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Volume 514: debated on Wednesday 21 July 2010

The Secretary of State was asked—

Scottish Economy

I have had productive discussions with CBI Scotland and others on the Scottish economy, as has my right hon. Friend the Under-Secretary, and I plan to meet them again in the near future. Our plan to cut the record budget deficit that this Government inherited is the key to ensuring a sustained economic recovery.

In the years to come, it must be the private sector that creates the growth and jobs in Scotland; it is not realistic to have an ever-increasing public sector there. Does the Secretary of State agree that for my constituents in Skipton and Ripon to be funding an ever-expanding Scottish state is an unfair situation?

Across the United Kingdom we inherited a huge deficit in the public finances, which we have to tackle. If we do not, it will not be in just the private sector but the public sector where difficulties will arise.

Recent economic indicators show that the recession in Scotland has been shorter and shallower than in the rest of the UK, but the recovery is fragile. Does the Secretary of State therefore agree that the case for proper financial responsibility in Scotland to help drive economic growth makes sense?

I quite accept the underlying figures that the hon. Gentleman refers to, and the situation in Scotland and in the whole of the UK is indeed challenging. However, as far as future financial accountability and other issues in Scotland are concerned, we believe that the Calman proposals, which we will bring forward in this House, offer the best way forward.

Professor Andrew Hughes Hallett, who advised the Calman commission, says that proper fiscal responsibility could significantly add to Scotland’s GDP. Is the Secretary of State looking closely at the proposals for growth and not just at a funding mechanism, which will not achieve that?

I am sorry but I do not accept the hon. Gentleman’s proposition, and nor should he ignore the others who sat with Professor Hughes Hallett on the Calman commission expert group. They have recently again made it plain that they believe these are the most appropriate powers to give to Scotland at this time.

In my right hon. Friend’s discussions with the CBI, did he recognise that it is very important to build on the success stories in Scotland in order further to advance the Scottish economy? To that end, with the north-east of Scotland providing so much revenue to the Treasury, will he ensure that all levels of government realise how important it is that there be no barriers to investment there, and that companies locating there benefit both the region and the UK?

My hon. Friend is absolutely right about that, and in getting private sector-led recovery in this country, businesses such as those in the energy sector in the north-east will be absolutely critical. I take on board all the observations he makes.

The right hon. Gentleman is having meetings with the CBI, but does he understand that the Government’s cancelling the third runway at Heathrow will have a remarkable effect on Scotland’s air transport system? What is he going to do about that?

We fundamentally disagree with the proposal for the third runway, as the hon. Gentleman understands; we do not believe that it is appropriate either economically or environmentally. The important point is that, by ensuring that we work with the private sector across the whole of government—be it our proposals in the Budget to reduce corporation tax, or the many others to do with banking reform—we believe that we will create the right conditions for the private sector and the transport sector to recover and have a sustainable future.

Scottish employers know that the future jobs fund helps people back into work. The Secretary of State for Scotland claims that it is unsustainable, but he will not publish a shred of evidence to back up his assertion. Employers, the unemployed and even Liberal Democrats in his own constituency support the future jobs fund. As unemployment continues to rise across Scotland, I ask the Secretary of State this specific question: will he now agree to lobby the Chancellor to maintain the future jobs fund in Scotland?

We had this exchange during the last Scottish questions, and the right hon. Gentleman has repeated the phrase that I used then. If I may, I will repeat the point I made then. The future jobs fund was not sustainable in the form it was in. May I remind him, as I did then, that places are still available under that scheme, which will run through to March next year? Some 11,000 places have been funded, but they were temporary, short-term jobs. We believe that a new system of supporting the unemployed is the best way forward.

So, the Secretary of State will not publish a shred of the evidence behind his assertion, and today he has confirmed that he will not even listen to Scotland and meet the Chancellor in order to maintain the future jobs fund and help the unemployed in Scotland. Does he not share the sense of anger across Scotland about the policy immorality of a gang of millionaire politicians cutting support to the most vulnerable people across Scotland? The only surprise for many people in Scotland is that he, as a Liberal Democrat, is going along with it. But perhaps Scotland should not be surprised, because he is fast developing a reputation not as Scotland’s man in the Cabinet, but as the Tories’ salesman in Scotland.

The immorality would be for us to do nothing about the legacy left behind by the right hon. Gentleman’s Government, which is undermining the public sector and any prospect of a private sector recovery.


2. What recent discussions he has had with the Deputy Prime Minister on the implementation in Scotland of proposals to equalise the size of constituencies; and if he will make a statement. (8912)

By equalising the size of constituencies across the UK, we will ensure that people’s votes carry the same weight. We have proposed the two exceptions of Orkney and Shetland and the Western Isles to take account of their special geographic circumstances. The Bill that we will introduce will also provide for an upper limit on the geographical size of a constituency.

In Scotland, there are urban seats that have an electorate of between 50,000 and 80,000; that disparity cannot be justified by extreme geography. Does the Secretary of State agree that it is disappointing that the previous Government had so little regard for the fundamental principle that every vote should have equal value? [Interruption.]

Order. First, some questions are too long, and secondly, at this early stage, the atmosphere is far too raucous. Right hon. and hon. Members need to calm down.

Yes, we have a few traditions to maintain. I agree with my hon. Friend the Member for Weaver Vale (Graham Evans) on the basic principle that votes should have equal weight across the country, wherever they are cast.

Members of the House understand the unique geographical factors that affect island communities, but does the Secretary of State accept that it would be grossly unfair to Scotland’s great cities if their constituency numbers were artificially inflated as a result of that fact, to make up the difference, so that the Government can reach an arbitrary number plucked out by Conservative party central office? Surely the issue should be determined solely by the independent Boundary Commission, not the Conservative party that he seeks to support?

The hon. Lady is trying to advance the very strange principle that across the country there should be different weights for votes, depending on where they are cast. We have to ensure that when we redraw the boundaries, we equalise out those votes to give them equal weight. If people need to register to vote, let us get on with ensuring that they do; there is a responsibility on all of us, and on local authorities, to ensure that that happens.

Future Jobs Fund

3. What recent discussions he has had with the Secretary of State for Work and Pensions on the effects on levels of employment in Scotland of ending the future jobs fund. (8913)

All existing future jobs fund commitments will be honoured, and there are still places available. Next year, we will bring forward our Work programme, which will introduce better targeted and more effective support for young people and the unemployed.

Until the recent worldwide economic downturn, youth unemployment in my constituency was all but eradicated. The future jobs fund created 11,000 jobs, and was projected to create another 20,000. What strategy does the Under-Secretary have on youth unemployment, or are the Government just hoping for a visit from the fairy job mother?

The future jobs fund creates temporary, short-term posts, and the grants do not include any incentives to move people into permanent jobs. Our investment will move young people into sustainable employment, rather than creating temporary changes to unemployment.

It is clear that the future jobs fund was not an effective use of resources. It was aimed at making temporary changes to unemployment figures, rather than moving people into sustainable, permanent jobs.

Commission on Scottish Devolution

4. What recent assessment he has made of the recommendations of the final report of the Commission on Scottish Devolution. (8914)

5. What the proposed timetable is for implementation of the Calman commission’s recommendations. (8915)

As I outlined in response to questions from hon. Members on 16 June, I have asked officials to work for the autumn introduction of a Bill to take forward legislative proposals, with non-legislative recommendations taken forward under a similar time scale.

I thank the right hon. Gentleman for that reply. He knows, or at least I hope he does, that one of the considerations in moving to a Scottish income tax, as proposed in a recommendation by the Calman commission, was whether Her Majesty’s Revenue and Customs systems would be able to collect it. They currently cannot; how does that fact correspond with the comments that the Chancellor made yesterday about tax simplification?

As I have set out, we intend to engage fully with the different sectors in Scotland that will be affected by the changes. As the hon. Gentleman will be aware, we are heavily engaged with the Treasury and HMRC to work our way through the changes that will come as a consequence of Calman, which I believe his party still supports.

Does the Secretary of State agree with the leader of the Liberal Democrats in the Scottish Parliament, Tavish Scott, when he says:

“Politicians should not be able to take easy spending decisions without the responsibility of accounting for this money. Blaming Westminster should not be a get-out clause”?

Does the Secretary of State agree that the devolution settlement in Scotland depends on having free and fair elections to the Scottish Parliament? Does he not see that the integrity of those elections is in danger of being undermined by the Government’s deciding to hold a referendum on the alternative vote on the same day as elections to the Scottish Parliament?

I regret having to disagree with my hon. Friend. We propose a referendum on the change to the voting system for this place on the same day as an election to the Scottish Parliament. We believe that that is entirely sensible. It will reduce cost, it will be more practical and it is on the same way of voting as in elections to the Scottish Parliament, so we will be able to cope with that without too much difficulty.

West Lothian Question

My hon. Friend will be aware that the coalition agreement specifically commits this Government to establishing a commission to look at the West Lothian question. We will bring forward proposals in the autumn.

The biggest threat to the United Kingdom comes not from Scotland but from the resentment that people in England feel at the current constitutional settlement. My right hon. Friend and I both stood on a manifesto promise that we would stop Scottish MPs voting on matters in this House that related only to England. When will that happen?

As I said in my answer, a commission is to be established. This coalition Government, unlike the previous Government, are determined to deal with the issue.

Can the Under-Secretary justify to his constituents the fact that he will not take part in such debates and such votes when he knows only too well that his constituents depend on health service provision in Cumbria and further education support from Cumbria? Is it not right that he takes an interest in what is happening this side of the border?

I can assure the hon. Gentleman that I will be taking an interest in the resolution of the West Lothian question. The hon. Gentleman agreed with Lord Derry Irving when he said that the only answer to the West Lothian question was not to ask it.

Devolution Settlement

7. What recent discussions he has had with the First Minister on the relationship between the Government and the Scottish Executive under the devolution settlement. (8917)

I am regularly in contact with Ministers from the Scottish Government, including the First Minister, on a range of matters.

I am delighted that the Prime Minister visited the Scottish Parliament on the third day of the new Government, unlike his predecessor who never visited there, but will the right hon. Gentleman have a word with the Prime Minister to encourage him to visit the Scottish Parliament again to have further discussions with the First Minister about the relationship between the Government and the Scottish Executive to see whether the new miracle cure for prostate cancer can be made available throughout England?

I absolutely agree that my right hon. Friend the Prime Minister took an important step when he visited the Scottish Parliament to meet the First Minister at such short notice after the coalition was formed. I understand the anguish, not just in Lockerbie and Scotland generally but across the world, about what happened in the course of the release of the Lockerbie bomber, but I believe that the medical decision was taken in good faith.

Given what the Secretary of State has said, will he press all relevant UK Government Departments to release all papers relating to both the negotiation of the prisoner transfer agreement between the UK and Libya and the concurrent commercial contract between BP and Libya?

The Prime Minister in his discussions with the President of the United States and other senior American politicians has put forward the proposal that the Cabinet Secretary will review the papers that exist, and we believe that that is a very important step forward, and one that, hopefully, will find support across the House.

Computer Games Industry

8. What discussions he has had with the Chancellor of the Exchequer on tax relief for the computer games industry in Scotland; and if he will make a statement. (8918)

My right hon. Friend is meeting the hon. Gentleman and representatives from the industry next week to discuss how best to stimulate further growth and expansion in this important sector.

We are actually meeting tomorrow, not next week. How can the Government justify a £110 million tax break for the film industry, but not allow a £50 million tax break for Dundee and the games industry?

I am glad that the Government are dealing with the issues that the hon. Gentleman raises with even more urgency. As he knows, the major package of reforms to business taxation in the Budget is designed to make the UK the most competitive tax regime in the G20 and that will substantially help the video games industry.

Future Jobs Fund

9. What recent discussions he has had with the Secretary of State for Work and Pensions on the effects on Scotland of ending the future jobs fund. (8919)

I am disappointed that yet again the Minister has failed to address the substance of this question. I have listened to his colleagues rubbishing these jobs, calling them artificial and unsustainable. Frankly, I am not surprised that a Cabinet packed with millionaires who went to exclusive private schools and elitist universities cannot see the need for such a scheme and how valuable it is to have paid employment on the CVs of these young unemployed people. Will he press his colleagues to re-examine the decision to scrap the future jobs fund?

When I had the opportunity to visit the Clydebank jobcentre in the hon. Lady’s constituency, I found that the people there—who are on the front line in helping the unemployed into work—welcomed the Government’s measures to replace the myriad schemes introduced by the previous Government with a single Work programme.

VAT Increase

10. What recent discussions he has had with the Chancellor of the Exchequer on the effect on households in Scotland of the proposed increase in the rate of value added tax. (8920)

The VAT rise is part of a fair and progressive Budget. Difficult decisions are necessary to tackle the record deficit that this Government have inherited, but the richest will pay more than the poorest.

Given that every independent analysis says that VAT rises are not progressive but regressive, did the Minister examine the impact of the rise on any aspect of Scottish industry and, in particular, the tourism industry in my constituency, which is a large employer and very relevant to household incomes? Did the Government look at the impact of the increase in VAT on anything?

The right hon. Lady makes a good point about the tourism industry and she will know that many jobs in that industry are low paid. The decision to raise the income tax personal allowance for under-65s by £1,000 in 2011-12 will benefit 2 million basic rate income tax payers in Scotland, including many working in the tourism industry.

Scottish Economy

I have had productive discussions with CBI Scotland and others on the Scottish economy, as has my right hon. Friend the Under-Secretary, and I plan to meet them again in the near future.

Bearing in mind that trade and industry is a reserved matter while economic development is devolved—and that both are vital in addressing the key challenge of economic growth—how will the Secretary of State use his role to work effectively to stimulate private enterprise and job creation in Scotland?

Given the legacy that we were left by the Labour Government, it is essential that we tackle the deficit so that we can tackle interest rates and do not pay the cost in jobs. As far as the private sector is concerned, the measures introduced by my right hon. Friend the Chancellor in the Budget, which we passed in the Third Reading of the Finance Bill last night, will see corporation tax lowered over the course of this Parliament, and include others to boost the private sector.

Given the delicate state of the Scottish economy and the fears about the recovery, does the Secretary of State accept that the proposed massive cuts in public spending—including the huge job losses and the taking of so much money out of the economy—risk a double-dip recession?

If we do not get rid of the historic deficit inherited by the Government—at £155 billion, the largest in peacetime history—we will pay the price in lost jobs for years and years to come. It is essential that we tackle that and take on board the other measures set out in the Budget to ensure we get a good private sector-led recovery, which will fund future public services.

Does my right hon. Friend agree that it was wrong of the Scottish Parliament to release al-Megrahi supposedly on compassionate grounds, and that this matter should be looked into given that he committed a horrendous crime?

The decision to release al-Megrahi was a decision for the Scottish Government—it was entirely theirs, and they answer for that decision—but we, as a Government, have made plain what we felt about it. However, there have been inquiries in the House and the Scottish Parliament, and I do not believe that, at this stage, a public inquiry would be appropriate.

Is the Secretary of State aware of research by Oxford Economics that states that 2.3 million jobs in the private sector will be lost because of the Government’s public sector cuts? Can he explain the devastation that that will cause in Glasgow, which it predicts will be the second-hardest hit city? What does he plan to do for jobs in Glasgow, not only in the public sector but in the private sector? Will the number of jobs go up or down in Glasgow because of his Government?

Across the country we want rising levels of employment and to ensure that, through a private sector-led recovery, we will have a sustainable economy going forward. Were we just to keep going as the hon. Lady’s colleagues in the previous Labour Government did, we would be in very deep trouble indeed.

A1 Upgrade

12. What discussions he has had with ministerial colleagues and the Scottish Executive on upgrading the A1 in Scotland. (8922)

The provision of road transport in Scotland is a devolved matter. Transport Scotland is responsible for the management and maintenance of the trunk road network in Scotland, including the A1.

For 13 years we have had an A1 that is largely single-laned, holding back economic development in south-east Scotland and Northumberland. Will its upgrade be considered in the comprehensive spending review?

I advise my hon. Friend that the Scottish Government have no proposals for any major schemes on the A1 trunk road in Scotland, but I will speak to colleagues in the Department for Transport about the need to liaise on cross-border routes. [Interruption.]

Order. There are far too many private conversations taking place in the Chamber, and the decibel level is far too high. I wish to hear the hon. Member for Dunfermline and West Fife (Thomas Docherty).

Strategic Defence and Security Review

13. If he will take steps to ensure that account is taken in the strategic defence and security review of the implications for the Scottish economy of that review. (8923)

Maintaining a strong Scottish economy is one of my top priorities, and I have, and will continue to have, regular conversations with my right hon. Friends the Secretary of State for Defence and the Chancellor of the Exchequer on the implications for Scotland of the strategic defence and security review.

Thousands of highly prized, highly skilled and highly paid jobs in manufacturing and engineering are dependent on the aircraft carriers going ahead. Back in Fife, all political parties, including the Liberal Democrats and Conservatives, support the building of the second aircraft carrier. The Secretary of State’s former special adviser said that scrapping the second aircraft carrier would be crazy. Will the Secretary of State therefore come to Fife and meet the management and work force at Babcock during the summer recess, so that they can present their case—

I join the hon. Gentleman in paying tribute to the skills and expertise of the engineering sector, not just in defence but in so many other parts of the Scottish and UK economies. I fully understand the concerns that he is raising, and many of these issues are being considered as part of the strategic defence review. He might also be aware that I am planning to visit Babcock in the next few weeks.

Does the Secretary of State want to go down in history as the man who presided over the closure of the Clyde shipyards, or will he defend the two aircraft carriers?

The hon. Gentleman, particularly in his distinguished new role as Chair of the Scottish Affairs Committee, is a strong campaigner on these issues. As he knows, I intend to visit with him the shipyards and other defence installations in Glasgow in the near future.


Since 1 May, the Advocate-General and his predecessor have received 716 minutes notifying them of devolution issues. In the same period, the Advocate-General has continued monitoring 41 devolution cases, has been represented in court in three, and is currently involved as intervenor in two cases.

Will the Minister share with the House whether or not the Advocate-General has given a view on the timing of a referendum on independence, as proposed by the Scottish Government?

As far as I am aware, the Scottish Government appear to have abandoned their proposal for a referendum on independence, especially after 80% of voters in Scotland at the recent general election voted for parties that support the Union.