The Secretary of State was asked—
The Government are committed to tackling poverty so that we can make a lasting difference to long-term outcomes. This Government have lifted 400,000 people out of absolute poverty since 2010, and income inequality has fallen. While the Scottish Government have powers to tackle poverty through the devolution of skills, education, health and employment programmes, it is important that Scotland’s two Governments work together to address this critical issue.
It is estimated that one in four children in Scotland—230,000 of them—are living in poverty, and that is substantially higher than in many other European countries. Like poor children everywhere, these children are likely to achieve less in school and more likely to suffer chronic illness and poor mental health. The Institute for Fiscal Studies predicts that child poverty could rise to about 37% by 2021. Does the Minister not agree that this Tory Government’s welfare policies, such as the two-child benefit cap, zero-hours contracts and the dreaded universal credit, are contributing to the increasing rate of child poverty in Scotland?
The hon. Gentleman will not be surprised to hear that I disagree with him. Since 2010, there are over 3.8 million more people in work and 730,000 fewer children growing up in workless households. Over three quarters of this employment growth has been in full-time work, which can be proven substantially to reduce the risk of poverty. But I know how passionate the hon. Gentleman is on this issue, and I would be very happy to meet him to hear his concerns.
The Minister has got to reflect on his answer. Yes, of course he is right about the growth of employment, but the majority of children in poverty in Scotland—230,000 of them—are living in families with parents in work. That is a disgrace. What are this Government going to do about it?
We do not want to see one individual family or child in poverty. The hon. Gentleman talks about in-work poverty. We are taking action, as a Government, to tackle in-work poverty. Real wages have risen for over a year—22 months in a row—and total wages rose by 3.2%. The national living wage rises to £8.72 in April, and we want to go further. That is why the Chancellor has announced that the national living wage will rise to £10.50 by 2024. We also have a focus, through a network of jobcentres, on in-work progression.
We know that children living in poverty experience poor physical and mental health, employment difficulties, stigma and chronic low self-esteem. This creates problems not just for the individual but for government further down the line, so would the Minister surprise us all and welcome the Scottish Government’s introduction of the Scottish child payment later this year?
I am looking very closely at that measure and its impact. I gently suggest to the hon. Lady that this is in fact evidence of devolution working. There is no monopoly on good ideas, and where the evidence suggests that a measure works, we should of course explore it, and I will. I stress that I am committed to working with the Scottish Government to improve the life chances of people across Scotland, as I am across our whole United Kingdom.
If this is evidence of devolution working, I would like to remind the Minister that that is why we want all the welfare powers devolved to the Scottish Parliament. Once rolled out, this new payment will help roughly 30,000 children out of poverty. So if it is a good measure for the Scottish Government, why are his Government not following suit?
I think I have already answered that question—I will look at it very closely. If the Scottish Government are serious about addressing child poverty more broadly, they should be making full use of the powers to reduce housing costs, improve earnings and enhance social security. As I said, the Scottish Government have powers to tackle poverty through the devolution of skills, education, health and employment programmes. In fact, the UK Government do welcome the Scottish Government’s child poverty strategy. I look forward to working very closely with my counterpart in the Scottish Government to ensure that we cover these devolved areas.
The child poverty payment is welcome, but does the Minister share my concerns that the vast number of welfare powers that the SNP Scottish Government argued for, which were transferred in the Scotland Act 2016, have not been taken forward? In fact, some of them are now delayed until 2024. Is welfare not just another victim of the Scottish Government’s obsession with the constitution, rather than focusing on the day job?
I thank my right hon. Friend and recognise his huge expertise in this area. The Scottish Government, and indeed this Government, want to address these issues, and I am committed to working with my counterparts in the Scottish Government to tackle child poverty and poverty in all its forms.
My Department has regular engagement with colleagues in the Department for Business, Energy and Industrial Strategy on a range of issues relevant to Scotland, including the renewable energy sector.
Scotland has a huge geographical advantage when it comes to wave and tidal energy, with reports suggesting that up to 40,000 jobs could be created in the sector if it had Government support. What work is being done in Government to explore wave and tidal technology?
The hon. Lady is right; we have an advantage with that and with our wind speeds, mountains and hydro schemes. The Government are supporting technology. Wave and tidal technology is being investigated in universities, and we are completely behind that, should it prove to work.
My hon. Friend the Member for Lancaster and Fleetwood (Cat Smith) is right about the geographical advantage. What infrastructure work are the Government undertaking—for example, interconnectors and storage—so that the clean green energy that Scotland is able to generate can be shared with the rest of the United Kingdom?
As the hon. Gentleman knows, interconnectors are a devolved matter, but we are looking at upgrading the schemes so that we can transfer our power across the United Kingdom and the advantage that we have in Scotland with renewables and our growing renewable industry can benefit the whole UK.
The Secretary of State will recall that, when EDF was given a licence to develop the wind farm at Neart na Gaoithe, 10 miles off the Fife coast, there was a commitment that 1,000 jobs would be created in making the jackets for the wind turbines. Can he tell the House how many jobs have been created?
I will tell the Secretary of State how many jobs were created: 1,000—in Indonesia. Is the GMB union right in saying that the transportation of those wind turbines from Indonesia to the Fife coast will be the equivalent of 35 million cars on the road? How does that fit our commitment to greening the economy, and what confidence can people in Scotland have that jobs in a wind farm 10 miles off the Fife coast will be created for people in Scotland, not people in Indonesia?
That is the market economy, and we need to be better at pricing and better at producing our turbines—that is the straight answer. We will discuss this issue and many others at COP 26 in Glasgow later this year, when we discuss the climate emergency, but I do not dispute the fact that bringing turbines from Indonesia is not the answer; we need to find a better way of efficiently delivering them in the UK.
We are 13 minutes in, and I am tempted to ask the Secretary of State—and it is to do with wind, because Saturday was a windy day—about us winning the Calcutta cup. [Interruption.] Come on! You have to be happy with that.
We have had a balance of payments deficit, with lots of wind farms in Scotland being paid not to produce any electricity. Is that likely to take place later this year?
Obviously, I disagree with my hon. Friend on the Calcutta cup; that goes without saying. It was a wet, windy and miserable day at Murrayfield for me.
We are trying to improve the way in which wind works for Scotland. Contracts for difference provide certainty for investors over the longevity and protect consumers. In October 2019, at the last round of contracts for difference, six of the 12 awarded went to projects in Scotland.
Offshore wind and contracts for difference entry was cost-free to both the Government and the consumer as the strike price was below the typical wholesale price, but 240 MW of that remains stranded because Ofgem demands that the island of Lewis has at least 369 MW to build an interconnector cable. Another 180 MW could have been consented to, and that would have been cost-free, but they were not consented to due to Government caps. Can we have some joined-up thinking in the Government between the interconnector and the contracts for difference to ensure we are not billowing out fossil fuels when we could instead have 600 MW of wind being produced?
Busy day—[Hon. Members: “Ah.”] It appears I have woken a few people up.
Scottish exports to the rest of the UK increased in 2018 by £1.2 billion to £51.2 billion. As a result, the rest of the UK continues to be Scotland’s largest market for exports, accounting for three times the value of exports to the European Union.
Given the Secretary of State’s assessment, will he confirm that Scotland’s trade with the rest of the UK is worth more than three times that with the EU, and this is only one of the benefits on offer of being part of the United Kingdom, not least for British firms?
The Scottish Government’s own figures show that Scotland’s most important trading partner is the rest of the UK and, as my hon. Friend said, that is worth more than three times the trade with the other 27 EU countries combined. In other words, the Scottish Government’s figures show that over 60% of Scotland’s exports go to England, Wales and Northern Ireland. Indeed, I would argue that this is just one of the many benefits that Scotland has from being part of the United Kingdom.
I absolutely agree with my hon. Friend that Nicola Sturgeon’s separatist agenda is a real threat to Scotland’s jobs, businesses and the economy, and that is why I am against the First Minister’s demand for another independence referendum. We want 2020 to be a year of growth, stability and opportunity for Scotland and for the whole United Kingdom, whereas the SNP wants 2020 to be a year of more political wrangling and wasteful debate.
Labour MSP Monica Lennon has introduced the Period Products (Free Provision) (Scotland) Bill to the Scottish Parliament to give free provision to women in Scotland, but it is opposed by the SNP Government because of “tampon raids” by the English into Scotland to steal the products. If that is the case, what kind of border does the Secretary of State think will be required in the event of an independent Scotland, with a separate currency, a different regulatory environment and different provisions on trade?
The hon. Gentleman makes an exceptionally good point. That is a border we need to avoid, and it makes no sense to have any sort of border between Gretna and Berwick. As for the SNP opposing that, and the opportunity to reduce VAT rates and other things that would help people on the poorest incomes, I simply do not understand what it is thinking.
If the Secretary of State truly values the trade between Scotland and the rest of the United Kingdom, why is he prepared to countenance a situation in which we would lose frictionless trade between Scotland and Northern Ireland?
The Scottish Secretary and I regularly meet the Secretary of State for Defence to discuss a range of issues of importance to Scotland, including maritime security.
Not least because of the Minister’s own constituency, he will understand that there is an obvious breach point in the high north of Scotland for adversaries to come into, as has happened before. Can he assure the House that the Scotland Office will be engaging fully with the upcoming integrated defence review, and will he agree to meet me to discuss some of the issues that are important to him and to the rest of Scotland?
I would be delighted to meet the hon. Gentleman, and we can continue that discussion about the great investment by the UK Government into Scotland, and into Moray. Last week, we welcomed the first of nine P-8A aircraft, the “Pride of Moray”, which touched down at Kinloss. That is a huge investment by the UK Government and Boeing, and I also put on the record the outstanding work done by local firm Robertson, in building the Poseidon facility.
That is a devolved issue, and I know that the Department for Environment, Food and Rural Affairs, and other Departments, are in continued dialogue about that with the Scottish Government and others. My hon. Friend’s longstanding commitment to the fishing industry has again been raised in the House, and he continues to stand up for his constituents in Banff and Buchan on that subject, and on many others.
UK Government Ministers and officials have regular discussions with the Scottish Government on matters of importance, including the Scottish fiscal framework. That historic arrangement delivers one of the most powerful and accountable devolved Parliaments in the world, and it is up to the Scottish Government to use those powers wisely further to increase the economic prosperity of Scotland.
It goes without saying that I agree with my hon. Friend, and it is disappointing that Scottish taxpayers who earn more than £27,000 will pay more tax in Scotland than they would in the rest of the UK. Furthermore, taxpayers in Scotland will pay 41% income tax on earnings between £43,500 and £50,000, compared with just 20% in the rest of the UK. A police officer with 10 years’ experience—mid-30s; bringing up a family—will pay 21% more tax on earnings between £43,500 and £50,000 in Scotland than they would pay in the rest of the UK.
Will the Secretary of State acknowledge that for the third consecutive year more than half of Scottish income tax payers will pay less tax than taxpayers in the UK? Will he explain to those UK taxpayers why his Government is ripping them off?
Leaving the EU
Now that we have left the European Union, we are free to determine our own future. We want 2020 to be a year of economic and social growth for Scotland and the rest of the UK.
The Secretary of State has stated in the Chamber that the UK internal market represents the majority of Scotland’s total export market, and it is therefore vital that he makes provision to develop and strengthen that market. Will he confirm that the Government will prioritise the UK’s internal market over any future US-UK trade deal that the Prime Minister wants with Donald Trump?
I absolutely can because the UK internal market is so important for this country and Scotland. The Secretary of State has mentioned some figures today, and Scotland does 1.5 times more in trade with the rest of the UK than it does with the EU and the rest of the world combined.
Absolutely. The future of Scotland’s economy and the UK economy will be buoyant, and as we leave the European Union we want to ensure that all our sectors continue to thrive. I assure my hon. Friend that we in the Scotland Office will do everything possible to facilitate those discussions.
The response we have heard from the Government Front Bench today might explain why the Minister has lost half his Scottish colleagues, why the SNP is at 51% in the polls and why the majority of the Scottish people now want independence. In the real world, the Chancellor of the Duchy of Lancaster says that border checks are now inevitable for almost everybody because of the Government’s disastrous Brexit. How will this help Scottish business?
The hon. Gentleman mentions the real world, so let us look at the real world in Scotland where the SNP is in power: we have bridges that people cannot get across; we have hospitals that it cannot open; and we have an education system that is failing. That is the record that the Scottish Government and the SNP will have to go to the people in a little over 15 months’ time. I look forward to that election, when what the Scottish Government and the SNP have done to Scotland since 2007 will have an impact on the result.
Thank you very much. I am busy today, Mr Speaker.
At the end of 2020, we automatically take control of our waters. This opens up a sea of opportunity for our fishing industry in Scotland, and across the UK. As I have said before, this Government will work tirelessly with our fishermen and coastal communities across Scotland.
I can confirm that we will no longer be bound by the EU’s outdated and unfair method for sharing fishing opportunities. We will set our own fishing quotas, based on science, and decide who can fish in our waters. I share my hon. Friend’s optimism for the future of our industry, and it is an optimism that I have heard time and again from fishermen and fishing communities the length and breadth of Scotland.
Can the Secretary of State reveal whether the UK Government’s stated intention of agreeing a mechanism of co-operation within the EU on fishing will include an extended agreement on access to waters as part of an EU trade deal?
Clearly, we are in discussions about this, but we have a positive vision for our fishing industry in Scotland now that we have left the European Union. How does that reflect on the SNP’s vision for fishing in Scotland, which is to take us back into the European Union, to be shackled once again by the common fisheries policy? That is something that many Scots and many fishermen voted comprehensively to leave, but the SNP wants to put us right back in.
I have regular discussions with all my Cabinet colleagues on issues important to Scotland’s economy, including the forthcoming Budget in March. The Government will deliver a Budget for Scotland’s businesses and Scotland’s people. We will set out ambitious plans to unleash Britain’s potential and level up across the nations and regions of the UK.
Given the close economic relationship between the south of Scotland and the north of England, particularly within the borderlands region, will the Minister make representations to the Chancellor on and give his support to a freeport at the Carlisle Lake District airport?
I welcome the recent freeports announcement, and I have no doubt that freeports will unleash the potential of our proud historic ports, boosting and regenerating communities across the UK. I and other Ministers on the Front Bench—the Chancellor is here—have heard my hon. Friend’s early representations on behalf of his airport and his area. Not only is he a great champion for the borderlands, but he is a great champion for the Carlisle Lake District airport.
Page 64 of the 2015 statement of funding policy document confirms that HS2 should have 100% Barnett consequentials for Scotland. Will the Secretary of State ask for those Barnett consequentials, roughly £750 million in relation to what is being spent on HS2, to be delivered in the Budget?
Over the weekend, Kingsbarns distillery in my constituency won the “Best Lowlands Scotch, 12 years and Under” award at the world whisky awards. However, the impact of US tariffs continues to impede the growth of the Scotch whisky industry in my constituency and across Scotland. Will the forthcoming Budget include provisions to help our distilleries to compete internationally, despite those stifling tariffs?
I know that the hon. Lady has a lot of experience of this, having formerly worked for Diageo. The 25% tariffs on malt whisky are a consequence of the Boeing-Airbus dispute between the EU and the USA. In the next carousel, by having useful negotiations on a US trade deal, we want to get those tariffs removed.