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Volume 575: debated on Wednesday 5 February 2014

The Secretary of State was asked—

Scottish Business Leaders: Independence Debate

1. What steps his Department is taking to encourage Scottish business leaders to participate in the independence debate. (902338)

I speak to businesses from across Scotland regularly and frequently. In those meetings we highlight the importance of the decision the Scottish people will make on 18 September, and encourage them to get involved in this important debate.

Has my right hon. Friend seen the recent intervention of Bob Dudley, the chief executive of British Petroleum—which, after all, has a major stake in Scotland—whose views should be taken seriously? Does he agree that other business leaders with a big interest in Scotland’s future should follow that example, and set out clearly the implications and consequences of independence for their employees, suppliers, and shareholders?

I have seen and studied the intervention from Bob Dudley yesterday. The terms of that intervention do not surprise me at all as they very much reflect the concerns expressed to me when I speak to businessmen and women across Scotland who represent businesses of all sizes. They all tell me the same: they see independence as being bad for their business. It brings uncertainties, uncertainty means risk, and that is bad for their business future.

11. Has the Secretary of State had any meetings with Sir Tom Hunter, who has been pretty vocal about the whole issue, and, if he has not, will he have such a meeting? (902349)

I recently met Sir Tom Hunter at a business breakfast organised by the Prime Minister in No. 10 Downing street. The hon. Gentleman will have seen the recent initiative by Sir Tom, which is interesting and valuable, and sits well with the efforts of Her Majesty’s Government to ensure a solid base of information to inform the electorate about the decision they are being asked to take.

14. Will the Secretary of State assure the House that he is aware of the fears and concerns of businesses about the uncertainty posed by an independent Scotland, not only the currency but the fact that interest rates and borrowing costs could be set from outside Scotland? (902352)

Indeed, the hon. Lady makes a point that was made eloquently—and, I thought, in a very measured way—by the Governor of the Bank of England in his speech last week in Edinburgh. He made the point that a currency union such as that proposed inevitably involves ceding some degree of national sovereignty—the very opposite of what independence is supposed to be about. One wonders why any nationalist would, in all sincerity, genuinely want one.

This week the Financial Times reported that an independent Scotland should have healthier state finances than the rest of the UK. So far, more than 1,200 business owners and directors have declared their support for a yes vote by joining the pro-independence business group, Business for Scotland. Does the Secretary of State recognise their role in the Scottish economy and welcome their contribution to the referendum debate?

I will, of course, speak to businessmen and women of all views at any time in Scotland. The difficulty for the hon. Gentleman is that the most recent polling exercise undertaken in the business community showed that roughly three quarters of business people in Scotland intend to vote no. They know that independence would be bad for their business.

All the evidence from polling in recent weeks shows a substantial swing to the yes campaign, and the polls also show that by a majority of 4:1, the public wish to see a debate between the Prime Minister and First Minister Alex Salmond. How long can the Prime Minister continue supporting everybody else becoming part of the debate, but run away from one himself?

Make no mistake, Mr Speaker, we know exactly why the nationalists want that debate between the Prime Minister and Alex Salmond: they are trying to set the decision up as a contest between Scotland and England, which it absolutely is not. This is about Scotland’s best-placed constitutional future, and it is to be decided by Scots in Scotland.

My right hon. Friend will be aware that the First Minister dismissed Mr Dudley’s remarks as purely a personal opinion. In the light of that, may we take it that all those in the business sector who have apparently subscribed to independence can have their opinions dismissed in the same way?

I would dismiss nobody’s opinion and I would engage with people of all shades of opinion across this debate, but the fact is that Bob Dudley is not a lone voice. He is part of a growing chorus from the business community in Scotland who highlight the dangers that would come from independence. They all say the same—it would be a risk to their business because of the uncertainty of the future position of the currency and membership of the European Union. On those two key issues, the nationalists have no comfort for business.

As the Secretary of State has said, it is welcome that the chief executive of BP and the outgoing chief executive of Sainsbury’s have both spelled out substantial concerns about independence. Does the Secretary of State agree that all businesses, trade unions and voluntary organisations have a right to be heard without insult, intimidation or fear of the consequences, regardless of which side of the debate they are on?

I do, absolutely, and in that regard I commend the efforts of the Scottish Daily Mail, which in recent weeks has sought to highlight the poison coming into the debate from some of the cyber-interventions. Other hon. Members have also raised this issue. Whatever the outcome on 18 September we will all have to work together in Scotland for its best future, and that will not be possible if we allow the well to be poisoned in the way the cyber-Nats in particular seem determined to do.

I thank the Secretary of State for that response, but may I press him a little further? Business leaders have told me of intimidatory tactics being used in an attempt to stop them intervening in the independence debate. One leader of a FTSE company told Robert Peston of the BBC that the Scottish Government “became very aggressive” when he tried to raise concerns about independence. Just yesterday, Bob Dudley of BP was dismissed by the yes campaign as “a British nationalist”. Will the Secretary of State join me in condemning the pattern of behaviour that we are beginning to see in Scotland and say, in the strongest possible terms, that it has no place for us Scots as we debate our future?

I agree with the hon. Lady on that point in the very strongest terms. She knows as well as I do that the incidents she highlights are by no means isolated—we hear them anecdotally all the time. I encourage anyone who is bullied or intimidated in that way to follow the example of Chris Whatley, an academic from Dundee university who appeared at a Better Together event before Christmas, following which a Scottish Government Minister was on the phone to his employers saying he should be silenced. That is deplorable and no way in which to conduct the debate on Scotland’s future.

Housing Benefit

In recent months, I have met every local authority in Scotland, and most of them twice, as part of an ongoing dialogue with local authorities and other stakeholders in Scotland on what the impact of welfare reforms and the challenges of implementation have been for them, their services and their tenants.

The Minister will therefore know that 80% of the households in Scotland affected by the bedroom tax are the home of someone with a disability. He knows that there is a mismatch between the available housing stock and the needs of tenants, and he knows that Scottish MPs, including Government Back Benchers, voted overwhelmingly against this policy. Will the Government now lift the legal restrictions on discretionary housing payments to allow the Scottish Government to mitigate the impact of this nonsense of a policy?

What I do know is that the hon. Lady has a brass neck. She is a member of the Scottish Affairs Committee, but fails to take up her place. This issue was debated in detail yesterday and if she had been present she would know that the Scottish Government already have the powers to take measures if they genuinely believe there are concerns with welfare policies.

I am pleased that the Government listened when I pointed out the problems that withdrawal of the spare room subsidy, also known as the bedroom tax, would cause for tenants on islands and in remote parts of the mainland. I am delighted that the Government have given more than £400,000 to Argyll and Bute council to help affected tenants, and I hope that that generous allocation will continue in future years.

I commend the hon. Gentleman for pointing out the specific issues raised in island communities and by rurality generally, and that is why the Government have provided additional discretionary housing payments for rural areas.

Single-tier Pension

3. What discussions he has had with his ministerial colleagues on increased national insurance costs for public bodies in Scotland resulting from the introduction of the single-tier pension. (902340)

Ministers in the UK Government and Scottish Government are in regular dialogue on issues relating to funding public bodies in Scotland. This Government believe that pension reform is essential because people are living longer and we all need to save for retirement.

Scottish councils are struggling to protect local services, because the Scottish National party Government are not fully funding the council tax freeze. Will the Minister, unlike the SNP, stand up for Scottish councils and make representations to relevant ministries to protect Scottish councils from this budgetary time bomb?

I note what the hon. Lady says. I am due to meet the Convention of Scottish Local Authorities and will ensure that her comments are on the agenda for that meeting.

It would be useful if the Minister, in his discussions with COSLA, pushed for a statutory override that would help companies in Scotland to manage the move to single-tier pensions, because that will have an effect when they are not able to opt out of the state earnings-related pension scheme.

The hon. Lady is the Chair of the Work and Pensions Committee and we take her comments very seriously. I will ensure that they are also part of the discussions with COSLA.

Household Energy Bills

Rising energy bills are a serious concern for consumers in Scotland and across the rest of the UK. We are sustaining vital financial support for the most vulnerable consumers. Our reforms are opening up the market to competition and we are working to ensure that suppliers put customers on the cheapest tariff possible.

As the Minister knows, energy prices have risen dramatically since the coalition came to power. In rural and island communities people pay an even greater proportion of their income on fuel. Citizens Advice Scotland says that there was a sevenfold increase last year in people approaching it for advice on mis-selling in the energy sector. Does he not agree that it is now time for a radical reform of the energy sector, and for a price freeze until we put that reform in place?

I say gently to the hon. Lady, who I know has taken a long-term interest in and has a notable record on this issue, that the phenomenon of energy price increases did not just start in 2010. It was a feature of the years of the Labour Government too, as a consequence of the reduction in the number of companies operating in the market. That problem would be recreated if we were to undertake her policy of a price freeze. We have already seen the number of energy companies operating rise from six to 14. A price freeze would be a real threat to that.

It is now clear that we have two Governments who are choosing to side with the big energy companies rather than people struggling with the cost of living crisis. Is it not now clear that the only way for families across the UK to see some relief in their cost of living, with a freezing of their bills and breaking up the monopoly of the big six energy companies, is to vote no in the referendum and return a Labour Government in 2015?

I certainly agree with the first part of the hon. Gentleman’s prescription that a no vote in September is very important, but I have to remind him that in one year alone under Labour there was a 20% increase in energy prices, and there was no suggestion of a price freeze then. When Labour Members were in government, they knew the reality: a price freeze would see prices going up before the price freeze and prices going up again afterwards. We are delivering help to vulnerable people in the here and now.

Whatever the headline average price increase, the fact is that that hides a multitude of sins. A constituent who approached me this week is a low electricity user and is facing a 50% increase in his unit cost. Others are finding that they are being hammered by high standing charges. Is it not time for the Government to take action and stop these practices?

These are all reasons why it is important to improve transparency in the market and the range of tariffs available. That has been the result of the action this Government have been taking. Under the previous Government there were at one point no fewer than 400 different tariffs available, so it was no surprise that people were confused. Simplicity is the way ahead and the Government are working on that, along with the regulator.

We know that energy bills have rocketed under the Secretary of State’s Government and that Labour will freeze energy prices. As my right hon. Friend the Member for Don Valley (Caroline Flint) said this morning, one third of British investment in renewables comes to Scotland, but Scots contribute less than one tenth. That means that the rest of the UK supports Scottish renewable generation through their bills. Does the Secretary of State agree that the best future for renewables in Scotland, and the best way to keep costs down for Scotland, is for Scotland to stay part of the United Kingdom?

That is absolutely the case. Scotland has a tremendous opportunity to contribute to the growth of renewable energy as part of the United Kingdom, but that will take subsidies that come from consumers’ bills, the cost of which is spread across the whole nation, not simply the households of an independent Scotland. It would be madness for the renewable energy industry to support Scottish independence.

Minimum Wage

5. How many cases of non-payment of the minimum wage have been detected in Scotland since 2010; how many such cases have been prosecuted; and how many employers have been named and shamed for non-payment. (902343)

While there have been no prosecutions or naming and shaming of businesses for non-payment of the minimum wage in Scotland since at least 2007, a revised scheme came into effect on 1 October 2013 making it simpler to name and shame such employers. I urge anyone with information about such an employer to use that scheme.

I note that the Minister did not tell us how many instances of non-payment had been detected. At a time of economic difficulty, it is a scandal that people are being exploited by being paid less than the national minimum wage. The policing of the Act ought to be much strengthened, then there ought to be vigorous prosecutions and harsh punishments, and there certainly ought to be naming and shaming. Will the Government agree to co-operate with any investigation that the Scottish Affairs Committee—with its full complement of members, I hope—conducts into this matter?

I recognise that the Committee has done much valuable work in this area, and of course we will continue to work with it. In Scotland, prosecutions are a matter for the Lord Advocate, but I am sure he will have heard the hon. Gentleman’s contribution this morning.

13. What representations has the Scottish Office made to the Chancellor of the Exchequer about increasing the national minimum wage to £7 an hour, and what effect does the Minister think such an increase would have on living standards in Scotland? (902351)

I agree with the Chancellor when he said:

“I believe Britain can afford an above-inflation increase in the minimum wage so we restore its real value for people and we make sure we have a recovery for all and that work always pays.”

Job Market

It is very encouraging news that employment has increased to near-record highs of more than 2.5 million and that unemployment has fallen to 6.4%, which is the lowest rate in more than four and a half years. Those figures reflect how well Scotland is doing as part of the UK and demonstrate that the Government’s long-term economic plan is working.

I thank my right hon. Friend for that positive response, which shows how well Scotland is doing as part of the Union. Does he agree that the biggest threat to Scottish jobs is the fantasy-land promise of the SNP and its attempt to remove Scotland from the Union and the UK labour market?

That is indeed the case. When we talk about business people having concerns, we are talking about a threat not just to business, but to jobs. The UK is now the fastest-growing economy in the G7, and unemployment in Scotland is at 6.4%, which is significantly lower than the average across the UK, which is 7.1%. We have achieved that because we are part of the UK, not despite it. It is a result of Scotland, with her own Parliament, being represented here and having the best of both worlds.

Unfortunately, unemployment levels in my constituency appear to have stagnated. Does the Secretary of State agree that the Scottish Government need to do more even for people living in Scotland’s capital city still without jobs?

There remains a great deal to do. I suspect I share many of the hon. Lady’s concerns about the continuing high level of youth unemployment and the number of people who have been unemployed for a longer period. I see encouraging signs of progress in these areas, but they are by no means to be taken for granted. There are tremendous opportunities for the two Governments in Scotland, along with councils in Edinburgh, Glasgow, Aberdeen and elsewhere, to work together to get the best possible arrangements for the unemployed.

When the Secretary of State visits the highlands and addresses a Burns supper in Inverness on Friday night, I am sure he will hear a lot from those present about one of the most exciting job prospects for the highlands and for Scotland as a whole, which is the potential of the Kishorn site in my constituency for offshore wind development. May I encourage him and his colleagues to continue to work with Edinburgh to promote the interests of this exciting project? I wanted to get my plug in now because, due to a previous long-standing engagement, I will not be there on Friday night myself.

I shall, in fact, be carrying out other engagements, although I understand that tickets for that Burns supper are still available and are very reasonably priced. In relation to Kishorn, my right hon. Friend raises an important local concern for his constituents, as he has a long and proud record of doing. I certainly look forward to hearing the detail about that. We are seeing such developments growing across the United Kingdom, particularly in Scotland, and it is because our plan has worked.

The Secretary of State may think that everything is rosy, but is it not a fact that we are seeing the most sustained fall in real wages since records began 50 years ago? Is it not also a fact that the jobs market is not working for ordinary Scots and that both Governments are failing the people we represent?

I wish the hon. Lady and her colleagues could find it within themselves to recognise the substantial progress we are making with the improving employment situation in Scotland. There is significant progress, which makes a real difference for her constituents and mine. Wage levels will doubtless need some improvement to catch up; that is an inevitable consequence of the steps we had to take to clear up the mess that she made.

“Scotland’s Future”

7. What assessment he has made of the Scottish Government’s White Paper entitled “Scotland’s Future”; and if he will make a statement. (902345)

The Scottish Government’s White Paper shows that the case for independence is unravelling. They promised answers, but failed to address key referendum issues such as currency, costings and EU membership.

I thank the Secretary of State for his candid answer. Can he explain why there would be issues with the funding of pensions if Scotland were to become a separate state?

In that regard, the most pertinent intervention came from the Institute of Chartered Accountants of Scotland—not a political party or a body that has an axe to grind, but people who know what they are talking about. They told us what we already know: there are substantial questions on pensions and other areas, and the Scottish Government have still failed to answer them.

Surely one of the great weaknesses of the White Paper is on the future of the pound in Scotland. Surely the simplest way in which the people of Scotland can guarantee to keep the pound is to vote no in the referendum.

That is indeed the case and I am confident that they will do so, because the people of Scotland value having the pound sterling as their currency. They value having the Bank of England as a lender of last resort and they value the fact that, as a result, risks and opportunities are spread across the whole United Kingdom.

The White Paper has caused ripples. The polls are tightening and the Tories, with their Labour friends, are worried, but still the Prime Minister is afraid to debate with Alex Salmond, the First Minister of Scotland. This week the Financial Times tells us that an independent Scotland could expect to start with healthier state finances than the rest of the UK. Our GDP per head is higher than France’s and Italy’s. Will the Secretary of State use his position to ensure that people know these facts and stay away from scares and fears designed to stop them making the best decision for Scotland?

Indeed I will, because these are all things that we have achieved as part of the United Kingdom. It all demonstrates what is possible for Scotland as part of the United Kingdom. As for any question of debate, we have dealt with that already, but is it not remarkable that when Scottish National party Members could be answering questions, all they want to do is have a debate about the debate?

Pension Funding

8. What discussions he has had with Ministers in the Scottish Government on the funding of pensions in Scotland after 2014. (902346)

Despite having published a paper specifically about pensions in September and the much vaunted White Paper in November, the Scottish Government have left many questions about pensions unanswered.

The hon. Gentleman will be aware that the UK and Scottish Governments have agreed that there will be no negotiation on any issues, including pensions, before the independence referendum in September.

The Institute of Chartered Accountants of Scotland published its first report on pensions in an independent Scotland before the publication of the White Paper, and we were told by the Scottish National party that the answers to our questions about pensions would be in the White Paper. This week the institute issued its response: the White Paper does not contain the answers that would give Scots certainty about their pensions. Is the Secretary of State aware of any intention on the part of the Scottish National party to answer the crucial questions about Scots’ pensions?

I am pretty certain that any answers that would come from the nationalists would not find favour with the people of Scotland, so I am also pretty certain that we will not be hearing much by way of answers in the future. The people will have heard what the Institute of Chartered Accountants of Scotland had to say, and they will now want to hear from the Scottish Government what their answer is, but I am not expecting to hear much.