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Volume 487: debated on Wednesday 4 February 2009

The Secretary of State was asked—

Barnett Formula

1. What recent discussions he has had with the Chancellor of the Exchequer on potential changes to the Barnett formula. (253059)

I am not entirely sure that that answers my question. My constituents pay the same taxes as the people of Scotland, yet receive £2,243 a year less public expenditure. Why should every man, woman and child in my constituency pay an extra £2,200 to subsidise the Scottish Government?

That is not the case at all. The four nations of the United Kingdom are, of course, stronger together. We gain great strength from the cohesiveness of that unique union of the United Kingdom. I think the hon. Gentleman would do well to reflect on the fact that there is higher spending on policing in England, that the rate of growth in health spending is 7 per cent. in England while in Scotland it is 4 per cent. and that Sure Start is available in England and not in Scotland, and so much else besides. Of course, it is an issue for the Scottish Government and the Scottish Parliament how they allocate the specific funding available to them.

One of the areas to benefit under the Barnett formula is education, yet colleges of education, including those run by South Lanarkshire council in my constituency, are turning away thousands of potential trainees. Following his meeting with the Chancellor of the Exchequer, and if he has plans to meet the First Minister, will the Secretary of State raise the importance of further education and ensure that those people who are demanding training and retraining are not denied it under the Administration in Edinburgh?

My right hon. Friend is absolutely correct. I plan to meet the First Minister, the CBI and the Scottish Trades Union Congress in Scotland next month to discuss those and other issues. Further education colleges in Scotland support about half a million Scots every year, including in Lanarkshire. It is essential that those who are unemployed in Scotland, those who need retraining and those who need apprenticeships can gain from those apprenticeships, and that the necessary Government investment is put in place. At the moment, the proposals brought forward by the Scottish SNP Government do not meet that ambition.

It is clear from the Conservative question that the Conservatives want to continue to cut the Scottish budget. Of course, the UK Labour Government’s position is also to cut £1 billion from the Scottish budget. Does the Secretary of State agree with Rhodri Morgan, the leader of the Labour party in Wales, that now is the wrong time to be cutting public expenditure? Will he stand up to the Treasury, demand that the £1 billion cut be frozen or reversed and that Scotland have the opportunity—

Order. This is not an opportunity to make a speech. The hon. Gentleman is asking a supplementary question.

I was in Dundee recently and met business representatives and trade unions. They welcomed the proposals being made by the UK Government. The hon. Gentleman invites me to agree with the comments of a fellow politician; I invite him to agree with the comments of Mr. Swinney, who is from his party. He said:

“we welcome a number of elements of the direction that the UK Government has taken to get the economy moving.”—[Scottish Parliament Official Report, 26 November 2008; c. 12722-23.]

The Scottish Government now have more than double the budget that Donald Dewar had about a decade ago. They should put it to good use and invest in Scotland to get us through this economic storm. I am determined to do what I can and will work with anyone in the interests of Scotland to ensure that that happens.

How can a nationalist-Tory alliance complain about a lack of money in Scotland if they can find £12.5 million to buy a single painting for Edinburgh at a time when galleries in Glasgow have rain coming through the roof and when spending on arts and culture in Glasgow is being cut? Does that not show gross incompetence?

My criticism of the SNP Government is not that they have invested in a single painting, but that they are not investing in thousands of Scots or in Scottish apprenticeships so that young Scots, in particular, have the chance to get the skills and confidence to compete in the labour market. We are joined in that criticism by the Scottish trade unions.

Order. May I remind the House that the criticism of the Scottish Government refers to a devolved Parliament? The Scottish Parliament is a creation of this House—we devolved the power—and prolonged criticism of the Scottish Parliament will give the impression that that is all we have to talk about.

Order. Mr. Robertson, I expect better. Your behaviour is terrible, absolutely terrible. You are a bad example.

I join you in that expectation, Mr. Speaker, but fear that we may be disappointed.

Does the Secretary of State agree that, for those of us who believe in the continuation of the United Kingdom, reform of the Barnett formula is necessary as part of a process that gives the Scottish Parliament more control over how it raises its budget, as well as how it spends it? In that regard, does he agree that the work of the Calman commission is crucial? It has been reported this morning that the Scottish Government are to start engaging with Calman. If so, does he agree that that will be welcome news indeed?

The Calman commission looking at the future of devolution in Scotland is undoubtedly an important piece of work. Ken Calman also initiated the work of the Muscatelli report on the future funding of devolution in Scotland. I shall not pre-empt the outcome of the Calman report today, but I agree with the hon. Gentleman that it is an essential and important piece of work and we look forward to co-operating on it very closely.

Home Repossessions

3. What steps to minimise home repossession he discussed with Scottish representatives of the Council of Mortgage Lenders at their meeting on 30 October 2008. (253061)

My right hon. Friend discussed a number of issues, including seeking reassurance that the new industry guidance on mortgage arrears and possessions applied throughout the UK.

I thank the Minister for her reply. The credit crunch continues to affect the lives of many people, in Scotland and all over the world. My constituents welcome the decisions that the British Government have taken to help home owners in Scotland, but unfortunately the Scottish Administration have not given the same guarantees—[Interruption.] I understand, but the problem affects thousands of my constituents in Glasgow. Will the Minister reassure me that she will do everything in her power to ensure that as few people as possible face the nightmare of home repossession?

My hon. Friend raises a very important matter. The UK Government are deeply concerned that as few people as possible should face the threat of repossession, and that is exactly why we have strengthened the level of income support for mortgage interest payments. That support is now available after 13 weeks rather than 39, and will cover mortgages of up to £200,000. In addition, we are working very closely with all major lenders on the new home owners mortgage support scheme, which will apply to people who may face redundancy or a drastic loss of income on a temporary basis and allow them to defer their mortgage payments for up to two years.

As my hon. Friend knows, it is also important that the court protocols are in place to make sure that people unfortunate enough to face repossession get protection and good advice when they enter the court process. I am pleased to note that, following representations in the later part of last year, the Scottish Government have agreed to set up a repossessions advice group to see how the law can be strengthened. I very much hope that it can follow the example introduced last year in England.

The Council of Mortgage Lenders was one of the participants in November’s housing summit in Inverness that was organised by the Highland council. One of the summit’s major conclusions was that much more needed to be done, especially at the Scottish Government level, to free up funding for housing associations. The lack of funding is restricting and slowing down housing associations’ ability to build more affordable housing, whereas what should be happening is that that activity should be accelerating. Did the Council of Mortgage Lenders mention that to the Minister, and what action is being taken to apply pressure on the Scottish Government to release the funds needed to get house building going in the highlands?

It is something that we have discussed and will continue to discuss. It is clearly important to stimulate the housing market, especially social housing, throughout the UK, and that is why we have introduced packages to that effect in England and Wales already. It is important to increase the amount of social housing available in Scotland to meet the very high demand that exists already and to stimulate the housing market in general.

My hon. Friend has mentioned that a working party has been established to look at repossession protocols in Scotland, but that has happened four months after the UK Government took action. The process is much too slow, and home owners in Scotland do not have the same protection in the courts as their counterparts in England and Wales. Will my hon. Friend call in Nicola Sturgeon, the relevant Scottish Minister, and make sure that she addresses the issue as urgently as the UK Government are doing, so that the UK and Scottish Governments can work together in a joined-up manner?

My hon. Friend has a long history of providing support and advice for people with personal debt problems, but the momentum in Scotland for repossessions has been growing. For example, Mike Dailly of the Govan law centre has drawn to our attention the fact that the number of repossession proceedings in Scotland has increased rapidly. It is important appropriate protocols to put in place at the earliest opportunity and without delay, and extend the network of sheriff court advice centres. At present, there are advice centres in only seven of Scotland’s 49 sheriff courts, but it is important for people to be able to get advice as soon as they face the threat of repossession.

Defence Policy

4. If he will hold discussions with the Secretary of State for Defence to draw up a contingency plan for defence policy in the event of Scottish independence. (253062)

Is that not a rather irresponsible position to take, bearing in mind the fact that it is clearly within the rights of the Scottish nation to decide to leave the United Kingdom, and bearing in mind the significant role that the Scottish nation has played over the years in the defence of the British isles? Surely it would be responsible of the Government to have such contingency plans in place.

The hon. Gentleman is right to say that the defence footprint is significant in Scotland, where 17,000 service personnel and civilians are employed by the Ministry of Defence. The defence industry in Scotland generates about £2.3 billion. All I would say is that there has never been majority support for independence for Scotland. The fact is that the longer the Scottish National party Government are in power in Scotland, the greater the deficit in support for independence becomes. Support for independence in Scotland is, in percentage terms, in the mid-20s. There is not a mandate for independence, and it would not be appropriate to have such conversations.

I agree with my right hon. Friend. On the defence industrial strategy, will he take every opportunity to remind his right hon. Friend the Secretary of State for Defence of the huge Scottish and British asset right at the sharp end—the forefront—of manufacturing, namely Selex, owned by Finmeccanica? Aerospace and avionics are engineering sectors in which Britain still leads. Will he take every opportunity to remind his colleagues of the importance of that facility to our defence, our industry and all military procurement, including Eurofighter?

My right hon. Friend is absolutely right. In Scotland, about 16,000 people are directly employed in the defence and aerospace industries, including in the areas to which he alluded. It is an enormous, important part of the Scottish economy, and it is a part of the Scottish economy that can continue to grow in the current economic downturn. It can fuel Scotland’s continued success in future years.

But in the past 12 years there has been a cut in service personnel, bases have been closed, regiments have been axed, and less than our share, in terms of population and tax contribution, is spent on procurement in Scotland. Those are the facts. Why should we put up with that? There is also the fact that Scottish service personnel were committed to illegal wars opposed by the people, and the fact that Trident was based in Scotland—a decision that was also opposed by the people.

I recently had the great honour of meeting the Royal Scots Dragoon Guards in Germany, and the whole House—certainly those on the Labour Benches, and almost everyone in the Opposition parties— would talk with great pride of the work that they did, in a remarkable, brave way, to defend democracy in Iraq. The fact is that if the hon. Gentleman had his way, there would be no Royal Navy, no Royal Navy aircraft carriers, and no Royal Navy jobs on the Clyde, in Rosyth or anywhere else. He and his policies are putting in jeopardy thousands of Scottish jobs in the manufacturing base, so it is no wonder that support for independence for Scotland continues to fall.

I speak as someone who gained from an apprenticeship in a shipyard in the west of Scotland. On shipbuilding, orders are being placed on the Clyde as a consequence of our having a United Kingdom, and that is resulting in more apprenticeships on the Clyde. Does my right hon. Friend agree that that is a good thing?

My hon. Friend is absolutely correct. There have been recent announcements about recruiting more people to shipbuilding apprenticeships on the Clyde. If it were not for Royal Navy orders for the Clyde area and other parts of Scotland, there would be no ships on which apprentices could learn their skills. I could not put the matter any better than BAE Systems did when it gave evidence to the Scottish Affairs Committee: it said that without Royal Navy orders,

“There would not be a ship building business.”

If the Scottish National party had its way, there would be no Royal Navy orders because there would be no Royal Navy.

The Secretary of State clearly knows the contribution that RAF Leuchars in my constituency has made to British defence for a very long time. He has told the House of the total contribution of defence expenditure to the Scottish economy. Will he consider a study of the contribution that individual defence installations make to their local economy, to include RAF Leuchars and also, perhaps, Faslane?

The right hon. and learned Gentleman raises an important point about the specific contributions made by RAF Leuchars and Faslane. I am aware that, for example, in Argyll and Clyde about 6,500 defence jobs are reliant on MOD work. On Leuchars, I am happy to discuss with him what specifically we could do to raise the profile of the work of the personnel there and across Scotland, but it is a matter that I would have to discuss in more detail with my right hon. Friend the Secretary of State for Defence.

I thank my right hon. Friend and our right hon. Friend the Secretary of State for Defence for all the thousands of jobs for people in my constituency on the Clyde working on the Type 45 and, hopefully, soon on the carrier. Will he not listen to Opposition parties, one of which would have closed the Clyde down before the last election, and the other which supported it in order to try to get rid of a Labour Government? They offer nothing to help the workers in Scotland or the workers in the defence industry.

Again, my hon. Friend is typically correct when he talks about the importance of the shipbuilding on the Clyde that he and other Glasgow Members have championed for some years. Our armed forces are part of our shared heritage—that of Scotland and the United Kingdom—and the Government will do all we can to protect and preserve that for many years to come.

It is perhaps tempting to remind the House of the Scottish National party’s military adviser, Colonel Crawford, who once proposed chemical weapons as a cheaper alternative to the nuclear deterrent in Scotland. May I urge the Minister not to waste any time or money on making unlikely and unnecessary plans for Scottish independence, which would see the demise of the defence industry in Scotland, and may I remind the House that our Army is better because of Scottish soldiers, and Scotland is safer because of the British Union?

The hon. Gentleman is correct: Scotland is stronger because of the Union and the United Kingdom. There is remarkable pride and passion across Scotland about the enormous contribution made by Scots as part of the United Kingdom armed forces. We will continue to oppose plans by the SNP, of course. Much more important is the fact that the vast majority of Scots refute the suggestions from the SNP that we should break up Britain and destroy the UK armed forces.

Claimant Count

5. What recent discussions he has had with the Secretary of State for Work and Pensions on the projected claimant count in Scotland in 2009-10. (253063)

I have regular discussions with my right hon. Friend the Secretary of State for Work and Pensions about how to support those people who lose their jobs in Scotland and the rest of the UK.

Is the Secretary of State concerned that a further £1 billion of cuts in the coming two years will mean a huge number of job losses in Scotland?

I would have expected the hon. Gentleman to reflect on the fact that, as part of the pre-Budget report, an extra £2 billion is going into the pockets and purses of Scots to support them through these difficult times. Scotland being in the United Kingdom makes Scotland more prosperous in good times and help us to insure against the most difficult times when we face crisis, such as the world faces now. Most Scots appreciate that we are stronger together and would be much weaker apart.

From his discussions with my right hon. Friend the Secretary of State for Work and Pensions, my right hon. Friend will be aware of the support that is now embedded to help the long-term unemployed into work. When he meets the First Minister, will he raise my concern that nothing has been done in Scotland to match the skills and training element of that support, which is available elsewhere in the United Kingdom?

My right hon. Friend is right. We need to make sure that today’s newly unemployed do not become the long-term unemployed of tomorrow. We will discuss those issues with the First Minister and others when we meet in Glasgow next month. We are putting in place welfare reform proposals and increasing the investment in Jobcentre Plus because we will not walk away from our responsibility to the newly unemployed in Scotland and the rest of the UK.

The Secretary of State is right to say that preparations need to be made to deal with the inevitable rise in unemployment as a result of the economic crisis. Will he also recognise that the best thing to do is to minimise the number of job losses? To that end, what are the Government doing to try to ensure maximum investment in the North sea during the current credit crisis? The traditional lending markets are drying up.

The hon. Gentleman is right about the importance of North sea oil and gas. I met representatives of the industry last week and, along with the Secretaries of State for Business, Enterprise and Regulatory Reform and for Energy and Climate Change, I will do so again in the next couple of weeks. It is crucial that we continue investment in the North sea, to access oilfields and gasfields that we have not got to in past decades; I am thinking in particular of the enormous untapped resource west of Shetland. We need to do all that we can to support the industry to exploit that.

As people begin to get worried about the rising claimant count, does my right hon. Friend accept that there are concerns in the oil and gas industry and energy companies such as INEOS, which he visited recently with me? However, those concerns are covered in Scotland by the national agreement for the engineering construction industry, or NAECI—made by the companies and Unite—under which the companies draw from within a 40-mile zone in Scotland. The concern in Scotland is that if workers were denied the right to work outwith Scotland, many with high skills would be unemployed. We need more high skills in Scotland to allow people to get the jobs available in the oil and energy industry.

My hon. Friend is right. I recently met representatives of INEOS and at the weekend I met shop stewards from Longannet and Grangemouth—both places out on strike. It was a helpful and constructive conversation. It is clear that the workers are concerned because of the economic climate and are worried that European law is preventing them from having a level playing field when it comes to employment opportunities. It is essential that those workers are able to compete on a level playing field, that European law is applied equally and that British workers are able to compete for jobs in Britain. We make it absolutely clear, along with the companies, that that is exactly the situation that should and must apply in the UK—and, in most cases, we believe that it does.

Will the Secretary of State admit that on the basis of the warnings from the International Monetary Fund and the Fraser of Allander Institute, his Labour Government have led Scotland not just into recession but to the brink of becoming the worst hit part of the worst hit country in the developed world? Does he agree that at such a time, Scotland does not need a do nothing Secretary of State? It needs him to bring the UK and Scottish Governments together to combat this recession. Can he tell Parliament how many times the Prime Minister has met the First Minister to discuss the recession? How many times has he himself done so?

I do not keep the Prime Minister’s diary, but I have announced that the First Minister, the CBI, the STUC and I will be coming together. We will look at what happened during previous recessions in the United Kingdom. We will look at the position of the Government in power at those times, who said that unemployment was a price worth paying. We will do the opposite. Unemployment is never a price worth paying, and we will do everything that we can to prevent the long-term generational unemployment that typified the Tory approach to previous recessions. [Interruption.]

Order. I say to hon. Members that it is far too noisy in the Chamber. That is unfair to those who are here for Scottish questions.

I think we can take it that the answer to the question about the number of meetings between the Prime Minister and the First Minister to discuss the recession is none. The people of Scotland will find it deeply disappointing that there has been so little, and such acrimonious, dialogue between their Prime Minister, Secretary of State and First Minister in the face of such a serious crisis. I say to the Secretary of State that under a Conservative Government things would be very different, because Scotland’s interests would be put first. Perhaps the Secretary of State can tell us: is it that the Prime Minister has been so busy saving the world that he has not had time to save Scotland, or that he simply puts partisan political interests ahead of Scottish business interests?

There we have it. The Conservatives’ approach would be entirely different. We know that from their history: long-term generational unemployment; incapacity benefit numbers trebling; a poll tax in Scotland first; no investment whatever in public services; and child poverty higher in the United Kingdom than in any industrialised nation in the world. Yes, there are enormous differences between the two parties. We believe in investing in these economically difficult times; the Conservatives are out of touch with the mainstream across the world, including new President Obama. On that basis, they are economically illiterate and politically isolated.