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Scotland: Economic Recovery and Renewal

Volume 816: debated on Thursday 9 December 2021

Motion to Take Note

Moved by

That this House takes note of Scotland’s contribution to economic recovery and renewal, and how this may support wellbeing and quality of life across the United Kingdom.

My Lords, I am delighted to have the opportunity to introduce this debate on a topic close to my heart—even if it is not close to the hearts of those who are now walking out of the Chamber.

To have the chance to talk about Scotland’s place within the United Kingdom is extremely important, and we do not do it enough. I refer to all my interests as laid out in the register but, most importantly, to the fact that I am a proud Scot: I live and work in Scotland. This debate is about the value of our United Kingdom and the value that we here, at its political centre in Westminster, place on Scotland. It is also about the future, about what kind of United Kingdom we want to build and about Scotland’s contribution to that future. I appreciate that it is very difficult to put a price on well-being and quality of life, but most of the priorities that we ask a Government to support to ensure them have a price tag on them.

I had hoped to welcome the new Minister from the Scotland Office to his post, but unfortunately he is isolating. I am sure that all Members will join me in wishing him a speedy recovery and good health.

The House of Lords Library briefing for today starts by saying:

“Assessing Scotland’s contribution to the wider UK economy and to UK wellbeing is complex.”

I do not expect that Members of this House have ever shied away from complex issues. Yes, defining “well-being” challenges most of us; the Scottish Government have been trying since 2007, with a national performance framework that has 81 measures of well-being, but potentially not much evidence of there having been any change. I am clearly not here today to speak for the Scottish Government, but I hope that the outcome is a commitment from this Government that they will not resort to pulling rank and that we build on the words of the noble Lord, Lord True, to this House in July to create a more regular rhythm of engagement and embed a culture of collaboration across all levels of government.

Today is an excellent day to highlight the Scottish economy, as the Scottish Finance Secretary is to set out her annual Budget in the Scottish Parliament. Clearly, she has different priorities from the Chancellor of the Exchequer, and I suspect that there will be a few caustic comments about how much the Scottish Government would like to do but cannot because of the constraints of Westminster—but I urge the Government not to rise to the bait. There is a bigger narrative here, to be found in the relation to well-being of the whole United Kingdom.

The real issue that I want to address is one of tone. While the SNP may want to argue that independence would make Scotland wealthier, much of the economic narrative regarding the devolved economies from the centre, countering that fiction, focuses on the union dividend. The majority of Scotland’s trade is with the rest of the UK, and the majority of public spending in Scotland comes from the block grant, so apparently we would be doomed without the broad shoulders of the United Kingdom Government. This narrative leaves the impression that the Scots are lucky to have the UK. While I believe that all of us, from whatever part of the United Kingdom, are fortunate to live in it, that does not give us an appreciation of the full picture. The debate simply becomes about knowing the cost of everything and the value of nothing.

If we look at the value rather than simply the cost, the opportunity that devolution has afforded Scotland to do things differently often offers the rest of the UK a template—a test—of change, which through collaborative working could support well-being and quality of life across the UK. On Tuesday, your Lordships debated the Second Reading of the Health and Care Bill. Health and social care integration was established in law in Scotland in 2014; in conjunction with the Social Care (Self-directed Support) (Scotland) Act 2013, that legislation may not have delivered on the policy intention—I accept that—but, as England struggles to grasp the nettle of the future provision of health and social care, the integrated systems in Scotland, as well as in Wales and Northern Ireland, offer valuable lessons.

It is the same with digital healthcare. Our experience in Scotland, where the demands of serving remote communities such as Orkney, Shetland and the Western Isles from specialist centres in Glasgow, Edinburgh and Aberdeen has meant that, long before we all rushed online because of Covid, clinicians and patients in Scotland were testing video consultations from 2016. The system, which is now known as Near Me, has been evaluated for its clinical appropriateness and for how patients experience it by the University of Oxford, and its recommendations have been acted on. In my own area of neurology and neurological services, national guidance is being developed collaboratively for the use of virtual versus face-to-face appointments. The Scottish Government have commissioned a further phase of evaluation to explore the rapid scale-up of this system in response to the pandemic—evidence that would be extremely relevant to the current debates throughout the UK on face-to-face versus virtual access to doctors and health services.

If we look to the future, post the pandemic—in those sunny upland days, although there is a climate emergency—we see that Scotland is in the strongest position to drive growth of the green economy in the UK by significant margins, based on its existing green infrastructure and future potential. We have a strong base of existing green economy jobs in sectors such as onshore and offshore wind, solar and hydroelectric power and, based on the size of the labour market, we have the highest concentration of green jobs in the UK. For future sector planning, Scotland also benefits from the largest relative number of higher education students studying green-related subjects, such as engineering, technology, building and planning and agriculture. The Scottish Affairs Committee recently noted in its report in September that investment in the national grid was necessary so that the renewable energy generated in Scotland could reach the rest of the UK. Can the Minister give us some reassurance on future plans in this area? Is this not the union dividend that we should be emphasising?

An area that we must support throughout Whitehall is the Scottish business community. Strathclyde University recently found that Scotland had the second-highest total early-stage entrepreneurial activity in the UK and, interestingly, that Scottish entrepreneurs were likely to be from non-white ethnic groups and activity was most prevalent in outlying hard-to-reach geographical areas such as the Highlands and Islands. Does this not feed very comfortably into the challenges that we face in other areas for levelling up in the rest of the UK?

I turn to the creative sector, because it is another Scottish success story. Just two and a half years after selecting Glasgow for a new hub, Channel 4 now has its biggest creative team based in Scotland. This is possible only because of the supply chain of independent production companies, which supports hundreds of jobs—and it is an example where a small level of publicly funded support in the early stages can generate positive economic, cultural and social impact in Scotland and across the UK. The 2019 report of my noble friend Lord Dunlop stressed that devolution must work not only in Scotland but throughout government here in Westminster. I hope that the Minister will keep a close eye on the impact of future plans that Channel 4 may have for this sector in Scotland.

Clearly now is not the time for indyref2 but, as my noble friend Lord Dunlop warned in his review, we must not devolve and forget. We must ensure that the unionist cause is not reduced simply to accountancy. To ensure quality of life throughout the whole UK, we have to work together across all levels—economic, health, education, social and cultural, on devolved and reserved matters, together. In closing, I ask the Minister to champion across government departments the integral role of Scotland in our recovery and to concentrate on the practical things that make devolution work for the whole UK. I look forward very much to this debate and beg to move.

My Lords, I warmly congratulate my noble friend Lady Fraser of Craigmaddie on introducing this debate so very ably just now.

I shall briefly connect a few points: how devolved powers to Scotland, as well as those to Wales and Northern Ireland, can facilitate good practice within the UK; yet how UK regions and their locations represent the sources and engines in any case thus additionally, or irrespective of devolution. I refer next to the central issues of education, apprenticeships and jobs; then national and international benefits when economic targets and well-being standards are set and measured together.

Before considering how devolution in a variety of fields may assist good practices within the UK, perhaps we should first look at economic results since 1999. This is the extent to which devolution may have improved regional economic outcomes. As it is, those showings are rather disappointing; for their readings have hardly changed at all from 1999 to 2019; nor has devolution held back an increase in regional inequalities across the UK.

Those seeking to explain the UK’s continuing geographical disparities sometimes point to the limited ability to raise income from local taxes. Certainly, it is often a more convincing story elsewhere, with local taxes accounting for more and central government grants for less. In 2015, 67% of local government revenue in the UK came from central government grants, compared to only 26% in France, 30% in Sweden, 34% in Spain, 38% in Germany and 40% in Italy.

It is also alleged that regional disparities may have been partly sustained through an insufficient willingness by devolution recipient hubs, such as Edinburgh and Cardiff, to redistribute funds quite enough to the Scottish or Welsh areas under their respective controls.

Nevertheless, although it may not have enhanced economic performance to date, devolution remains a useful intervention, as my noble friend Lady Fraser has just pointed out. Each devolved authority can adjust and amend a wide range of services and disciplines such as health, local government and law and order, as relevant. Therefore, through comparison, evidence and synthesis, better practices have the chance of coming to light and becoming adopted throughout the UK, to the advantage of all. And much more so than they ever could have done when the delivery of these services was centralised, as it was before devolution.

This leads to a separate, if connected, focus. That is the enormous potential of various parts of Scotland to contribute to the UK economy. Here the Government’s recently published strategy, Build Back Better, is to be welcomed.

In 2022 and 2023, and following their prescriptions, what steps will be taken to create free ports and trade hubs in Scotland? Where and how will Scotland benefit from the current review of United Kingdom transport links? Can the Minister also indicate when the process to roll out gigabit broadband in rural areas will begin and what timescale is envisaged for this? On proven growth industries, what plans do the Government have further to advance financial services and insurance, which in 2018 and 2019 was already the largest industry for Scottish exports to the rest of the UK? What plans do they have for utilities, the second largest Scottish growth industry, which has been driven by an increase in electricity exports?

Next, and concerning Scotland, are the very good prospects of the UK’s creative industries. We may take heart that, between 2011 and 2019, their gross value-added measure grew four times faster than the rate for the rest of the UK economy. The sector exported £36 billion in services worldwide and accounted for almost 12% of the UK’s services exports.

That apart, renewed efforts must continue to be made to spread out these advantages—still far too heavily concentrated in south-east England—much more to the rest of the UK. What government intentions and proposed actions, therefore, are there to extend them to Scotland?

The central issues may be education, apprenticeships and jobs. The Government are investing in city and growth deals in Scotland, Wales and Northern Ireland. In Scotland—and included within a range of new and worthwhile avenues—are international city partnerships, the vastly increased scope for education as a result of digital technology, and more effective options and approaches towards skills, apprenticeships and jobs.

In Europe, the structure of twinning cities together, initially to build up good will after the fighting of the Second World War, has now evolved a further and pragmatic agenda which goes beyond reconciliation and good will. Through trade, culture and academic exchanges, increasingly the same twinned cities form working synergies, sometimes—for best mutual advantage —by widening the original network with additional cities.

As Scottish consul for Croatia, I have been keen to encourage this process, enabling the city of Dundee to form a working partnership with the city of Zadar in Croatia. Some of those among Edinburgh, Glasgow, Dundee, Aberdeen, Inverness, et cetera, are twinned with cities outside Europe, yet not least with cities or regions within the human rights affiliation of the 47 states of the Council of Europe, within which the UK remains a prominent member.

Would my noble friend the Minister agree that the accomplishment of international city working partnerships is an area where Scotland may already be leading within the UK? Does he identify certain respects, whether through funding or in other ways, in which the Government’s current city and growth deal might further support such partnerships?

Then there is the increased scope for education through digital technology. This includes both formal and informal education and its ability to be applied at any and all levels, whether local, national or international.

The Government’s pre-Covid industrial paper calls for the better teaching of maths, sciences and technical knowledge. All such programmes would be best delivered online. There is also a strong case to include the humanities within a comprehensive range of subjects. Video games systems, such as those designed in Dundee, already cover a number of subjects with excellent results, particularly when, through use of the Socratic dialogue, learners are also challenged to ask questions and drawn out to give their own opinions on what they are learning.

Where it already exists, there may be no need to replace good teaching at schools and universities. Instead, locally and nationally within the UK, the purpose of online learning delivery is to supplement teaching as required, although it may occasionally provide courses in the first place, if they are otherwise lacking.

Internationally, however, the purpose is different. Within a full range, it offers countless numbers of people abroad whichever subject or subjects they need and want to learn but have not been able so to do, owing to an insufficient availability of teaching in their own countries.

The Minister will recall that, in chairing the G7 summit in June this year, the UK launched an initiative to assist education internationally. A key issue is that online learning courses should meet standards and lead to qualifications. As a Council of Europe parliamentarian and through its committee structure, I am writing a report on that now.

The Government are already committed to supporting, for the next three years, the UK games fund, which is based in Dundee. In connection to both this and their G7 commitment, what steps are being taken to ensure that online learning delivered internationally meets standards and that its learners receive qualifications? Equally, what plans do the Government have to inspire the design of such programmes within the creative industries?

In Scotland’s towns, cities and rural areas there is an urgent need to encourage apprenticeships, leading to employment, and to provide training and motivation for young people as well as for other community groups, including refugees—in the latter case to help them settle in and find jobs.

Local authorities are fully mindful and conscientious, yet inevitably overstretched, with limited resources and many responsibilities. Significant progress can often be made, however, through public-private joint initiatives or through local charities, such as our own small family one which works in this way in Dundee.

Can the Minster advise in which respects current government city and growth deals and other projects can help with motivation, skills, training and apprenticeships for young people and other relevant groups in Scotland?

Recent findings compare well-being measures in Scotland, England, Ireland and Wales. On two of these, overall happiness and the extent to which people feel that the things they do in life are worthwhile, Scotland scores worst. Nevertheless, and equal with England and Wales, Scotland is first on overall life satisfaction and, together with England, it also has the lowest anxiety level.

Even in theory, let alone as a desirable political deployment, well-being has always been slightly elusive and suspect, such as the reference of Epicurus to happiness as the only possible good. Later on, picking up the reins with utilitarianism, Jeremy Bentham may have been a bit more convincing, but there was still the challenge of demonstrating how something as private as well-being could ever be much advanced within the necessary nuts-and-bolts machinery of a working economy.

In view of this apparent inconsistency, and owing to the dry subject matter of his further writing, although he and Mill remained staunch advocates of collective human well-being—the greatest happiness of the greatest number—there came the joke rhyme pretending that Mill might have become tempted to change horses all the same:

“John Stuart Mill, by a mighty effort of will, overcame his natural bonhomie, and wrote ‘Principles of Political Economy’”.

That apart, in OECD countries in recent years, there has been a welcome and growing consensus for well-being to take a central role. One explanation for this shift of opinion is the recognition that, however subjective, its effects can still be fairly easily measured over a number of different fields, including health, education, relationships, personal activities and so on.

Another explanation is the understanding that GDP and well-being indicators do not have to conflict with one another. Instead, they can be complementary.

I know that your Lordships will support me in paying tribute to the noble Lord, Lord Layard, for his enormous contribution and vision within the wide field of well-being and its pursuit.

The priority is to increase opportunities for learning and employment, particularly so that young people sustain confidence and motivation from matching their skills and abilities to an ever-widening and diversified range of apprenticeships and jobs.

Not least through digital technology and the creative industries, this is already the direction of a much better UK economy: one in which Scotland can come to excel, thus demonstrating to the benefit of others elsewhere its good practices; and a proven consistency between daily work, well-being and the quality of life.

My Lords, I congratulate my noble friend Lady Fraser on securing today’s debate and for having the foresight to schedule it on budget day in Holyrood.

An economic debate is usually all about the numbers, but before I get to them, I will spend a short time talking about language, because language matters. Too often I feel that those of us who support the continuation of our United Kingdom are at risk of doing the Scottish nationalists’ job for them by talking about Scotland in a way that separates us from that of which we wish to remain a part. This happens, for example, where we compare facts or figures, spending or investment, hospital waiting times or educational attainment, where Scotland is reduced to a comparator of our neighbouring nations, not a member of the wider whole. From there, it seems to me that, it is only a short hop from defining ourselves as a counterpoint to our opponents’ preferred framing, where they define the United Kingdom as some kind of imposition, something that is done to Scotland, rather than the simple truth that the establishment of the United Kingdom and its development down the centuries is something that Scots not just participated in but helped build and that we had and continue to have ownership over. It is our union too.

I also feel that, when we are discussing the nuts and bolts, particularly of the economic relationship—whether that is examining the balance of trade or pointing out that rUK is by far Scotland’s biggest and most important market—we must not forget that British companies do not divide themselves at Berwick or Carlisle. Their offices, factories, distribution chains and retail outlets are dotted all over these islands, and neither the Treasury nor the Scottish Fiscal Commission can or should seek to box them into just one geographically defined column on a balance sheet.

I am as guilty of falling into the trap of talking about Scotland comparatively as any; it is easy to do. Vigilance against it is why I am so appreciative of the manner in which my noble friend Lady Fraser defined today’s debate, with its focus on the contribution to the recovery of the whole of the UK and looking at that not as a metric and measure simply of itself but examining how that economic recovery can impact and improve well-being and quality of life.

I am unashamedly a pro-business Tory. I believe, yes, that hard work, endeavour, production and earning, and providing for one’s family are good for the individual, for health, self-esteem, freedom, increased choice and agency. However, I also believe that what work does for the individual, business does for the country. A healthy economy gives us the funds and levers to improve public policy and grants greater influence in an ever more integrated world to be able to shape improvements on a global scale. It is a virtuous circle.

That is why I despair when I see people—even those of my own party—dismissing business or disrespecting the herculean efforts that people have gone to, especially in the last two years, to look after their staff, do well by them, keep the show on the road, survive and fight back. We know that it is all interconnected. A feeble economy, suppressed earnings and high levels of unemployment increase poverty, and poverty, particularly intergenerational poverty, impacts enormously on health outcomes, educational outcomes, employment outcomes and future earnings. As businesses are being asked once again to send workers home, it is more important than ever that this Government and all the devolved Governments and Administrations work together to support firms back to health.

No Government, particularly not a Conservative one, would seek to tell companies how or whether to operate, nor welcome the sustained taxpayer subsidy of profit-making industries. Yet, in the extraordinary times we find ourselves in, this Government have mobilised to do both, to keep people safe and protect the economy. I for one am proud that my Government made the decision to invest £400 billion in British business, protect more than 14.5 million jobs and make over £100 billion in business grants and loans available to ensure that fundamentally sound companies that would not otherwise have made it survived. Within that envelope, we see 910,000 Scottish jobs protected through the furlough scheme and 100,000 Scottish businesses supported through UK Government loans.

Supporting both the labour market and the companies that sustain it has been so important. It is one of the reasons why the UK has the fastest rate of economic growth in the G7. It is why we see record job vacancies across the country as firms are able to bounce back. Yet both the UK and Scottish economies still find themselves 2.1% smaller than in the last quarter before the pandemic struck, so there is work to do. Scotland’s whisky producers, food manufacturers, financial service providers, farmers, hoteliers, truck drivers, shops, bars and restaurants will be every bit as key to this recovery as Midlands garment makers, Yorkshire farmers, Welsh agribusiness, Northern Irish tourism operators, Essex bank workers or Mancunian nightclub owners.

I would like to say a word about the recognition on the part of businesses that their responsibilities go far beyond the bottom line and further still than looking after their own workforce, to contributing to their home communities. When Covid struck, I was still an MSP, representing a city-centre constituency. I know from my own experience of businesses that dipped into their own pocket to support their staff while they waited for government help to kick into gear. I know of companies that dedicated time, product lines and personnel to help with the volunteering effort, to ensure the vulnerable and clinically vulnerable were okay. I know of firms which were not content to just clap NHS workers once a week, but supported them directly with transportation, discounting or food. I know—well—one gin distiller who immediately switched production, using his white spirit to make hand sanitiser to donate to charities and not-for-profits around the city, so they could carry on their important work at the very beginning of the pandemic when sanitiser was short. It was a superb effort—especially as the one thing the rest of us needed when Covid struck was gin.

This is why I so appreciate what this Motion attempts to convey. There is an enormous recovery under way, and Scotland, its companies, its people and its resources are playing a full part in that recovery effort. They do so not because a healthy economy is an end in itself but because it is that healthy economic recovery which will support hospitals everywhere, including in Scotland, to start tackling the treatment backlog, and because it is a strong economy which will underpin educational investment, training the next generation of research scientists so that any new vaccines are as likely to come from Edinburgh or Glasgow as they are from Oxford.

It is only through a healthy economy that we can support the thing that matters most of all: giving people the belief and opportunity to ensure that their children have a better quality of life than they did.

My Lords, it is a great pleasure to follow that excellent speech from the noble Baroness, Lady Davidson, whom I know so well and have great personal respect for. Like her, I congratulate the noble Baroness, Lady Fraser, on choosing this subject and introducing it so appropriately today. I shall concentrate on two related issues: first, the threat to the union, which I believe is growing; and, secondly, the improper expenditure by the Scottish Government.

As my noble friend Lord McAvoy will confirm, I have been an enthusiast for devolution since way back in the 1960s and campaigned for it when it was not all that popular. Devolution and independence, as I think even the noble Lord, Lord Wigley, will admit, are two totally different concepts; sometimes the SNP does not really understand that. With devolution, it is implicit that Scotland, Wales and Northern Ireland remain part of the United Kingdom.

As an MP, I campaigned for devolution, because I saw as a Member of Parliament—the noble Lord, Lord Cormack, will remember this very well—that Scottish legislation was an afterthought, dealt with inappropriately or late at night in the Westminster Parliament. Scottish education, the Scottish health service and Scots law were different—the noble and learned Lord, Lord Hope, knows this better than anyone. For over a century, we had administrative devolution but not democratic accountability; we needed to set up a Scottish Parliament for those particularly Scottish Bills.

I campaigned through the Campaign for a Scottish Assembly, and then I campaigned for the Scottish Parliament with the Labour campaign. My old friend Jim Boyack, who is sadly no longer with us, was one of the great campaigners for that; his daughter, Sarah Boyack, is now doing a wonderful job in the Scottish Parliament, I am glad to say. Eventually, after an abortive referendum in 1979, in which we did not get over that artificial barrier of needing support from 40% of the electorate, we had a successful referendum in 1997 and created a Scottish Parliament. I am very proud of that.

Devolution in Scotland worked—and worked well—between 1999 and 2007, when we had a Labour-Liberal Democrat coalition, working well with Westminster. We saw some huge advances in Scotland. There was free personal care for the elderly—we are just getting round to that in England now. The smoking ban was in Scotland first. Free travel for elderly people was introduced in Scotland; again, ahead of England. The SNP is now trying to take credit for some of those things, but it was a Labour-Liberal Democrat Administration who introduced it.

Negotiations took place between Westminster and the Scottish Parliament. I remember it well because for a year I was Minister of State for Scotland and I used to take part in them. They were friendly. Sometimes they were quite—not difficult—serious and strong negotiations. I remember on free personal care it was about who should pay for it. I had discussions with Malcolm Chisholm, who was the Minister then, and we eventually came to an agreed conclusion, but they were serious negotiations.

However, there was a change in 2007. The change came with Alex Salmond and the result of that election. I think it is still uncertain whether the SNP won that election, but that is another story. The SNP started to build up the campaign for independence, using the Scottish Parliament and the Scottish Government as a campaigning vehicle for independence. That is what it is doing. They are a campaigning tool for independence, rather than for the delivery of the services devolved to the Scottish Parliament.

As a result, we have seen a decline in those services. We have heard from previous speakers about education in Scotland. Sadly, on some international criteria, education in Scotland has deteriorated rather than improved in the last few years. We have had the ferry fiasco, with rusting ferries at Ferguson on the Clyde, while ferries operating to the islands are breaking down and the islanders are left isolated. We have had the deaths at the Queen Elizabeth University Hospital, which somehow Nicola Sturgeon and her Health Minister, Humza Yousaf, seem to shrug off as someone else’s responsibility, but they are the people responsible.

What should the United Kingdom Government do in relation to these matters? I have two suggestions. First, they should rein in spending by the Scottish Government on areas that are not devolved. The constitution is a reserved area and I would argue that using the time of civil servants, publishing documents and arguing the case for independence using public money is not right. It is irresponsible and should be clamped down on by the United Kingdom Government. They have 26 Ministers in Scotland—that is more than the Government of Norway, an independent country—and some of them work on reserved areas.

Let us take foreign affairs. It is a reserved area. No one here would deny that. To quote the website of the Scottish Government, they say:

“We also have a network of eight offices worldwide who work to promote Scottish interests overseas and strengthen our relationships with countries and continents.”

In fact, that what they are promoting overseas is Scottish independence. They are arguing the case for Scottish independence in other countries. Where are these overseas offices? They are in Beijing, Berlin, Brussels, Dublin, London—“overseas” seems a strange definition of London; they might like one, but there is no sea between Scotland and England, thankfully—Ottawa, Paris and Washington DC. In my view, that is improper expenditure.

When I was a Minister at DfID, we agreed on some expenditure by the Scottish Government in Malawi. Just as local councils can complement and add to DfID expenditure, so should the Scottish Government, but not a whole development programme, which is what they propose.

I say to the noble Viscount, Lord Younger, that I have raised this with Ministers on a number of occasions. I think they are afraid to do anything. They are fearful of the Scottish Government. We know that the Scottish Government have a grip over the media in Scotland but we should not be afraid to argue what is right—and keep on arguing. I think the time is right. It is long overdue, as I see from social media. When I post these things, I get people coming and agreeing with me very strongly.

I can tell noble Lords also that when I go to Tynecastle to support Heart of Midlothian—and most recently when I was at Livingston and surrounded by Hearts supporters—they say to me, “Keep rattling that woman’s cage.” Noble Lords know the woman they are talking about.

The second thing I want to come to is the need for a UK constitutional review. I admit an error as far as the Labour Government are concerned: not following up on devolution—we gave it to Scotland, it followed in Wales and it was already there in Northern Ireland—but there is an English democratic deficit and we should have followed up. We did try with the abortive referendum in the north-east of England, but we were not offering real power and it was carried out at a very inauspicious time.

We now end up with a hotchpotch of mayors and other so-called devolution, but it is not real devolution and the counties of England are forgotten. What we need is a convention, somewhat like the Scottish Constitutional Convention, which moved quickly to legislate. The Labour Government were able to legislate quickly because we had the blueprint from the Scottish Constitutional Convention. We need a UK constitutional convention, or it could be a royal commission or a Speaker’s conference or something like that, but we need something on a UK basis.

I have been arguing this—I have written to Minister after Minister about it but they seem to shrug their shoulders—but it is the responsibility of the UK Government to do it. The Labour Party has set up a commission, which Gordon Brown chairs. I welcome that and I have accepted that, but it is more of an academic exercise. The reality is that what could be done can be done only by the Government. I see my noble friend Lady Wilcox is here. I think it is a mistake that the Labour Government in Wales have set up a separate commission to look at devolution—all the options for the development of devolution in Wales, including independence. They have a Plaid Cymru person as one of the joint convenors. I think that is a mistake. With the campaign for indyref2 in Scotland, with this new Welsh commission and, unfortunately, with the consequences of Brexit in Northern Ireland, I see the break-up of the United Kingdom getting nearer and nearer.

My time is running out, although apart from the Front Bench I am the only Labour speaker, so if noble Lords would excuse me a little, I think the union is in grave danger of disintegrating and it would be an absolute disaster. As we heard from the noble Lord, Lord Frost, trying to answer some questions earlier—not very well—Brexit shows how breaking up a union of 40 years has caused problem after problem. How many more problems would be caused by breaking up a successful union of 300 years? The UK Government need to take some action now.

I know the Minister. I am very pleased to see that it is the noble Viscount, Lord Younger, here, although I extend my sympathies to the Minister who was not able to be here because of Covid. I was very friendly with the noble Viscount’s father. He and I worked very closely together in Ayrshire on an all-party basis and he was a great man, a man I had great respect for. With due respect to the noble Viscount, Lord Younger, I know that he cannot give me answers to these questions today but I ask him just one thing. Will he take the pleas that I have made today to the Prime Minister, to Michael Gove, to the Secretary of State for Scotland—to people who can make decisions so that we can get some answers that will preserved this United Kingdom?

My Lords, I congratulate my noble friend Lady Fraser on securing this debate and on her admirable analysis of Scotland’s contribution to economic recovery and its effect on the well-being and quality of life across the United Kingdom. It is a great pleasure to follow the noble Lord, Lord Foulkes, who spoke as always with knowledge and authority.

I speak as someone of Shetland parentage, like my noble friend Lord Lamont, and much of what I have to say relates to Shetland. I wish first to deal with the Cambo oilfield, north-west of the Shetlands, which Shell recently announced it is pulling out of. The project is currently awaiting the green light from the Government’s Oil and Gas Authority, which I hope will be forthcoming. I hope that the authority will bear in mind the words of the Shell spokesman when announcing the Cambo decision:

“continued investment in oil and gas in the UK remains critical to the country’s energy security. We believe the North Sea and Shell in it has a critical role to play in the UK’s energy mix, supporting the jobs and skills to enable a smooth transition to Britain’s low carbon future.”

While we move towards net zero, it is worth remembering that 75% of the UK’s total energy needs are met by oil and gas. As my noble friend Lord Callanan reminded your Lordships last Thursday, oil and gas are still essential for our energy needs, are vital to the production of many everyday essentials such as medicines, plastics, cosmetics and household appliances, and they will remain so in declining amounts, even in a net-zero world. As he rightly pointed out, the choice we face is whether we wish to use oil produced domestically or to import it.

Opponents of the development of the Cambo field might reflect on the desirability of replacing publicly listed companies—accountable to shareholders and regulators and beholden to disclosure requirements—with private equity capital, which does not have such obligations. Cambo is majority-owned by Siccar Point Energy, which is backed by private equity. There are many eager private investors in fossil fuels. According to the Private Equity Stakeholder project, over $1 trillion has been invested in the energy sector since 2010, and only 12% of that in renewable energy projects. Opponents of Cambo should perhaps beware of what they wish for.

Siccar Point has said that the Cambo project would create over 1,000 direct jobs and thousands more in the supply chain. This is obviously of relevance to Shetland, which has a population of just over 23,000. The west of Shetland province has been identified as an important location for future offshore oil production. In 2019, McKinsey consultants projected that by 2025 the west of Shetland province would contribute around 30% of UK continental shelf production, up from 2% in 2014. The report said that these estimates could rise further if break-even levels fall as the price of oil rises—it is currently predicted by JP Morgan to rise to $150 a barrel—bringing into production a potential 3 billion barrels of oil: equivalent to the province’s previously unsanctioned reserves. The Oil and Gas Authority suggests that around a quarter of all upstream production and operations jobs in the UK continental shelf—about 67,000 jobs—may be centred on the west of Shetland by 2025. The country as well as the industry has a clear incentive to support production to the west of Shetland.

Other industries important to Shetland are aquaculture and fishing, which account for nearly 40% of Shetland’s exports. One-fifth of all fin-fish landed in Scotland and about one-sixth of that landed in the UK are landed in Shetland. More fish and shellfish are landed in Shetland than in any other port in the UK except Peterhead. The weight of fin-fish landed in Shetland in 2020, at 51,000 tonnes, was almost as much as the total landed in England, Wales and Northern Ireland—52,700 tonnes—and was greater than that landed in all of England and Wales: 40,800 tonnes. Perhaps my noble friend when he comes to reply might indicate what the implications of the post-Brexit negotiations are for Shetland’s fishing industry.

Other important developments include the Shetland Space Centre on Unst. Following the Government’s approval for Lockheed Martin to transfer its satellite launch operations, the space centre estimates that by 2024 the spaceport could support a total of 600 jobs in Scotland, including 140 on Unst and 210 across Shetland. Although there has never been a whisky distillery in Shetland, there is now a gin distillery on Unst, which in addition to juniper relies on local seaweed for a flavour which I hope your Lordships would find most palatable.

Tourism is of increasing importance to Shetland. In years gone by, only birdwatchers and archaeologists made the journey. Now visitors include ecotourists, gastronomes and fishermen—the trout fishing is exceptional, the local rule being that if the fish are unco-operative, you change not your fly but your loch. I believe my late father’s record of a 20-pound sea trout caught in Tingwall Loch still stands. I hope the pandemic will subside soon enough for the cruise ships to return, bringing as they do welcome tourists to Jarlshof, Eshaness and some of the most beautiful countryside in the world.

On 9 September 2020, the Shetland Islands Council voted in favour of a Motion that

“The Shetland Islands Council formally begins exploring options for achieving financial and political self-determination.”

It is easy to understand why it did so. Let us hope that the council’s Motion has been noted in Edinburgh, which I very much doubt. However, I am confident that it will have been noted in London. Whatever future governance arrangements eventuate, Shetland will continue to contribute, as it always has in peace and war, to economic recovery and the well-being and quality of life of what I hope will remain the United Kingdom.

My Lords, it is a great pleasure to follow my noble friend Lord Goodlad. I also congratulate my noble friend Lady Fraser on securing this debate and introducing it so well. May I also say how sorry I am that my noble friend Lord Offord is not able to take his place on the Front Bench today? I suppose that as we are discussing recovery and renewal, I join others in wishing him a speedy recovery and an early renewal of his bid to make his maiden speech.

The Motion refers to well-being. Our national well-being has been threatened as never before by the pandemic. Every aspect of life has been affected, not simply the direct impact of the virus but the indirect effects: the impact on mental health, the diagnostic tests postponed, the operations cancelled, the huge waiting list backlogs, creaking social care, strains placed on our public finances, and the cost to businesses whose trade has been disrupted for prolonged periods and now face further uncertainty. It is therefore hardly surprising that the experience of the last two years has caused everyone to re-evaluate priorities and to think hard about how individually and collectively we bounce back.

The pandemic has taught us two important lessons. First, it has reminded us of the value of being able to act collectively across the UK. Where would we be today without furlough and the vaccine rollout? Secondly, the delivery of public services is more effective when local know-how is properly engaged—when decisions are taken closer to the people affected by them. How much better might test and trace have been if less centralised at the outset? I suggest that these lessons now need to be applied to economic recovery and renewal and to the task of improving quality of life in Scotland and the UK as a whole.

Scotland, as the Motion makes clear, has an important economic contribution to make. Scotland is rightly famous for its whisky, shortbread and, as we have heard, gin. Food and drink are certainly jewels in Scotland’s exporting crown, yet this stereotype is long out of date. Scotland is now making a name for itself in industries of the future too. For example, it is a little-discussed fact that Glasgow manufactures more satellites than anywhere else in Europe. The engineering skills honed in the North Sea are now being applied in developing the next generation of renewable energy, which will help us tackle climate change. I might add in passing, to echo my noble friend Lord Goodlad, that one good reason to take care not to scare off investment in sustaining jobs, skills and businesses in north-east Scotland is that it would put at risk a managed and orderly transition away from fossil fuels.

Scotland has some outstanding performers, yet the substantial potential remains unfulfilled. Take exports: Scotland has around 350,000 businesses; only 11,000 of them export and, of those, just 100 account for over 60% of all Scotland’s international exports. If Scotland could increase its international export share of GDP to the same level of the UK as a whole, it would be worth £16 billion annually to the economy. That would provide a lot of financial firepower to help tackle, for example, the blight of child poverty in Scotland.

Fulfilling potential is a challenge that Scotland shares with the UK as a whole. One of the UK’s most intractable problems of the past 30 years has been regional economic inequality. Scotland and the UK have some of Europe’s most dynamic and productive cities and regions, yet the UK remains one of the most economically unbalanced countries in the industrialised world. Disposable incomes in the north-east of England, Wales and Northern Ireland are more than 40% lower than in London, and disparities between, for example, North Ayrshire and Edinburgh, are similarly large. Half the UK’s population, including those in the poorest parts of Scotland, live in regions with productivity no better than the poorer areas of the former East Germany. This has held back the UK’s economic performance and undermined the cohesion of the union.

International evidence suggests that economies grow faster and more strongly when they grow more evenly, and they do that where governance is less centralised. Why should that be? Because communities have greater control over resources, policies are better tailored to local needs, public investment is more effective, and beneficial yardstick competition develops. Why, for example, is Manchester doing better than Newcastle? What can we learn from Birmingham and Glasgow? Today, the UK remains one of the most centralised states, despite significant devolution to Scotland, Wales and Northern Ireland.

Within Scotland, devolved power is hoarded in Edinburgh, with local authorities increasingly emasculated. We cannot hope successfully to meet the challenges ahead without empowering local communities, north and south of the border, to play their part. There is mutual interest in this agenda—one that is unifying after all the division of recent years. London and the south-east are obviously the main drivers of the UK’s economic success—the places where returns from public investment are highest, thereby generating resources to fund better public services and support less prosperous areas. However, reducing reliance on London and the south-east can only be healthy for Scotland and all parts of the UK. As we have heard, nearly two-thirds of Scotland’s exports are sold in markets in the rest of the UK. Building stronger English regional economies will create greater opportunities for Scottish businesses, and vice-versa. I understand that the levelling-up White Paper has been delayed until the new year, so we must wait to see if the Government are serious about pursuing this agenda, but I have to say that the indications seem to be encouraging.

A less centralised UK will alter fundamentally the nature of government in this country. When significant powers were devolved to Scotland, the mistake was not to think harder about the continuing need for joint working where devolved and reserved powers intersect. Michael Gove, the first formally titled Minister for Intergovernmental Relations, is working hard to rectify that omission, and he needs to.

Covid has highlighted just how much the UK and devolved Governments depend on each other to be successful. Whatever the deep divisions are over our constitutional future, the vast majority of people in Scotland are united in wanting to see the UK and Scottish Governments working together on their behalf.

In conclusion, building what I have described as a union of co-operation will require a culture change from a Whitehall used to issuing directives and jealously guarding the purse strings. There needs to be a change of attitude in Edinburgh too. New partnerships will need to develop, in which the centre and more peripheral areas of the UK learn to work together in new ways. Whitehall will need to continue to improve its capability to negotiate with and mediate between the demands of different tiers of government. Other countries seem to manage this successfully, and there is no reason why we should not do so too.

My message to the Government and my noble friend on the Front Bench is this: do not give up when the Scottish Government refuse to work with you on valuable UK initiatives such as the connectivity review and free ports. Scotland’s network of city and growth deals shows that co-operation is possible. Press to deepen that co-operation in areas such as new green technology, space and export promotion, where Scotland has so much to contribute. Do so confident that this approach is in tune not only with the Scottish business community but the Scottish people as well, and so clearly in the best interests of Scotland and the UK as a whole.

My Lords, it is a great pleasure to follow those wise and judicious speeches by my noble friends Lord Goodlad and Lord Dunlop. It is also a great pleasure to be able to congratulate my noble friend Lady Fraser of Craigmaddie on securing this Motion and on phrasing it as she did—looking not only at the balance sheet and the economic contribution that Scotland makes to these islands but to the well-being of its people. We often miss that in these debates.

Patriotism is not reckoned in tally sticks. As my noble friend Lady Davidson of Lundin Links points out, it is a terrible mistake to look only at block grants and bottom lines and try to assess nationality in numbers. We should take a moment in this Chamber to celebrate all the contributions that Scotland makes to the well-being of the human race. I cannot think of any similarly sized territory that has contributed more to the happiness of mankind proportionate to its population. Let us think of all the things that Scotland has given us—steam engines, television, telephones, daily disposable contact lenses, golf, toasters, cash machines and, not least, the United Kingdom. We can very easily forget that Great Britain, and after it the United Kingdom, were largely Scottish creations.

One oddity of the age in which we live is that people are determined to see everything through an imagined prism of hierarchy and oppression, so everything is squashed into a pyramid of greater or lesser victimhood. This has given rise to the slightly “Braveheart” view that, in some way, the smaller of the two nations must have been annexed or colonised in some way. That would have been quite a shock to people in England at the time, first, with the Union of the Crowns and then the Acts of Union. If one looks at the response south of the border when James VI was making his procession, there was a general fear that swarms of landless lairds were going to descend on England and snap up all the sinecures and titles. It was the English Parliament that denied His Majesty the title of King of Great Britain that he so craved and that continued to deny the claims of his son.

I occasionally go and look at the ceiling in Banqueting House on Whitehall. Since I was last there, they have put beanbags in, so you no longer have to crane your neck in quite the same way. There is a wonderful iconographic celebration of the union there. England and Scotland are shown as great, fleshy, Rubenesque ladies, coming together and bestowing the crown on the baby Charles I, as Prince of Wales, while the weapons of war are consigned to a furnace. In a funny kind of way, the Stuarts created a sense of shared Britishness, although not in the way that they intended. The shared nationality came out of a common opposition to that dynasty.

It is striking that, when you look at what was happening during the Wars of the Three Kingdoms, you see that people were not arraying themselves as English or Scottish; they were making alliances across the border, as royalists or puritans, with Presbyterians and whoever else. In the end, I suppose, it was almost intrinsic in the design of that Rubens ceiling, for which Charles I paid the almost astronomical price—at least, in those days—of £3,000. It looked a bit foreign, and the Stuarts felt a bit foreign. In a shared opposition to this rather transalpine school of art that was thought to influence the dynasty’s thinking, a common Britishness was forged, resting on shared language, manners and beliefs.

Of course, when the Acts of Union went through, people were change-resistant; Parliaments were change-resistant. A certain amount of cajolery was needed on both sides of the border to get the legislation through. For some reason, that cajolery was remembered and resented in Scotland but has been almost completely forgotten in England. Had there been a referendum, I am pretty that it would have gone against England. Luckily, the Acts of Union went through and, as Adam Smith pointed out, having lived through it, the removal of that border opened the door to a united Great Britain, rising above the run of nations. It no longer needed to fret about internal borders and turmoil; it could concentrate on the rest of the world.

In doing so, it lifted the well-being not just of people in this archipelago but of peoples elsewhere, as a family—as peoples with a community of interest and shared affinities that go well beyond simple geographic proximity. It is relationship that I sometimes think was incarnated in that between Boswell and Johnson; teasing and occasionally joshing, their relationship was fundamentally deeply affectionate. Neither of those men would have reached the heights of fame that they have now attained without the participation of the other.

It is a relationship sometimes summarised by what is possibly an apocryphal story but such a good one: that of the highlander at Dunkirk who, observing the total rout on the beaches, told his sergeant, “You know, if the English give in too, this could be a long war”. In that spirit, we see something of our shared national outlook, resting as it does on character and what James VI and I called “similitude of manners”. It was that bridling at injustice and slowness to anger but resolution when roused, if you like, that led the peoples of these islands together on the great endeavours of ending slavery, spreading law and justice around the world, and saving Europe, first from Bonapartist tyranny and then from fascism, and then playing a brave role in saving it from Stalinist tyranny. These were the achievements of a common people, resting not just on proximity but on real affinities of outlook. We have only just got started.

My Lords, I am grateful to the noble Baroness, Lady Fraser, for initiating this debate on the contribution that Scotland makes to the United Kingdom.

There have been many references to the financial side of this subject, including the contributions that Scotland has made financially and the financial advantages that Scotland has gained from the union with England, including the Barnett formula. Instead of focusing on these matters, I wish to dwell on the great contributions that Scotland has made in education, science, medicine, infrastructure and many other spheres of life, as the noble Lord, Lord Hannan, mentioned.

On the cultural side, one remembers Robert Burns and his inspiring and amusing poetry, such as “Tam o’Shanter” and its warning on the dangers of alcohol, and the outstanding novels of Sir Walter Scott and the Governor-General of Canada, John Buchan, and many others. On casting an envious eye on the past, I wish to look to the future developments in Scotland that will benefit the whole of the United Kingdom.

When one looks back, it is with some sadness that we see the deterioration in Scotland of the health service and education, and the political shenanigans of the past 10 years. I was brought up in Glasgow, and had the privilege of a classical education at a grammar school in the Gorbals—a school that produced outstanding people such as the noble and learned Lord, Lord Irvine of Lairg, the noble Baroness, Lady Smith of Gilmorehill, the noble Baroness, Lady Ramsay of Cartvale, and John Buchan.

Then we remember the grandson of a Scottish crofter, Harold Macmillan, who was Prime Minister at a time when the House of Commons was a civilised place of courtesy and good humour. When the United Nations Assembly delegates were horrified by the President of Russia taking off his shoe and using it to thump the podium, Prime Minister Macmillan quietly asked, “Can anyone give us translation of that, please?” We must not forget Keir Hardie, that splendid statesman who never engaged in the trivial pursuits that have recently become habit in the House of Commons.

Does the Minister agree that we must learn from history, be inspired by our history and seek to encourage the striving for a better and more optimistic future?

My Lords, first, I congratulate the noble Baroness, Lady Fraser, on initiating this debate. I reflect that we do not debate Scotland—or indeed the other devolved Administrations—enough in this Chamber. I hope that we will do so more in future. We have heard a variety of speeches and contributions. I take from the noble Baroness that there is an attempt to be positive and constructive, although I think that it is sometimes difficult not to depart into some areas of criticism and concern at the state in which we find ourselves.

My view is that, given the right policies and a following wind, Scotland is well placed to make a positive contribution to the UK’s recovery post Covid. Scotland accounts for a significant and rapidly changing energy sector, and I welcome the contribution of the noble Lord, Lord Goodlad, to which I will come back. We are leaders in food and drink. We have world-class bioscience and healthcare capacity, although I agree that, sadly, there has been a diminution in the support for health in recent years. Scotland is the UK’s second most important centre for financial services, and is a world-class destination for tourism and culture. Until a few years ago, I would also have recorded that Scotland had an outstandingly good education system. Sadly, that is no longer the case, thanks to a flawed secondary school curriculum and a wholly dysfunctional exam system.

What is incontrovertible is that Scotland’s economy and well-being are closely integrated into the rest of the UK. Those who try to change that will likely find it difficult and destructive. As the Library briefing points out, 62% of Scotland’s exports go the rest of the UK and 38% elsewhere. Scotland has a trade deficit with the rest of the UK—something you do not hear north of the border. It is further worth noting that our two most important exports are financial services and utilities. In the case of utilities, our success in exporting electricity is largely due to feed-in tariffs paid for by customers in the rest of the UK.

As for financial services, Scotland’s long history of canny financial management is a valuable reputation which, however, probably would not survive if Scotland adopted a currency other than sterling. For 50 years, Scotland has been at the sharp end of the development of the UK’s offshore oil and gas resources. Parking for a moment the claim that it is or was Scotland’s oil, the industry has been a huge driver of the Scottish and UK economies for two generations. It created hundreds of thousands of jobs, the majority in England, underpinned world-leading technologies and delivered substantial balance of payments benefits, both in reduced imports of oil and gas and in exports of products and services. The UK is a major supplier of subsea systems and technology.

Even without the urgent pressure to tackle climate change, the UK continental shelf is a mature province and production is in decline. The question is how we manage it. Since the establishment of the nationalist/Green coalition in Scotland, the Government have joined forces with campaigners to promote the accelerated shutdown of Scotland’s offshore industry. Having built the case for independence during the referendum on that very oil and gas industry, the SNP is asking us to believe that we could do it just as easily without it. Knowing that the decision rested with the UK, Nicola Sturgeon called for the cancellation of the Cambo field, and it appears that that may have contributed to Shell’s decision to pull out of the project. Regardless of the merits of Cambo, the accelerated shutdown of the North Sea, pressed for by Green Ministers, will make achieving net zero harder, take longer and be more costly.

These are the facts. The oil and gas industry currently supports around 200,000 jobs across the UK, 71,000 of them Scotland, and 90% of those jobs are transferable into renewables and net-zero technology. That is demonstrated in a very good report produced by Robert Gordon University, demonstrating how we can use oil and gas technology, expertise and capital to achieve the transition. It shows that a managed transition can reverse the decline in employment. We need that capital and expertise to achieve this and to do it without further damaging the economy by importing oil and gas that we could produce and losing billions of pounds of export opportunities for our technical expertise. If we do it right, we will accelerate to net zero and go from a low of 160,000 jobs and falling to 200,000 jobs and rising across the UK.

The Greens, incidentally, also want to close down salmon farming, which is obviously very important in Shetland and the Highlands, and are pretty hostile, generally, to our livestock industry and related food processing. The Scottish Government have chosen to intervene in the Scottish economy in failing sectors, with a spectacular lack of success. They have acquired an airport with no flights, a fabrication yard with no orders, a shipyard unable to complete its construction and ferries that do not operate. They have underwritten an aluminium smelter, to the tune of an eyewatering £586 million, which has so far secured only 50 jobs; that is more than £11 million per job. Another £1.35 billion was spent on a new Forth Bridge, which not only appears to have been unnecessary but has had to be closed because of icing, with traffic diverted to the original bridge. Rail investment has been concentrated in the central belt and those of us in the north-east of Scotland still face a single track between Aberdeen and the south. I can only wait with trepidation for Ministers with the track record of success I have just summarised to take over responsibility for running our rail services.

I have to say that the UK Government are also not entirely blameless in inhibiting Scotland’s potential to contribute to recovery. Prime Minister Boris Johnson won a referendum on the slogan “Take back control” and a general election on the mantra “Get Brexit done”. Neither of these things has been achieved. Trade deals are looking weaker than those we had in the EU and involve more concessions to secure them. In turn, this threatens Scotland’s livestock industry, which has responded to the deals with New Zealand and Australia with outrage: it was not consulted, of course. The UK economy is weaker because of a botched Brexit—I am not going back over the ground, but Brexit has not been delivered effectively—and decisions of incompetence, and the Scottish economy is weaker because of the obsession with independence and poor policy decisions. If these are addressed, Scotland and the UK can flourish together.

I welcome the very thoughtful report of the noble Lord, Lord Dunlop, which was a long time being published. The whole point of his very thoughtful contribution was that we can achieve far more by co-operation. Indeed, the Common Frameworks Committee, of which the noble Lord, Lord Foulkes, and I are members, had the Constitution Secretary of the Scottish Government in front of us this week. He used every opportunity to promote the case for independence, but he was not prepared to acknowledge that we live in a devolved settlement and that the Government have a responsibility to operate within that and not to use the Scottish Parliament just as a lever to break up the United Kingdom. Of course, as the noble Lord, Lord Foulkes, said to him, the problem is that making devolution work would undermine the case for independence, which is why they do not want to do it. As a passionate home ruler who worked to deliver a Scottish Parliament, for which I have no regrets, and worked with the Labour Party to do that, and to ensure that it was representative and had adequate powers, I never believed or intended that the Scottish Parliament should be used simply as a lever to crack open the United Kingdom. That is not what it is fit for.

This is a plea to the people of Scotland, who I think are split down the middle, and to those who may not be sure which camp they are in, to wake up and smell the coffee about what they are being led into, because it is not something that will achieve what this Motion wishes to achieve. I genuinely believe that Scotland and the UK are interdependent in every way, not just economically but socially. We are married to each other—literally, in many cases. We are family and it is absurd to treat, as Scottish nationalists do, England as the enemy and the UK Government as a hostile agent while looking across to countries of which Scottish people know less, and whose language they do not speak very well, compared with the islands we all share. I am somebody who was born in England with an incontrovertibly Scottish name and three Scottish grandparents and who has spent my entire adult life in Scotland, through choice. I am proud to be Scottish and British: why on earth should I have to choose?

My Lords, it is nice to be back on the Front Bench. I start by congratulating the noble Baroness, Lady Fraser of Craigmaddie, not just on securing this debate but on the way in which she opened it and, I presume and hope, will close it as well. I thank other noble Lords for their thoughts and contributions across your Lordships’ House.

My speech, like that of the noble Lord, Lord Bruce, will be a bit more political and I fear will drift into some of the comparisons and statistics that the noble Baroness, Lady Davidson, understandably warned against. I say “understandably” because I share many of her fears that if we are not careful, we will do the independents’ job for them—but I do think there is a way of balancing the criticism of many of those failures with a vision for the future of the United Kingdom.

Reciprocity has always been at the heart of my beliefs: not what you do to or for people but what you do with people. The fundamentals of that principle sit at the heart of how I believe Scotland, Wales, Northern Ireland and the regions of England should fit together for all of our mutual benefit. It should never be just about what Westminster does to or for the devolved nations or regions, but what it does with them.

When the Scottish Government present their 2022-23 Budget, the focus must be on Scotland’s recovery from the Covid pandemic. A national recovery presents an unrivalled challenge and one that requires urgent, direct and bold action in order to address it. But to properly tackle Scotland’s pandemic recovery, this Budget must also confront many of the harms caused over the past 14 years, with underinvestment and underfunding by the SNP Government. The examples of the Scottish Government’s negligence are endless and it is worth spending a bit of time examining them before we look at some of the solutions.

Some 350,000 people in Scotland still earn poverty wages, more than one in four children in Scotland still live in poverty, and foodbank use in Scotland is up 75% since 2015, long before the pandemic even started. Despite this, the Scottish Government have twice delayed taking over control of the benefits system. They have rejected taking responsibility and only sit on the sidelines and complain.

For me, the worst example of the Scottish Government’s negligence is Scotland’s appalling drug death numbers. Scotland’s drug death numbers are three and a half times more than those of the other parts of the United Kingdom, with 1,339 people dying from drugs in Scotland in 2020. Drug death numbers are more than three and a half times higher than they were a decade ago, with this alarming upward trend accelerating since 2013. This high number of drug deaths does not occur in Portugal, the Netherlands, Norway or many other European countries. The Scottish Government have had more than enough time to deal with this issue but have repeatedly failed, and the numbers continue to rise. Those 1,339 drug deaths are not just statistics: they are someone’s son or daughter, sister or brother, mother or father. Those 1,339 people have been failed and paid with their lives. The solutions are not simple and they are not free, but they exist and could be delivered, if the will was there.

The SNP has also broken its own treatment time guarantee a staggering 380,000 times. The 62-day waiting time standard for urgent cancer referrals has not been met since 2012. Life expectancy has stalled in Scotland, and there is a 10-year gap between the richest and poorest areas. One in four young people are being rejected by CAMHS, almost three years after an external review called for rejections to end.

If Scotland’s recovery is to be long term—and let us be clear; everyone in your Lordships’ House wants it to be—it needs to be a green recovery. As the noble Baroness, Lady Fraser, said in her opening remarks, Scotland is well placed to deliver this green recovery. But, as we have heard, the Scottish Government’s record on the environment and climate change fills me with little hope that they will deliver on it. In 2016, the Scottish Government promised to have their first low-emissions zone in place by 2018, but their failure means that the earliest we will see this low-emissions zone is 2022—next year, four years after it was promised. The promise to create a publicly owned energy company has not gone beyond the business case stage, and the current rate at which the Scottish Government are buying low-emission buses means that it will take 65 years for all the buses to be replaced.

To pick up a theme that the noble Lord, Lord Bruce, and my noble friend Lord Foulkes touched on, when you look at the state of the public services, it makes you think sometimes that the current Scottish Government are comfortable with their failure. It gives them a grievance with which to rail against the current devolution settlement; if the situation in Scotland was better across education, health and the economy, their arguments for fuller independence would be weaker. With that in mind, why does the SNP continuously focus all its efforts on a second independence referendum? I believe it is because it does not want to talk about its record or the issues that affect the people of Scotland. Rather, it focuses on division and a divisive second referendum.

On these Benches—and we have heard from other Benches as well—there are plans and a vision for Scotland; there are ways that we can build and deliver a better future for Scotland. In understanding Scotland’s recovery, it must deal not only with the immediate impact of Covid and protect jobs, incomes, and our health service; it must also mark the start of a long- term recovery and make Scotland a fairer place to live. Although the Chancellor previously announced £170 million as part of a levelling-up fund to help Scottish communities, analysis by Citizens Advice Scotland revealed that more than 1.4 million people ran out of money before pay day during the pandemic. Can the Minister please outline exactly how the Government’s levelling-up fund will help Scottish communities?

We understand what is needed to get Scotland’s economy back on its feet. Introducing a skills for recovery fund would guarantee everyone who has struggled to find work a job for at least six months. We would introduce 50% relief on business rates in 2022 for retail, hospitality and leisure properties. We would introduce a high street voucher, where every adult would be provided with a £50 prepaid card to spend in non-grocery businesses in physical premises in Scotland to support local businesses. When it comes to health, Labour would plug the gap in social care and introduce a mental health recovery fund, as well as commit £100 million to tackle the workforce shortage in the NHS. Scottish Labour would also spend £500 million to tackle the backlog that the NHS in Scotland faces. No recovery will be long-lasting without education investment being at the heart of it. We would commit £30 million to install active ventilation in schools, along with £110 million towards targeted tuition—practical, physical and educational investments that are critically needed.

Scotland needs a recovery as bold and direct as the one we propose but, sadly, I fear that the Scottish Government will not take on board this offer. With the positive contributions in this debate from across your Lordships’ House, I believe we have shown what can be achieved. We cannot just devolve and forget.

My Lords, the origins of this debate are rather unusual. First, it was supposed to include the maiden speech of my noble friend Lord Offord, who only yesterday had to withdraw due to illness. He informed me yesterday that he was exceptionally apologetic not to be here. We all wish him a speedy recovery and much look forward to hearing him for the first time soon, in the new year, as he steps fully into his new ministerial role in the Scotland Office. If your Lordships will excuse the Scottish reeling pun, you have second fiddle today. I will attempt to cover my noble friend’s points and some of my own, and of course do my best to answer questions where I can.

The debate was initiated by my noble friend Lady Fraser, and I welcome her to the first debate she has opened. Today is also unusual in that it seems to me to have been a very long time indeed since we had a proper debate on Scotland. My thanks are certainly due to my noble friend in that respect as well.

My first observation is that this debate has demonstrated forcefully and eloquently the strength of feeling in this House for this great union of ours—of our four nations, including Scotland, being inexorably linked—which has stood the test of time. I loved the historical perspective outlined by my noble friend Lord Hannan.

On the same subject of devolution, which was raised by my noble friends Lady Fraser and Lord Dundee, let me be clear that we believe that the people of Scotland are best served, supported and protected by the UK Government and the Scottish Government working together. This was a theme from my noble friend Lady Davidson, who made some strong remarks in this respect, and from my noble friend Lord Dunlop. The UK Government and Scotland Office respect the devolution settlement and we seek at all times to work together. My noble friend Lord Dunlop’s report was an important and helpful piece of work, informing our intergovernmental review. We firmly believe that there is a shared ambition to improve intergovernmental arrangements. As the noble Lord, Lord Foulkes, said, it is so important to work hard to preserve this particular union. It was interesting to have his reflections on negotiations pre Mr Salmond.

These structures and processes are the best route for proactive, effective and formalised engagement, with accountability grounded in shared secretariat arrangements, transparency and dispute resolution arrangements. The UK Government are operating on the basis of new working arrangements with the devolved Administrations, as my noble friend Lord Dunlop outlined. The UK Government’s quarterly transparency reports show the range of ministerial and official-level meetings. I can report that there is extensive engagement between UK and devolved Ministers and officials every day, so this is very important ongoing work.

I will take a step back and reflect on Scotland’s place in the United Kingdom. Again, my noble friend Lord Hannan perhaps stole some of my lines. We Scots are well aware that we comprise only 8% of the population but 33% of the geography, and our DNA dictates that we must always contribute more than 8% and aim for 33% in every endeavour. I believe that we are happiest and most productive working together as four nations. This strength has allowed proud Scots in the past to demonstrably punch above their weight, from Alexander Bell to Alexander Fleming, the manufacture of some of the world’s greatest ships on the Clyde, and from Robert Burns to the great John Rae, a particular unsung hero of mine—an Orcadian and one of our great Scotsmen, who discovered half of northern Canada in the mid-19th century. I could go on.

I will start on a positive note by looking at the rude health of the Scottish economy. Our economy is performing well—remarkably well, given the awful impact of the Covid pandemic over the past two years, which has rightly been raised in this debate. The UK economy is the fastest-growing in the G7 this year and Scotland is playing its full part. Total exports have risen by over 4% this year, estimated at just over £87 billion.

However, it is no time for complacency and if the pandemic teaches us one thing it is the necessity for constant vigilance. My noble friend Lord Dunlop and the noble Lord, Lord McNicol, raised this important point. New variants such as omicron are a constant threat, though one we can face with more confidence than we could muster just over a year ago thanks to the wonder of science in the UK, which delivered vaccines on a timescale previously unthinkable. Now we urgently need to get booster jabs into as many people’s arms as possible. My noble friend Lady Davidson is right to praise the work, ingenuity and resourcefulness of the people of Scotland in helping their communities in this respect.

I turn now to energy, which formed part of my noble friend Lady Fraser’s remarks and those of the noble Lord, Lord McNicol. My noble friend Lady Fraser also asked a question on the link to the national grid. On the back of the high-profile COP 26, chaired by the UK in Glasgow, energy is certainly one area where Scotland can be a world leader in the transition to net zero. We have all the natural resources and existing infrastructure, plus the scientists and engineers required to build a balanced scorecard in energy. We contribute 60% of the UK’s onshore and offshore wind generation, our tidal and hydro opportunities are immense, plus we have 100,000 highly skilled jobs already working in energy with 70,000 in oil and gas.

We must remember, though, that the transition is to net zero, not to zero carbon, and with 35% of our energy needs in 2050 still coming from carbon—halved from 70% today—we would be foolish to ditch our world-class oil and gas sector in the North Sea just to import from elsewhere. This was a key point of my noble friend Lord Goodlad’s remarks and those of the noble Lord, Lord Bruce of Bennachie. A balanced approach in energy should include renewables, oil and gas, hydro and tidal, and carbon capture, as well as nuclear. Scotland is uniquely placed to lead the world in this space and, by doing so, will contribute massively to the well-being of and quality of life in the UK.

COP 26 in Glasgow brought the world to Scotland’s door. What a tremendous achievement for the two-year presidency of the UK to increase those countries committed to net zero up to those responsible for 90% of emissions. It is sometimes said that the UK has a limited role to play in climate change because it accounts for only 1% of world emissions, yet Glasgow proved that our UK leadership still counts as we demonstrate that it is possible to simultaneously grow our economy while cutting our emissions.

There is a determination to see nascent green technology make the breakthrough to deliver genuine environmental benefits and prosperity through employment. Scotland’s wind power, which was also a theme of this debate, is being resourced. To that end, the Government have announced £160 million to create floating offshore wind farms, maximising the higher wind speeds found out to sea. That follows the biggest investment yet seen in tidal power, namely £20 million per year. Scotland is also home to a £9.4 million trail-blazing hydrogen project at the UK’s largest onshore windfarm, Whitelee, on the hills south of Glasgow. Coupled with carbon capture, whereby the greenhouse gases which damage the environment so gravely can be safely stored in the very rocks from where we once drew oil and gas, Scotland’s energy transition surely can lead the way, making a huge contribution to the well-being of the people of Britain, notably in keeping the lights on.

Financial services were raised briefly by the noble Lord, Lord Bruce. This is one of the most successful sectors in Scotland, employing 150,000 highly skilled jobs and contributing £13 billion to Scotland’s economy. Our fintech cluster comprises more than 150 fintech start-ups in Edinburgh and Glasgow, which combine to be in the top three clusters in Europe, and Scotland is now responsible for 11% of the UK’s responsible investing market. Overall, we contribute 20% of UK exports in financial services, a sector where the UK is ranked second in the world after the USA.

Fisheries were raised by my noble friend Lord Goodlad. Our fisheries, food larder and drinks cabinet are world-class. Exports of salmon and whisky together account for 20% of UK exports of food and drink, and the whisky industry supports 10,000 jobs in Scotland, 7,000 in remote communities and 40,000 across the UK. This is where I have a reflection: assuming we can secure a trade deal with India, we could dramatically increase our exports of Scotch. Langoustines served in swish Parisian bistros are won from pristine Scottish waters and whisked from port to plate at speed. A £100 million UK seafood fund, allied with new opportunities afforded outwith the EU’s common fisheries policy, means that fishing is an industry charting its own course into the future.

I will say a few words about defence. It was not a particular theme in this debate, but I think it is important. BAE Systems on the Clyde and Babcock at Rosyth on the Forth are at the heart of the UK’s defence capability. I understand that the Indian navy is particularly interested in our state-of-the-art weaponry and defensive systems, where 15 world-leading UK companies have significant design and manufacturing operations in Scotland.

One great example is HMS “Queen Elizabeth”, the aircraft carrier built on the banks of the Forth at Rosyth, which has just returned to UK waters. As well as a potent symbol of defensive power, this trip delivered innovative trade possibilities. For example, in Mumbai, the ship was the backdrop to UK—including Scottish—promotion opportunities. It was not just whisky—I am sure gin was on board as well—but, for example, we showcased the Royal Edinburgh Military Tattoo.

Scotland’s vital contribution to defence is essential in today’s deeply uncertain world. Scots serve proudly in all branches of the forces, and RAF Lossiemouth and Her Majesty’s naval base at Faslane are at the cutting edge of our air and sea power. As we know, Faslane is home to the Royal Navy’s Submarine Service, including the continuous at-sea nuclear deterrent.

Shipbuilding, although reduced in scale, remains a Scottish speciality. I should point out that, over the last 15 years, she has delivered six Type 45 destroyers, two aircraft carriers, five offshore patrol vessels, and already has orders for eight Type 26 frigates. I am sure that I could go on.

On this link to trade, raised by my noble friend Lady Davidson, noble Lords will be well aware of the Government’s commitment to secure trade deals with 80% of the world’s trade within three years of leaving the EU. I am pleased to say that we have currently signed up to 64%, but there is much more work to do. We will bring extensive new trade alliances across the world, from which Scotland is well placed to benefit.

I turn to another theme that was raised by the noble Lord, Lord McNicol, and my noble friends Lady Fraser and Lord Dundee: the levelling-up agenda. Following COP 26, within the Scotland Office our attention has turned to the post-pandemic levelling-up agenda across the UK. EU structural funds are being replaced by the £2.6 billion shared prosperity fund and the £220 million community renewal fund, and it is worth noting the explicit commitment by the Chancellor at the Budget, reaffirming that total replacement funding via the UK shared prosperity fund will at a minimum match the previous size of EU structural funds in Scotland.

These are further complemented by the £4.8 billion levelling-up fund, with almost £180 million committed to local projects in Scotland, as part of the recent funding round announced at the Budget, alongside the ongoing investment of £1.5 billion in UK government funding. Of course, this supports the 12 city and growth deals across all of Scotland. Your Lordships will be pleased to know that the city and growth deal agenda is a good example of joint working between the two Governments and local areas across every part of Scotland. In this spirit of co-operation, a new heads of terms agreement for the Falkirk growth deal will be signed this month, as well as the full deal in Moray.

I hope the House will agree that Scotland is uniquely served by two Governments, and these UK government investments will augment and strengthen devolution by investing in people, projects and businesses within local communities equally across the whole of the United Kingdom. This plays quite well into the remarks from my noble friend Lord Dundee, who spoke about the importance of skills.

I turn to universities. All of this high-end design, technology and manufacturing is backed up by our world-class universities, such as the UK’s current top university and my alma mater, St Andrews, which continue to attract research funding of 13% to 15%—another exemplar of our “more than 8%” rule, which I alluded to at the beginning. On the new green economy, the first Industrial Revolution was born on the Clyde, and, last month, Glasgow showed once again that our universities and technologists are leading the charge.

Cities were raised by my noble friend Lord Dundee. I took note, with interest, of his remarks on twinning, which is often important. We should always remember Scotland’s vibrant cities: Glasgow for its culture—the Burrell Collection, for example—and its architecture by architects such as Charles Rennie Mackintosh, and Edinburgh for its great humour, not least the Edinburgh International Festival.

I will also pick up the point made by my noble friend Lady Fraser about Channel 4, which she is right to raise. As part of an internal channel restructuring process to take jobs outside London, Channel 4 created headquarters in Leeds and regional hubs in Glasgow and the other devolved nations. Scotland has begun to show its strength here and has a strong track record of staging big Hollywood film productions, such as the sequence of “Fast & Furious” films and “World War Z”, starring Brad Pitt, the storyline of which covers a threatening virus that turns humans into zombies, which is perhaps a sombre reflection for us this afternoon. Perhaps I should not go further on that. In addition, the £7 million UK global screen fund will target support across the screen sector, including film, TV, documentaries, animation and interactive narrative games content.

Health was raised by a number of noble Lords, including my noble friends Lady Fraser and Lord McColl. I note the points made about the record on health, which was also raised by the noble Lord, Lord McNicol. The UK Government recognise that it is important to support the Scottish Government, and £14.5 billion in additional funding has been given through the Barnett formula since the start of the pandemic. I hasten to add that this is on top of the block grant and in addition to extensive direct UK government support to people and businesses in Scotland.

More than 100,000 Scottish businesses have also benefited from £4 billion of UK Government loans. Vaccinations, which were alluded to, have been a great success, with almost 120 million doses administered, as of 8 December 2021. It is fair to say that Scotland has benefited from closely working with, and from the input of, the UK Government. I stress again: working together is the theme.

My noble friend Lord Dundee spoke about digital connectivity. The recent Budget confirmed a further £8 million from Project Gigabit to deliver full fibre to 3,600 premises in Scotland, including in Aberdeenshire, Angus, Highland, Moray, and Perth and Kinross. It has delivered faster speeds to 600,000 households and businesses in Scotland, replacing legacy copper wire with full fibre. This is part of the overall £5 billion Gigabit programme.

My noble friend Lady Fraser spoke, rightly, about tone, which was also picked up by my noble friend Lady Davidson and the noble Lord, Lord McNicol. As far as I am concerned, Scotland and the Scots people are a much-valued and most important part of our United Kingdom. Long may this continue. We hope that more Scots will come around to thinking the same about the UK Government and those good souls south of the border.

I finish by agreeing with my noble friend Lord McColl and the noble Lord, Lord Bruce, that we must strive for a positive future. I believe that there is one.

My Lords, I thank all noble Lords who have spoken in this debate, the first that I have led—I very much enjoyed it. I am grateful to so many who have given me a history lesson. I take the words of my noble friend Lord McColl that we should learn from and be inspired by our history but that we need to look to the future. I have learned a few things: I did not know that Glasgow was so good at building satellites, and I am delighted to hear that the noble Lord, Lord Foulkes, is a Jam Tarts supporter.

Looking to the future, my noble friend Lord Dundee pointed out the importance of sectors that we do not traditionally think of in Scotland, such as the video games and creative industries. The noble Lord, Lord Bruce, and others pointed to the importance of financial services and the potential for Scottish businesses to export more, which the Minister illustrated in relation to the potential to export to places such as India.

Many noble Lords have touched on the importance of the green economy and the role of the transition to net zero. At the moment, this is a really interesting example of somewhere there is an opportunity. My noble friend Lord Goodlad and the noble Lord, Lord Bruce, mentioned Cambo, which to me is an example of the vulnerability of the Scottish Government’s current position, because, as was alluded to, the SNP is very happy not to take responsibility for decisions on this.

So I hope that the UK Government are not scared of the Scottish Government, as the noble Lord, Lord Foulkes, mentioned, but are able to identify and, potentially, magnify these sorts of issues, such as the opportunities in the green economy, as we mentioned. If we do not and if we are not careful, there is a perfect situation at the moment for the SNP of a Conservative Government in Westminster and an SNP Government in Edinburgh. We cannot do anything about Edinburgh at the moment, but we can do something about Whitehall and Westminster. So I urge the Minister to take back to all departments from the Scotland Office the words of my noble friend Lord Dunlop that we achieve more through co-operation and that we need a culture change in Whitehall. Yes, we need one in Edinburgh as well, but we need one in Whitehall.

There is a generation of people in Scotland who are now entering the workforce who have known nothing but the Scottish Parliament, which was established in 1999. Let us not forget that in Scotland you can vote from the age of 16 onwards. This generation does not hark back to history. They know only the current devolved situation, so it is important that we heed my noble friend Lady Davidson’s words about language. We are in a devolved settlement, we are collectively the UK and that is the way that we will make the case for the union.

I thank all contributors to today’s debate and I thank the Minister for his response, but we will hold his words to the sticking place, to quote the Scottish play, and I look forward to another opportunity, I hope in the not-too-distant future, to return to this place to celebrate the progress that Scotland and the rest of the UK have made in the recovery from the pandemic.

Motion agreed.