North Sea Oil and Gas Industry

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Mr. Michael Weir (Angus): Will the hon. Gentleman give way?

John Robertson: The hon. Gentleman is too late.

1.15 pm

The Minister of State, Scotland Office (Mr. George Foulkes): The hon. Member for Angus (Mr. Weir) was, yet again, too late.

I congratulate my hon. Friend the Member for Glasgow, Anniesland (John Robertson), first, on securing this Adjournment debate, secondly, on his choice of subject and, thirdly—with some envy—on the success of his football team in the Scottish cup. I must say that, when I first saw the subject that he had chosen—Scottish trade with the rest of the UK—my mind went back to the shenanigans that surrounded the passage and implementation not of the Scotland Act, but of the Act of Union. I do not remember it personally, but I have been told about it. At a very late stage, English Members of Parliament attempted to impose duties on exports from Scotland and were foiled only by Queen Anne proroguing Parliament. That was an 18th century, rather than a 21st century, solution but very timely and effective nevertheless.

We have come a long way since then. As my hon. Friend said, the United Kingdom has become probably the world's most successful single market, benefiting from a completely level playing field. Traders based in any part of the United Kingdom may do business and win orders in the other parts. These days, the threat to that single market comes not from the little Englanders in this House but from the little Scotlanders of the Scottish National party. Scotland's trade and commerce, not only with England but with Wales and Northern Ireland, would be placed in jeopardy were the SNP to come to power—however unlikely that might be—and start breaking up Britain to achieve independence.

In jeopardy also would be tens of thousands of Scottish jobs and the prosperity in Scotland that this Government have striven to nurture, with such success. We had an excellent debate on the biotechnology industry in Westminster Hall, initiated by my hon. Friend the Member for Dundee, West (Mr. Ross). Not one of the five SNP Members was there.

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Notwithstanding the fact that they were here in the Scottish Grand Committee, we had Liberal Democrat, Tory and Labour Members present in Westminster Hall. I wondered why the SNP was not there, but it became clear. We were talking about what the hon. Member for Somerton and Frome (Mr. Heath), a Liberal Democrat, called a great success story for Scotland and the United Kingdom. Success stories do not fit the SNP's agenda. Its members want to whinge and whine; they are doom and gloom merchants.

The single market that I described has been perpetuated and consolidated in the constitutional revolution that our Government have brought about. It was not an accident that, when we set the parameters for devolution, the framework and regulation of the UK single market were firmly reserved.

Mr. Weir: If the single market in the UK is such a success, why is Scotland to be disadvantaged in the single market in the European Union? The hon. Member for Glasgow, Anniesland did not answer that. Scotland is a large market within the whole European Union, and will be cut off because of the Westminster connection.

Mr. Foulkes: I shall come on to that in the moment, but I can confirm that that was not a planted question. I did not speak to the hon. Gentleman in advance, and I shall deal with it.

Why did we reserve the single market? Not because we Scots cannot be trusted with those powers, or with any of the reserved areas. Many are being exercised by Scots down here in the United Kingdom Parliament. It is because the economy of this Untied Kingdom is indivisible; or, at least, not divisible without great damage. The decision was not taken lightly. Members will recall that the White Paper ''Scotland's Parliament'', which paved the way for devolution, was the result of a protracted and extensive process of consultation and debate; a process, incidentally, from which the SNP, typically, excluded itself.

When the late Donald Dewar and the Government put the White Paper to the people of Scotland for their endorsement, it was a fundamental of the scheme that he recommended that the levers of the economy, and its regulation, remained functions of Westminster. Those functions include the macro-economy and its management, of course, but also taxation and benefits, financial services, most aspects of energy policy, protection in the workplace, legislation to protect the consumer, telecommunications policy and regulation. All those elements are required for the maintenance of a viable, vibrant economy, delivering for all the peoples of the United Kingdom. We are also delivering for people in need in other parts of the United Kingdom. [Interruption.] If the hon. Member for Perth needs any advice on how to apply for an Adjournment debate, my hon. Friend the Member for Glasgow, Rutherglen (Mr. McAvoy), who is an expert on the workings of the House, will advise her and she will not need to sit there squawking from a sedentary position. She will be able to get up on her hind legs and say a few barely coherent words.

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Annabelle Ewing: I thank the Minister for giving way in his usual courteous manner. He was saying how successful the Union with England has been for Scotland, but how can he possibly sustain his comments when growth in the Scottish economy in the last quarter was 0.1 per cent.?

Mr. Foulkes: That is very good growth in comparison with growth in other European countries and with world growth. If the hon. Lady looks at more than one quarter, she will get a better perspective.

John Robertson: How much growth does my hon. Friend think we would have if there were an independent Scotland tomorrow?

Mr. Foulkes: I think that my hon. Friend knows the answer to that. It would be negative. However, I should press on.

Mr. Weir: Will the Minister give way?

Mr. Foulkes: No. As I say, my hon. Friend the Member for Glasgow, Rutherglen can give advice on how to secure an Adjournment debate.

With the single market in place, Scotland's trade with the rest of the UK has thrived. It has thrived also with the European Union—this is what my hon. Friend wants me to talk about—thanks to a larger, if looser, single market that increasingly dwarfs our own. Of the exports that Scotland sends beyond the United Kingdom, fully 63 per cent. go to other member states of the European Union; a success story if ever there was one.

With tariff and non-tariff barriers to trade between Scotland and its partner territories things of the past, the Government are now striving to limit the impact of geography that has harmed Scotland in the past. That is why the Secretary of State for Scotland and I are working hard to secure more direct international flights between Scotland—all its airports, not just Prestwick—and Europe's main business centres. That is why the Scotland Office and the Scottish Executive lobbied hard in Brussels to win approval for the new fast ferry service between Rosyth and Zeebrugge, which will be so vital to Scotland's links with the rest of Europe. That is also why we are so pleased that the House will shortly be asked to devolve powers to the Scottish Executive for restarting the Campbeltown to Ballycastle ferry, so that a vital trade link for Kintyre has a chance of success.

While the Government are putting in place new building blocks for Scottish competitiveness in our single market, the SNP is campaigning to knock the foundations from beneath the entire edifice. It blethers on about independence in Europe, but it seems to have no more concept of why Europe is a success than why the United Kingdom is a success. It is surely no accident that the 15 member states of the EU are trying to make their own single market deeper and more comprehensive; they can see how effective and successful ours is and what a disadvantage it is to them, for example, to have 15 different regimes for financial services in Europe, when the four parts of the United Kingdom thrive through having just one.

It is no accident either that countries throughout central and eastern Europe—as you know better than

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anyone, Mr. Hood—are queuing up to join the European Union and its single market, for they can see the benefits too. Hon. Members can take my word that, once those countries have joined, they too will push hard for the elimination of the remaining barriers to trade and commerce that are encountered in Europe, but not in the United Kingdom. Once again, the SNP just does not get it.

A few months ago, the SNP dug itself into a hole—no new experience for that party, I must admit—by answering a question about what would happen if a newly independent Scotland were not automatically admitted immediately to the European Union. Its answer was that Scotland would then seek membership of the European Free Trade Area—the European economic area—and would sever its ties with England, Wales and Northern Ireland to form a far looser arrangement with Iceland, Liechtenstein, Norway and Switzerland. I have done some research into what membership of that powerhouse would mean for the Scottish economy. Without disrespecting the present member states, the answer is not much.

Membership of the EEA would make an independent Scotland subject to the rules of the EU single market but, not being a member of the EU, it would have no say in the formulation of such rules; a return to taxation without representation. Being outside the EU would also mean Scotland's exclusion from other vital areas of EU activity, such as co-operation on justice and home affairs, and the common foreign and security policy. The sole added benefit of joining EFTA would be a customs union with Switzerland, which refuses to have anything to do with the EU single market and retains its tariff barriers. What a consolation prize.

All this makes independence for Scotland sound like a nightmare, and it certainly does not appeal to the bulk of the business community. There are always a few businessmen who have given up trying to squeeze their egos into the Kelvin hall and feel the need to be very big fish in a small pool. However, they want independence in the same sense that Dorothy-Grace Elder wants independence. They want it for themselves, not for Scotland. A few others in the business community are lured by the siren voices of Andrew Neil and fringe elements of the Scottish National party—an unholy alliance, if ever there was one—on to the rock of fiscal autonomy. They have been persuaded that key elements of the UK single market, such as control over taxes and revenues, can be dismantled without placing the political structure of the UK in jeopardy. Frankly, they have been taken in, because fiscal autonomy effectively means independence. There is no disguising it. As I have said before, if it looks like a duck, walks like a duck and quacks like a duck, there is a very good chance that it is a duck.

Against that background, it is no surprise that the key players in Scottish business, commerce and manufacturing—including the oil and gas industry that the Committee discussed earlier—want Scotland's

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trade with England, Wales and Northern Ireland to continue to enjoy the benefits of a vital single market. They are well aware of the investment decisions that have been taken to Scotland's benefit because of its role in the UK single market and the European single market. Indeed, they may have taken such investment decisions themselves because of those important markets.

When the Bank of Scotland merged with the Halifax, the bulk of the merged organisation's headquarters activity was set up in Scotland. Now that global financial institutions are seeking to diversify from Wall street and the City of London in the wake of 11 September, what do we see? Morgan Stanley Dean Witter, which my right hon. Friend the Secretary of State for Scotland visited last week, not only is thriving in Cumbernauld but is setting up back-office operations in Glasgow. Would they have come here if there were even the slightest barrier to cross-border commerce? Of course not. That is why the suggestions from some Opposition Members are so dangerous.

My hon. Friend the Member for Glasgow, Anniesland must have the record not just for asking questions but for raising Adjournment debates in Westminster Hall and in the Scottish Grand Committee. He would not come top of some artificial list produced on an entirely false basis, but would be at the top of a list based on real work and on representing his constituency. He has done the House a service in choosing what must, on the face of it, have seemed a rather strange subject for the debate, and one that I suspect has not been debated in precisely this way in the House or in the Scottish Grand Committee before.

The debate has enabled me not only to highlight the benefits for Scotland of the UK's single market, but the flimsiness of the case for independence mounted by the SNP. It is clear from their frustration, annoyance, whining and whingeing that they recognise the flimsiness of their case. It is a case that we look forward to exposing regularly and ever more comprehensively as we approach the elections for the Scottish Parliament. I am glad to see that a poll by The Herald—it even put it on the front page—showed a huge increase in the Labour percentage over the SNP, not just for Westminster, but for Holyrood elections.

Mr. Weir: I should like to point out that the poll also showed an increase in SNP representation in the Scottish Parliament.

Mr. Foulkes: But the polls are going in the right direction, and the SNP position will change soon as well. My party looks forward to those elections with relish, just as we looked forward to the general election, and expects to replicate the result.

Question put and agreed to.

Adjourned accordingly at twenty-nine minutes past One o'clock.

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The following Members attended the Committee:
Hood, Mr. Jimmy (Chairman)
Barrett, John
Begg, Miss Anne
Brown, Mr. Russell
Bruce, Malcolm
Cairns, David
Campbell, Mr. Menzies
Carmichael, Mr.
Clark, Dr. Lynda
Clarke, Mr. Tom
Connarty, Mr.
Donohoe, Mr.
Doran, Mr.
Duncan, Mr. Peter
Ewing, Annabelle
Foulkes, Mr.
Hamilton, David
Harris, Mr. Tom
Joyce, Mr.
Lazarowicz, Mr.
Liddell, Mrs.
Luke, Mr.
Lyons, Mr.
McAvoy, Mr.
MacDonald, Mr.

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MacDougall, Mr.
McFall, Mr.
McGuire, Mrs.
McKechin, Ann
McKenna, Rosemary
Moore, Mr.
Murphy, Mr. Jim
O'Neill, Mr.
Osborne, Sandra
Reid, Mr. Alan
Robertson, Angus
Robertson, John
Ross, Mr.
Salmond, Mr.
Savidge, Mr.
Sheridan, Jim
Smith, Sir Robert
Stewart, Mr. David
Thurso, John
Tynan, Mr.
Weir, Mr.
Wilson, Mr.
Wishart, Pete
Worthington, Tony

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