Examination of Witnesses (Questions 40-59)
RT HON
ALISTAIR DARLING,
MR DAVID
CAIRNS AND
DR JIM
WILDGOOSE
19 OCTOBER 2005
Q40 Mr MacNeil: Taxi fares?
Mr Darling: I am sure it is all
accounted for properly.
Q41 Ms Clark: My question about whether
we are making the best use of resources so far as accommodation
is concerned. Do you currently have an official office both at
Dover House and at the Department for Transport and, if so, is
there any room for trying to ensure that both functions are carried
out from the Department for Transport? Is that something that
has been looked into?
Mr Darling: Most of my time is
spent in my office in the Department for Transport, I frequently
have Scotland Office meetings there because it is convenient to
me, of course it follows it is not convenient to other people
because they have to come and see me. The Scotland Office owns
Dover House, as you know, and I do use Dover House on a number
of occasions but for obvious reasons most of my time is spent
in the Department for Transport. We try and use them efficiently.
The main purpose of Dover House is not to house me, it is to house
those civil servants in the Scotland Office who are employed in
London, although Dover House is also used by the Advocate-General,
in addition to that the Scottish Executive have the use of facilities
there should they choose to use them and we also have various
other people working there as well.
Dr Wildgoose: We have SDI housed
there, and some of the Wales Office people are housed there as
well and there may be some changes in that. We are looking carefully
at the use of Dover House in fact over the next couple of months.
Mr Darling: It is really trying
to make the best use of Dover House. It is clearly historically
of great historic importance and also it is used for occasional
receptions and things where that is appropriate to the Scotland
Office. I suppose the answer to your question is, suppose we shut
the Dover House office, it does not save that much money and I
would still need a Scotland Office private office and of course
if the responsibilities are reallocated in the next reshuffle,
it would add to even more expense if we have to go and open the
whole thing up again because, whatever the new arrangements were
they would not be appropriate. The staffing generally, as I was
saying to Gordon, has come down quite dramatically. One of the
first things I did was to say we should get out of Meridian Court
in Glasgow, because I could not for the life of me see why we
had people in Glasgow and in Edinburgh and although we have got
three people left in Glasgow that is not going to last much longer,
I do not think. So the staff are predominantly in Melville Crescent,
which is the Scotland Office in Edinburgh, or they are in Dover
House. Most of them are in Melville Crescent.
Q42 Ms Clark: So overall you are
satisfied that there is a good use of the accommodation as available,
sharing with other departments as required?
Mr Darling: We are looking at
Dover House at the moment. We are not going to get rid of it,
it is just a question of using it better because it was not built
as an office, as you know, it was built as residential accommodation
and it is not ideal. I suppose if you were starting from here,
you probably would not be there. We are looking to see at how
we best use it, it is an extremely expensive building to maintain
because it is listed. What is it, 200 years old? I cannot remember
when it was built.
Q43 Mr Walker: I do not think there
is anything wrong in having two offices. If we accept we need
a Secretary of State for Scotland, he is perfectly entitled to
have an office outside his Transport office which is surrounded
by civil servants who help him run Scotland.
Mr Darling: I did think about
it for about two hours, after I was appointed, about moving my
Scotland Office private office into the Department for Transport—
Q44 Mr Walker: Disaster.
Mr Darling: —but you get
into all sorts of difficulties, not least accounting difficulties,
because people come along and say, "Why is this person using
the Department for Transport lights rather than Scotland Office
lights?"
Q45 Mr Walker: So does this mean
when you are in your Scottish Office you are thinking about Scotland
and when you are in your Transport office, you are thinking about
transport, and when you are in between you are thinking about
both places?
Mr Darling: Usually when I am
in between, I am thinking about transport.
Chairman: Wider market initiatives, sponsored
and hosted events?
Q46 Mr MacNeil: This is in response
to written questions from the Committee following the publication
of the Department Annual Report 2005. Does the Scotland Office
generate much income from Dover House?
Mr Darling: No. We are not set
up to generate income. As you will see, we do allow the place
to be used for receptions for those organisations, and I think
they are in general non-profit making, they tend to be charitable.
We insist they pay for any hospitality they wish to offer, refreshments
and the rest of it, flower arrangements and so on, we do not charge
them for the staff mainly because the staff are there anyway for
other duties. I do feel it is an asset that can be used. The Scotch
Whisky Association, for example, I think it can only do Scotland
good if it wants to use the place as a place for advertising their
existence and encouraging people and, frankly, to go through the
whole bother of charging them for the use of the man at the door,
who would be there for other reasons as well, would probably not
be worth it. Jim, you had better explain the niceties of this.
Dr Wildgoose: Yes, that in essence
gets the position. I think we did supply some information in the
written evidence that we gave on this.[8]
In the year in question I think we had 33 events, 22 of which
were private events and were paid for by those private individuals
at a very modest cost associated with the staff who would come
with that but we do not charge out. A large proportion of the
people who come are charities in any case and there is an issue
about being able to support that kind of activity and give opportunities
for that.
Mr Darling: The Poppy Appeal is
being launched there tonight and it would be wholly inappropriate
to charge them for doing that.
Q47 Mr MacNeil: All the various consultations
by the Scottish Executive, and promoting Scotland as a counter
for doing business, have many major companies relocated to Scotland
in the last year?
Mr Darling: I cannot give you
offhand a comprehensive list of the numbers that have relocated
to Scotland but, as I said, I think I was saying yesterday at
Scottish Questions, it is notable that the Royal Bank of Scotland,
which is the fifth biggest bank in the world, has chosen to put
its headquarters in Scotland just outside Edinburgh. I can think
of many countries that would kill to have an organisation of that
size and prestige and there are many other examples of companies
in the oil industry in the North East, for example, where a lot
of the business is done outside Scotland but they have chosen
to stay there. If you take, say, the First Group, the travel group,
that operates train services out of Paddington to the West Country,
their head office is in Aberdeen. There are many examples of companies
that have come to Scotland because it is a good place to do business,
but we are not for locate in Scotland, it is not our job to go
out and say "Look, I would really like you to get set up
there". If by our conduct we enhance the reputation of Scotland
that is a good thing.
Q48 Mr MacNeil: As Secretary of State
how attractive would you say Scotland was for major international
companies in comparison to the Republic of Ireland?
Mr Darling: I think it is attractive,
particularly the stable economy, the tax regime. I think the best
place you should go and look at is the OECD report that said Britain,
and Scotland as well, is the one of the best places in terms of
pro-business to do business. Ireland is attractive too to other
countries, they can offer some things we do not offer. Most companies
look at these things in the round. For example, London is the
indisputable financial centre for the world in many respects,
and nobody is coming near it.
Q49 Mr MacNeil: A global economic
hot spot.
Mr Darling: It is an essential
part of the global economy. What is good is outside of London
Edinburgh is the next biggest financial centre, and that is good
for the Scottish economy as a whole not just for the financial
service in Scotland.
Q50 Danny Alexander: I notice from
the Department's Annual Report that officials regularly attend
meetings of the Department for Work and Pensions' Partnership
Against Poverty. What has been gained for Scottish interest from
the attendance at these meetings? Can you mention any initiatives
that are specific to Scotland that have been agreed by the working
group as a result your officials' attendance at these meetings?
Mr Cairns: The Partnership Against
Poverty is specifically dealing with pensioner poverty and we
have an official who has input into that, as indeed does the Scottish
Executive. The idea is not to come up with Scotland-only initiatives
but to look at ways in which there may be specifically Scottish
dimensions to UK initiatives. I think the Department for Work
and Pensions has got a very good track record of ensuring that
when it does, as a UK department, trial new initiatives, that
Scotland features very prominently in the pilots. If you trace
through the initiatives from the various New Deals through to
the one initiative Jobcentre Plus, Pathways to Work and the next
one building on New Deal bond, all of them were trialled in Scotland,
very significant major trials in Scotland. Pathways to Work is
a very good example that was trialled in Renfrewshire, Inverclyde
and Argyll, it is now being rolled out across into Glasgow taking
a very large number of people. It is not a Scotland-only initiative,
but it was very important it was trialled there because if Pathways
to Work is going to work, it has to have a very good liaison between
the Employment Service, Jobcentre Plus and the Health Service
because part of it is dealing with people who are on Incapacity
Benefit who will need some remedial treatment or therapy or whatever.
It was very good and proper that when the department was looking
at placing a trial for that it had to take place in Scotland otherwise
when it was rolled out across the UK it would not work. By and
large the DWP is a reserved department and what it applies, applies
across the UK particularly in the realms of pensioner poverty.
Obviously there are some issues that affect pensioners in Scotland,
Scotland seems to be a colder country, so issues through the fuel
poverty would be highlighted in these kinds of discussions as
well. It is not designed to produce Scotland-only initiatives
but to have a Scottish dimension to UK initiatives.
Q51 Danny Alexander: You have highlighted
one of the things I wanted to follow up on which was about fuel
poverty because you are quite right that has a specific Scottish
dimension and a specific Highlands and Islands dimension, as it
were, the further north you go the colder it gets. I wondered
whether in that context, particularly a context of recent rise
in fuel prices which has had a particular effect on pensioners
who rely on heating oil, for example, whether that is an issue
which has been addressed through this Committee in terms of taking
specific Scottish problems into account and reflecting them in
proposals agreed on a UK-wide basis?
Mr Cairns: Tackling fuel poverty
has been a priority of the Government since we came into office.
When the Winter Fuel Payments came in they were very warmly welcomed
and now they have increased in value, up to £300 for pensioners
aged over 80 or more. We fought against any attempts to impose
VAT on domestic fuel. I think we have a very good track record
on that and of course it is not just Scotland that is cold. Somebody
said in Parliament yesterday Scotland has got unique weather,
it might be a unique mix, but it is not uniquely cold, there are
other parts of the UK that are cold as well. The other side of
the coin, of course, is on energy conservation and I think the
Scottish Executive has got a very, very good track record on that
and on looking at energy conservation issues, particularly for
old people, the central heating programme and so on. I think it
is a very good example where we do have specific Scottish problems,
the Executive are tackling some of it through energy conservation
and the warm front initiative; the DWP are looking at it through
things like the Pension Credit and getting extra money to poorer
pensioners, and across the whole of the UK there is a universal
approach in terms of the winter fuel payment.
Q52 Mr McGovern: Secretary of State,
the Annual Report makes reference to the introduction of the Consumer
Credit Act in 2004/2005, given there seems to be an ever-increasing
personal debt, not specific to Scotland but certainly it seems
to be a problem in Scotland, can you explain how the Scottish
Office works with the relevant government departments to ensure
that any issues specific to Scotland were considered when drafting
the Bill?
Mr Darling: This Bill was drafted,
and we are aware of it; the principal responsibility for that
was the DTI; in relation to how it works of course we will keep
an eye on it. This really goes back to what I was saying right
at the start, the Scotland Office increasingly encourages UK departments
to try and have a look across the piece to see how any legislation
is being effected throughout the whole country and not relying
on us north of the border to do this work. But if issues arise
that need sorting out or improvements of course we will make sure
that is fed into the process that might lead to any changes that
might be necessary. In relation to personal debt generally, that
is something which is not just the DTI, of course it is a matter
the Treasury also keeps a close eye on for obvious reasons.
Q53 Mr McGovern: I think everybody
is aware that if you watch daytime television, or even the mail
which comes through your door every day, there are these financial
organisations practically offering to throw money at people. I
know that is not specific to Scotland but do you feel the Bill
addresses these sorts of issues?
Mr Darling: I hope it will do,
time will tell. It is very recently on the statute book. As you
rightly say, this is not just a Scottish problem, it is a more
generalised problem. I hope this legislation will generally improve
things, but it is something that I think is looked at across the
whole of the UK rather than Scotland in particular because the
problem of people getting into deep financial trouble is not something
that is purely Scottish. There will certainly be examples of it
in Scotland but it is not confined to Scotland.
Q54 David Mundell: In the context
of energy policy and of your Objective 3[9]
if, as I and my constituents certainly hope, the Prime Minister
is giving a clear indication that there would be a new generation
of nuclear power stations, what role will you have in lobbying
for one of those power stations to come to Scotland?
Mr Darling: I think my primary
duty as a Member of the Government, a Member of the Cabinet, is
along with my colleagues first of all to formulate what our policy
ought to be and as the Prime Minister has said, given where we
are at the moment with the demand on energy, the understandable
concern about carbon emissions, we have to decide what the mix
of energy generation ought to be and as the Prime Minister said
in Brighton we need to look at the future of nuclear power. I
will be involved in the formulation of that policy. I think until
you have formulated the policy you do not then know what additional
plant you might need or where they might go, but that is something
we shall have to see. What I do think, and I have said this in
the House of Commons on numerous occasions, is I think we need
to have a serious debate about where we get our energy from because
as recent power cuts have shown we are far more dependent now
on electricity than we were, say, 20 years ago, and that is why
it is important that we have a serious debate about nuclear in
particular.
Q55 David Mundell: You would see
part of your role as acting as an effective channel of communications
for Scottish opinion in such matters as conveying the opinion
from constituencies such as my own which has benefited from long-running
nuclear facilities, there was strong support in those areas for
nuclear industry?
Mr Darling: Part of what I do
is to be aware of what views are, I do that as an MP in Scotland
anyway, but certainly as Secretary of State I will do that. Across
the country and across Scotland we do need to have a debate about
these things. There are two nuclear plants, as you know, that
are possibly in the second part of their lives, a decision will
have to be taken as to whether we extend their leases, decisions
may be taken as to whether an additional plant is required, I
do not know. Whilst we have made great strides on renewable energy,
as you know, it is not without its controversy, most people are
in favour of it, but equally a large number of people are not
in favour of it in their own backyards. These are difficult issues,
but they need to be addressed because one thing that is certain
is our demand for energy is likely to increase and not decrease.
Q56 David Mundell: Just for the record,
my constituents in Annan are in favour of it in their own background
and given that the Chapelcross is the largest licensed nuclear
site in Scotland, it certainly seems to me to be a debated item.
Mr Darling: I am aware of that.
I visited Chapelcross, although it is some years ago. It is interesting
that certainly—this is not universal but generally speaking—people
living around these power stations take a different view from
people who do not live around them. As you know, there are legitimate
concerns about nuclear generation in relation to waste and so
on but these are issues that need to be discussed.
Q57 David Mundell: Can I move on
to a separate question on financial matters. In the Treasury autumn
White Paper published in the summer the Scottish Executive was
attributed to having £1.5 billion of end year flexibility.[10]
Is there not something fundamentally wrong with the way the Scottish
Executive manages its resources that this Committee should be
concerned about and, if not, does it indicate that no significant
element of carry forward relates to reserve matters?
Mr Darling: No. I think EYF—end
year flexibility—can be an important way of managing your
expenditure. You know that you have got, for example, large expenditure
coming up next year; you can ask the Treasury to carry forward
money into that financial year to meet that lump, if you like.
There will be other examples where you might have hoped to build
a road, for example, but for one reason or another the expenditure
did not occur and you do not have the money you expected to do
it. If you look across the piece, I think I am right in saying
that last year the Scottish Executive's EYF was 2.5%—
Dr Wildgoose: Less than that,
1.2%.
Mr Darling: Across Whitehall the
figure was nearer four per cent. These things do change from time
to time and in terms of the amount, there are other departments
which will have that. The key is that the Scottish Executive ministers
may use EYF for sensible reasons, there may be some projects that
have slipped. I will give you one example where I think it is
a very good thing. In the past there was this tendency towards
the end of the financial year where departments had not spent
money, to start spending money on things they did not really need,
but if they did not spend the money the Treasury took it back.
EYF was introduced to stop that, to try and make that less likely
to happen, so I think it does provide a flexibility that is quite
helpful. The other thing is, remember, all departments now are
on three-year spending programmes, so it does mean we have got
money for three years. In my own Department, for example, we do
need to move money between years, you cannot do it on a huge scale
for obvious reasons but it does allow sometimes a flexibility
you would not otherwise have.
Q58 Ms Clark: I was going to move
on to the area of renewable forms of energy. In your Department's
Annual Report, paragraph 2.29 it is stated that the Scottish Office
was involved in assessing the impact of electricity market regulation
on the prospects of renewable energy development in the more remote
areas of Scotland. I wonder if you can tell me what the key findings
of that work were and what your Department is proposing to take
those findings forward in assessing the wider potential for renewable
energy sources in Scotland?
Mr Darling: I think this was the
study that was being carried on by the regulator in making transmissions
charges. One of the things that we were concerned about is generally
speaking renewable energy wind farms and so on—there are
likely to be more of them in the north of the country than there
are in south—and we were concerned when the regulator changed
the transmission charges regime, so basically it was the distance
charged, you would not find a situation where it became uneconomic,
for example the wind farm in Shetland or the north west of Scotland.
That is why the law was changed to allow a reduction in charges
to carry that energy and therefore remove the otherwise unfair
advantage that would be imposed because of distance. The Scotland
Office was quite heavily involved in that and that is a classic
example I suppose of where although the decision was being taken
by the regulator, the Department of Trade and Industry, of course,
is generally aware of these things but because the Scottish regime
had been different since privatisation, we had quite a major role
to play. Now, people can and frequently do complain about what
the regulator eventually came up with, but what I wanted to do
was to make sure a wind farm, say, in the north of Scotland was
not disadvantaged. It is not the only thing you have got to consider,
as I said earlier, these wind farms are not without their controversy
in some parts of country. Transmission lines to bring electricity
to the market are not without their controversy either. It must
occur to people at some stage if you wish to get electricity into
your kettle, it has to get to your house some way and that involves
some form of transmission; however it is not as straight forward
as that as anyone driving up the A9 looking at posters can see.
Q59 Danny Alexander: I just want
to follow on very briefly from David Mundell who was asking you
about end year flexibility. The Scottish Executive has adopted
a lower target for efficiency savings under the Gershon Review
than the UK Government as a whole, I think 2.8% compared with
3.75%. Does that create friction in your dealings with other departments,
the feeling perhaps that the Scottish Executive is not being as
efficient? For example Mr Cairns going to the Partnership Against
Poverty meeting at the DWP where they are having to make cuts
of 30,000 staff saying, "Why are you not doing the same in
Scotland?"
Mr Darling: The reason the DWP
is reducing staff—and I know this because I started the
process off—is because the DWP needed to swing in to 21st
century. Its systems were antiquated, its organisation was largely
based on a historical accident and it needed to change, and that
is why there was a big staff reduction there. If you look at Gershon
generally some departments have already made changes and some
have not. Now, again, this comes back to the old point that we
were raising at the start of this who is responsible for these
things? It is for the First Minister, for his administration,
to decide on the efficiency targets and then implement them. I
think it is not the only driver; public opinion demands that we
be efficient but I am not aware of any particular frictions as
far as that is concerned.
8 See page Ev 10 Back
9
Scotland Office and Office of the Advocate General for Scotland
Annual Report 2005 page 7 Back
10
HMT Outturn White Paper CM 6639, July 2005 Back
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