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Volume 508: debated on Wednesday 7 April 2010

The Secretary of State was asked—

Highlands and Islands Economy

1. What assessment he has made of the prospects for the economy of the highlands and islands in the next two years; and if he will make a statement. (325086)

Good morning, Mr. Speaker.

Real help provided by the UK Government since the start of the recession will ensure economic recovery is locked in and will allow the highlands and islands economy to prosper.

Would the Minister agree that it is highly ironic that at a time when the Government—with everyone’s support—are seeking through their commitment to offshore wind development, for example, to encourage major inward investment in manufacturing in the highland economy from firms such as KBR at Nigg, Her Majesty’s Revenue and Customs’ approach to small and medium-sized businesses is driving the likes of Highland Airways, Gaeltec on Skye and others to the wall with the result that the savings accruing to the public purse are more than wiped out by the additional costs of unemployment and all the other benefits that will have to be paid?

The right hon. Gentleman is wrong to say that the Inland Revenue has not been helpful to Scottish businesses given that its own business payment support service has helped more than 18,000 firms in Scotland, with deferred payments of tax totalling more than £300 million. That, I think, is one of the “real help” ways in which we have assisted small businesses. The package announced in this year’s Budget will give £2.5 billion to small businesses and includes a doubling of their investment allowances. We have a good track record in helping businesses and especially in helping growth in new jobs from which the highlands and islands, in particular, will benefit.

When I was a Northern Ireland Minister, I organised an 11-city tour of the United States to try to bring jobs and inward investment to Northern Ireland. Nationalists were involved in those visits, but they did not try to sell the message of trying to take Northern Ireland out of the United Kingdom. Might I suggest to my hon. Friend that she should draw that to the attention of those separatist Scottish National party Ministers from the Scottish Parliament, who are peddling separatism in the United States rather than trying to bring jobs to Scotland?

Yet again, my right hon. Friend gets to the heart of the matter. Tartan week should be a showcase for increasing our exports to the USA and increasing tourism. Instead, the SNP has characterised it by its own obsession with independence and its gripes, rather than promoting Scotland.

The highlands and islands economy has indeed been damaged by Labour’s many fuel tax hikes. The increased tax on cider has been scrapped; can we have the same again for fuel in the Hebrides, please? HMRC’s actions have pushed Highland Airways to the wall. As a result, people in Lewis and Harris are now having to wait until late afternoon before they get their newspapers. What will the Labour Government do to make amends for their actions?

The hon. Gentleman should look at the facts of the case. Sadly, Highland Airways had substantial trading difficulties and many more debts beyond that owing to HMRC. Unfortunately, a takeover was not possible at the last moment and the company went into liquidation, but I understand that the services to the Western Isles are being maintained by Loganair and other services are also being taken account of. We are working hard to help the employees of Highland Airways find new work under the PACE—partnership action for continuing employment—scheme. That is the best and most practical way in which we can help companies and businesses suffering from the recession.

The Minister’s answer to my right hon. Friend the Member for Ross, Skye and Lochaber (Mr. Kennedy) shows just how out of touch she and her ministerial colleagues have become. In the last two years, a quarter of corporate insolvencies in Scotland have been enforced by HMRC. Literally thousands of Scots have lost their jobs because the Chancellor of the Exchequer has been unable to translate his good intentions on managing HMRC into hard, effective action. Does not that embarrass the Minister even slightly?

The hon. Gentleman should remember that output in the highlands and islands has risen by 75 per cent. since the Labour Government were elected in 1997, and there are 220,000 more jobs in Scotland since we were elected in 1997. Through our real help to businesses, including the business support scheme, which I again point out has benefited more than 18,000 small businesses in Scotland, we have helped to keep people on the road and to get Scotland into recovery.

The Minister compares the number of jobs now with the number in 1997, but she seems to ignore the fact that, last year alone, 65,000 Scots lost their jobs as a result of this Government’s policies. The Government now turn around and offer us empty promises of 100,000 new jobs. They have always taken Scotland for granted; now they are just taking the mickey.

It is interesting to note that the unemployment rates in the hon. Gentleman’s constituency are among the lowest in the United Kingdom. That is because of Labour policies, which are creating jobs and supporting people through the recession. The future jobs fund has benefited more than 10,500 people in Scotland by helping them and keeping them close to the job market. It is because of the UK’s policies, taking the tough decisions that the Liberal Democrats would care to ignore, that we have got through this recession much quicker than they would have.


I am most grateful for that very full reply. How does the hon. Lady envisage the situation being resolved if there is a difference in the way in which the Flood and Water Management Bill, for example, once it is adopted, is interpreted in Scotland as opposed to its interpretation in England?

The hon. Lady might be aware that there was recently a case in the Supreme Court regarding the competency of the legislation of the Scottish Parliament. I think that would provide valuable guidance. At the end of the day, when we have difficulties in terms of our relationship with the Scottish Government, we have very detailed procedures with joint ministerial committees in which we can work together to find solutions to problems rather than necessarily considering court action. The fact that the Advocate-General has not needed to take one single case to the Supreme Court since devolution is a symbol of its success.

During her discussions with the Advocate-General, will the Minister raise the devolved issue of transport? Will she also issue guidelines for visitors coming to either Edinburgh or Aberdeen to make it clear that safety is important, particularly when people are travelling in open-decked buses?

My hon. Friend might be referring to the shadow Secretary of State’s unfortunate experience yesterday when his campaign got derailed on day one by inanimate objects. However, I certainly take my hon. Friend’s points on board.

One of the Advocate-General’s roles is to ensure that the relationship between the Scotland Office and the Scottish Executive works within the devolution settlement. It is clear that when it came to the release of al-Megrahi, the Lockerbie bomber, both the victims and the Scottish Executive were the last to be consulted. What steps has the Minister put in place to ensure that that does not happen again? Will she take this final opportunity to condemn the early release of that bomber, who is alive and well seven months later?

The Calman commission recommended a number of ways in which we could improve intergovernmental relationships, and we are very keen to take them forward. It is regrettable that the Scottish Government have declined to accept those recommendations, which have been supported by the majority in the Scottish Parliament. I note the hon. Gentleman’s concerns, which I share, regarding the release of Mr. al-Megrahi, but at the end of the day that was a decision solely for the Scottish Government.

Disabled Children (Benefits)

3. When he last discussed with the Secretary of State for Work and Pensions the benefits provided for disabled children and their families in Scotland. (325088)

Good morning, Mr. Speaker.

The Government are totally committed to supporting disabled children and their families. I discuss these matters and welfare reform with the Secretary of State for Work and Pensions.

Does my right hon. Friend recall that one of the most shameful episodes in the history of social services in Scotland was when the Scottish Government accepted £34 million that was allocated for disabled children and their families and used it to give to local councils to keep council tax steady? Will he continue to consult with colleagues so that never again can we have such a distortion of the Barnett formula, and never again can we trust those who claim to speak for Scotland and attack the most vulnerable?

Scottish National party Members are shouting at my right hon. Friend, but over many years he has established an impeccable record among others across the House through his campaigning for families with disabled children. His criticism is therefore all the more valid. It is a matter of cross-party consensus that we should all try and do as much as we can to support families with disabled children. It is pretty shameful that the £34 million that was meant to go towards supporting the NHS in helping disabled children in Scotland went into a big black hole created by the SNP.

The Secretary of State will realise that this has been an excessively cold winter in Scotland, and that one of the challenges for people with disabilities is their need for extra heating in their homes. In his discussions with the Secretary of State for Work and Pensions, has he therefore pressed the case for extending the winter fuel payment to people with disability and on disability benefits?

We continue to keep all these things under review. Last year we made some important changes to winter fuel payments for pensioners across Scotland, almost trebling the amounts involved, and we have announced further changes in support of families with disabled children. The Government have announced that people with severe visual impairment will become entitled to the higher-rate mobility component of disability living allowance from April next year. That is after a campaign supported by Members of Parliament of all parties and the Royal National Institute of Blind People. We continue to look for other ways to support families with disabled children.

Calman Commission

We remain committed to taking forward the proposals outlined in our White Paper on Calman. We will bring forward a Bill early in the next Session of Parliament to implement these recommendations.

The Calman commission proposals to make the Scottish Parliament more responsible for its financial decision making offer the possibilities of improving democratic accountability in Scotland and also strengthening the Union. Will my right hon. Friend commit himself to introducing the proposals on financial accountability as part of that package?

The Scottish Parliament is one of the great democratic innovations and constitutional changes of recent decades, but the Government and the Calman commission believe that there is an in-built weakness in its architecture, in that it is responsible for spending money but not for raising enough of it. The envisaged radical reforms will give it much more power, and in future the ultimate decision about how much money the Scottish Parliament and Government will spend will be for the Scottish Parliament, which will have to make an annual decision on tax rates in Scotland. That is a fair, sustainable and radical approach, and it is an important part of having a stronger Scotland inside a proud United Kingdom.

Although some form of constitutional reform is certainly necessary, does the Secretary of State agree that the best future for all the people of Scotland is to ensure that the country is not an isolated, small entity but part of a strong and prosperous United Kingdom?

I do not agree with the hon. Lady on all matters, of course, but she is right on this one. All of us who love Scotland and are patriotic about our country know that it is a fantastic place to live and bring up a family, and that it has a phenomenal history. However, it is part of our future and destiny to ensure that a proud Scotland remains an equal part of the United Kingdom. That is not just my view, but the view of the majority of people all across Scotland.

The Secretary of State is absolutely right that there is a commonality of purpose between Labour and Conservatives—they both want to bring cuts to Scotland. We were promised action on the Calman proposals back in the Queen’s Speech in November, but since then we have heard nothing, zilch, not a peep. Is it not the case that the Government have no intention of bringing forward his proposals, and that they would prefer to introduce cuts rather than Calman to Scotland?

The hon. Gentleman makes his point with his characteristically good manners and great sense of humour. This is the latest attempt on this matter by a political party, the SNP, that no one in Scotland takes seriously. It is using desperate tactics, but the only thing that Scotland would get by voting SNP in the general election would be a Tory Government. That is because the SNP brought Mrs. Thatcher to power and is desperate to remove this Labour Government as well. The moment that the party decided to prop up a Tory Government was the moment that it surrendered the right to speak for Scotland.

Future Jobs Fund

The future jobs fund is making a significant impact in Scotland, and more than 10,500 jobs have been funded, including in Aberdeen.

Does my right hon. Friend agree that this investment in jobs and the announcement today that Labour will introduce another 100,000 skilled jobs in Scotland will be the thing that makes a difference to my constituents in Aberdeen? It will make sure that Aberdeen moves from being the oil and gas capital of Europe to being the energy capital of Europe. Some of those new jobs will be green jobs, but they will be skilled jobs.

My hon. Friend is right. Over recent decades, Aberdeen has been a remarkable European and global centre for the oil and gas industry, but although oil and gas have still some years to run they will not last for ever, so this is an enormous opportunity for Aberdeen, and the north-east of Scotland in particular, to have a permanent centre of European excellence in renewable energy that can bring tens of thousands of jobs to Scotland, especially in my hon. Friend’s Aberdeen constituency and the north-east of the country.

Total Block Grant

6. What discussions he has had with the Chancellor of the Exchequer on the adequacy of the total block grant to the Scottish Executive for 2010-11. (325091)

I have regular discussions with the Chancellor on a range of issues. The allocated Scottish Government budget for 2010-11 is the highest ever—more than double that available to Donald Dewar in the first year of devolution.

I thank the Secretary of State for the clarity of his response. Can he confirm that the UK Government are still offering a package of financial support to the Scottish Government in relation to the Forth crossing?

Throughout my time as Secretary of State, I have tried to take a reasonable approach to the big issues facing Scotland. Of course, that has often not been responded to by the Scottish National party, but in an attempt to be reasonable, and trying to set aside party political divisions on those big issues, the UK Government offered an unparalleled and unprecedented flexibility package to help the Scottish Government build a Forth road bridge. Unfortunately, they rebuffed it; they are stuck in an old ideology, which means that, as we speak, the bridge is no closer.

The Scottish Secretary has done nothing to stop the real-terms cuts to the Scottish budget this year, part of a package of cuts that will be deeper and tougher than Margaret Thatcher’s. Is he proud of his Thatcherite legacy and what will he say to the thousands of Scottish public sector workers who will lose their jobs as a result of British Labour party cuts?

I thought the hon. Gentleman was getting up to thank the Labour Government for the tax credits on innovation in the games industry in Dundee, but he is silent. He cannot bring himself to support his constituents and his city.

I am proud of what we have achieved over the past 12 years, and I thank the people of Scotland, because together we have made Scotland a fairer, more confident place. The last thing we need is a vote for the SNP, to bring in the Tory party by the back door.

Economic Inactivity

7. What recent discussions he has had with the Secretary of State for Work and Pensions on the level of economic inactivity in Scotland. (325092)

Order. Before the Minister replies, there are far too many private conversations—some of them indulged in by very senior Members of the House, who I am sure know better. It is not fair to Members and it is not fair to the people of Scotland.

Thank you, Mr. Speaker.

The Secretary of State for Scotland has regular discussions with the Secretary of State for Work and Pensions about the level of economic inactivity in Scotland.

I thank the Minister for that answer. Does she agree with me? In Scotland, Labour is working!

My hon. Friend, as always, is short, succinct and to the point. He is absolutely accurate. We are determined not to repeat the errors of the 1980s and 1990s recession. That is why we are helping young people in particular to get back into work. That is why we are growing jobs with our green investment bank. That is why we are helping new industries and renewable industries in the video games industry and in the life sciences. It is by having a managed industrial policy that we will grow our way into recovery.

The Minister will know that 665,000 working-age people in Scotland are economically inactive. In the past three months, that figure has risen by 21,000. In the past year, Labour has wiped £4.8 billion off the value of the Scottish economy. Since 1997, Scotland’s share of the national debt has more than doubled, and almost 150,000 manufacturing jobs have been lost. Those are facts; there is little that the Minister and the Secretary of State can do about them now, but will she take this last opportunity at the Dispatch Box to apologise to the people of Scotland?

Well, I will tell the hon. Gentleman what we certainly will not do. We will not halt recovery in its tracks by cutting public investment now and squeezing off our recovery. He can be sure that the Labour Government are determined to ensure that the recovery works.

Like most people, but unlike Labour Members, I am interested in talking about the present—2010. Labour’s last manifesto said:

“2010: Full employment in every region and nation”.

The number of people who have been on the dole in Scotland for more than one year has in fact gone up by 122 per cent. in the past 12 months, yet the Minister and the Secretary of State still want to introduce a tax on jobs that will kill recovery. If she thinks that that is a good idea, is it not she and the Secretary of State who have been misled, not leading Scottish business figures?

The hon. Gentleman forgets that since 1997 there are 220,000 more Scots in employment, courtesy of a Labour Government. We are determined to continue the recovery, which is why the national insurance increase will not occur until next year, at which point all predictions show that we will have a strong and sustainable recovery. Under this Government, when we have increased national insurance, jobs have continued to rise.


I have regular discussions with the Secretary of State for Work and Pensions about employment in Scotland. Despite the severity of the recent recession, there are almost 250,000 more Scots working today than there were in 1997.

Has the Secretary of State been discussing the shipbuilding industry with his ministerial colleagues? In particular, has he been discussing the fact that Scotland faces the choice of the Type 45 with Labour or the P45 with the separatists? Has he been discussing the fact that the aircraft carriers are threatened by the Tories and would be sunk by the separatists, but are safe with Labour?

My hon. Friend is absolutely right. He and others are fantastic champions of shipbuilding in Scotland. He makes a very clear point. The Scottish Conservatives are in favour of industry-destroying cuts, creating elitism and sinking shipyards—we have an unchanged Scottish Conservative party. The last thing that Scotland wants to do is to go back to the old divisions of the 1980s under the Tory party. [Interruption.]

Order. We must have some quiet. I am sure that the House will want to hear Sir Nicholas Winterton.

Speaking in this House as a Conservative and Unionist, may I ask whether the Secretary of State agrees that Scotland’s part of the Union has been very beneficial to Scotland, not least in respect of employment?

I am glad that the hon. Gentleman endorses some of what we have been doing over the past decade. Compared with 12 years ago, there are almost 250,000 more people in work in Scotland today, despite the recession. Most people in Scotland are passionate patriots and most Scots are not nationalists. That is why the longer the SNP is in power in Edinburgh, the smaller the support for breaking up Britain becomes.

Immigration Removal Centres (Contraband)

9. What recent discussions he has had with the Secretary of State for the Home Department on levels of contraband in immigration removal centres in Scotland. (325094)

Given that contraband is being sent into Her Majesty’s prison in Edinburgh by the use of crossbows, what is the danger of that happening in the immigration centre? Why do Scottish people use crossbows rather than English longbows?

The management of prisons in Scotland is, of course, a matter for the Scottish Government’s Ministry of Justice. We have policies and procedures in place to prevent contraband from coming into removal centres, but we would not comment on the details because that might compromise the safety of the centre.


10. What his most recent assessment is of the state of the economy in Scotland; and if he will make a statement. (325096)

Official data showing Scotland’s gross domestic product for the end of last year have not yet been published by the Scottish Government, but most indications suggest that Scotland emerged from recession in the fourth quarter of 2009, although the recovery is fragile. The Government are committed to doing all that is necessary to help to drive recovery in the Scottish economy.

The Minister and the Secretary of State will be aware that, in the past two years, 466 Scottish companies have been shut down by Her Majesty’s Revenue and Customs for not paying their bills on time. Currently, many solvent companies in Scotland are being pushed towards liquidation because of HMRC’s actions. Will they have a word with the Chancellor of the Exchequer to get him to take the heat off those solvent companies, so that they can continue to trade and pay their bills?

As I said earlier, the Inland Revenue already has a business support package, which we introduced last year, to defer tax payments. More than 18,000 Scottish businesses have benefited and more than £300 million of tax has already been deferred. It is, however, important that HMRC is operationally independent, and its job is to protect the interests of the UK taxpayer.