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Volume 572: debated on Wednesday 18 December 2013

The Secretary of State was asked—

Whisky Industry

1. What discussions he has had with the Chancellor of the Exchequer on the employment interests of workers in the whisky industry in Scotland. (901633)

I have regular discussions with the Chancellor about a wide range of issues, and I can assure the hon. Lady that the whisky industry in Scotland and its employees are a key priority. My Department has long-standing contact with the Scotch Whisky Association, which aids our understanding of the industry.

Scotch whisky is exported to about 200 countries, and the industry directly employs 10,000 people in Scotland. According to a recent White Paper from the Scottish Government, there will be about 90 Scotch whisky embassies if the Scottish Government have their way after independence. Does the Secretary of State agree that trade agreements brokered by a strong and extensive United Kingdom diplomatic and international trade infrastructure are integral to the success of Scotch whisky exports? I—

The right hon. Lady is absolutely right. Given that 90% of the product of the Scotch whisky industry is for the export market, it is of supreme importance that Scotland has the best possible access to that market, and we have that facility through the network of some 270 embassies throughout the world and through United Kingdom Trade & Investment. That is what matters, and that is why the Scotch whisky industry makes such good use of it.

The Scotch whisky industry provides many jobs in my constituency, but I feel that it is very unfair that whisky is taxed at a higher rate per unit of alcohol than beers and wines. Will the Government look again at alcohol taxation with a view to creating a level playing field?

I may be wrong, and if I am I apologise, but I do not think my hon. Friend is right about the relative taxation of whisky and other alcoholic drinks. [Interruption.] I have now been informed that beer duty is 37% and whisky duty is 42%, but in any event it is wrong to play off one part of Scotland’s highly successful food and drinks industry against another. I am sure that the Chancellor will continue to listen to representations from the Scotch whisky industry, which my hon. Friend and I have made jointly over the years.

I declare an interest, as secretary of the all-party parliamentary scotch whisky and spirits group. Nearly every week the group receives representations about the whole question of the duty escalator and the unfair treatment of the spirits industry in relation to the beer industry. The Chancellor gave so much to the beer industry in his most recent Budget. What representations has the Secretary of State made to the Chancellor with the aim of overcoming the problem?

I will continue to make representations on behalf of the whole food and drink industry in Scotland, in which the hon. Gentleman and his all-party group play an important part. I have joined the hon. Gentleman on many occasions over the years as part of such delegations, and I will continue to give him as much support as I can.

Does the Secretary of State not accept that 80% of the price of a bottle of Scotch whisky is duty, which is paid to the United Kingdom Treasury? Duty discrimination by the UK Government is widening the gap between the price of whisky and the price of other beverages. How does that help the industry and employees?

The point to which the hon. Gentleman should respond—although I suspect that he will not—is that the Scotch whisky industry does very well as part of the United Kingdom industry, taking full advantage of the string of embassies and UKTI offices that we have throughout the world, and his policy of independence puts that at risk.

In opposition, the right hon. Gentleman and I, along with others, lobbied the Treasury to end tax discrimination. In fact, the right hon. Gentleman himself tabled an amendment for that purpose, supported by Liberal Democrat Members and the Scottish National party. Since becoming Secretary of State for Scotland, he has taken the Tory shilling, he is letting the industry down, and he is supporting a discriminatory duty. When will he stand up and be Scotland’s man in the Cabinet, rather than the Tories’ man in Scotland?

I do hope that that sounded better when the hon. Gentleman rehearsed it in the mirror earlier this morning, because it sounded pretty poor just now. There is no escaping the fundamental truth that his policy would be the ruination of the Scotch whisky industry, for no good reason.

Low Pay

With your permission, Mr Speaker, before I answer that question, may I draw the House’s attention to the fact that Saturday 21 December will be the 25th anniversary of the Lockerbie bombing? That remains the single largest loss of life ever in the United Kingdom, with 270 people perishing on that fateful evening. I am sure that the thoughts and prayers of the whole House will be with the community and with those who lost friends and family on that day. Much of the focus over the past 25 years has been on the perpetrators, but the friends and families of the victims and the community of Lockerbie deserve our respect and admiration for the formidable way in which they have coped with 25 years of unprecedented global attention.

The national minimum wage is one of Government’s key policies to support the low paid, and it is UK wide. On 1 October, the adult minimum wage increased to £6.31 per hour. We have also increased the income tax personal allowance to £10,000, taking 224,000 Scots out of income tax altogether and benefiting 2.2 million Scottish taxpayers.

I am sure that the whole House will commend and agree with the Minister’s remarks about Lockerbie.

In his subsequent answer, the right hon. Gentleman omitted to say that prices had risen more quickly than wages in 41 of the 42 months he has served as a Minister in this House, that low pay was on the rise in Scotland and that the value of the national minimum wage had declined in real terms under this Government. When are he and the Business Secretary going to do something concrete to deal with all that? Or is he just going to sit on his hands while the cost of living crisis in Scotland gets worse by the day?

The hon. Gentleman is simply wrong. The October 2013 adult minimum wage rate is around 27% higher in real terms compared with the consumer prices index and about 15% higher in real terms compared with the retail prices index than it was on its introduction in 1999.

Does the Minister agree that the best way to tackle low pay in Scotland is to get the economy growing and to create more job opportunities?

I absolutely agree with my hon. Friend, and I hope that Opposition Members will welcome today’s announcement that employment is up and unemployment is down in Scotland. We are not complacent, but we are on the right track.

12. Low pay is a scourge that is now affecting thousands of families throughout Scotland. Would those families best be helped by giving them a decent living wage or by introducing a tax cut for millionaires? (901644)

The Government support the concept of the living wage, where employers can afford to pay it and where it is not introduced at the cost of jobs. It is something to be encouraged.

The UK Government’s attitude to the living wage was encapsulated by the Under-Secretary of State for Business, Innovation and Skills, the hon. Member for East Dunbartonshire (Jo Swinson) earlier this year when she said:

“There is no recognised definition of a national living wage.”—[Official Report, 10 June 2013; Vol. 563, c. 211W.]

She went on to explain that the Government had therefore made no assessment of its consequences, were it to be introduced. Should not the Government move quickly to introduce a living wage for their employees, wherever they might be based in the UK, rather than hiding behind the vacuous argument that it is too difficult to calculate, given that we know it will be £7.65 an hour in Scotland and £8.80 in London next year?

It is never a surprise to hear the Scottish National party mention London in the same breath as Scotland. As I said to the hon. Member for Motherwell and Wishaw (Mr Roy), the Government believe that the living wage is a concept that should be supported, where employers can afford it and where it is not introduced at the cost of jobs.

May I associate myself with the Minister’s remarks about the terrible tragedy of Lockerbie?

Low pay is one of the reasons that people are using food banks in Scotland today. I wish nothing personal towards the Minister, but I am disappointed that the Secretary of State did not answer this question himself, because we know that the Secretary of State has recently begun to struggle with some of the details of his brief. Let me see whether the Minister can do any better. Will he tell the House what the percentage increase in the number of people using food banks in Scotland in the past year has been? Given that it is Christmas, I will offer him a hand. Is it (a) 100%; (b) 200%; (c) over 400%?

What the hon. Lady omitted to tell us was that under her Government the increase in people using food banks was 1,000%. Our Government are concerned about people needing to use food banks in a moment of crisis in their lives. We support the development of food banks and those who operate them, and I was very proud to open the food bank in Peebles in my constituency. But to pretend that these crises are of this Government’s making and that they have not been going on for a continuing period is to mislead the House.

The Minister should know that the increase in the past year has been 435%, which is more than 34,000 people, including more than 10,000 children, using food banks in Scotland. Those are shameful figures and all Members of this House should pay attention to them. He has refused to be drawn on why this is happening. Citizens Advice, the Trussell Trust and the Child Poverty Action Group are all saying that this Government’s policies are driving people in Scotland to use food banks. Are they all wrong?

Of course the hon. Lady does not acknowledge the 1,000% rise in the use of food banks under the last Labour Government. We want to look at, and understand, why there has been an increase in the use of food banks. That is why the Department for Environment, Food and Rural Affairs has committed to an extensive study on the use of food aid across the United Kingdom, and she will be able to read that when it is published.

Illegal Immigration

Given the ability of illegal and clandestine immigrants to move freely within the UK, it is not feasible to produce separate estimates for each part of the UK.

It would appear that the Government do not really know how many illegal immigrants there might be in Scotland. Given the attraction of the whole of the UK to people from other countries, I suspect that the problem might be rather greater than the Secretary of State imagines, particularly in cities such as Glasgow and Edinburgh. Will he reassure the House that he will work closely with the UK Border Agency to ensure that Scotland is not an easy route into the UK for illegal immigrants?

Certainly there should be no easy routes for anyone in these circumstances, but I would caution the hon. Gentleman against devoting too much Government resource to the compilation of figures that do not help us to tackle the problem.

What discussion have the UK Government had with the Scottish Government about the operation of border controls in an independent Scotland?

We have had no such discussion so far. The truth of the matter is that either we can have an open area with no border controls or we can have closely aligned immigration policies—unlike the position of the Scottish National party, we cannot have both.

For years, immigrants have been vital to the economy—in my constituency, I see the importance of Filipino fishermen—and, since the Union, the problem in Scotland has been emigration, not immigration. But what can we do for Syrian refugees, to enable them to come here as legal immigrants? Although the Secretary of State might have failed to get his colleagues to vote for war in Syria, what might he do this Christmas to help refugees come from Syria, especially given that Germany is taking 80% of the European total and the UK is taking zero, which Amnesty International says should cause heads to hang “in shame”?

This country has a long and proud record of offering asylum to those who seek it and those who deserve it and need it. That will continue to be the case.

Barnett Formula

That is not quite what the Secretary of State said only a few weeks ago. Gary Robertson asked, “What about the Barnett formula? Will that change post-2014?” The Secretary of State said—because it was he—“Let me be absolutely clear, erm, erm, er, there will be no action taken on the Barnett formula, erm, erm, until the economy has erm, er, stabilised.” Help me Rona! Why is he not just straight with the Scottish people? We all know that the bosses and the paymasters of the no campaign—his Tory friends—want Barnett scrapped. Is that not the real cost to the people of Scotland—£4 billion?

It is a classic of the genre—synthetic outrage at its very best. The hon. Gentleman knows that the Barnett formula is one reason the people of Scotland reject independence. That is why he is operating his own little “Project Smear” to pretend that it is somehow at risk. The position has been put beyond any doubt today by the Prime Minister in a letter to the First Minister. The hon. Gentleman should explain that and tell the people of Scotland that the best way to get rid of the Barnett formula is to vote for independence.

Does my right hon. Friend agree that the Scotland Act 2012 transferred substantial tax-raising powers to Holyrood, and that these complex changes should be allowed to bed in before we start making any further radical changes?

Not only do I agree with my hon. Friend on that point, but I believe that the energies of the Scottish Government would be much better served if they were devoted to dealing with the implementation of those highly complex tax changes, which are due to come on stream in 2016, rather than running around and setting up scare stories of that sort.

The Barnett formula has served Scotland, and the Opposition believe that it is at the heart of redistribution across the entire UK, which is why we support it. I agree with the Secretary of State that the only threat to the Barnett formula is a vote for independence. Will he share with the House why he believes that the SNP Scottish Government do not understand that they are the only threat to the Barnett formula?

I have a strong suspicion that that is wilful on the part of the Scottish Government. As I said a few moments ago, they know that people in the United Kingdom value the Barnett formula so they try to pretend that there is some threat to it. That is part of their strategy. They identify things such as the pound, the Bank of England and the ability to build complex warships on the Clyde, which are the things that the people of Scotland value from being part of the United Kingdom, and then pretend that they can hold on to them while becoming independent. It is just not credible, which is why they are losing the argument.


I have regular discussions with Ministers in the Scottish Government on a range of issues, including fisheries policy.

My ministerial colleagues in the Department for Environment, Food and Rural Affairs also work closely with the Scottish Government to ensure that the interests of Scottish fishermen are fully recognised in the UK position in EU fisheries negotiations.

I congratulate the Government on achieving reform of the common agricultural policy and on introducing an element of regional control. What assessment has my right hon. Friend made of the implications for Scottish fishermen, and will they benefit greatly from it?

I have long been an enthusiast for the regionalisation of the common fisheries policy, and I am delighted that, for the second round of reform, we have seen that at the heart of it. There is still more that can be done, but anything that brings fishermen, scientists and other stakeholders together in order to manage fisheries away from Brussels has got to be good.

Was the right hon. Gentleman as surprised as I was to see Scottish Nationalist party Minister Richard Lochhead claiming that he has secured the quota deal for Scottish fishermen while, at the same time, complaining that he has no voice? Is it not the fact that Scottish fishing is best represented in the EU with a strong voice as part of the UK?

No, I was not at all surprised, because that is exactly the sort of double standard that we have seen from the SNP over the years on this and just about every other issue. The fact is that my hon. Friend the fisheries Minister led the delegation this year to the December Fisheries Council with exceptional skill. He delivered for the Scottish fleet the things that really mattered. In particular, he ensured that there was no further cut in effort and brought home important flexibility on monkfish quotas. He is to be commended for that—[Interruption.]

Order. There is far too much noise in the Chamber. Let us have some quiet so that we can hear a Scottish knight, Sir Menzies Campbell.

No pressure, then, Mr Speaker. When my right hon. Friend is giving proper consideration to the future of the fisheries industry in Scotland, will he pay particular attention to the village-based fisheries industry? That is a particular issue in areas such as my constituency, based as it is on Pittenweem and surrounding ports. It is essential that the interests of the village-based fishing industry are not subjected to the sometimes overbearing influence of those who go further out to sea.

I know from my constituency experience that the small inshore fleet is of great importance to the communities represented by me and my right hon. and learned Friend. His point is well made, and it is important that we do what we can to sustain the fleet in those small ports.

The Secretary of State knows that the postponement of the negotiations with Norway over shared North sea stocks means that the fishing fleet faces an uncertain new year. Will he support the Scottish Government’s calls for an increase in the North sea cod quota next year, in line with the scientific advice?

As the hon. Lady knows, that is a subject to be determined at the EU-Norway talks in January. They have been held over, and although such an increase would be desirable—it is certainly what the industry is looking for—that is not entirely within our gift, as it is an EU negotiation.

Energy Prices

6. What assessment he has made of the effect of energy prices on consumers in rural areas of Scotland. (901638)

I know from my own constituency that rural consumers face particular challenges on energy bills. The Minister of State, Department of Energy and Climate Change, my right hon. Friend the Member for Sevenoaks (Michael Fallon), who is responsible for energy, is working with all interested parties to obtain more secure and affordable off-grid supplies. I am due to meet the Office of Fair Trading early in the new year to discuss the matter.

I thank the Minister for that answer. As he is well aware, rural consumers who are off the grid are often forgotten in arguments over energy prices. The energy company obligation is supposed to be technologically neutral, but the major energy companies will not include LPG or oil boilers in their schemes, which is surely discriminatory. Will he press his colleagues in the Department of Energy and Climate Change to ensure that such boilers are included in ECO schemes?

I am happy to do that. The hon. Gentleman has championed the issue of off-grid supplies, and I suggest that we hold a round table, as we did on rural fuel, with DECC and interested Scottish MPs to discuss that and other issues.

Is my right hon. Friend aware of the particular difficulties in remote rural areas, where there is no access to main supplies for both gas and oil? Will he commend the concept of heating oil clubs, such as the one I am promoting in Landward Caithness? They have done much to depress that cost. What can the Government do to assist?

The Government are keen to support oil clubs like the one in Landward Caithness. I am sure that the issues that concern the hon. Gentleman’s constituents will be ably discussed at our proposed round table in the Scotland Office with DECC and Scottish MPs.

14. Why do the SNP, the Tories and the Liberal Democrats all agree that the price should go on the energy bill and the tax bill and that the energy companies should be let off scot-free? (901646)

We believe that something should be done about the mess in the electricity industry that the hon. Gentleman’s party left behind. That is why we are seeking to move people on to lower tariffs, that is why we are rolling back green levies, and that is why we are encouraging competition. What his party offers is a gimmick and a con.

North Sea Oil and Gas

7. What assessment he has made of the interim report by Sir Ian Wood on the future regulation of oil and gas extraction in the North sea. (901639)

The interim report by Sir Ian Wood has given Government and industry alike plenty to think about and that is exactly why we asked him to carry out his review in the first place. After his final report is submitted early next year, the Government will set out our plans to make the most of our offshore oil and gas fields.

I thank the Secretary of State for that answer. He will be aware that Sir Ian Wood’s report refers to much of the North sea as a mature environment and to the need for collaboration to maximise the economic recovery for what is, by record, a volatile and, by definition, diminishing resource. Does he agree that the fragmentation of fiscal and regulatory regimes through separate arrangements for Scotland and for the rest of the UK continental shelf would minimise the chance of achieving that outcome?

I think it is very clear to all who have an informed view of the industry that its best future lies as part of the United Kingdom, rather than as part of a Scotland separated from the rest of the United Kingdom. It is a mature industry that still has a great deal to offer, but it is telling that the Scottish Government’s recent White Paper gives absolutely no guarantees about the future of field allowances in the industry, which will be absolutely crucial to its future development.

Is not the most exciting thing about Sir Ian Wood’s report the consensus he has discovered in the industry, which is that with more regulation and a stronger regulator with more resources there is the potential to unlock even greater investment, supporting jobs, taxpaying and energy security?

The real strength of the Wood report, at least the interim version, is its credibility in the industry, because it has been informed by the industry and led by one of its most respected figures.