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Volume 492: debated on Wednesday 6 May 2009

The Secretary of State was asked—

Home Repossessions

1. What discussions he has had with ministerial colleagues and Scottish Executive Ministers on assistance for people in Scotland facing home repossessions. (271861)

My right hon. Friend the Secretary of State and I have discussed measures to support people in the economic downturn with both ministerial colleagues and Scottish Government Ministers.

I thank my hon. Friend for that response, but what discussions has she had with Scottish Parliament Ministers about the Scottish repossessions working group and what, if any, progress it has made? What discussions has she had about whether the pre-court protocol that exists in England and Wales could be better utilised in Scotland as well?

The important point is that Scottish house owners should not have any less protection than house owners south of the border enjoy. The pre-court protocol in England and Wales has been successful in helping to stem the number of repossessions cases that pass through the court system. In addition, I am sure that my hon. Friend will welcome the new home owner mortgage support scheme introduced last month, which covers about 80 per cent. of all lending and will offer relief on mortgage interest payments for up to two years for those who suffer a substantial but temporary loss of income. I very much hope that the work of the repossessions working group in Scotland will lead to further protections so that the trauma of repossession can, as far as possible, be avoided.

The Minister mentioned the home owner mortgage protection scheme; it was announced back in December, but has only just come into being. Likewise, the consultation on the sale and rent back proposals does not even conclude until this May. Would the Minister like to take this opportunity to remind the House that congratulations are due to the Scottish Parliament on having had mortgage protection in place since 2001, on having a mortgage rights Act and on committing more money pro rata to mortgage to rent and mortgage to shared equity schemes than elsewhere in the UK?

I certainly welcome any such measures, and I can advise the hon. Gentleman that the consultation on sale and rent back concluded last week. We hope that there will be a move to bring the regulation of these schemes under the Financial Services Authority, and we are already ensuring that when mortgage lenders write to people who have got into arrears, they advise them of the potential pitfalls and problems of such schemes. It is also important that people who face repossession have the best possible advice when they get to court. In England and Wales, people are offered free advice at court. I know that some courts in Scotland have started along that route, but I very much hope that the number doing so can be increased so that a consistent level of advice and service is available to anyone facing the trauma of repossession at this time.

Budget 2009

2. What discussions he has had with Scottish Executive Ministers on the implications for Scotland of the measures contained in Budget 2009; and if he will make a statement. (271862)

Good morning, Mr. Speaker. The Budget included new measures to support Scots on modest and middle incomes through the recession, and I look forward to discussing those plans with the CBI, the Scottish Government and trade unions at our next meeting.

My right hon. Friend will be aware that there has been a lot of discussion in Scotland about the implications of the Budget for the finances of the Scottish Government. Will he make clear just how much the Scottish Government are getting as a result of the Budget? What assistance can he give the Scottish Government in terms of their own budget in the current financial circumstances that we are all facing?

My hon. Friend raises an important point. An international financial crisis is sweeping across the globe, but, despite that, the Scottish Government will continue to receive increased funding—an extra £700 million next year. That is a very important statement of intent of continued support. [Interruption.] Scottish National party Members may shout, but the fact is that the Scottish Government now have double the budget that Donald Dewar had when he was First Minister just a decade ago. The people of Scotland will judge whether their current Government are twice as good as Donald Dewar’s Government.

Does the Secretary of State agree that the one Government policy that is having no visible effect in Scotland is the temporary reduction in value added tax? Would not that money have been of greater economic and social benefit to Scotland if it had been spent on home insulation, replacing inadequate schools and building council houses?

I have great respect for the right hon. and learned Gentleman, but the fact is that the VAT cut is working in Scotland. Independent economists now assess that that is the case. The Centre for Economics and Business Research says:

“The figures are clear; the VAT cut is working.”

We have never argued that the VAT cut that helps so many Scottish families is, in and of itself, the solution. We have, of course, to continue to look for other ways to support Scots families through, and beyond, the recession, and the Labour Government are determined to do just that.

Largely as a result of this Government’s reckless tax and spend approach, the Scottish block grant has, indeed, grown to twice the size of 10 years ago. Despite some implausibly optimistic forecasts in the Budget, it is clear that the Treasury is now on course to run out of money, yet all the First Minister has done is attempt to persuade the Government that no cut at all can be made to the block grant. Has the Secretary of State informed the Treasury that, following this development, the Chancellor now looks like only the second most deluded politician in Scotland?

That is entirely pleasant. I wonder whether the hon. Gentleman has entered himself for the gold medal in that particular competition following his celebration of the 30th anniversary of Mrs. Thatcher’s ascent to power and the disruption of Scottish industry. I am glad to see him in his place following his celebration of that anniversary and Scotland’s commiseration of it over the weekend.

In the previous recessions of the 1980s and 1990s, a generation of young people were abandoned to a life of poverty and a life on benefit. It is our intention to do, wherever possible, the exact opposite to what the Tories did, so that a generation of young people are not abandoned to a life of unemployment free of any hope.

The Secretary of State can resort to all the old mantras that he wants, but they will do him no good because the public know where the buck stops for this crisis. Does he really disagree with the view of the Centre for Public Policy for Regions that the years of the Scottish Executive coffers being full to overflowing thanks to block grant increases are over? Will he confirm that, as a direct result of Labour’s financial mismanagement of the UK, up to £4 billion in real terms will have to be cut from the Scottish budget over the next four years? Is it not about time that he and his Prime Minister finally took responsibility for Labour’s catastrophic economic failures and, in particular, the damage that they have done to Scotland’s public finances?

The hon. Gentleman refers to relying on old mantras. I would never mention the old lady or the iron lady in those terms, but if he wishes to insult her in that way, he can do so. The fact is that Scots know what happened in the previous recession. They know that industry was destroyed and that instead of supporting that industry and the people who were made redundant, the Conservatives simply cast them aside. Hundreds of thousands of Scots were made unemployed; hundreds of thousands of Scots were deliberately pushed on to incapacity benefit and a life free of hope, which is why I am happy to announce today that we will be organising a jobs summit next month in Scotland to ensure that the lessons are learned from the previous recession, so that young Scots can benefit from the £1 billion announcement that the UK Government have made about preventing long-term youth unemployment in Scotland.

Further to the Secretary of State’s answer to my right hon. and learned Friend the Member for North-East Fife (Sir Menzies Campbell), can he confirm that if that VAT cut, which has had so little impact, had been reversed, it could have brought Barnett consequentials for the Scottish Government of almost twice the sum that has been complained of as a cut by the Scottish Government? Did the Government not realise that that VAT cut was doomed to fail when they enlisted the support of the SNP for it in the Lobby here?

The hon. Gentleman is just wrong; the economic experts say very clearly that the VAT cut is working. A philosophical disagreement is involved here. Of course the Scottish Government are getting more money and their budget continues to increase, but the UK Government’s view is that money should also be in the pockets and purses of Scottish consumers, so that they can spend and thus ensure that the Scottish economy is bolstered and that the recession is shallower and shorter than it would otherwise be. The VAT cut is, of course, one of a range of measures, another of which is the scrappage scheme for cars, which has been welcomed by the industry in Scotland. That is another important measure of a Labour Government who are taking decisive action to do what we can throughout this international recession.

Economic Downturn

3. What discussions he has had with the First Minister on the effect on Scotland of the economic downturn. (271863)

The Prime Minister recently hosted a dinner with the CBI, the Scottish Trades Union Congress and all the party leaders in the Scottish Parliament to discuss working together through the recession.

I suggest that our constituents watching these exchanges are hardly likely to be impressed by what they see on the television. Given that unemployment is rising—it has increased by 87 per cent. in my constituency alone in the past year—and people are worried about losing their homes, does the Secretary of State think it would be better if less time was spent bickering and engaging in political point scoring between Westminster and Holyrood, and more time was spent on working together to help Scots to deal with the effects of the recession?

I cannot come to a judgment as to what the hon. Lady’s constituents who are watching her on telly make of her performance. I have tried my very best in my time in this job to say to Scotland, and to politicians throughout Scotland, that it is time to set aside some of the traditional disagreements. I have tried to bring together all the politicians of different political parties, but a philosophical difference remains. The SNP believes that Scotland would be better off being like Iceland, whereas I simply believe, as do most Scots, that we are stronger, better off and better protected because we are part of one of the largest economies in the world.

Has my right hon. Friend seen the statement by Michael Levack, the chief executive of the Scottish Building Federation, in which he said:

“In the current economic downturn, unless we see rapid progress towards the Scottish Futures Trust actually starting to fund new infrastructure projects, we could see a significant number of construction firms left high and dry within a matter of months and faced with the real prospect of having to down tools.”

When my right hon. Friend meets the First Minister and his Cabinet, will he draw their attention to that statement by builders who face a fall off the cliff in October or November of this year?

My right hon. Friend raises a very important point about the future of the construction industry in Scotland. Of course, the failure of the Scottish Futures Trust to build schools and other public works in Scotland is remarkable, but that will be debated in detail in the Scottish Parliament. For our part, after ensuring that savers were saved from the actions of the banks, our focus was on getting the banks to begin to do more to support the construction industry. There are early signs that that is happening, but more needs to, and will, be done.

We are all reminded of the description of the Labour party by Lord Mandelson that

“we are all Thatcherites now”.

No, we are not—not on these Benches—unlike the Labour Government and their privatisation and cuts agenda. In the same vein, the Treasury has confirmed savage cuts in public spending in the years ahead. In the teeth of a recession, how can the Secretary of State marry his rhetoric against cuts with his plans to cut £1 billion of public spending in Scotland?

We no longer hear from the hon. Gentleman about Iceland or Ireland and the arc of prosperity—now the arc of insolvency. He talks about Thatcherism. Let us recall that it was in this very Chamber just three decades ago that his party ensured the defeat of a Labour Government and a general election. In the Scottish Parliament, the SNP has been supported admirably by the Conservative party in different votes. Despite the SNP and its relentless personal attacks, I am determined to rise above that and work to do what is best for Scotland. The public will punish whichever political party continues to put itself before our country.

My right hon. Friend has always recognised the importance of Ministry of Defence expenditure to the economy in Scotland, and he is well aware of the centre of engineering excellence at SELEX in Edinburgh, which leads on the radar contract for the Typhoon. Given that it has now been reported in the industry that we have negotiated a good new deal on tranche 3, split into two and with the Saudi Arabia export planes counted, will he resume his discussions with colleagues in the Cabinet, such as the Chancellor and the Secretary of State for Defence, with a view to ensuring that Britain stays fully behind this world-beating new plane?

My right hon. Friend raises an important point, and he has raised it many times before. I will of course look into the points that he raises, but the wider point that he makes is a fair one. MOD contracts are of great importance to Scotland and its economy, especially the new aircraft carrier orders. It is a fact that Royal Navy orders have ensured years of work in Scottish shipyards, which is of great importance to current workers and those on apprenticeships. It is very welcome investment indeed.

The decisions in the recent Budget, including, for example, the increase in the price of fuel without concessions for remote rural areas and the increase in whisky duty, have made the economic downturn worse in the remoter parts of my constituency. Those increases severely affect Islay especially. Will the Secretary of State come with me to Islay to meet local businesses and discuss how the Government can help to see them through the recession?

I am always happy to meet the hon. Gentleman to discuss any issue relating to his constituency. The Budget ensured record investment in Scotland, building on the pre-Budget report. I have pointed already to the VAT cut, but we also have the support for pensioners in the winter fuel payment and the car scrappage scheme. In a real policy innovation, we are also considering new ways to support grandparents who look after their grandchildren. Of course, I am happy to listen to any representations that he wishes to make.

My right hon. Friend will remember the meeting he attended in Prestwick, where a number of industrialists were very concerned about banks and the problems associated with banks. He will know that he is coming back to Ayrshire for a further meeting. He should be aware that a number of the industrialists are now concerned about the Scottish Executive’s lack of activity in providing them with relief from the problems that they face because of this economic downturn.

I look forward to returning to Ayrshire to meet leaders of large and small businesses and to discuss ways in which we can provide further help to their companies at this difficult time. One thing raised on a separate visit to Ayrshire was how we support people on the minimum wage in the retail and entertainment sectors. That is why we will take further measures to ensure that it is against the law for tips to be used as subsidies for people on the minimum wage. People have to be sure that when they offer a tip in a restaurant or a bar, that goes to the staff rather than to the employer to be used to subsidise low pay.

It is 10 years since devolution and since my hon. Friend the Member for Dumfriesshire, Clydesdale and Tweeddale (David Mundell) and I entered the Scottish Parliament as two brand new MSPs. We should not let the occasion go without registering that. It is of course amazing that the silence from the party that introduced devolution 10 years ago has been deafening. Does the Secretary of State think that because devolution has meant that the Prime Minister has had less influence on economic development in Scotland, the country will be in a better position to weather the storm than the rest of the UK? Is it not ironic that the one part of the country that is shielded from the Prime Minister’s economic policies will be the country that he is from?

I welcome the fact that the Parliament that the hon. Gentleman opposed continues to be a success. After his short term in the Scottish Parliament, I welcome him to the green Benches here in the Palace of Westminster. The fact is that Scotland, England, Northern Ireland and Wales are stronger together and would be weaker apart. Together we have this unity and Members on both sides of the House—except for four or five who sit opposite—have a sense that our country has a remarkable history. We have achieved so much together and together we can get through this recession strongly, effectively and successfully and we can continue to be the brilliant, wonderful, successful nation that we all believe that we can be.

Oil and Gas Fields

4. Whether he has had recent discussions with the First Minister on the development of small and technically challenging oil and gas fields; and if he will make a statement. (271864)

I thank my right hon. Friend for that extensive answer. The financial support promised in the Budget for the oil and gas people and the work that my right hon. Friend is doing with the Scottish Executive deserve congratulations. Will he assure me that the work that he is doing within Cabinet to secure money for Scotland will not be put in danger because of the separatist Administration north of the border?

I will continue to do all I can to support the oil and gas industry in the North sea. I believe that the North sea has a big future not only with its continuing oil and gas industry, but as a world centre for carbon capture and storage. That is why the new investment is so essential. The field allowance has ensured that companies can continue to invest by removing the supplementary charge from up to £75 million of their profits so that they qualify for the small field allowance. That is an important announcement, which will be welcome on both sides of the House.

I thank the Secretary of State for his answers so far, but does he recognise that the impact of that field allowance is limited to only very specific marginal fields? The crisis facing the North sea is much bigger now, given the credit crunch and the banking crisis. Will he work with the Chancellor to see whether more can be done to bring forward tax reliefs that will allow new entrants to explore up front during this credit crisis and so that the Government ease the industry’s cash flow?

Of course I have those conversations with the Chancellor and I have spoken to the hon. Gentleman about some of these issues in the past. As he knows, the fuel allowance has been carefully targeted to ensure that, as far as possible, it supports those projects that would not otherwise go ahead. That is the purpose of the targeted way in which it is being introduced. We continue to look for additional ways to support the industry in Scotland and throughout the United Kingdom and I look forward to discussing them with the hon. Gentleman, the Chancellor and the industry in the future.

Sheep Tagging

5. When he next expects to meet members of the Scottish Executive to discuss the co-ordination of implementation of policy on sheep tagging. (271865)

My right hon. Friend has no plans to meet the Scottish Executive to discuss the electronic identification of sheep. However, the Secretary of State for Environment, Food and Rural Affairs is in regular contact with his Scottish counterpart on this issue and, on 27 April, he met representatives of the Scottish sheep industry.

Is the Minister aware that a recent survey carried out by NFU Scotland revealed that 74 per cent. of farmers said they would reduce the size of their flocks if electronic tagging with individual registration came in? Is she aware that these EU proposals could do untold harm to Scottish agriculture? What is wrong with the existing system?

The Government recognise the concerns that the costs could well be disproportionate to the benefits. That is why we have been working closely with the devolved Administrations, including the Scottish Government, to seek a number of concessions. In fact, we met the Commission again on 4 May, when it appeared supportive of our new proposals about third party reporting; we very much hope that they will be passed. We recognise that there are additional costs, but this is a mandatory scheme and it must be implemented by the end of this year.

As a crofter, I wonder whether the Minister will do all she can to prevent this daft, unworkable and expensive scheme coming into being.

I hear what the hon. Gentleman has to say, but I again point out that the scheme is mandatory. The EU has stated that it is not prepared to review the scheme until implementation. However, we are working very closely with the Scottish Government and the other devolved Administrations to try, as far as possible, to reduce the impact on sheep farmers. We have already achieved a number of important concessions and we continue to work closely with the Commission to achieve more.

River Forth (New Crossing)

6. What the outcomes were of his recent discussions with the Chief Secretary of the Treasury and the Cabinet Secretary for Finance and Sustainable Growth in the Scottish Executive on funding for the construction of a new crossing over the River Forth. (271866)

I want to see the new crossing over the River Forth built. We had a constructive meeting on 4 March and identified a number of ways of dealing with the funding of a new bridge.

I thank the Scottish Secretary for that answer. People in Fife are getting exasperated by the failure of the Scottish Executive and the UK Government to reach an agreement on this. The £1 billion that has been offered is not new money, and not a single penny has been raised by the Scottish Government to pay for this bridge. I know that the Scottish Secretary and the First Minister are not best buddies, but can they please kiss and make up and sort out this problem before it has an effect on Scottish jobs and Scottish investment?

I know that the hon. Gentleman has been campaigning for this bridge for some time, as have my hon. Friend the Member for Glenrothes (Lindsay Roy) and others in Fife. We had that meeting, and we offered a package of support of up to £1 billion for the new Forth road crossing, including £500 million as consequentials from Crossrail. I am disappointed, and I think all of Scotland will be disappointed, that the Scottish Government at the moment refuse to accept this offer of unprecedented support for this Forth crossing, but despite the opposition, the offer still lies on the table.

Does my right hon. Friend accept that not everyone agrees that there should be a second bridge going across to Fife? Indeed, many of us believe that it should be a tunnel, because it would last a lot longer. The problem with a second bridge is that in 30 years’ time it will have the same problems as the present bridge, and maybe we should be looking at an alternative and that should be a tunnel—and we could take out some coal at the same time.

I am happy to listen to my hon. Friend’s representations that we should have a bridge, a tunnel, a flyover or any other sort of crossing across the Forth. The important thing is that we make progress. That is why the Treasury offered unprecedented deals to the Scottish Government of up to £1 billion to help to make a reality of the Forth crossing—because it is so important to Scotland’s economy. I repeat, despite the SNP’s opposition to an unprecedented offer, the offer still stands.

Does my right hon. Friend agree that a funding mechanism is vital, not just for Scotland’s infrastructure but, as we have already heard from my right hon. Friend the Member for Stirling (Mrs. McGuire), for the future of the construction industry in Scotland, which is in decline due to the failure of the Scottish Futures Trust?

My hon. Friend raises an important point. He is an acknowledged expert on the construction industry in Scotland. Of course, the Scottish Government have to get Scotland building again, and it is for them to discuss how they do that. As for the UK Government, stability in the banking sector and the way in which we save savers from the actions of the bankers, the fact that there needs to be additional support for the construction industry in Scotland is generally recognised. However, I am confident that with the stability that the UK Government have ensured in the banking sector, Scotland’s construction industry can have a bright future.

North Sea Oil

I continue to discuss the issues with members of the Scottish Government, and with those in the oil and gas industry in Scotland.

I thank my right hon. Friend for that reply. Does he agree that as well as economic investment, investment in human resources is important, not least because of the demands of health and safety?

My right hon. Friend raises a crucial point. Business confidence is important, but so is the confidence of those who work in the North sea, following the recent dreadful, high-profile tragedy that claimed so many lives. That is why there is again consideration of the reintroduction of personal locator beacons. However, in the past, those lights interfered with the long-range beacons fitted to helicopters and life rafts. Of course we are looking into the detail of that horrific crash, and are seeing what lessons can be learned. The reintroduction of those beacons is now under consideration.