2 billion go into the pockets and purses of Scots. Across the country and across the world, Governments are trying to find ways to drive efficiencies. I will not take any lectures from the hon. Gentleman. His party argued for lighter regulation of the banking system, just as it started to collapse; his party argued for an oil fund, just as oil prices fell from $150 a barrel to $42; and his party argued that Scotland should be just like Iceland, when the International Monetary Fund was being called in to save the latter’s economy.

Surely the Secretary of State cannot be telling us the accurate position when he says that the Royal Bank of Scotland and the Bank of Scotland were getting more money than the whole of Scottish Government. Surely those figures cannot be true. Could he tell us a little more about that?

I would like to thank my hon. Friend for his question. The small number of SNP Members were heckling, so perhaps my hon. Friend was not able to hear. We are investing £20 billion of UK taxpayers’ money in the Royal Bank of Scotland, and £17 billion based on the HBOS-Lloyds TSB merger proposals. That direct investment in those banks has led to the Royal Bank of Scotland taking an entirely sensitive approach to small businesses in Scotland, and where that bank has led, we look forward to other banks following.

We share the Secretary of State’s welcome for the Calman commission. Does he note the contrast between the application and thoroughness of the interim Calman report and the so-called national conversation, which appears to be little more than a taxpayer-funded blog site for insomniac nationalists? Does he share my disappointment not only with the content but with the tone of the First Minister’s response to the interim report? Will he therefore use his best endeavours to persuade the First Minister that now is the time to show that he is a man not a mouse—to use the First Minister’s own analogy—by abandoning the national conversation, which does not have the support of the Scottish Parliament, and by engaging, as many in the Scottish Government wish to do, in the Calman process?

The hon. Gentleman is right to say that it is both surprising and disappointing that Scottish Government Ministers will not give evidence to the Calman commission. Of course, Scottish civil servants cannot give evidence to the Calman commission. He is absolutely right to say that if the Scottish Government continue to wish to see this process provide the high-quality outcome that we all want, that position should change over the next few months. The hon. Gentleman is right: there are a number of insomniac SNP supporters across Scotland at the moment. That is partly because their economic dream has turned into a nightmare and their ambitions of Scotland being just another Iceland are really a nightmare come true.

I have particular warmth for Scotland and all the people who live there because I have Scottish blood in my veins and I represented a substantially Scottish ward on the local authority until I came to this place.

Further to the point made by the hon. Member for Blaby (Mr. Robathan), he and I represent constituencies in the east midlands of England that have a population not dissimilar to that of Scotland and a social, economic and demographic profile close to that of Scotland. However, public expenditure in the east midlands is 20 per cent. less per head than it is in Scotland. No one wants to take away from Scotland, but does the Secretary of State hope that one day the east midlands of England will rise to receive the largesse that those north of the border receive?

My hon. Friend raises an important point. Anton Muscatelli looked in great detail at the funding balance and other issues, and the Calman commission will reflect on that and produce its proposals next year. Whether it is in Leicestershire, Lanarkshire or north or south of the border, the United Kingdom provides us with great prosperity in good times and great security in more difficult times. That is a situation that all of us in the House—except one, two, three, four, five and one other who is not in the Chamber at the moment—wish to continue.

Does the Secretary of State accept that today’s exchanges highlight the need for the financial issue to be addressed and that central to that will be the tax-raising position of the Scottish Parliament? Does he recall the Prime Minister telling the CBI dinner in September:

“Devolution has worked, but I do see one problem…the Scottish Parliament is wholly accountable for the budget it spends but not for the size of its budget…That is why we asked the Calman Commission to look carefully at the financial accountability of the Scottish Parliament”?

Is that still a statement of Government policy and can we expect to see that reflected in future submissions from the Scotland Office to the Calman commission?

I am sure it will come as no surprise to the hon. Gentleman to hear that the Prime Minister was speaking on behalf of the Government, and it is important for that to be the case. The Calman commission and Anton Muscatelli have looked at those specifics in precise and great detail. Today’s exchanges have also shown the merit of having a dispassionate, thorough, detailed analytic piece of work such as that currently being produced by the Calman commission. We look forward to the commission’s final report next year and we will continue to give evidence to it. I say again that I think the process would be stronger if the Scottish Government joined the UK Government and gave evidence to the commission.


My Department and I are in regular contact with all sectors of the energy industry, including clean coal, oil and gas, renewables and the nuclear industry.

I thank my right hon. Friend for that answer. I know that he will be playing a part in Pilot, the cross-industry, Government and trade union committee. Does he agree that the best way to secure Scotland’s future energy needs is to ensure that we maximise the recovery of the oil and gas that we already know are in the North sea, particularly in the west of Shetland? What will he do to encourage the Treasury and the Department for Energy and Climate Change to ensure that we successfully get the gas finds that are already being exploited by Total and others in the west of Shetland basin to shore, so that they can fulfil Scotland’s future energy needs?

My hon. Friend speaks with great experience and a detailed understanding of the oil and gas industry, particularly in the North sea. I had the opportunity of visiting and speaking at the oil and gas supply chain conference last month. It is clear, as my hon. Friend rightly said, that a large proportion of the untapped oil reserves lie west of Shetland. I met Total and others when I was in Aberdeen to discuss that very issue. Those conversations need to continue within government and with the industry so that we can exploit that natural resource in the North sea for years to come.

Has the Secretary of State had a chance to look at the report on Scotland’s energy by the Scottish Council for Development and Industry, which found that Scotland can meet

“its target of 50 per cent. of electricity from renewable sources by 2020”

but also that

“Scotland needs £10 billion of investment in new electricity generation between now and 2020”?

How does that fit with his Government’s plan to cut £1 billion from the Scottish Government’s budget?

I have to remind the hon. Gentleman, as I did his hon. Friend the hon. Member for Moray (Angus Robertson), that a few days ago the pre-Budget report put £2 billion back into the pockets and purses of Scottish taxpayers. That is an important point to bear in mind. I know that the hon. Member for Angus (Mr. Weir) and his party have a virulent ideological opposition to the nuclear industry, but as he referred to yesterday’s report by the SCDI, which he quoted selectively, perhaps I can add a quotation. The report also said:

“it is our view that nuclear power should be considered as a potential part of the longer term generation base in Scotland.”

The SCDI speaks the truth.

Does my right hon. Friend agree that one of the energy industry’s problems is sourcing skills? Is he aware that his right hon. Friend the Secretary of State for Innovation, Universities and Skills has earmarked £50 million for high-level skills training in the oil and gas industry, but that there is no such fund in Scotland? The Minister I wrote to in Scotland says that the Scottish Executive have no plan to deal with the problem in Scotland, but that they will bring out a report in the spring, two years after they were elected. Is it not a concern that Scotland may have to go to England to find trained, skilled workers to work in our energy industry?

It is indeed a fact that the oil and gas industry in Scotland, as well as the energy sector more generally, needs access to the most highly skilled workers, not only from throughout the UK but from across the world. There is global competition for those highly skilled workers, which is why I, along with the industry, announced a working group to look into the issue. I share my hon. Friend’s concerns that if the Scottish Executive cannot ensure that Scotland has the highest quality workers and apprentices to exploit the opportunities in the oil and gas industry, that will be a blow to the Scottish economy.

Is the Secretary of State aware of the potential of marine energy in the Pentland firth to provide something in the order of 31 GW for Scotland’s future energy needs? Is he further aware that, although the Crown Estate has started applications for the licensing process, applications are being limited to 20 MW and five years, which is possibly a barrier to future development? Will he use his good offices to speak both to the companies that are making applications and the Crown Estate to see whether a better method can be found for applications?

I listened with great interest to the hon. Gentleman’s genuine point. My hon. Friend the Under-Secretary and I recently met the Crown Estate, so I should be happy to meet him to discuss the issues that he raises. His point is important. For two centuries Scotland relied on its geology, through the exploitation of coal, for our energy. Now we increasingly have to rely on our geography, through the exploitation of natural resources, including wind and wave power.

When he meets the energy companies, will my right hon. Friend raise the fact that although the prices of commodities in the market place have dropped like a stone in the past few months, that has not been passed on to consumers? What is he doing in that respect?

It is entirely unacceptable if the energy companies do not pass on these lower prices to Scottish and UK consumers, and we will continue to press them on that point. Additionally, it is important that the social tariffs that have been announced are more highly publicised. They offer support for tens of thousands of Scots, and are worth hundreds of pounds. The energy companies must not only agree to the social tariffs but publicise them so that they can be taken up.

Reference has already been made to the Scottish Council for Development and Industry report, but does the Secretary of State recognise that not only the business community but every other objective analysis suggests that if there are no new nuclear power stations in Scotland, the lights will go out? Can he offer any hope, not only on the security of energy supply in Scotland but on the economic benefits that the new nuclear development offers to constituencies such as my own, or does he share the nuclear industry’s pessimistic view that, because of the actions of the Scottish Parliament, there is no prospect of new nuclear development in Scotland in the foreseeable future?

I should like to say to the hon. Gentleman:

“We cannot afford for the Scottish Government to play fast and loose with the security and reliability of our future electricity supplies and run the risk of the lights going out in Scotland”.

[Interruption.] Hon. Members may scoff, but those are not my words; they are the words of Liz Cameron, the chief executive of the Scottish Chambers of Commerce. The fact is that the Scottish National party Government are isolated on this issue. Business, trade unions and experts know that the nuclear industry must be part of a balanced energy policy in the United Kingdom and in Scotland.

Post Office Card Account

3. What discussions he has had with ministerial colleagues on the use of the Post Office card account in Scotland. (240212)

My right hon. Friend and I have regular discussions with ministerial colleagues on a range of issues. I particularly welcome the awarding of the Post Office card account contract to Post Office Ltd.

I thank my hon. Friend for that answer. We should be talking about expanding post office services, and looking at the savings gateway project, which was announced by the Post Office last week. We should also be encouraging the roll-out of more free ATMs—many people are unaware that those operated by the Post Office are free. There are now only nine banks in my area, but there are 19 post offices, and we should also be considering expanding the post office network in such a way that it can become the people’s bank.

My hon. Friend is absolutely right. The Post Office is a trusted brand that is considered reliable, safe and secure, and I am delighted that the pre-Budget report announced that the savings gateway account will be available through the Post Office. We estimate that about 725,000 people in Scotland will be eligible to open an account from 2010. We all know that, in times of economic difficulty, saving even a small amount of money can make a real difference to the quality of people’s lives.

East Dunbartonshire has lost a third of its post offices in recent years, and others have been threatened. What other plans do the Government have to build on their belated, but very welcome, decision to save the Post Office card account, in order to deliver many more Government services through the post office network and to give the remaining post offices a much more secure future?

I recently met Ian McKay, the director of Scottish affairs at Royal Mail, and I know that Royal Mail is considering bringing a number of innovative products to market through the Royal Mail services. It believes that it now has a sustainable network in Scotland, and it is working hard to ensure that the universal service is maintained. That is exactly why the Government have set up the Hooper review, which will report to the Government later this year on how we are going to sustain the universal service in the long term.

Is my hon. Friend aware of the discussions that are currently taking place on the possibility of post offices offering credit union services in their branches? The credit union movement is particularly strong in Scotland, and it is playing a particularly important role in the current financial situation. Will my hon. Friend ask her officials to look into this possibility, to see whether such an arrangement could bring added business into the post office network in our communities?

My hon. Friend has had long experience with personal debt advice services, and has supported them through his chairmanship of the all-party group on debt and personal finance. I fully agree that there is an important possible link-up between Royal Mail and the credit unions, and I would be happy to work with him to pursue that matter with Royal Mail.

Calman Commission

4. Whether he has discussed the findings in the interim report of the Commission for Scottish Devolution with the First Minister. (240213)

I am very disappointed by that. The First Minister has a tendency to conflate the interests of the Scottish National party with the interests of Scotland. It would very much be in the interests of Scotland if Scottish Government civil servants were able to give evidence to the Calman commission. If the Secretary of State manages to have that conversation, perhaps he could use his undoubted charm to persuade the First Minister to remove the ban and let them give evidence.

It is, as I said, both disappointing and surprising that Scottish Government Ministers will not give evidence; and Scottish Government civil servants cannot give evidence to the process. I want to strike a tone whereby I work with all Scots in Scotland’s interests and I am just disappointed that that offer has not been taken up by the First Minister and the Scottish Government.

It is clear that by next summer the Calman commission will have completed its work and a final report will be published. In the light of the fact that Scotland’s First Minister and the Scottish National party are not really interested in better governance for Scotland—[Interruption.] We hear about the Tory-Labour pact, and I am in favour of pacts so far as the Union of the United Kingdom of Great Britain is concerned, as opposed to the arc of insolvency offered by the SNP and its swivel-eyed supporters. Will the Secretary of State please tell us his plans for the Government timetable when the final report is published in the summer?

We cannot dictate to the Calman commission the timetable for the publication of its report, but we continue to engage with it and we will respond to it. The fact is that Scotland gets the best of both worlds: it has the benefit of a devolved Parliament in Edinburgh and the security of the UK Parliament, which provides a sense of security and stability in these very difficult times.

UK Fishing Quota

5. What recent representations he has received on the management of the UK fishing quota in Scotland. (240214)

My right hon. Friend and I have not received any recent representations on the management of the UK fishing quota in Scotland, but I am aware of current industry concerns.

Does my hon. Friend agree that the current EU proposals on fishing quotas will have a devastating impact on the west coast and island fishing communities in Scotland if they are not vigorously challenged and changed at the Fisheries Council on 18 and 19 December? Will she further suggest to Ministers in the Scottish Government that, at this crucial time, some of their proposals such as dual registration have more to do with a separatist agenda than with benefiting fishermen in Scotland?

My right hon. Friend has always taken a keen interest in the western isles and the fishing industry there. Our focus next week is on the year-end negotiations and, despite the different policy approaches, we will not jeopardise the UK position in them. We are working closely with all Administrations within the UK. Last week, my hon. Friend the Under-Secretary of State for Environment, Food and Rural Affairs, who has responsibility for fisheries, and I met west coast fishermen to discuss what viable alternatives we could offer at next week’s negotiations. We believe that we are working hard to put forward a package that will preserve fishing in the west coast.

Will the Minister join the Scottish Government in supporting Scottish fishing communities and retain the quota in Scotland? We know that the Minister has been silent on the staggering £1 billion of cuts that Labour’s pre-Budget report will deliver to Scotland. We know of the £120 million of consequential prison spending to come to Scotland and of the HBOS measures, but there has again been silence, endangering 20,000 jobs in Scotland—[Interruption.]

I am surprised that the hon. Gentleman takes so little interest in his own fishing communities and refuses to listen to them when they have made it quite clear that they do not want any change in the current fishing quotas system or the terms of the ability to transfer licences within the UK. We are not prepared to take risks with the UK fishing industry as a whole and we are working hard, along with the industry and all the other devolved Administrations, to achieve the best possible deal next week. It is time that the SNP Government, rather than producing a Christmas card with a fishing boat on top of it, actually spoke up for fishermen.

Does my hon. Friend agree that although it is vital to secure in Brussels the best results in the fisheries negotiations on quotas, it is also important to secure an extension of local fisheries management schemes so that we can move away from the policy of discards that requires fishermen to throw fish out of quota back into the sea? We need to make real progress for our fishermen and real progress on conservation.

I thank my right hon. Friend for that question. I very much welcome the agreement that has just been reached between the EU and Norway, which will mean a significant reduction in discard in North sea fishing, while at the same time see 30 per cent. more fish from Scottish fleets delivered to Scotland. That represents the success and strength of a united approach to the discussions.

Great Britain Football Team

6. What recent discussions he has had with ministerial colleagues on the creation of a Great Britain football team for the 2012 Olympics. (240215)

I met my right hon. Friend the Secretary of State for Culture, Media and Sport last month. I am passionate about our national sport and national team. If there is to be a one-off under-23 football Team GB at the London Olympics, I want to make sure that it does not affect any of the home nations.

Will the Secretary of State not get it into his skull that the Scottish Football Association, the tartan army and the vast majority of Scottish football fans want nothing whatsoever to do with his Team GB, and that his and the Prime Minister’s attempt to bully Scotland into a Team GB threatens the very continuation of the Scottish football team? Will he now take the advice that Sebastian Coe so sagely offered the SFA—“Go away and do absolutely nothing to threaten our team”?

It is true, of course, that all politics is personal, and for the hon. Gentleman all politics is personal insult. He does not want a one-off British Olympic football team, but nor does he want a British Olympic cycling team that Chris Hoy did so well in, a British rowing team that Katherine Grainger did so well in, and a British Paralympics team that Aileen McGlynn did so well in. The fact is that he does not believe in a country called Britain, so it is hardly surprising that he does not want to see any representation of Britain at the Olympic games, but I am pleased to say that the majority of Scots continue to support the United Kingdom of these great islands.