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SCOTLAND

Volume 612: debated on Wednesday 6 July 2016

The Secretary of State was asked—

EU Referendum

1. What assessment he has made of the potential effect on the economy in Scotland over the next five years of the outcome of the EU referendum. (905593)

6. What assessment he has made of the effect on the economy in Scotland of the outcome of the EU referendum. (905598)

The Scottish economy faces a number of challenges as a result of the vote to leave the EU. Yesterday I began a process of direct engagement with Scottish business leaders to ensure that their voice is heard in the forthcoming negotiations.

I thank the Secretary of State for that answer. Now that the Brexit decision has been made, does he think that it will be easier for the Scottish and UK Governments to support the Scottish steel industry in tackling things like energy costs, procurement and business rates?

Regardless of the vote, the two Governments must continue to work together to support the industry. The Scottish Government have taken steps in relation to the two plants in Scotland, very much supported by me and the Scotland Office and the UK Government. We will continue that support, and the Scottish Government will play a part in the steel council that has been established.

Standard Life, one of the largest private employers in Scotland, ceased trading in its UK property fund this week, and the Governor of the Bank of England has said that the consequences of Brexit are beginning to crystallise. Given that financial services are 7% of Scotland’s GDP and employ tens of thousands of my constituents, what reassurances was the Secretary of State able to give businesses yesterday that not one job will be lost because of the Conservative gamble with this country?

May I begin by commending the hon. Gentleman for his service as shadow Scottish Secretary? No one knows better than me how difficult it is to be your party’s sole representative from Scotland in this House and be shadow Scottish Secretary. He performed the role with great distinction, and I am particularly grateful for his work to ensure the passage of the Scotland Act 2016 in this place. He will be pleased to know that when I met business leaders yesterday Standard Life was represented. One point that its representatives made, which is important for discussions on the future of the Scottish economy, is how important the market outwith Europe is, as well as the market within Europe. Standard Life did not wish us to lose focus on the many business opportunities it pursues, in north America in particular.

When will my right hon. Friend lay out the exciting opportunities there are for Scotland as a result of leaving the European Union for the wider world?

Obviously when I met Scottish businesses I wanted them to address the opportunities for business. I have just referred to a leading Scottish company with significant interests outwith the EU, but businesses in Scotland are naturally concerned to understand the arrangements that will be put in place for our future relationship with the EU.

In Scotland more than 62% of voters voted to remain in the European Union. Since then the Scottish Parliament has voted overwhelmingly to support First Minister Nicola Sturgeon in her efforts to protect Scotland’s place in Europe. That was voted for by the Scottish National party, the Labour party, the Liberal Democrats and the Scottish Green party. The Tories abstained. Will the Secretary of State finally join the cross-party consensus to protect our economy and our place in Europe, or will he abstain like his colleagues?

The right hon. Gentleman omits one fact. My colleagues were unable to support his party’s motion because the SNP would not take the toxic and divisive issue of a second independence referendum off the table. Anyone who wants to unify opinion in Scotland does not start talking about a second Scottish independence referendum. I hope the First Minister was listening yesterday to Scottish businesses when they said decisively in relation to discussions about the EU that they did not want to hear about Scottish independence.

Tens of thousands of European Union citizens play a massive role in our economy and society in Scotland. The Scottish National party wants to do more than just pay tribute to them; we want them to have guarantees that they can stay in Scotland. Will the Secretary of State act in the Scottish and European interest, and guarantee the rights of fellow EU citizens to remain in Scotland, and end the intolerable worry and concern with which they are being confronted?

I share the right hon. Gentleman’s view of the important role that EU citizens play in Scotland, and we want them to stay in Scotland and have their position guaranteed. We also want British citizens in the rest of Europe to have their right to stay there guaranteed, and I hope that it will be possible to issue both guarantees.

May I start by echoing the compliments paid to my predecessor, my hon. Friend the Member for Edinburgh South (Ian Murray)? He will be a hard act to follow.

Sitting opposite the Secretary of State reminds me of the many good times that I have spent in his constituency in the great town of Moffat. Friends of mine from Moffat, John and Heather, live on the Old Carlisle Road, where they have a small family farm and a business. They want to know what guarantees have been given about the future of payments that they receive as part of the common agricultural policy, and what benefit they can expect from the £350 million a week that senior members of the Government promised we would get back from the European Union to fund the NHS. How much of that can we expect to go to Scotland and, crucially, when can we expect to see it?

I welcome the hon. Gentleman to his position, and he is welcome in Moffat any time he wants. I have performed his role in the past, but when I did so there were 41 Scottish MPs opposite me, and 15 months later it has come to this. CAP payments will be subject to negotiations, and as someone who argued for a remain vote, I made it clear to farmers in Scotland that there would be a degree of uncertainty if there was a vote to leave. As a result of our withdrawal from the EU, responsibility for agriculture will now rest directly with the Scotland Parliament.

I do not think that John and Heather will be reassured by the Secretary of State’s response, and I note that he did not answer my question on the NHS.

The Chair of the Foreign Affairs Committee was right yesterday to accuse our hapless Prime Minister of being guilty of a dereliction of duty for failing to set up withdrawal planning units until after the referendum. Will someone please tell the Prime Minister that the words to the song are not: “When the going gets tough, the tough do a runner”? With that in mind, does the Secretary of State believe that the Prime Minister’s policy of placating fruitcakes and loonies has been a price worth paying for the economic crisis that is now upon us, and the risk of the break-up of the United Kingdom?

I am a democrat. I respect the democratic decision of the people of the United Kingdom, and that decision will be implemented.

3. What discussions he has had with the Scottish Government on the effect of the outcome of the EU referendum on Scotland. (905595)

4. What discussions he has had with the Scottish Government on the effect of the outcome of the EU referendum on Scotland. (905596)

9. What discussions he has had with the Scottish Government on the effect of the outcome of the EU referendum on Scotland. (905601)

Since the outcome of the EU referendum, both the Prime Minister and I have had discussions with Scottish Government Ministers, and we will continue to do so over the coming weeks and months. As the Prime Minister has made clear, we will fully involve the Scottish Government and other devolved Administrations as we prepare for negotiations with the European Union.

Does my right hon. Friend agree that we should respect the outcome of the democratic process, even if some do not agree with the result?

I am clear that the majority of people across the United Kingdom voted for the UK to leave the European Union, and that decision must be implemented. In doing so, we must secure the best possible deal for Scotland and the rest of the United Kingdom.

Will the Secretary of State confirm that it is the UK Government’s intention to invite the Scottish Government to participate directly in the EU negotiations?

I confirm that the Scottish Government will be at the heart of the negotiation process. I can also confirm today that I and my Cabinet colleague, my right hon. Friend the Member for West Dorset (Mr Letwin), who is responsible for the European unit within the Government, will meet the First Minister next week to discuss how that might be achieved.

The Secretary of State says he is a democrat. Will he support the long-established position in Scotland that sovereignty rests with the people? Now that the Parliament has said that we wish to negotiate Scotland’s remaining in the single market, will he stand up for those rights? Is he Scotland’s man in the Cabinet, or is he, as we suspect, the Cabinet’s man in Scotland?

I expect slightly more original lines from the hon. Gentleman. My position is clear: I very much welcome any initiative pursued by the First Minister or by the Scottish Government that can be to the benefit of Scotland without being to the detriment of the rest of the United Kingdom. I look forward to hearing from the First Minister when I meet her next week how the various initiatives she is pursuing are going. We want to work together. Businesses in Scotland yesterday made it very clear that they want a Team UK approach: the Scottish Government and the UK Government working in tandem in the best interests of Scotland.

Does my right hon. Friend agree that, just as the Scottish referendum was binding for a generation, so too is the United Kingdom’s decision on the European Union? Is it not incumbent on all politicians, including those in the devolved Administrations, now to come together to make this work?

I very much hope that that will be the case. I met Fiona Hyslop, the Minister responsible in the Scottish Government, within hours of the EU declaration being made. My right hon. Friend the Minister for Europe is in Scotland today. I am meeting Fiona Hyslop tomorrow, and, as I have already said, I am meeting the First Minister next week. We want to work as closely as we can with the devolved Administrations to get the best outcome for Scotland.

On the previous question, I would point out that Scotland voted by a large majority to remain in the EU. As a self-confessed democrat, will the Secretary of State therefore confirm that he will support the Scottish Government’s efforts to find a mechanism to keep Scotland in the European Union?

The hon. Gentleman may not have read the ballot paper, but the question was not about Scottish independence. It was about whether voters in Scotland wanted the United Kingdom to remain in the EU. I was a part of the 1.6 million people in Scotland who voted to remain in the EU, but I did not do so on the basis that Scotland would then be dragged out of the United Kingdom if I did not get the decision I wanted.

11. With over 1 million people in Scotland voting to leave the European Union last month, what is my right hon. Friend’s assessment of the rush for a second independence referendum on the Union? (905603)

It is important that we respect the views of people we do not agree with. It has become evident that the Scottish National party cannot respect the views of the 2 million people who voted to remain in the United Kingdom in the 2014 referendum and it does not respect the people who voted to leave the EU. I do not agree with the people who voted to leave, but their views need to be respected.

In the light of statements made by the Secretary of State for Justice and the new shadow Secretary of State for Scotland over the weekend, will the Secretary of State for Scotland give us an unequivocal confirmation that the Barnett formula will not be changed or affected as a result of the EU referendum and that Scotland’s budget will be protected?

The Government were elected on a manifesto that made it clear there would be no changes to the Barnett formula. The hon. Lady has been in several political parties over her political career. Perhaps she noticed earlier this week that there is a vacancy at the head of the UK Independence party; that might be her next destination.

12. Will my right hon. Friend tell us what discussions he has had on the possibility of Scotland having to accept joining the euro if, as it claims, it wants to stay in the European Union? (905604)

Clearly the parameters have changed, and if any proposition were put forward for any prospective further independence referendum, it would be carried out on an entirely different basis from what we had with the 2014 proposition, and membership of the euro might well be part of that.

A close relationship between Scotland and the European Union is obviously in the best interests of Scotland. Has the Secretary of State any specific suggestions about how that relationship might be made real in the future?

I think I have set out clearly how I see the way forward on these matters, and it lies with the Scottish Government and the UK Government working as closely as they possibly can together. That is the way we will get the best possible arrangements for Scotland. The message from business leaders I met yesterday was that we need a Team UK approach to get that deal for Scotland.

7. What discussions he has had with the Secretary of State for Work and Pensions and Ministers of the Scottish Government on the devolution and implementation of social security powers. (905599)

I am committed to working with the Scottish Government to ensure a safe and secure transfer of welfare powers. I met Scottish Ministers in the joint ministerial working group on welfare on 16 June. We had a constructive meeting and issued a joint communiqué about our discussions.

What assurances can the Secretary of State give that Scotland will be no worse off with the devolution of new social security powers?

I certainly hope that individuals in Scotland will be no worse off. Inevitably, the devolution of these powers means that specific decisions about their use will be made by the Scottish Parliament and Scottish Government. The amount of certain payments and their shape and nature will be matters for them.

14. Will the Secretary of State update us on discussions on the devolution of the social fund funeral payments? (905606)

I am hoping to move forward with a commencement order for those powers before this Parliament goes into recess. That effectively means the transfer of the arrangements to the Scottish Government.

I have asked the Scottish Secretary twice via written questions when he last visited a food bank. The answer has been the same on both occasions—he has not visited a food bank in his capacity as Secretary of State for Scotland. Will he therefore today agree to visit a food bank with me in my constituency so that he can see at first hand the devastating effect of Tory sanctions and welfare policies?

The hon. Lady is very well aware that I have visited a food bank and understand the issues that surround them.

The agreement between the United Kingdom Government and the Scottish Government set out exactly how the new Scottish welfare budget will be agreed. Will the Secretary of State explain what would happen in the event of the UK Government abolishing a specific benefit that has been devolved to Scotland? In that circumstance, will the Scottish Government retain the budget or will they lose it?

The financial arrangements for the transfer of powers were dealt with in the fiscal framework, and that circumstance was contemplated in it. There are two sets of benefits that are subject to transfer: one is a set of benefits for which the Scottish Government will have full responsibility and can therefore shape and make a new benefit or change benefits; and the other set involves powers to top-up existing UK benefits. Clearly, if an existing UK benefit did not exist, the power to top it up would not exist either, but the power to create an equivalent might well do.

Womenomics Report

8. What progress the Government are making on implementing the recommendations of the Womenomics report on the role and contribution of women in the Scottish economy, published in March 2015; and if he will make a statement. (905600)

I thank the right hon. Gentleman for commissioning the Sawers report. The Government have published their response, and, following the elections in May, a ministerial group is being put together from all the Administrations in the United Kingdom—it will include my hon. Friend the Under-Secretary of State for Women and Equalities and Family Justice—so that we can begin to make progress. Meanwhile, the gender pay gap is diminishing to an all-time record low.

As we tackle the economic challenges that face Scotland as a result of Brexit, removing barriers to the full economic contribution of women to Scotland’s economy becomes more important than ever. Professor Sawers’s report offers the Government a road map. Will the Minister ensure that someone in the Scotland Office blows the dust off it, and implements some of the very good, solid recommendations that it contains?

As I have said, the report is very good, and it is critical for everyone to work together. The Scottish Parliament now has more devolved powers specifically to address the problems of gender equality, which, of course, includes any disadvantage for women.

Steel Industry

I was delighted to be present at the Dalzell plant in April for the handover of that plant and Clydebridge from Tata to the Liberty Group. I think that if we continue the excellent process of working together, the prospects for the steel industry in Scotland must be good, and I am going to be positive about its future.

I thank the Minister for that encouraging answer. What discussions is she having with the First Minister and with other Departments to ensure that the Scottish steel industry receives all the help and support that it needs?

We work together hand in glove, which I think is very important. It is also important to note that the Steel Council, which the Government established, contains a number of representatives of both the Scottish and the Welsh Governments. Together, we can ensure that throughout the United Kingdom we have a strong and sustainable steel industry.

Brexit will be helpful to the British steel industry, including the steel industry in Scotland. It was a good day when we came out. Will the Minister welcome it?

What I will say is this: I think that we must all work together now, however we voted and whatever our views, to ensure that we do the very best for our country. We should be under no illusions about the fact that we face some very big challenges and some very difficult months and years, not just days. What is important now is coming together and putting the past behind us.

Public Procurement: Small Businesses

13. What plans he has to work with the Scottish Government on ensuring that more public procurement is directed towards small businesses; and if he will make a statement. (905605)

Procurement has been an important part of the Government’s work. We are determined to deliver our target of central Departments spending 33% of their budgets with small and medium-sized enterprises by 2020. The last set of results showed that we were increasing the proportion to 27.1%.

Does the Minister agree that rather than setting specific percentage targets for small business procurement, the Scottish Government should follow best practices in counties such as Norfolk, and also work in close co-operation with the United Kingdom Government?

North Sea Gas and Oil Industry

In the 2015 Budget, the Government introduced a £1.3 billion package of tax measures to help our oil and gas industry. Today I am launching the inter-ministerial group’s oil and gas workforce plan, which sets out how we can retain talent in this sector and opportunities for workers in other sectors.

The North sea oil and gas industry supports a range of supply chain partners, including businesses on the south coast. Will the Minister continue to support those businesses as they diversify by exporting their expertise?

Yes, because we fully understand the difficulties in the oil and gas sector at the moment. That is why we have launched this plan. By working together we can improve the lot, but these are difficult times for the oil and gas sector.

I am extremely grateful to the hon. Member for Havant (Mr Mak), who posed the question succinctly but comprehensively, and to the Minister for succinctly but comprehensively answering it, so that it is now time for Prime Minister’s questions.