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Volume 681: debated on Wednesday 7 October 2020

The Secretary of State was asked—

Coronavirus: Employment

What discussions he has had with Cabinet colleagues on supporting job retention in Scotland during the covid-19 outbreak. (906960)

What estimate he has made of the number of self-employed people in Scotland who have not received support from the Government’s covid-19 financial support schemes. (906961)

What discussions he has had with Cabinet colleagues on supporting job retention in Scotland during the covid-19 outbreak. (906972)

I have regular discussions with my Cabinet colleagues, including the Chancellor, on all aspects of how the UK Government continue to support Scotland’s economy. The Chancellor recently announced a package of measures that will continue to support jobs and help businesses through the uncertain months ahead.

At the height of the biggest economic downturn this country has seen in our lifetime, the UK Government stepped up and protected nearly 1 million Scottish jobs through the job retention scheme and the self-employment income support scheme. Does the Secretary of State agree that those measures show that the UK Government have done everything possible to support people’s livelihoods across the entirety of the United Kingdom?

Yes, I do. The might of the UK Treasury has supported all parts of the United Kingdom, including Scotland.

I note that the Government’s latest package of measures for the self-employed slashes their support from 70% of income to just 20%. And that is only for those who are eligible—many self-employed people have not received any help at all from the Chancellor. How many self-employed people in Scotland have fallen through the financial safety net, and what is the Secretary of State doing to help them?

The hon. Lady will know that we have brought in a new set of measures, as she said. There is the self-employed support scheme and the new job retention scheme. We have made a cut in VAT for the tourism and hospitality sector, and introduced the kickstart scheme. The self-employed income support scheme was a broad scheme. By definition, in a broad scheme it is inevitable that some people will sadly miss out, but I would say that in Scotland 283,000 grants were given, which came to some £777 million of support. The scheme now continues for another six months.

Many hard-working people in Hertford and Stortford are set to benefit from the introduction of the job support scheme, offering employers and workers a transition from furlough. Will my right hon. Friend confirm that this job-saving measure will have the same impact north of the border, and that Scotland shares in this Government’s focus on jobs, jobs, jobs?

Yes. The whole United Kingdom will benefit from all the measures put in place by the Chancellor.

Businesses across Scotland, particularly in the hospitality, tourism and culture sectors, are still closed or nowhere near back to any sort of normality. With additional restrictions being reintroduced as cases have rocketed in Scotland, things are only going to get worse for those sectors. The high-profile case of Cineworld is the latest in a very large number of hammer blows to Scottish jobs. The Government do not seem to see that the health and economic responses to covid are one and the same thing. What message does the Secretary of State have for workers on the precipice of losing their jobs and business owners on the verge of losing their viable businesses, or is it simply the flippant response, as the Chancellor said yesterday to the culture sector, that they simply have to retrain and get new jobs?

In this pandemic, the Chancellor has been very clear that he cannot save every business and every job. The hon. Gentleman mentions Cineworld. Independent cinemas were supported through the culture fund to the tune of £97 million in Barnett money. As I said, sadly we know we cannot save every business. Retraining programmes and the kickstart scheme are being put in place, and we have reduced VAT for hospitality, leisure and tourism to 5%. To protect the Scottish economy, I encourage the Scottish Government to make the restrictions coming forward as local as possible.

I am grateful to the Secretary of State, but the reality on the ground is that the Chancellor’s measures simply do not go far enough to protect jobs. The employees and businesses in the sectors hardest hit will need more support, and what they are getting from the Chancellor’s announcement is less support.

Another area critical for jobs is the Scotch whisky industry. This week marks one year since the United States announced a 25% tariff on Scotch whisky. Figures from the Scotch Whisky Association show that that has led to a devastating 32% drop in US Scotch whisky exports, costing a massive £360 million. Given the thousands of jobs in the industry that this supports, rather than the Secretary of State just telling us that he will raise the issue again with the International Trade Secretary, what is he actually going to do to encourage the US to lift the tariffs on Scotch whisky, or is this just another example of what his new Scottish Conservative leader describes as the Tories not caring about Scotland?

The hon. Gentleman raises a very serious issue not just for the whisky industry, but for biscuits and cashmere. I am pleased that biscuits are now off the tariff carousel. The Boeing-Airbus dispute has been many years in the making. It is unfair. It is harmful to both industry and consumers. However, in the trade talks that have opened up with the US, we have now got agreement to have a bilateral discussion—in other words, not using the EU negotiators anymore—with the US. The good news I can tell him is that we have moved to a new phase. The Secretary of State for International Trade this week is starting discussions to try to resolve this problem.

I very much welcome the fact that 11,000 or more of my constituents have benefited from the furlough scheme. Covid is changing our economy. We therefore need to focus on creating new sustainable jobs. That is why it is even more important that we press ahead in the south of Scotland with the borderlands growth deal. Will my right hon. Friend agree that we need renewed impetus into the deal, in particular into delivering the mountain bike innovation centre of Scotland in Innerleithen?

I thank my right hon. Friend for the invaluable work that he did in bringing the borderlands growth deal to fruition. I am also delighted to inform him that the business case for the mountain bike innovation centre was delivered by the Borderlands Partnership only yesterday. It obviously has to go through further assessments in the usual way, but I am well aware of and support the initiative, because mountain biking in what is a very beautiful part of Scotland is an incredibly popular sport, and it is locally a very popular initiative.

Knowing as we do the negative consequences that the delay to the autumn Budget will have on the Scottish Parliament passing its budget, will the Minister tell us if he made his Cabinet colleagues and the Chancellor aware of these negative consequences, or was he himself unaware?

We have had one Budget this year in March. That was slightly delayed and, at the time, the then Finance Secretary in Scotland, Derek Mackay, said that that was going to be disastrous for Scotland and that it would be unable to set its budget, but that was incorrect. The Finance Secretary was able to set her budget, and the message goes out now from the Treasury, as it did then: if she has any problems setting her budget, Kate Forbes should come forward and talk to us.

Just to ask the Secretary of State again, because I did not hear an answer in there: can he tell us if he made his Cabinet colleagues aware of the negative consequences that would happen, and what was the result of these conversations?

I say to the hon. Lady that I do not agree that there are negative consequences. The Chancellor and I have had discussions on this matter. I make it quite clear that if Kate Forbes has any questions on setting her budget, she should come forward and ask us. The offer was made to Derek Mackay when he made similar cry-wolf stories back in March, when there was a delay, but no questions were asked and nothing came forward because they had all the information they needed to set their budget.

The Union connectivity review announced by the Prime Minister will improve transport infrastructure across the country and bring jobs and investment to Scotland. I assume that Scotland’s two Governments will work together on this ambitious programme, so will the Secretary of State outline what response there has been from the Scottish Government so that the two Governments work together to deliver jobs and progress right across the country?

The Union connectivity review, which is being led by Sir Peter Hendy, who I met yesterday, is a really important initiative for Scotland and the whole United Kingdom, and it will create very exciting opportunities. However, I am concerned that Transport Scotland has been told by the Cabinet Secretary for Transport, Infrastructure and Connectivity, Michael Matheson, not to engage with the review, and I urge Mr Matheson to think again and to ensure that his officials take part. It cannot be in Scotland’s interest for the SNP to play politics with an issue that is so important to our economic future.

The Secretary of State says that the job retention scheme is a great example of their Union, but according to his boss, the ever-cheerful hon. Member for Moray (Douglas Ross), the Westminster Tories are not interested in their Union anymore. He says:

“The case for separation is…being made more effectively in London than…in Edinburgh”.

Is his boss right? Are the Westminster Tories full of defeatism about their Union? And if they do not care about their Union, why on earth should the Scottish people?

First, the new leader of the Scottish Conservatives cares deeply about the Union, and that is something that we cannot say for the Scottish nationalist party. But I would go further: he was making the very clear point that Westminster should not devolve and forget. Huge sums of money and support go to Scotland and other parts of the United Kingdom, and he was just pointing out that Departments in Whitehall should stay focused, stay connected and follow up on those funds.

The Secretary of State and his colleagues are given to chest-beating about the tremendous amount of revenue flowing to Scotland to get us through the pandemic—every penny of it, of course, borrowed. Will he tell me and the people of Scotland why those borrowing decisions are better made here than they would be by the people of Scotland in Scotland, and why we are habitually brow-beaten into being grateful for a service that we never asked for?

The simple reason is that not only do we have a strong Bank of England underpinning a strong currency, in the pound, but we are one country with one currency and because we have a strong economy, we are able to borrow money at much better rates.

Autumn Budget: Devolved Administrations

What discussions he has had with (a) the Scottish Government and (b) Cabinet colleagues on the effect of the delay to the autumn Budget 2020 on the finances of the devolved Administrations. (906962)

What discussions he has had with (a) the Scottish Government and (b) Cabinet colleagues on the effect of the delay to the autumn Budget 2020 on the finances of the devolved Administrations. (906968)

I have regular discussions with my ministerial colleagues and Scottish Government Ministers on economic and fiscal matters. The Treasury has made an unprecedented up-front guarantee to the devolved Administrations, guaranteeing that Scotland will receive at least £6.5 billion in additional funding this year on top of its Budget 2020 funding.

Last year’s delay to the UK Budget saw knock-on delays in the Scottish Government and local government being able to set their own budgets, with the result that many local authorities were forced to separate setting their council tax rate from settling their revenue budgets. Given this year’s delay, which has united devolved Finance Ministers in condemnation across these islands, would the Minister like to take this opportunity to apologise for the further uncertainty and risk that his Government are about to inflict on local and national Government in Scotland?

First, I repeat the point made by my right hon. Friend the Secretary of State that we have heard this “cry wolf” story before from the Scottish Government. The fact of the matter is that, as well as the guaranteed minimum funding for this year, the Chancellor has asked the Office for Budget Responsibility to provide forecasts next month. Together with the spending review, which will happen this autumn, that will give the Scottish Government plenty of certainty in setting their budgets.

This is just the disrespect agenda in action. The Tories never really wanted devolution anyway, and now they do not really give a stuff about whether or not it works properly. If they do not think that people in Scotland should not be in control of their finances, why will they not give the Scottish Finance Minister the information she needs to be able to set the budget properly? If they will not give her the information she needs, why not just give her the power to set our budget properly, without any recourse to Westminster at all?

I shall make a number of points in response to that. First, the Scottish Finance Minister is very welcome to contact me and explain why she has underspent the budget every year since the SNP has been in control of the Scottish Government. I have already explained in reply to the hon. Member for Gordon (Richard Thomson) that there will be plenty of information. The evidence is in the fact that this year we have guaranteed a minimum spend in addition to the usual budget of £6.5 billion. Only the separatists could call that a small amount of money.

The Scottish Government’s budget has been boosted by £6.5 billion to help to deal with the coronavirus. That is a true mark of the importance of the four nations working together. However, it was revealed last week by the Scottish Government’s Finance Secretary that £500 million of that has yet to be allocated. Does the Minister agree that the Scottish Government should be prioritising that funding to those people most in need in Scotland just now?

My hon. Friend makes an important point, and it is not just last year: as I said earlier, in every single year since the separatists took control of the Scottish Government, they have underspent their budget. It may come as news to the House, but under the fiscal framework agreement, which was made between the Scottish Government and UK Government, underspends can be transferred between fiscal years.

This week is Challenge Poverty Week in Scotland. Statistics show that almost a fifth of people in Scotland are living in relative poverty after 10 years of a UK Conservative Government and 13 years of an SNP Government in Holyrood. This should bring shame on both parties. Councils are critical to looking after the most vulnerable in society, yet they have seen their budgets slashed in recent years. It is not just the Tories who enjoy cutting budgets. The SNP has disproportionately cut local government funding since 2013-14, taking almost £1 billion out of those budgets. Will the Minister press the Chancellor to consider the impact of his economic policies on poverty in Scotland, and while he is at it, in his conversations with Scottish Ministers, will he ask them to stop disproportionately cutting local government budgets in Scotland?

The hon. Gentleman raises an important point. When we recover from the coronavirus period, we will, to coin a phrase, build back better. To that extent, I have involved the Equality and Human Rights Commission in Scotland in my regular meetings with business groups and others in Scotland to ensure that all parts of Scotland can flourish once we emerge from this. He is also right to highlight the fact that the centralising separatist Government in Scotland suck powers and money from local authorities in Scotland. I have met representatives of the Convention of Scottish Local Authorities, and they are deeply concerned about this.

The UK Government’s decision to end the job retention scheme at the end of this month will throw tens of thousands of Scots into unemployment. What effect does the Minister think that will have on poverty levels in my constituency of North Ayrshire and Arran and in Scotland as a whole?

The job retention scheme was the right intervention at the right time and has supported tens of thousands of jobs in Scotland, but across the world it is right that we move to more targeted measures of support. The job retention scheme was just one part of a whole suite of policies and support that we are putting in place and that will help to support Scottish businesses and employees in the months and years to come.

Strengthening the Union

The Government have always stressed the importance of the Union. The UK is a family of nations that shares social, cultural and economic ties that, together, make us far safer, more secure and more prosperous. As we have seen throughout the covid crisis, it is the economic strength of the Union and our commitment to the sharing and pooling of resources that has supported jobs and businesses throughout Scotland.

The Government are committed to their levelling-up agenda throughout the UK, as part of their plan to unleash the power of our Union. Does my right hon. Friend agree that the UK shared prosperity fund is an opportunity for our UK Government to be more ambitious in their pursuit of spreading the benefits of being part of our Union? Will the UK Government show their funding in the same way as EU funding has been prominently displayed?

Yes, I absolutely agree with my hon. Friend. Not only will the shared prosperity fund help, but thanks to the United Kingdom Internal Market Bill, the UK Government will be in the place of the EU—where the EU previously spent money in Scotland and other parts of the UK, the UK Government will do that. The Scottish National party has a serious objection to that. It is a strange ideology from the nationalists that they object to money coming from the Great British Government but are quite happy to take it from the EU.

I welcome the launch of the new UK Government trade hub in Edinburgh, which will not only strengthen the Union but help to support Scottish businesses so that they can thrive internationally. Does my right hon. Friend agree that expanding the export of world-famous Scottish products, such as Scotch whisky, will help to give our economy a much-needed boost as we recover from the coronavirus across the whole UK?

Yes, absolutely. I am pleased that we have announced a Department for International Trade hub in the new Queen Elizabeth House in Edinburgh. It will help our exporters in Scotland and build on the excellent trade deal that we have already agreed with Japan.

Darlington is the birthplace of the modern railway. Stronger railway links between Darlington and Scotland will be vital for the success of our internal market. Will my right hon. Friend join me in welcoming the independent Union connectivity review, led by Sir Peter Hendy, which will look at how we can improve our transport infrastructure to bring our communities closer and level up access to jobs and opportunities?

I absolutely will. The Union connectivity review will explore ways to build back better. As I said, I met Sir Peter Hendy yesterday, and it is extremely disappointing—it is worth making this point again—that Transport Secretary Matheson has instructed his officials not to engage in the review, to the detriment of Scotland and her economy.

Covid-19: Support for Businesses

What discussions he has had with the Chancellor of the Exchequer on the economic support available to businesses in Scotland during the covid-19 outbreak. (906964)

I have regular discussions with my ministerial colleagues, including the Chancellor, on all aspects of the impact of the coronavirus pandemic in Scotland. We have taken substantial action to support the economy from the shock of covid-19—for example, more than 65,000 businesses in Scotland have benefited from more than £2.3 billion of support through Government-supported loan schemes.

Productivity rates in Scotland are some of the very best in the UK. Does my hon. Friend agree that the vital extra support going to Scottish companies at this time, as he just mentioned, plus the extra £6.5 billion that the UK Government have made available to the Scottish Government, means that Scottish business will be well placed to help to lead a UK-wide recovery?

My right hon. Friend is absolutely right. Let me just quantify the support that we are giving on a per capita basis: it is around £1,200 extra for each man, woman and child in Scotland. He is absolutely right that Scottish business is in a good place. I have regular meetings with many companies that are putting forward very innovative schemes that we are supporting through the city and regional growth deal package to help us build back better when we emerge from this crisis.

Covid-19: Response Throughout the UK

What recent steps he has taken to help ensure a co-ordinated response to the covid-19 outbreak throughout the UK. (906989)

An effective response to covid-19 does indeed need to be a co-ordinated response across the UK. On 25 September, the UK Government and the three devolved Administrations published a joint statement on our collective approach to responding to covid-19. We reaffirmed our shared commitment to suppressing the virus to the lowest possible level and keeping it there while we strive to return life to as normal as possible for as many people and businesses as possible.

I raised this matter with the Secretary of State for Health yesterday, because of local concern that people in the south of England were being asked to travel to Inverness for covid tests. That is why I am concerned about the level of co-operation between the two Governments. May I press the Minister further to give me specific examples of co-operation between the two Governments?

I thank the hon. Gentleman for his question. Like me, although on a much larger scale, he has a rural constituency—I believe it is one of the largest rural constituencies, if not the largest. Pooling resources and using the strength of the UK economy enables the UK Government to support jobs and businesses, but the decision making on public health of Ministers in those devolved Administrations has been fully respected. There are examples of UK-funded measures that have been delivered but managed locally by the devolved Governments: we have six UK-funded drive-through testing facilities; four, or five as I believe it is, walk-through testing facilities; and up to 22 mobile testing facilities, some of which have been used to effect in the hon. Gentleman’s constituency.

Covid-19 has been rising rapidly in many parts of Scotland and, indeed, across much of the north of England, including in my own constituency, leading to the introduction of tighter restrictions. Given the impact that these restrictions are now having on the economy, particularly on those hardest-hit sectors, will the Minister ask the Chancellor of the Exchequer to revisit his previous refusal to continue the furlough scheme with a sectoral-based approach in those nations and regions of the UK that are worst affected?

The UK Government have provided a host of measures to support tourism and hospitality businesses throughout this crisis. As well as the job retention scheme, which has already been extended to the end of October, new measures announced in the Chancellor’s winter economic statement include the new job support scheme, the extension of the very welcome reduction in VAT to 5% for hospitality and tourism, the deferral of VAT and other tax payments and greater flexibility in the paying back of Government-backed loans.

Covid-19 Restrictions: Tourism and Hospitality

What discussions he has had with (a) the Scottish Government and (b) Cabinet colleagues on the effect of additional covid-19 lockdown restrictions on the Scottish tourism and hospitality industries. (906981)

What discussions he has had with (a) the Scottish Government and (b) Cabinet colleagues on the effect of additional covid-19 lockdown restrictions on the Scottish tourism and hospitality industries. (906986)

Both public health and tourism policies are devolved to the Scottish Government. However, I and my Office are in regular discussions with both the UK Government and the Scottish Government to identify sectoral issues in Scotland due to lockdown restrictions and co-ordinated areas of UK-wide support to the sector.

Scotland’s tourism and hospitality industries have been hammered by the coronavirus restrictions and by the impact on international travel. What specific discussions has the Secretary of State had with the Chancellor on providing additional sector-specific support to these industries?

My right hon. Friend the Secretary of State described earlier the ongoing discussions not just between the Scotland Office and the Scottish Government, but between the Scotland Office and other UK Departments, including the Treasury, on a wide range of issues, including the impact on the tourism sector. Tourism is one of Scotland’s most important industries. This Office and I have spoken regularly with businesses and industry bodies in the past few months, and they have outlined their concerns and also their desire to reopen and to stay open as the best way to stimulate recovery.

Scotland’s drinks industry has been hit hard by the US tariff on Scotch whisky as a result of the US-EU trade dispute. What discussions has the Secretary of State or the Minister had with the International Trade Secretary on this, and will the Secretary of State use his new position on the Board of Trade to stand up for Scottish industry?

The very short answer to that last question is: yes, of course. In response to the earlier part of the hon. Lady’s question, I can say from personal experience—having worked as a Parliamentary Private Secretary in the Department for International Trade for a while—that the Secretary of State for International Trade is fully committed to getting a deal and removing those tariffs. As my right hon. Friend the Secretary of State for Scotland said earlier, the discussions have moved on to another phase in which bilateral discussions, outside of the EU negotiation team, will be taking place.