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Volume 583: debated on Wednesday 2 July 2014

The Secretary of State was asked—

International Inward Investment

1. What assessment he has made of the potential for international inward investment in Scotland after 2014. (904528)

As part of the United Kingdom, Scotland has an impressive track record of attracting international inward investment, which recent figures have put at its highest level for 16 years. Scotland has strong potential to build on that record as part of the UK, the No. 1 location for Europe-bound foreign investment.

Does my right hon. Friend agree that inward investment is boosted by Scotland being part of a single market and having a single currency?

Indeed; I do agree with my hon. Friend. The people of Scotland very much understand that access to the pound sterling as our currency and access to that larger UK market benefit them, and they value them, especially the business community. We know that, because that is why the nationalists are constantly telling us that even in independence we would still be able to keep those things. They are wrong; it is cynical; and as we saw from yesterday’s poll, nobody is really being fooled by it.

11. However, it is the case that inward investment is faltering. I have had experience after experience of talking to foreigners who are not investing in Scotland as a result of the uncertainties and the possible likely divorce. Are we not by far better off as a united kingdom than we would be with a separate Scotland? (904538)

We are very much better off as a result of being part of the United Kingdom, and I long for the day when again Ministers here and in Edinburgh can all concentrate on doing their day job of working together to get the maximum benefit to Scotland and Scotland’s economy, and jobs for the people of Scotland that come from inward investment—instead of a referendum distraction.

My right hon. Friend will be well aware that marine renewable energy presents a considerable opportunity for inward international investment as well as for export, based on the knowledge we have acquired. In that regard, it is vital that MeyGen’s project goes ahead. What discussions has he had with either the Department of Energy and Climate Change or the Crown Estate to enable that to happen?

I have had a number of discussions, as I think my hon. Friend is aware, involving my colleagues in DECC and in the Crown Estate. I am very keen to ensure that no procedural difficulties will stand in the way of the development from MeyGen, which, as he and I both know, is a very exciting and potentially lucrative development for his area.

Inward investment into Scotland is at a 16-year high under a Scottish National party Government and in the run-up to an independence referendum. That contrasts with all the claims of doom and gloom from the Chancellor of the Exchequer. Given that the UK Government were spectacularly wrong in their claims on inward investment, why should anybody trust the myriad Westminster scare stories?

I am delighted that the hon. Gentleman gives me the opportunity to remind the House that of the 111 inward investment projects that were successful in 2012-13, 84 were supported by UK Trade & Investment. That is the sort of heft that is given to Scottish business by being part of the United Kingdom; that is what he wants us to walk away from.

The UK Government have launched a confrontational approach to the European Union. The Prime Minister went to Brussels last week and was outvoted 26 to 2. If smaller countries have no say in the European Union, why is it that a Luxembourger is the new President of the European Commission—from a country smaller than the city of Glasgow?

I will take absolutely no lectures from the Scottish nationalists on the subject of confrontational approaches. It really is a mark of the desperation of the position in which they find themselves that that is the best they can come up with.

The Secretary of State commented on the Ernst and Young report, and it also identified that although investment was increasing, the number of jobs related to that inward investment was decreasing. I wonder what action the Minister can take, hopefully in co-operation with the Scottish Government, to ensure that there is greater correlation between investment and jobs created in Scotland.

The right hon. Lady points to a direction in which sensible politics ought to go, and I would love to be working in that way with the Scottish Government. Unfortunately, however, it takes two to tango.

Living Wage

The Minister will be aware that many people in Scotland have started the holiday season and packed their bags, and many will be visiting the beautiful islands of Scotland, but last week the National Union of Rail, Maritime and Transport Workers reported that foreign-resident seafarers who are working on the ferries are being paid as little as £2.35 an hour. That is a disgrace to Scotland, and I urge the Minister to use his offices to work with the Scottish Government to persuade the ferry companies to pay not only the minimum wage but a living wage to every single one of their workers.

I most certainly take on board what the hon. Lady says and I will make representations in that regard. I am sure she welcomes the fact that earlier this month the UK Government published a list of employers who had not paid the minimum wage. Unfortunately, two of them were in Scotland.

Mr Speaker, I know that you will be happy to hear that in May I employed an apprentice in business administration in my office and committed to paying her the living wage. Does the Minister agree with me that all MPs’ offices and Government Departments should set an example and move as quickly as possible to being accredited living wage employers?

The hon. Gentleman sets a good example, and certainly in apprenticeship schemes offered by Members of Parliament, I support the action he has taken.

14. Seven out of 10 young people in Scotland who are unemployed are applying for benefit for the second time. Is that not testament to the fact that there are simply not enough secure jobs for them that pay the living wage? Why will this Government and their equally bad counterparts in Edinburgh not use the public procurement powers available to them to ensure that every Scottish young person gets the living wage? (904541)

I would have thought that the hon. Gentleman would welcome the fact that the number of those in the 16 to 19-year-old category in Scotland who are out of work has fallen by 4,000. Work is the way out of poverty, and that is what this Government are encouraging.

Does my hon. Friend not agree that the best way to achieve the living wage in Scotland and elsewhere in the country is by continuing to take millions of low earners out of paying income tax altogether?

I absolutely agree. Tens of thousands of Scots have benefited from the fact that we have raised the personal allowance. Roughly two thirds of those on the minimum wage are now paying significantly less tax than they were when this Government came to power.

I know the Minister recognises that payment of the living wage will ease the pressures of the cost of living that many households experience, but in view of his recent admission to the Scottish Parliament’s Welfare Reform Committee that his Government’s benefits sanctions and welfare reforms have contributed to the increase in the number of food bank users, will he now apologise?

What I think politicians should apologise for is making the poor and most vulnerable into political footballs. Poverty is a scourge in our country, not an opportunity for a press release.

Order. In case the House is not aware, I can inform colleagues that the House of Commons has received its accreditation from the Living Wage Foundation.

Independence Referendum

To inform the debate, a variety of information, including a range of detailed analysis papers and a booklet for each household in Scotland, has been published. I have also participated in public debates and will continue to do so to set out the benefits of Scotland’s remaining in the United Kingdom.

For which we are eternally grateful, but is not the best way to inform people to debate? Instead, we have the leader of the no campaign, his right hon. Friend the Prime Minister, running a mile, feart to do just that? What about the substitute-designate? It will be a slaughter worse than the Bannockburn re-enactment if they put up the angry, agitated Alistair to debate with the First Minister. The Secretary of State himself could do it; he is good at this stuff—he could even take Rhona with him. But what we really need is the organ grinder, not one of the Alistair monkeys to debate with the First Minister.

That was pitiful. I cannot believe it sounded good even when the hon. Gentleman rehearsed it in the mirror this morning. It is typical, though, of what we hear from the Scottish nationalists. They are desperate always to talk about how we will debate. They do that only because they want to avoid the actual debate, because they know that the force of argument is on the side of those of us who want to remain in the United Kingdom.

15. Will my right hon. Friend make sure that before 18 September the public have full information at their disposal about the significant extra powers for the Scottish Parliament for which this Parliament has already legislated? It is perfectly possible for Scotland to have more autonomy without ripping up our country. (904542)

That is exactly the position. As of next year, as a result of the Scotland Act 2012, the Scottish Parliament will have control over stamp duty land tax and the landfill tax, it will have a borrowing power and, come 2016, it will have the power to set a Scottish rate of income tax. Those are significant tax-raising powers. I want to see us go further on that. Of course, that will require Scotland to decide to remain part of the United Kingdom.

Does the Secretary of State agree that third parties such as businesses and trade unions need to be able to make their voices heard in the referendum debate? Will he join me in condemning those people who continue to intimidate those who speak out against independence?

I absolutely 100% and without any reservation condemn any intimidation, wherever it may appear. This is by a country mile the single most important issue that we, the people of Scotland, will ever have to resolve for ourselves. Nobody should feel that they are constrained in having their say or asking questions about what it would mean for them, their family or their business. Anybody who tries to silence people on the other side of the debate should be no part of it.

Is not the role of our Government to provide answers to the questions that those arguing for independence refuse to provide—either because they do not know the answer or because they do not want us to know the answer?

Indeed, that is the case. It has been remarkable that on every occasion when we could have been given hard facts and information by the Scottish Government throughout this exceptionally long campaign, we have instead been given opinion and assertion. People are not stupid, though. They draw their own conclusions from that, as was apparent from yesterday’s YouGov poll in The Times.

This is the last Scottish questions before the referendum. People across Scotland know the magnitude of this decision and that if there is a yes vote, it is irreversible. That is why people need as much information as possible. Does the Secretary of State agree that when presented with the facts, most Scots do not want to turn their backs on the United Kingdom, and that a message of a strong Scotland with a strengthened Scottish Parliament is gaining support in every part of Scotland?

The most important message that the people of Scotland have to get from any source is that the decision we make on 18 September is a decision from which there will be no going back. This has to be a once and for all decision. From that point of view I agree completely with the hon. Lady. Over the past 300 years, as part of the family of nations that is the United Kingdom, we have achieved a great deal of which we should be proud, and I and the people of Scotland do not want to walk away from that.

I thank the Secretary of State for that answer, which is particularly important this week, as we celebrate the naming of HMS Queen Elizabeth. Will he ensure that people across Scotland are informed about the value of such UK contracts to the shipbuilding industry in particular? Does he agree with the shop stewards at Rosyth and on the Clyde that the best way to protect the shipbuilding industry in Scotland is to say no thanks in September?

I absolutely agree with the hon. Lady and with the shop stewards at Rosyth and on the Clyde, all of whom I have met on a number of occasions in recent weeks. They are clear and unambiguous about the message that the hon. Lady has just articulated. The House should remember that that is not the view of a politician; that is the view of trade unionists—people who are charged with protecting the best interests and the jobs of their members. If they thought for a second that independence would be good for their members and that it would help to protect their jobs, I have no doubt that the trade unions on the Clyde and at Rosyth would be supporting it. The fact that they are not tells us all we need to know.

Will the Secretary of State ensure that Scottish voters understand that if they vote for Scotland to become a foreign country, they will lose the pound and all the stability and economic advantage that goes with it? Will he also make it clear that many of us in England—indeed, the vast majority—want Scotland to remain a vital and important part of our United Kingdom so that we can jointly share in our future prosperity?

I agree with my hon. Friend that that is the view of most people in England, and in Wales and Northern Ireland. I look at how we have tackled the challenges we have faced over the past 300 years, and I see that over that time we have identified the problems and reached out from Scotland, to communities such as Liverpool, Newcastle, Manchester, Cardiff and Belfast, and tackled them by making common cause. That has worked for us, and I believe that it will continue to work for us.

Regional Air Connectivity Fund

4. What assessment his Department has made of the effect of the regional air connectivity fund on Scotland. (904531)

The regional air connectivity fund was announced by the Chief Secretary to the Treasury last year and was doubled to £20 million in the Budget. It has already been successful in securing the air link between Dundee and London, a vital support for economic growth in the hon. Gentleman’s great city.

I thank the Minister for that answer. Some £2.8 million came from the UK Government to retain the air link between London and Dundee. Is that not just one more example, albeit a crucial one for Dundee, of why Scotland is stronger as part of the UK?

I absolutely agree. The air connectivity fund is a good example of the UK Government working to support economic development across all the nations and regions of our United Kingdom.

May I ask the Minister, on behalf of my hon. Friend the Member for Argyll and Bute (Mr Reid) and myself—this is not just a parliamentary pincer movement; it is close to the Secretary of State’s heart, and I am assured that he does have a heart, at least on Wednesdays—about Islay airport and Broadford airport on the Isle of Skye? They could both benefit if that excellent scheme were extended in conjunction with the Scottish Government: in the case of Islay, because it lacks a public service obligation and wants more commercialism; and in the case of Broadford, by re-establishing passenger links. Will he give that his full support?

I will most certainly take on board what the right hon. Gentleman says on his behalf and that of his colleagues. I am sure that everybody would welcome the opportunity to fly over the sea to Skye.

Does the Minister agree that those who are using that fund to fly from London to Dundee later this week in order to see the launch of the aircraft carrier will be able in two different ways to see the strength of the United Kingdom?

Absolutely. The hon. Gentleman will have heard the Secretary of State highlight the importance of the flotation of the aircraft carrier on Friday, which will be a very important moment not only for Scotland, but for our whole United Kingdom.

Energy (Independence)

5. What assessment he has made of the potential effect of Scottish independence on energy flows between Scotland and the rest of the UK. (904532)

Scotland has a thriving energy sector which benefits from unrestricted access to the integrated Great Britain energy market. That supports jobs, keeps bills lower and spreads the substantial costs over 30 million households and businesses.

The Scottish Government have now decided to generate 100% of electricity from renewables by 2020. The implied subsidy for that is £4 billion a year, or £1,000 per voter a year. Has the Secretary of State had any discussions with the Scottish Government about who would pay for that in the event of independence?

What I can tell my hon. Friend is that at the moment the cost of the subsidy required for the development of renewables is spread across the whole United Kingdom market. In an independent Scotland, that cost would have to be met by households in Scotland, which would mean a difference of between £38 and £189 in Scottish energy bills. We do exceptionally well from the subsidies that come to Scotland as part of the United Kingdom.

Does the Secretary of State think there would be a market in the rest of the UK for expensive renewable energy from an independent Scotland, or is a single regulated energy market best for Scotland and best for the UK?

The benefits and opportunities that come to generators of renewable energy in Scotland from being part of that single integrated market speak for themselves. The fact that we are being asked to leave that should be of concern to them.

Transition Costs (Independence)

6. What discussions he has had with his ministerial colleagues on the transition costs of an independent Scotland. (904533)

I have regular discussions with ministerial colleagues, to ensure that people in Scotland have the full facts about the economic consequences of independence. The Scottish Government have repeatedly refused to publish their own workings. I call on them today to publish the work they have carried out.

I thank the Secretary of State for that reply. The Scottish Government’s own Finance Secretary calculated, in an internal memo, that the cost of setting up a new tax authority alone would be some £650 million. Is it not right that the Scottish Government should give that and other, similar information they have to the Scottish people before asking them to vote for a pig in a poke?

It is worth reflecting that that figure is in the public domain only because the document was leaked. The truth of the matter is that, whenever there is any difficult news to be had, the Scottish Government will go to any lengths to suppress it, because, frankly, they are prepared to tell us anything that they think will make us more likely to vote for independence.

13. With the renovation costs of the Westminster Parliament expected to be £400 million a year every year for 10 long years, Professor Patrick Dunleavy said yesterday at the London School of Economics that the set-up costs for an independent Scotland would be £200 million and not the £1.5 billion that is on the Treasury website. Will the Secretary of State see to it that that figure is corrected and that the Westminster Government apologises both to Professor Dunleavy, an expert in this area for 30 years, and to the people of Scotland for that error and misinformation? [Interruption.] (904540)

The hon. Gentleman is out of date. I can tell him exactly what Professor Dunleavy said yesterday:

“Scotland’s voters can be relatively sure that total transition costs over a decade will lie in a restricted range, from 0.4 of one per cent of GDP (£600 million), up to a maximum of 1.1 per cent (£1,500 million). This is a step forward in debate”.

He was agreeing with Professor Iain McLean and said:

“I am grateful to Iain for helping to bring it out.”

The hon. Gentleman should also be grateful.

Housing Benefit

A report by my trade union, the GMB, shows that huge sums of housing benefit are paid to company landlords in Scotland. Bearing in mind the Secretary of State’s earlier answer, will the Minister meet me to discuss how we can bring together the UK, Scottish and local governments to ensure that we get best value for housing benefit and that we can create new houses and new jobs, rather than fill the pockets of company landlords?

I would certainly be happy to meet the hon. Gentleman, with a view to convening such a meeting.

I want to thank the Government for recognising the extra costs of living in remote rural areas and giving councils such as Argyll and Bute extra money to give discretionary housing payments to their tenants. I hope the Government will continue to give extra money to such councils in future years.

The hon. Gentleman will know that I wrote to the Deputy First Minister of Scotland with an offer to executively devolve the power to Scottish Ministers to set the statutory cap on discretionary housing payments in Scotland. That offer has been accepted and we are working constructively with the Scottish Government to take it forward in relation not just to rural areas, but to all councils in Scotland.

Will the Minister intervene with the Department for Work and Pensions so that we can have a system where someone who is sanctioned and taken off benefits when they have an appeal does not lose their housing benefit until the appeal is heard? Once the appeal is heard, they get their money back, but they then have the problem of finding that they are in debt to the local council. Can we not have a system that is sensible and fair to people who are sanctioned by the DWP?

I certainly take note of what the hon. Gentleman says, and I would be happy to meet him to discuss it further.