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Volume 540: debated on Wednesday 22 February 2012

The Secretary of State was asked—

Independence Referendum

1. What recent discussions he has had with the First Minister of Scotland on a referendum on independence for Scotland. (95262)

8. What discussions he has had with the Scottish Government on a referendum on independence for Scotland. (95269)

10. What recent discussions he has had with the First Minister of Scotland on a referendum on independence for Scotland. (95271)

The First Minister and I met on Monday 13 February to discuss a referendum on independence. The Prime Minister, the First Minister and I had a further meeting on Thursday 16 February, when we discussed the need for any referendum to be legal, fair and decisive. It is in everyone’s interests that both of Scotland’s Governments work together and I look forward to meeting the First Minister again in due course.

The Scottish Government are the most resolute defenders of the Barnett formula, arguably against the interests of the other nations of the United Kingdom. Does the Secretary of State therefore think that if the people of Scotland vote yes in a referendum on independence, the Barnett formula should apply to the nation’s debt?

I do not envisage that Scotland will become independent from the United Kingdom. I think we are stronger together and weaker apart. The hon. Gentleman touches on the fundamental issue of sorting out what the basis of that independence might look like, and the Scottish National party has so far singularly failed to answer questions on that.

Will the Secretary of State again confirm his and the Government’s commitment to a single, non-leading question in the referendum on Scottish separation, and will he further commit to a simple yes or no reply?

The fundamental issue is about independence, and that is what we must resolve. We must have a legal, fair and decisive independence referendum.

Will my right hon. Friend clarify whether he has had conversations about Antarctica and whether it is true that the previous Government simply forgot to deal with Antarctica and the British territory there? What is his position on making sure that we retain control of it?

The hon. Lady highlights an important part of the world in which it is important that the UK Government have a role to play. May I point out that through the Scotland Bill, which is passing through their lordships House, we are delivering the biggest transfer of powers to Edinburgh since the Act of Union and tidying up some of the inconsistencies of the devolution settlement?

When the Scottish Secretary and the Prime Minister met the First Minister, the Prime Minister offered a proposal for enhanced devolution but failed to spell out what that might be. What does the Scottish Secretary envisage a package of devolved financial powers might look like? Would it include corporation tax, all of income tax and the aggregates levy?

It is incredible that the SNP wants to ask a question about further devolution when it has not set out what the fundamentals of independence would be. One would think that after decades of having that as its main reason for existing, it might have some clear ideas on the issue.

That was a very instructive answer because it failed entirely to answer the question. There was no detail about what the Prime Minister proposes. Is that because there is no detail, is it because the announcement was made simply to capture one day’s news headlines, or is it meant to cover the embarrassment of this Government, who voted against the devolution of any further powers in the Commons debates on the Scotland Bill last year?

Honestly, the hon. Gentleman has a bit of a cheek talking about a lack of detail when his party cannot spell out what the currency situation would be in an independent Scotland, what the national debt might look like and how it might deal with pensions and financial regulation. It is absolutely clear that we must make the most fundamental decision on Scotland’s future in a clear-cut and decisive way. The debate about devolution will be ongoing and I very much look forward to being part of it.

My right hon. Friend has spelt out the absence of detail given by members of the Scottish National party in this House. Has he impressed on the First Minister, in the opportunities he has had to do so, the First Minister’s unequivocal obligation to explain to the people of Scotland not just the process of independence but the consequences and costs of it and the length of time it would take to implement?

My right hon. and learned Friend highlights some very important central issues in the debate about independence. I believe Scotland is stronger as part of the United Kingdom, and the United Kingdom is stronger because Scotland is part of it. On financial issues, our place in the world and the strength of our defences, there are huge numbers of unanswered questions for the SNP that it must now get on and address.


2. How many young people aged between 16 and 24 are not in employment, education or training in Scotland; and if he will make a statement. (95263)

According to the latest figures published in the annual population survey, the number of 16 to 19-year-olds estimated to be not in education, employment or training in Scotland in 2010 was 36,000.

There is another important element to the question that I asked, which refers to young people up to 24 years old. They are the hardest-hit young people and we do not want to see that generation lost. In rural localities such as the right hon. Gentleman’s and mine, policies to get young people back into work will depend, as far as the private sector is concerned, on small and medium-sized enterprises. These businesses are suffering severely and the pressure on them is not enabling them to create jobs. Does the Secretary of State understand that we need a taskforce mentality to deal with young people’s unemployment?

My officials are working on the statistics for up to 24-year-olds. They are not currently published but I look forward to getting the data for the hon. Gentleman and other hon. Members.

On the fundamentals of the economy, I absolutely agree that we need small and medium-sized businesses to be given the ability to grow. That is why we are putting pressure on the banks to lend to them and ensuring that we support the young people we are dealing with. The youth contract is fundamental—£1 billion to help people get more places on work experience and to help employers to take people on. It is that kind of action that will help people get into the jobs market.

My right hon. Friend rightly mentions the youth contract, which comes into effect in April. Does he agree that it is imperative that the Scottish Government, the British Government and employers in Scotland work together positively to ensure that young people get the opportunities, and that they are not distracted by scoring points against each other, but rather work together for young people?

I quite agree with my right hon. Friend. Working with Members across the House over the past six to eight months, I have held meetings and seminars around Scotland that have been focused on youth unemployment and on bringing together employers, young people, Scottish Government agencies and United Kingdom Government agencies. In March in Dundee we will have a national convention which John Swinney and my right hon. Friend the Secretary of State for Work and Pensions will attend, so that we can take the agenda forward together.

No one in the House is complacent about youth unemployment and the plight of young people trying to find work in very trying economic circumstances. I welcome the joint initiative of the national convention taking place next month, but may I press the Secretary of State on what outcomes he expects from that convention, and whether he will welcome the initiatives that the Scottish Government have taken to ensure a place for every young person aged 16 to 19 in Scotland in work, training or education?

It is vital that Scotland’s two Governments work together on this terrible problem that existed under the previous Government and continues. We need to address that using everything we can to help young people get experience, training or jobs. We will work hard on all those, and if others wish to work with us, we will welcome that.

Will the Secretary of State tell the House how many young Scots have lost their jobs since he was appointed to his job in May 2010?

If I may say so, the hon. Lady should remember the economic mess that we inherited from the Labour Government, since when we have been fixing the deficit and seeking to rebalance the economy and ensure that we have sustainable growth. The youth contract, work experience and all the support we are giving are vital to ensuring that we get young people back into the workplace.

I notice that the Secretary of State struggled somewhat with that answer. There is one statistic that he should be familiar with. Since his Government scrapped the future jobs fund, 23,000 jobs have been lost in Scotland. That is more than 400 jobs every week for young people, while he has become the Tories’ man in Scotland. We are in the midst of a youth unemployment crisis, and the Secretary of State for Scotland has been posted missing. In contrast, Labour took direct action through the future jobs fund, delivering more than 10,000 real jobs for young people in Scotland. So can the Secretary of State share with the House what plans he has—any ideas at all—to take direct, effective action to tackle youth unemployment in Scotland?

As ever, the hon. Lady wishes to leave behind the horrible mess that the Government she supported left for us to fix. She cannot escape that reality or the fact that youth unemployment rose under Labour. We are investing £1 billion in the youth contract, which will enhance the number of work experience places and provide additional support for employers taking on young people, and has provided the Scottish Government with additional resources. I have been working with her colleagues and others to ensure that we do everything we can to tackle this terrible problem.

Human Trafficking

3. What steps he is taking to ensure that the findings of the Equality and Human Rights Commission’s inquiry into human trafficking in Scotland are discussed by the relevant officials in England and Wales. (95264)

The Government are considering the findings of the Equality and Human Rights Commission’s inquiry into human trafficking in Scotland, in line with the ongoing implementation of the human trafficking strategy we launched in July 2011.

If the Minister had read the inquiry report, he would have seen that its main recommendation is that there should be a new human trafficking Bill for Scotland. I suggest to him that that would solve the problem of implementing the EU human trafficking directive, which we have signed up to, across the UK. I invite him and other interested parties to attend the all-party group on human trafficking next Monday in Room 7 to hear the inquiry being reported on in the House and perhaps take some advice.

Does my right hon. Friend agree that the field of human trafficking, where co-ordination between involved agencies is critical if we are to find real solutions, is yet another practical example of a policy area that is best tackled at UK level?

I absolutely agree with my hon. Friend that the UK can bring great weight to this issue on behalf of Scotland. It is also an issue where we have been able to work with the Scottish Government, demonstrating that the two Governments can work together on matters of great importance on a day-to-day basis.

Credit Rating

4. What recent discussions he has had with the Chancellor of the Exchequer on a credit rating for Scotland. (95265)

Thanks to the decisive action that this Government have taken, the whole of the United Kingdom benefits from record low interest rates and a confirmed triple A credit rating status.

What estimate has the Secretary of State made of the extra debt interest that an independent Scotland would have to pay were it not to benefit from a triple A rating?

My hon. Friend makes an important point about how an independent Scotland would fare. The rating agencies have been quite clear that there are issues relating to the track record of Government, the pension arrangements, national debt and so much more that they need to take into account. Of course, it is in the gift of the Scottish Government, should they so wish, to ask for a draft opinion on what that status might look like, but so far they have not done so.

What analysis have the Government undertaken on the impact of a low credit rating on my constituency, and more widely on Lanarkshire, in the event of Scotland separating from the rest of the United Kingdom?

I recognise the challenges that face the right hon. Gentleman’s constituents and many others in Lanarkshire and elsewhere. I stick to the basic belief that Lanarkshire and Scotland are better off being part of the United Kingdom and much stronger that way than they would be if we went our separate ways.

Crucial to a good credit rating for Scotland will be its attractiveness to private investment to come into the country to invest in jobs and the economy. To that end, will the Secretary of State emphasise to the Scottish First Minister that the uncertainty caused by the referendum is causing a growing number of companies to pause their investment decisions until they get clarity on Scotland’s direction of travel?

My hon. Friend goes to the central issue, which is when this debate will take place. We should get on and make this fundamental decision about Scotland’s place in the United Kingdom sooner rather than later. I cannot for the life of me understand why we should have to wait the best part of three years, with all the economic uncertainly that will generate, until reaching that decision.

Does the Secretary of State not understand that it is not the credit rating score that matters, but the cost of servicing Government debt? Japan, which has a much higher net debt and a double A minus credit rating, pays less interest on Government bonds than the UK. The truth is that it is the yield that counts, not the triple A rating or lack thereof. Will he now stop this ridiculous scaremongering about ratings?

Is the hon. Gentleman seriously suggesting that the triple A status has no bearing on the interest rates we pay? He really needs to wake up and, with his colleagues, answer some of the fundamental questions at the heart of the debate, which so far they have ducked.

Benefits Cap

5. What meetings Ministers in his Department have had with Ministers in the Department for Works and Pensions to discuss the effect on Scotland of the proposed benefits cap. (95266)

12. What meetings Ministers in his Department have had with Ministers in the Department for Work and Pensions to discuss the effect on Scotland of the proposed benefits cap. (95273)

Mr Speaker, you will be aware that the Chairman of the Work and Pensions Committee, the hon. Member for Aberdeen South (Dame Anne Begg), who is a regular attendee at Scotland questions, has suffered a fall. I am sure that we all wish her well in her recovery.

My right hon. Friend the Secretary of State for Scotland and I are in contact with Ministers in the Department for Work and Pensions on a range of issues concerning welfare reform.

Is it not clear that if the nationalist Government in Scotland had control of welfare policy, there would be no benefits cap in Scotland, despite widespread public support for it?

What is clear is that the Scottish National party is making a proposition for independence without explaining to people how benefits at current levels would be paid in future, or where the money would come from.

With the average income in Scotland being £419 a week, does the Minister not agree that a benefit cap of £500 a week is a reasonable and sensible level?

I do agree that that is a reasonable and fair measure, and constituents in constituencies such as mine cannot understand how the Labour party and the nationalists can promote the idea that the benefit cap should be higher than £35,000.

Is not the truth about the benefit cap, however, that if such a household on £419 a week, as cited by the previous questioner, had six children—like some of my constituents do—who had to be cared for, they would also receive child benefit, and that therefore the comparison that has been made is not fair? What is going to happen when the discretionary housing payments to a council—that is the only answer from the Government—run out?

The hon. Lady should listen to her hon. Friend the Member for Leeds West (Rachel Reeves), when she says that if Labour is to be taken seriously on any issue it has to

“pass the test of fiscal credibility.”

On this issue, that is a very relevant point.

The right hon. Gentleman will not be aware that I have the highest percentage of single women in any constituency in the country. What is he doing to help those women—[Interruption.] This is not a joke. This is a serious point, and Government Members can laugh all they like, but there are single women in this country who are struggling. What is his party going to do to help them?

What this Government are doing is tidying up the mess that the hon. Gentleman’s Government left, which has placed single women and many other people in a perilous financial position.

Public Expenditure

The most recent estimate of the level of public expenditure in Scotland, published in October 2011, shows that the level of public expenditure in Scotland was £10,165 per head for 2010-11.

Last week at the breakfast table, Mrs Bone and I were talking about public expenditure in Scotland and the First Minister, as one does, when suddenly our 11-year-old son, Thomas, asked, “Is Alex Salmond a goodie or a baddie?” What does the Secretary of State think?

As ever, the goings on at the Bone household breakfast table are a thing of national interest, and we look forward to further updates in due course. I think that when the hon. Gentleman’s son gets a chance to meet the First Minister, he will be delighted by the conversation that he has, but the important point that we should know is that the First Minister wants to make England separate from Scotland; we do not.

On public expenditure, the Secretary of State will know that not one ounce of UK steel is being used to build the new Forth road bridge. Is it not shameful that 29,000 of tonnes of steel can be shipped 12,500 miles from Shanghai but not 33 miles from Lanarkshire?

The hon. Gentleman’s commitment to Lanarkshire and to the steel industry is absolutely understood and well known, and his anger is understood, too. It is a matter that was of course devolved to the Scottish Government, and it is for them to answer his very difficult question.

In welcoming the additional per capita expenditure represented by the £100 million investment in sleeper services, I wonder whether the Secretary of State agrees that it is a good example of the Westminster and Holyrood Governments working more effectively together than separately, and will he seize the opportunity now to call on the likes of Richard Branson, Pete Waterman and others with innovation and entrepreneurial skills to see whether we can re-establish motor-rail services now that the sleeper services are secure?

My right hon. Friend is right to highlight the important investment that we have committed to the sleeper services, for which he has been an undoubted champion over a very long period. He is right to stress that we need to look at innovative ways to develop those services, and I look forward to discussing his idea further.

Severe Disability Premium

As at 3 April 2011 in Scotland, there were 4,800 in-work families benefiting from the severely disabled child element and with child tax credit above the family limit. There are 5,000 severely disabled children in these families.

I thank the Minister for that answer. The Prime Minister told this House on 14 December and again on 23 January that his Government will not be cutting benefits for disabled children. Given that almost 8,000 children in Scotland will lose £1,400 a year through the child tax credit changes, does the Minister agree that the Prime Minister was plain wrong and clearly does not understand his own policy?

What I agree with is the fact that the Government are not making any savings at all from these changes. Savings from abolishing the adult disability premiums and changes to the child rate will not return to the Exchequer; those savings will be recycled into higher payments for more severely disabled people. [Interruption.]

Order. There are far too many noisy private conversations taking place in the Chamber. I know that the House will want to hear Mrs Eleanor Laing.

Thank you, Mr Speaker.

Does the Minister agree with me and my constituents that in matters of disability payments for severely disabled children, and of all other payments from taxpayers’ money for the people who are most in need throughout our entire country, we are better off raising money together and working together as one United Kingdom?

The severe disability premium and all other benefits are clearly set out by the United Kingdom Government. The Scottish National party has failed to set out how a single benefit in Scotland would be paid for post independence, if it were ever achieved.

Defence Munitions Beith

I spoke to the Under-Secretary of State for Defence, my hon. Friend the Member for Mid Worcestershire (Peter Luff), last week on this issue. As he confirmed on Monday, there are no current plans to change the status of DM Beith. There is a need to maintain Beith until the Spearfish torpedo has been converted to a single-fuel system, when the need for specialist facilities may lapse. The conversion programme is expected to be completed around 2018.

Defence Munitions Beith is one of the largest employers in North Ayrshire and is wholly dependent on Ministry of Defence contracts. Will the Minister ensure that there is a ministerial visit to the facility from the Scotland Office to find out what more can be done with a view to ongoing representations for future contracts with the Ministry of Defence?

I am pleased to be able to confirm to the hon. Lady that the Secretary of State for Scotland will be pleased to visit that facility in her constituency.

Independence (Financial Effects)

15. What preparations his Department has made for dealing with issues that would arise in the event of Scottish independence. (95276)

The Scottish Government are proposing independence, but they have failed to set out what independence would mean for Scotland. This Government are clear that Scotland is stronger for being part of the United Kingdom and that the United Kingdom is stronger for having Scotland within it.

Does my right hon. Friend agree that Scottish politicians, instead of focusing on independence, should, in these difficult economic times, stop depending on one industry in the North sea and look to create a broader industry sector that will provide economic support for the rest of Scotland?

My hon. Friend is right that our primary concern is to ensure that we get the economy on the right track. By fixing the deficit, rebalancing the economy and ensuring that there is sustainable growth, we will do just that. In the meantime, we should get on with resolving the issue of independence to remove the uncertainty that it causes. [Interruption.]

Does the Secretary of State agree that in the event of independence, there would be many unnecessary financial and regulatory costs to both Scotland and England in the areas along the border between the two countries? In an extreme case, there is the absurd possibility of border controls.

First, I am not contemplating Scotland actually becoming independent, because I am confident that Scotland will vote to stay in the United Kingdom. However, my hon. Friend highlights a central issue. The SNP cannot dodge some of the issues that there would be in relation to Europe if we were to become separate, including those to do with the borders. As a borders MP, I think that those issues are as absurd as he does.

Has the Secretary of State considered the recent study by the National Institute of Economic and Social Research, which shows that even if it formed a sterling zone with the UK, a separate Scotland would experience volatile public finances, inherit debts at either 70% or 80% of GDP, and face tougher constraints on levels of tax and borrowing than it does as an equal participant in fiscal union with the UK?

Of course I have studied that report. The hon. Gentleman puts its conclusions succinctly. Those are points that the SNP has failed to answer.