Skip to main content


Volume 596: debated on Wednesday 10 June 2015

The Secretary of State was asked—


1. What discussions he has had with the Chancellor of the Exchequer on the potential effects on Scotland of measures in the next Budget. (900150)

This is the first Scottish questions since the passing of the former Member for Ross, Skye and Lochaber. Charles Kennedy was a regular participant at Scottish questions and I wish to pass on my personal condolences to his family at this sad time.

I have regular discussions on a range of economic issues with my Cabinet colleagues, including the Chancellor of the Exchequer.

It gives me great pleasure to welcome the Secretary of State to his new role and wish him well. In my constituency RBS has announced the closure of branches in Kelty and in Aberdour, a further sign of withdrawal from the banking sector that should be supporting small and medium-sized enterprises and communities. What is the right hon. Gentleman’s view of the retail banking sector in Scotland? Has he had discussions with the Chancellor about creating challenger banks out of RBS?

This is a momentous question because it is the first time that a Member representing Kirkcaldy and Cowdenbeath has asked a question at Scottish questions. I share the hon. Gentleman’s concern about RBS’s approach to branch closures, its commitment to smaller communities and its breach of a commitment not to be the last branch to leave a community. I will certainly take up with RBS the issues he has raised.

The Secretary of State will know that my Dual the A1 campaign has achieved committed funding from this Government of £290 million for the 13 miles of dualling towards the Scottish border. I will need cross-border support to build the economic case for the remaining 35 miles to complete the dualling between London and Edinburgh. Will my right hon. Friend support my campaign?

I have said in the House that I fully support that campaign, and I know that it also has the support of my colleague John Lamont, the local Member of the Scottish Parliament on the Scottish side of the border.

I associate my right hon. and hon. Friends with the comments of the Secretary of State in respect of Charles Kennedy, and I welcome the right hon. Gentleman back to his place in his role as Secretary of State for Scotland.

The next UK Budget is going to continue the austerity course of the Tory Government, and it will hit the poorest in society. Will the Secretary of State be up front and explain whom it will hit when £12 billion of cuts hit families and communities across Scotland?

When it comes to being up front, it is the Scottish National party that needs to be up front about its proposals for taxation and spending. It used to tell us it wanted full fiscal autonomy, but now it does not seem to want that. It is for the SNP to answer the question of where the additional spending in Scotland would come from.

The last time I looked, this was Scottish questions, where it is the Government who have to answer the questions on the powers for which they are responsible. They are about to bring in £12 billion of cuts and the Secretary of State for Scotland has not been up front about where they will hit. On a related topic, the living wage can make a huge difference to those on low incomes, and I am very proud that the SNP Scottish Government are the first Government in the UK to become an accredited living wage employer. When will his Department and his Government follow the SNP lead on the living wage?

I am very proud of the proposals that my colleague Ruth Davidson has taken forward in the Scottish Parliament to incentivise small businesses to pay the living wage. One would have thought, when one hears SNP rhetoric, that it supported such proposals, but it does not.

13. A number of businesses in Pendle trade with Scotland, including Carlson Filtration in Barnoldswick, which supplies products to the Scotch whisky industry. Does my right hon. Friend therefore agree that we are better together? (900162)

I absolutely agree with my hon. Friend that businesses right across the United Kingdom benefit from the continuance of our United Kingdom. This Government’s commitment particularly to the Scotch whisky industry is evidenced in the last Budget, which was warmly welcomed by the Scotch Whisky Association.

First, I thank the Secretary of State for his fine words in relation to the passing of Charles Kennedy and of course associate myself and my party with them.

The Secretary of State will have seen at the weekend reports indicating that the Chancellor of the Exchequer intends to use next month’s Budget to start increasing fuel duty again. As the economic recovery starts to take hold, does the Secretary of State understand the very serious impact that that could have on the economies of rural Scotland, and will he use his office to argue against such a move?

The right hon. Gentleman should be wary of newspaper reports. Let us hear what is said in the Budget. The Chancellor has made no clear statement of any intention to increase fuel duty.

I, too, congratulate my right hon. Friend on his superb election victory and his appointment as Secretary of State for Scotland. Does he agree that, with greater fiscal devolution to the Scottish Parliament, places such as Carlisle will assess the potential effects on Carlisle of measures in the Scottish Government’s budgets as well as the national Budget? Does he also agree that the Carlisle principle set out during the election campaign is important not only to the north of England but to the south-west of Scotland?

Indeed I do agree with my hon. Friend. Of course, the nature of the devolution settlement means that different decisions will be taken in Scotland on those matters that are devolved, so inevitably different policies will be pursued on one side of the border from the other. I think that the Carlisle principle set out by the Prime Minister during the general election should be followed.

As this is the first Scottish questions, I also pay tribute to Charles Kennedy. He was warm, he was witty, he was kind, and our condolences go out to his family, his friends and his party, and, of course, his son Donald.

How many more Scottish children of working-age families will fall into poverty as a result of his Government’s decisions on welfare?

There is no evidence that there will be a further increase in the number of children falling into poverty as a result of welfare changes in Scotland. Indeed, the evidence shows that since statistics began there has been a relative decrease in child poverty in Scotland. As the hon. Gentleman will know, the Scotland Bill is devolving extensive welfare provisions to the Scottish Parliament, and if the Scottish Parliament believes that there is any detriment in Scotland it will have the opportunity to top up or create new benefits.

The Secretary of State says that there is no evidence. I find that answer contemptible. Let me give him some evidence. John Dickie, the head of the Child Poverty Action Group, has said that the Government’s £12 billion cuts to welfare could lead to a “child poverty crisis”. The Institute for Fiscal Studies has said that those most likely to be affected are low-income working households with children. Is it not time that the Secretary of State stopped ducking the question and came clean about the impact this will have on vulnerable Scottish families, given that 50% of children in poverty in Scotland are from families who are in work?

The Government’s position is clear: the best way out of poverty is into work. There is a record low number of workless households in Scotland, and I hope that the hon. Gentleman welcomes that. I also hope that he welcomes the Government’s decision to devolve significant welfare powers to the Scottish Parliament so that if there are specific issues in Scotland decisions can be made in Scotland to deal with them.

Scotland Act 2012: Financial Provisions

2. When he plans to publish the third annual report on the implementation and operation of part 3 (Financial Provisions) of the Scotland Act 2012. (900151)

I thank the Secretary of State and also say how much I and all my Back-Bench colleagues will miss the real gentleman who was Charles Kennedy.

Part 3 of the Act includes the power to devolve further existing taxes as well as creating new ones. Just so that we know where we stand following the election, will the Secretary of State update the House on what further taxes the emboldened Scottish Government have asked to be devolved and which requests he is minded to grant?

The hon. Gentleman will know from the Second Reading debate on the Scotland Bill that there was some uncertainty on the SNP Benches about whether proposals would be brought forward to put in place the SNP’s previous policy of full fiscal autonomy. I now understand that such proposals will be brought forward, but only on the basis that other parties with a real interest in Scotland will vote them down.

Will my right hon. Friend explain to SNP Members how the Barnett formula actually works? If there are spending cuts in English Departments, it follows that there are cuts in Scottish spending as well. If they support the Barnett formula in the vow, they presumably understand why these reductions have to be made.

It is not clear what the SNP understands in relation to fiscal matters, but I agree at least with the new hon. Member for Edinburgh East (Tommy Sheppard) that fiscal autonomy for Scotland would be “a disaster”.

Business Groups

My right hon. Friend the Secretary of State for Scotland and other UK Ministers and officials meet business groups in Scotland regularly. I am pleased to say that one of my first visits in my new role will be to Aberdeen.

The UK Government are committed to reducing the burden of red tape on businesses. The Scottish Government have some powers in this area. Is it not a good idea for them both to work together to reduce the burden of regulation on businesses full stop?

Absolutely. It is imperative that Administrations right across the United Kingdom work together to reduce the burden of red tape and deregulate as much as they can. We achieved £10 billion of benefit to small businesses and other sectors under the previous Government, and our aim is to achieve another £10 billion of savings for the benefit of everybody in the United Kingdom.

Has the Minister met the open-cast coal industry recently, and if so will she urge the Chancellor to introduce a site-specific coal carbon tax exemption in the July Budget? This move would create 1,000 jobs, provide a net income for the Exchequer and restore open-cast sites in east Ayrshire.

That is the set of proposals we are considering. May I make it very clear to the hon. Gentleman that I am more than happy to speak to and meet him? If he would like to contact me after this session, we can arrange such a meeting.

Trade Unions

4. What recent discussions he has had with trade unions in Scotland on the Government’s proposed legislation on trade unions. (900153)

We are in the process of bringing forward new legislation in relation to trade unions to make sure that we carry out our manifesto commitment. I have not yet met any of the trade unions in Scotland. I look forward to that so that we can make progress with the Bill.

From what the Minister has just said, it is quite clear that she has regular discussions with business, but no discussions with trade unions. It is clear that trade union association is a matter of human rights, and that the right to strike makes the difference between people being workers and being slaves. Will she assure the House that she will listen to the voice of the trade unions, and will she confirm that these rules will not breach International Labour Organisation conventions?

May I make it very clear to the hon. Gentleman that as a former trade unionist and shop steward I am more than willing to listen to trade unions? Equally, however, it is really important to understand that in the modern world it cannot be right that a minority vote to strike has the most profound effect on travellers and on carers and children. It is in everybody’s interests for us to make sure that our trade unions are democratic and work for everyone.

Does the Minister agree that strong trade unions are vital if we are to ensure that people receive fair pay for the work they do? What steps is she taking to work with Scotland’s trade unions to promote the living wage in Scotland?

As I hope I have made clear, I agree with the hon. Lady. Trade unions play an important part in economic success, or at least they should do. The difficulty is that too many trade unions do not represent their members and do not engage and work with their members. We therefore need to make sure that we have modern legislation for our trade unions so that they do not hold people, in effect, to ransom.

Stranraer to Larne Ferry

Home Office Immigration Enforcement in Northern Ireland and Police Scotland work together closely to intercept and share information about illegal immigrants travelling between the west of Scotland and the Northern Ireland ports.

Of the people stopped on that route—they are a small percentage of the total number of travellers—a very high number are illegal migrants or people who mean to do harm to our country and seek backdoor routes between the Republic and mainland Britain. What conversations has the Secretary of State had with Police Scotland to ensure that the resources are there to catch those people?

I have been heavily involved in this issue and I was very disappointed that the Scottish Government chose to dissolve Dumfries and Galloway police force, which had considerable expertise in that area. Police Scotland has set up a ports unit, which is seeking to deal with these issues, but I will continue to pursue the hon. Lady’s concerns with the Scottish Government.

This is yet another example of the Scottish Government having to step in and stump up following further UK Government cuts. Given the security concerns raised by the hon. Member for Hackney South and Shoreditch (Meg Hillier) and the further cuts proposed to Scotland’s budget, will the Secretary of State commit to revisit his Government’s decision to withdraw border agency staff from the port of Stranraer in 2010?

I particularly welcome the hon. Gentleman to his place because he is my neighbouring MP, but I do not share his analysis. The most unhelpful contribution to policing in Stranraer and surrounding areas was the Scottish Government’s decision to get rid of Dumfries and Galloway police force, against the wishes of local people.

What efforts is the Secretary of State making to ensure that the illicit trade in cigarettes, other contraband and oils through these ports is tackled effectively, so that the criminals behind it can be stamped out once and for all?

I am happy to confirm that I will raise those specific issues in my next discussions with the Chief Constable of Police Scotland.

Tax Receipts

6. What assessment he has made of the potential effect of full fiscal autonomy for Scotland on the level of tax receipts in Scotland. (900155)

In March, Her Majesty’s Treasury published an analysis that estimated that funding available to Scotland under full fiscal autonomy would be £7.7 billion lower in 2015-16 compared with the current arrangements. The assessment made by the Institute for Fiscal Studies shows that deficit reaching £9.7 billion in 2019-20.

The Secretary of State and his Tory friends have an ideological fixation with austerity, but is he surprised that the nationalist ideology of a self-identifying left-wing party such as the Scottish National party leads it to advocate full fiscal autonomy, which would lead not just to austerity but to “austerity-max”?

I agree with part of the hon. Gentleman’s analysis, but he will be aware that it is now not clear what the SNP is asking for. I welcome the fact that it will be able to table amendments in relation to full fiscal autonomy during the Committee stage of the Scotland Bill. My suspicion, however, is that it is asking for something it does not really want, and that it will complain when it does not get it.

Does my right hon. Friend agree that to reduce poverty in Scotland and indeed in the rest of the UK we need full employment? Would not the worse thing be to have an SNP Government in the United Kingdom with no understanding of fiscal responsibility, which would result in mass unemployment and mass poverty?

I am not clear whether my hon. Friend is suggesting that the SNP take over the Government of the UK, although that may be one of Miss Sturgeon’s aspirations—we do not know. It is for the people of Scotland to choose their own Government, but the SNP’s policies are clearly now for higher taxation and we need to know what that tax will be.

The Scottish Secretary is absolutely wrong about full fiscal autonomy. It does not lead to a reduction in tax yield. Surely he would agree that if we were to use the flexibility in the tax code to grow the economy and increase tax yield, that would be a good thing.

I agree with two of the hon. Gentleman’s colleagues from Edinburgh, one of whom has described full fiscal autonomy as a disaster and the other of whom has described it as suicidal.

Given that the respected Institute for Fiscal Studies has estimated that full fiscal autonomy would result in a near £10 billion black hole in Scotland’s finances, and that, as the Secretary of State said, the Scottish National party Member for Edinburgh East (Tommy Sheppard) has called it a disaster—perhaps we should lock him in the gents—is it not clear that it would not lead to a stronger Scotland or promote fairness and social justice? However, given the Scottish Government’s reluctance to accept the impartial IFS’s figures, will the Secretary of State back Labour’s amendment to the Scotland Bill to provide a full and independent report on the implications of full fiscal autonomy?

If we have any votes in the House on full fiscal autonomy, we may have to ensure that the toilets are enlarged, because I suspect all SNP Members will want to lock themselves in so that they can absent themselves from any decision.

Child Benefit

7. What assessment he has made of the potential effect on families in Scotland of the Government’s policy on child benefit. (900156)

Child benefit will continue to provide essential help for low-income families, and the latest statistics show that it has benefited more than 966,000 families and children in Scotland. We are also supporting Scottish families by cutting tax for nearly 2.3 million people, taking 261,000 people out of paying income tax altogether. Some 210,000 families in Scotland will also benefit by up to £6,000 a year from tax-free childcare.

On a day when the Chancellor is saying that he will take action on how this Government and future Governments run deficits, will the Secretary of State tell us that he will protect the worth of child benefit in Scotland for the lifetime of this Parliament?

Will the Secretary of State acknowledge that the people most likely to be impacted by the changes to the child benefit policy are the most vulnerable individuals in society? Those people are also the most likely to be affected by the changes made in the welfare reforms implemented by this Government.

I could not have been clearer—we are retaining child benefit and keeping to the promises made in the election campaign. We are also devolving significant responsibility for welfare to the Scottish Parliament, so that if it wishes to make alternative decisions, it will have the capacity to do so, provided that it can pay for them.

Scottish Government Funding

8. What discussions he plans to have with the Chancellor of the Exchequer on funding for the Scottish Government and the next Budget. (900157)

On Monday, the Chancellor of the Exchequer and the Chief Secretary to the Treasury met Scotland’s Deputy First Minister to discuss the new fiscal framework. While the Barnett formula will continue as promised, the Scottish Government will be less reliant on the block grant.

The SNP manifesto proposed an alternative to austerity—0.5% public spending increases a year. Does the Secretary of State accept that that means that his Government’s cuts are ideological, not inevitable, and that it is in fact possible for the Government to increase public spending by £93 billion a year to invest in the economy and public services?

What is now clear is that the SNP wants to put up taxes in Scotland. Its next Scottish Parliament manifesto needs to tell the people of Scotland by how much.

National Minimum Wage

9. How many companies in Scotland have been prosecuted for non-compliance with the national minimum wage since 2010. (900158)

So far no companies have been prosecuted, but we have named the 14 that have not complied with the law. We feel that is the right way to go about things, but if there are serious cases, they are referred to the Crown Prosecution Service in England or the procurator fiscal in Scotland.

That is just not good enough. Labour wants to see the minimum wage protected, increased and properly enforced, so why not give local authorities the powers to tackle bad employers and enforce the minimum wage properly?

I have to disabuse the hon. Gentleman of a few misconceptions. We are actually following guidance that his party’s Government introduced in 2008, and it was good guidance. In very serious cases, companies should be referred onward for prosecution, but those decisions are ultimately left to the CPS or, in the case of Scotland, to the procurator fiscal.

I congratulate the Secretary of State on his position. Everyone across the Chamber will agree that it is vital to enforce the minimum wage, but does the Secretary of State agree that we need to go further to deliver a fair wage for thousands of our fellow citizens? Will he now confirm the answer he failed to give to my hon. Friend the Member for Moray (Angus Robertson): when will his Department become an accredited wage employer?

I remind the hon. Lady that the minimum wage will be going up in October. It is up to employers to make sure they pay the wages they seek and want to. It is also important to remember that as a result of the policies of this Government, we have reduced the amount of taxation the low paid are paying. That is the right thing to do. Take low-paid people out of taxation—a Conservative policy.