Skip to main content


Volume 615: debated on Wednesday 12 October 2016

The Secretary of State was asked—


1. What assessment he has made of the potential effect of the UK leaving the EU on the economy of Scotland. (906389)

2. What assessment he has made of the potential effect of the UK leaving the EU on the economy of Scotland. (906390)

4. What assessment he has made of the potential effect of the UK leaving the EU on the economy of Scotland. (906392)

Mr Speaker, may I begin by commending you not only on your attendance at the Davis cup semi-final in Glasgow, but on your obvious enthusiasm and exuberance, which the hon. Member for Glasgow Central (Alison Thewliss) and I were witness to? I am sure you will agree that, although the result was not as we would have wished, the event once again confirmed Glasgow’s place as a great international sporting venue.

The UK leaving the EU should be seen as an opportunity for Scotland. Today’s GDP figures are an encouraging sign of growth. However, Scotland is still lagging behind the UK as a whole and that underlines the need for Scotland’s two Governments to work together to take such opportunities.

The Secretary of State and his daughter did a fantastic job as well, as did the constituency Member of Parliament.

Given that Brexit continues to be billed as taking back control, will the Secretary of State tell us which of the powers currently controlled by Brussels the UK Government will commit to giving to Holyrood and which will be re-reserved to Westminster?

It is self-evident that, because the devolution settlements within the United Kingdom are predicated on the basis that the United Kingdom was a member of the European Union, those devolution settlements will be changed by the United Kingdom leaving the EU. Those will be matters that will be subject to debate and discussion.

I am not entirely certain that the Secretary of State answered that question. Will he categorically rule out powers being re-reserved to this Parliament as a result of the decision to leave the European Union?

What I can say is that no powers which are currently exercised by the Scottish Parliament will be re-reserved to this Parliament as a result of the United Kingdom leaving the EU.

With a constituency that has an interest in having an aerospace cluster, an airport and large pharmaceutical production, may I ask what the Secretary of State’s view will be on the single market, the open skies and the European Medicines Agency?

The Prime Minister made it very, very clear at the Conservative conference that we want to have access to the single market and to ensure free trade. The sectors that the hon. Lady mentioned are very important; they are part of the group of sectors with which we are engaging very closely to identify their specific interests and concerns so that they are part of the UK’s negotiating position.

12. Is it not the case that there should be a substantial boost for Scottish exports as a result of the depreciation of the pound since the Brexit vote? (906401)

Sectors in Scotland would acknowledge that they have benefited from the devaluation of the pound. The tourism sector, which saw a record attendance at the Edinburgh festival recently, and the agricultural sector would acknowledge it, but I do not see that as being an end in itself. What we need to do is ensure that we get the best possible deal for Scotland and the UK from these negotiations so that Scottish business can flourish.

My right hon. Friend is absolutely right in saying that we are leaving a dysfunctional union—the European Union—and that that is an opportunity for the people of Scotland. Is it not also the case that if we were to follow the Scottish National party’s advocacy and leave the union that works—the United Kingdom—we would land the people of Scotland with a huge public sector deficit and the prospect of either tax rises or cuts in services?

My right hon. Friend is absolutely right. There seems to be a very strange contradiction here: Members on the SNP Benches are rightly concerned about Scotland’s continued trade with the EU, but they disregard the fact that Scotland’s trade with the rest of the United Kingdom is four times as much as with the EU, and that a million jobs in Scotland are dependent on our trade within the United Kingdom—that is the union that matters to Scotland.

Given the importance of that single market to Scotland, does my right hon. Friend agree that the last thing that the Scottish economy needs is the perpetual uncertainty of another independence referendum?

If anyone actually listens to businesses in Scotland and, indeed, to the people of Scotland, it is quite clear that people do not want another divisive independence referendum in Scotland—other than individuals who are obsessed with independence. We need to listen to business, take a second independence referendum off the table and concentrate on getting the best possible deal for Scotland and the UK from these negotiations.

As a result of demands from Nissan, the Chancellor of the Exchequer has suggested that companies that will suffer a loss of profits as result of exiting the EU may be due compensation. Can the Secretary of State assure businesses based in Scotland which will suffer the same loss of profits that they will be entitled to the same deal, and if so has he made an assessment of the costs of such compensation?

May I congratulate the hon. Gentleman on retaining his position as shadow Scottish Secretary? I understand that on the Benches behind him is the Westminster spokesman of the Scottish Labour party, and I am sure that it will emerge during these questions how those two positions interrelate.

The point that I would make in response to the hon. Gentleman’s question is that we will have a common response across the United Kingdom and that whatever support is put in place for businesses in the north of England will apply to businesses in Scotland.

13. Scotland has a long and proud history of invention, innovation and creativity, and has always looked out to the world. Could the Government do more to rekindle that outlook in Scotland, rather than the First Minister creating uncertainty and constantly talking about independence? (906402)

I agree that we need to see Brexit as an opportunity, and I was very interested to see yesterday that the leader of Glasgow City Council also took the view that Brexit offered an opportunity for Glasgow to continue to flourish. Rather than doom-mongering, which is the constant refrain of the SNP, let us take a positive approach and seize the opportunities that are out there for Scotland.

May I remind the Secretary of State for Scotland that he was elected on a manifesto commitment to

“safeguard British interests in the Single Market”,

so will he and his Government work with the Scottish Government, respect the 62% of Scottish voters who voted to remain within the European Union and protect our place in Europe?

Of course I will do that, but I will also respect the half of voters in the right hon. Gentleman’s constituency who voted to leave the EU. He does not make much of it, but a higher percentage of people in his constituency voted to leave the EU than voted for him, so let us respect everybody in this debate. I am committed to working with the Scottish Government. I have met Michael Russell on a number of occasions. The First Minister and the Prime Minister will meet on 24 October, and their engagement will be essential to achieving what we want: the best possible deal for Scotland.

Yesterday, we learned from statistics emanating from the right hon. Gentleman’s Government that Brexit will cost £66 billion a year. If these statistics are being prepared for the Cabinet Office, surely they are also being prepared for the Scotland Office, so will the Secretary of State for Scotland be candid with the House and with the people of Scotland and tell us how much Brexit will cost Scotland?

We are not even at the stage of beginning the negotiations. What we are going to see—[Interruption.] The Prime Minister has set out the process for taking those negotiations forward. It is inevitable that, over the next few weeks, months and years, we will see press reports and speculation, leaks and all sorts of other supposition. I want to ensure that we go into those negotiations in conjunction with the Scottish Government to get the best possible deal, and that is my commitment.

Has the Secretary of State seen the report published yesterday by the NAFC Marine Centre, showing that half of all demersal fish and two thirds of all pelagic fish caught in UK waters are caught by boats from other EU countries? Does he understand why Scottish fishermen see these negotiations as a once-in-a-lifetime opportunity to undo the damage caused by the common fisheries policy, and will he put their interests at the heart of the negotiations, unlike his Tory predecessors in the 1970s, who saw our fishing industry as expendable?

I commend the Scottish Fishermen’s Federation and others on their approach to the negotiations; they see them as an opportunity, for the very reasons referred to by the right hon. Gentleman and by yesterday’s report. The SFF was quite right to characterise the report as “A Sea of Opportunities”, and it will have my support in realising them.

Has the Minister included, in his assessment of the impact on the Scottish economy of the UK leaving the EU, the impact of Scotland leaving its biggest single market: the rest of the UK—something that some people are demanding, week in, week out?

As I said earlier, I find it very surprising that people who declare a great enthusiasm for the European single market are willing to dismiss the United Kingdom single market, which is worth four times as much to the Scottish economy and employs a million Scottish people.

Today’s GDP figures for Scotland are welcome, as is the major increase in GDP arising from the services sector, probably driven by the financial services sector in Scotland, and in my city of Edinburgh. What specifically is the Secretary of State doing to protect that financial services sector, and can he give the House, and Scotland, an assurance that he will stand by the Conservative party’s commitment in his 2015 manifesto to saying yes to the single market?

First, we fully recognise the importance of the financial services sector in not just Edinburgh but Scotland more generally. I am determined to ensure that its interests are protected. We are working very closely with it to ensure that it is very much at the forefront as we move forward with establishing the UK’s negotiating position.

Overseas Trade

3. What discussions he has had with businesses and trade bodies in Scotland on opportunities for overseas trade. (906391)

6. What discussions he has had with businesses and trade bodies in Scotland on opportunities for overseas trade. (906394)

7. What discussions he has had with businesses and trade bodies in Scotland on opportunities for overseas trade. (906396)

Since the EU referendum, Scotland Office Ministers have held over 50 meetings with Scottish Government Ministers, Scottish organisations and trade bodies to discuss the implications for Scotland. We intend to hold further such meetings in the coming months, to ensure that Scottish business interests are fully represented in the negotiations on the UK’s exit from the EU and in any future trade arrangements.

Does my right hon. Friend agree that when we negotiate free trade deals outside the European Union, we can remove some of the protectionist tariff barriers that the EU has erected, thereby reducing consumer prices for consumers in Scotland—and, indeed, across the United Kingdom?

I agree with my hon. Friend, and I believe that this Government and this country can be advocates around the world for free trade. Trade liberalisation between advanced economies can have a positive impact on the consumer, and that is what we want to see in Scotland and across the UK.

Will the Secretary of State reassure the House that as he is conducting discussions around the world and engaging with British business, he gets the maximum opportunities for Scottish business, uses his opportunities to demonstrate that Scotland is better as part of the United Kingdom, and knocks on the head all this talk of independence that we incessantly hear from the Scottish National party?

I agree with my right hon. Friend. It is vital that we promote Scotland’s interests in that way, and do so working in conjunction with the Scottish Government. Both Governments have a role to play—in, for example, as the Scotch Whisky Association identified, developing new markets and promoting that product, which is vital to Scotland’s economy.

I was pleased to read last month that exports of Scotch whisky were up for the first time in three years, with a surge of exports to India. Does my right hon. Friend agree that everyone in the UK should work together to support the export of great British products, including great Scottish products such as whisky?

I do agree, as I have set out. Bodies such as the Scotch Whisky Association acknowledge and accept that, and want the two Governments to work together in that regard, and that is what I am committed to doing.

If the Government leave the European Union without a specific trade arrangement with the EU, is the Secretary of State happy to fall back on World Trade Organisation methods?

I am sure that that is the type of speculation that will constantly be sought from Ministers in the weeks and months ahead. The Prime Minister has set out the process for negotiating our exit from the EU, and at the conclusion of that process I am confident that we will be able to achieve the best possible deal for Scotland and the rest of the UK.

The Secretary of State has, on many occasions, extolled the trade benefits of the single market for Scotland. Regardless of whether or not the UK is a member state of the EU, does he still believe that it is in Scotland’s interest to have membership of the single market, rather than trying to negotiate third-party access?

What I have also said on many occasions, as the hon. Lady will know, is that the UK will have a bespoke arrangement with the EU when we leave. It is not appropriate or sensible to see the negotiating process in the context of existing arrangements with other countries or, indeed, the existing structure of the EU. We should seek to get the best possible deal for our businesses.

Crucial to promoting trade is the need to support apprenticeships. However, training bodes, organisations, businesses and employers in Scotland have told me that they are struggling to get clear guidance on how the apprenticeship levy will work. Will the Secretary of State ensure, unlike his colleague the Business Secretary, that he works urgently with the Scottish Government to give those people the information that they need?

I am absolutely committed to doing that, and I can confirm that the apprenticeship levy will be discussed when the joint ministerial council meets on 24 October.

One area in which apprenticeships could work is the oil industry and the decommissioning of oil rigs. We have already seen the loss of 80,000 jobs in that industry, and that will be compounded if we continue, as has happened recently, to lose decommissioning contracts to other countries. Do the Government have any strategy at all to ensure that those crucial jobs remain in Scottish hands?

The hon. Gentleman will know that the Government are committed to the industry, and a £2.3 billion investment and associated tax changes were exactly the support that it asked for. We have also established, along with the Scottish Government, the £250 million Aberdeen city deal, which will have at its heart a new technology centre to ensure that skills and jobs remain in the north-east.

Welfare Powers

5. What steps the Government are taking to transfer welfare powers to the Scottish Government. (906393)

A significant number of new welfare powers came into force this September, and give the Scottish Parliament new choices over welfare in Scotland. The joint ministerial working group on welfare, which includes Scottish Ministers, met yesterday to continue its important and constructive work overseeing the transfer of remaining powers.

With that significant transfer of powers from the UK Government to Edinburgh, does my right hon. Friend agree that the Scottish Government should get on with exercising those powers for the sake of the welfare of the people of Scotland, rather than wasting time on expensive and unnecessary talk of a second independence referendum?

I absolutely agree. These are significant powers, which the Scottish Government and the Scottish National party in this House asked for. People around Scotland will want to see how they are being deployed and what process is being used. The message from the people of Scotland generally to the Scottish Government is “Get on with the day job.”

11. I am sure that at yesterday’s meeting of the joint ministerial working group Scottish Ministers will have stressed their desire to see their employment programmes proceed on a voluntary basis. What steps will the Secretary of State take to ensure that his Government respect that desire? (906400)

We have made it absolutely clear that we will respect that desire for the programmes to proceed on a voluntary basis. What I think the people of Scotland will want to know is what the Scottish Government intend to do in relation to people who do not volunteer to be part of the programmes.

North Sea Oil and Gas

8. What discussions the Government have had with oil and gas companies on support for North sea industry. (906397)

10. What discussions the Government have had with oil and gas companies on support for North sea industry. (906399)

The Government continue to work closely with industry, both directly and through the Oil and Gas Authority, to drive investment and support jobs in the North sea.

Revenue from North sea oil has dropped by more than £10 billion over the past two years. What steps are the Government taking to ensure that public services in Scotland do not suffer as a result of this shortfall in public revenue?

As my colleague rightly notes, there has been a shock in the oil and gas industry resulting from global changes. As the latest public finance figures show, being part of the UK protects living standards in Scotland. The drop in revenues has been offset by a vigorous programme of Government support in tax relief and allowances, as well as in a host of other areas.

The supply of home-grown feed stocks is vital to the Cheshire chemicals industry and is in part reliant on the success of North sea oil and gas. Can the Minister assure the House that the Government will continue to take steps to support the many jobs in our foundation industries that depend very much on this sector?

My colleague is absolutely right to highlight this issue. The UK chemicals sector is a vital part of our manufacturing industry and an important contributor to the economy. The Government are working closely with the industry to implement the desire to grow gross value added by £105 billion by 2030, and a key element of that will be delivering competitive energy and feed stock supplies.

Industry has been crystal clear that more work needs to be done to boost exploration. Will the Government bring forward exploration incentives in the autumn statement to protect employment and boost production?

Exploration remains very important. The continental shelf is depleting. As the hon. Gentleman will know, the Government have taken some serious steps in Aberdeen with the city deal. I will not comment on the autumn statement, but it is an issue of some focus for the Government.

Since Question Time began this morning, five Members on the Scottish National party Benches have asked about membership of the European Union, and two have asked about Scottish jobs. Seven Members on the Conservative Benches wanted to talk about Scottish independence. Which group would the Secretary of State describe as being obsessed with independence?

I can do no better than to refer the hon. Gentleman to the words of Adam Smith, who said that the Union of 1707 was

“a measure from which infinite good has been derived”

for Scotland.

Steel Industry

Order. There is far too much noise in the Chamber. The Minister is a debutante at the Box. He ought to be heard.

Not quite a debutante, Mr Speaker—we can only hope.

The steel industry in Scotland remains a vital part of the UK steel industry as a whole. The Government continue to engage with steel companies, devolved Governments and trade unions to ensure a sustainable and prosperous steel industry for the UK.

Liberty House is taking more than 70% of its new workforce from among former Tata Steel employees, which is good news for Motherwell, and it should be congratulated on that. Will my hon. Friend congratulate the company, in particular, on its apprenticeship programme, which is a positive endorsement of Britain’s engineering future?

My hon. Friend is absolutely right to focus on the Dalzell plate mill, which opened last month under its new owners, Liberty House Group, with the Government’s support. As this illustrates, we have taken clear action to help the industry, for example by securing state aid to compensate for energy costs and through flexibility over EU emissions regulations and many other areas. I also share his delight in the work that has been done on apprenticeships.

During recess, I attended the reopening of the Dalzell works in Motherwell. Will the Minister speak to the Scottish Government about how steel jobs can be saved by putting together a package that really works?

I am grateful to the hon. Lady. The Government stand ready to work together with the Scottish Government on any area that can support and protect Scottish jobs and Scottish industry.