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House of Commons

Wednesday 10 December 2008

The House met at half-past Eleven o’clock


[Mr. Speaker in the Chair]

Oral Answers to Questions


The Secretary of State was asked—

Calman Commission

1. Mr. Andrew Robathan (Blaby) (Con): What assessment he has made of the interim Calman commission report. [240210]

The Secretary of State for Scotland (Mr. Jim Murphy): The Calman commission was set up after a vote of the Scottish Parliament and supported by Labour, the Conservatives, the Liberal Democrats, trade unions and Scottish businesses. I welcome its interim report.

Mr. Robathan: Does the Secretary of State think that the current system of funding is fair to the rest of the United Kingdom, especially the north-east of England?

Mr. Murphy: I know that the hon. Gentleman has great affection and passion for the north-east of England, but the fact is that the funding settlement that has been established across the UK has been in place in a period during which Conservative and Labour Governments have been in power. The hon. Gentleman raises the type of issue that the Calman commission, through Anton Muscatelli’s work with his expert group, will be considering, and it would be wrong of me to second-guess that process at this time. That work has to continue.

John McFall (West Dunbartonshire) (Lab/Co-op): I welcome the Calman report as a sound, thorough piece of evidential work. The evidence shows that in the financial crisis, with the loss of two of our dear banks in Scotland, Scotland on its own would not have been able to cope. [ Interruption. ] Is there not a case— [ Interruption. ] Is there not a case for looking at the evidence, working for devolution, and ensuring that we have good government in health, education and community care—all areas that are crying out for good policies, which the Administration in Scotland are not delivering?

Mr. Murphy: My right hon. Friend is typically right on the money. In his chairmanship of the Select Committee on Treasury, he shows great expertise in these issues. Despite the SNP heckling and haranguing him, the fact is that the £37 billion investment by the UK taxpayer in the two Scottish-based banks is more than the entire budget of the Scottish Government. That shows yet again that in good times the Union of the United Kingdom helps to make us all more prosperous, and in more difficult times it makes us safer and stronger.

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Angus Robertson (Moray) (SNP): The Calman commission has not yet had time to consider the £1 billion of cuts announced by the UK Government, which will impact negatively on Scottish social services. With the Labour and Conservative parties working hand in hand in the Calman commission, is it not time for the Secretary of State to be honest about the Tory-type cuts that he is now in favour of?

Mr. Murphy: Not at all, because in the recent pre-Budget report we saw an additional £2 billion go into the pockets and purses of Scots. Across the country and across the world, Governments are trying to find ways to drive efficiencies. I will not take any lectures from the hon. Gentleman. His party argued for lighter regulation of the banking system, just as it started to collapse; his party argued for an oil fund, just as oil prices fell from $150 a barrel to $42; and his party argued that Scotland should be just like Iceland, when the International Monetary Fund was being called in to save the latter’s economy.

Mr. Ian Davidson (Glasgow, South-West) (Lab/Co-op): Surely the Secretary of State cannot be telling us the accurate position when he says that the Royal Bank of Scotland and the Bank of Scotland were getting more money than the whole of Scottish Government. Surely those figures cannot be true. Could he tell us a little more about that?

Mr. Murphy: I would like to thank my hon. Friend for his question. The small number of SNP Members were heckling, so perhaps my hon. Friend was not able to hear. We are investing £20 billion of UK taxpayers’ money in the Royal Bank of Scotland, and £17 billion based on the HBOS-Lloyds TSB merger proposals. That direct investment in those banks has led to the Royal Bank of Scotland taking an entirely sensitive approach to small businesses in Scotland, and where that bank has led, we look forward to other banks following.

David Mundell (Dumfriesshire, Clydesdale and Tweeddale) (Con): We share the Secretary of State’s welcome for the Calman commission. Does he note the contrast between the application and thoroughness of the interim Calman report and the so-called national conversation, which appears to be little more than a taxpayer-funded blog site for insomniac nationalists? Does he share my disappointment not only with the content but with the tone of the First Minister’s response to the interim report? Will he therefore use his best endeavours to persuade the First Minister that now is the time to show that he is a man not a mouse—to use the First Minister’s own analogy—by abandoning the national conversation, which does not have the support of the Scottish Parliament, and by engaging, as many in the Scottish Government wish to do, in the Calman process?

Mr. Murphy: The hon. Gentleman is right to say that it is both surprising and disappointing that Scottish Government Ministers will not give evidence to the Calman commission. Of course, Scottish civil servants cannot give evidence to the Calman commission. He is absolutely right to say that if the Scottish Government continue to wish to see this process provide the high-quality
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outcome that we all want, that position should change over the next few months. The hon. Gentleman is right: there are a number of insomniac SNP supporters across Scotland at the moment. That is partly because their economic dream has turned into a nightmare and their ambitions of Scotland being just another Iceland are really a nightmare come true.

David Taylor (North-West Leicestershire) (Lab/Co-op): I have particular warmth for Scotland and all the people who live there because I have Scottish blood in my veins and I represented a substantially Scottish ward on the local authority until I came to this place.

Further to the point made by the hon. Member for Blaby (Mr. Robathan), he and I represent constituencies in the east midlands of England that have a population not dissimilar to that of Scotland and a social, economic and demographic profile close to that of Scotland. However, public expenditure in the east midlands is 20 per cent. less per head than it is in Scotland. No one wants to take away from Scotland, but does the Secretary of State hope that one day the east midlands of England will rise to receive the largesse that those north of the border receive?

Mr. Murphy: My hon. Friend raises an important point. Anton Muscatelli looked in great detail at the funding balance and other issues, and the Calman commission will reflect on that and produce its proposals next year. Whether it is in Leicestershire, Lanarkshire or north or south of the border, the United Kingdom provides us with great prosperity in good times and great security in more difficult times. That is a situation that all of us in the House—except one, two, three, four, five and one other who is not in the Chamber at the moment—wish to continue.

Mr. Alistair Carmichael (Orkney and Shetland) (LD): Does the Secretary of State accept that today’s exchanges highlight the need for the financial issue to be addressed and that central to that will be the tax-raising position of the Scottish Parliament? Does he recall the Prime Minister telling the CBI dinner in September:

Is that still a statement of Government policy and can we expect to see that reflected in future submissions from the Scotland Office to the Calman commission?

Mr. Murphy: I am sure it will come as no surprise to the hon. Gentleman to hear that the Prime Minister was speaking on behalf of the Government, and it is important for that to be the case. The Calman commission and Anton Muscatelli have looked at those specifics in precise and great detail. Today’s exchanges have also shown the merit of having a dispassionate, thorough, detailed analytic piece of work such as that currently being produced by the Calman commission. We look forward to the commission’s final report next year and we will continue to give evidence to it. I say again that I think the process would be stronger if the Scottish Government joined the UK Government and gave evidence to the commission.

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2. Miss Anne Begg (Aberdeen, South) (Lab): What recent discussions his Department has had on Scotland’s future energy needs. [240211]

The Secretary of State for Scotland (Mr. Jim Murphy): My Department and I are in regular contact with all sectors of the energy industry, including clean coal, oil and gas, renewables and the nuclear industry.

Miss Begg: I thank my right hon. Friend for that answer. I know that he will be playing a part in Pilot, the cross-industry, Government and trade union committee. Does he agree that the best way to secure Scotland’s future energy needs is to ensure that we maximise the recovery of the oil and gas that we already know are in the North sea, particularly in the west of Shetland? What will he do to encourage the Treasury and the Department for Energy and Climate Change to ensure that we successfully get the gas finds that are already being exploited by Total and others in the west of Shetland basin to shore, so that they can fulfil Scotland’s future energy needs?

Mr. Murphy: My hon. Friend speaks with great experience and a detailed understanding of the oil and gas industry, particularly in the North sea. I had the opportunity of visiting and speaking at the oil and gas supply chain conference last month. It is clear, as my hon. Friend rightly said, that a large proportion of the untapped oil reserves lie west of Shetland. I met Total and others when I was in Aberdeen to discuss that very issue. Those conversations need to continue within government and with the industry so that we can exploit that natural resource in the North sea for years to come.

Mr. Mike Weir (Angus) (SNP): Has the Secretary of State had a chance to look at the report on Scotland’s energy by the Scottish Council for Development and Industry, which found that Scotland can meet

but also that

How does that fit with his Government’s plan to cut £1 billion from the Scottish Government’s budget?

Mr. Murphy: I have to remind the hon. Gentleman, as I did his hon. Friend the hon. Member for Moray (Angus Robertson), that a few days ago the pre-Budget report put £2 billion back into the pockets and purses of Scottish taxpayers. That is an important point to bear in mind. I know that the hon. Member for Angus (Mr. Weir) and his party have a virulent ideological opposition to the nuclear industry, but as he referred to yesterday’s report by the SCDI, which he quoted selectively, perhaps I can add a quotation. The report also said:

The SCDI speaks the truth.

Michael Connarty (Linlithgow and East Falkirk) (Lab): Does my right hon. Friend agree that one of the energy industry’s problems is sourcing skills? Is he aware that
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his right hon. Friend the Secretary of State for Innovation, Universities and Skills has earmarked £50 million for high-level skills training in the oil and gas industry, but that there is no such fund in Scotland? The Minister I wrote to in Scotland says that the Scottish Executive have no plan to deal with the problem in Scotland, but that they will bring out a report in the spring, two years after they were elected. Is it not a concern that Scotland may have to go to England to find trained, skilled workers to work in our energy industry?

Mr. Murphy: It is indeed a fact that the oil and gas industry in Scotland, as well as the energy sector more generally, needs access to the most highly skilled workers, not only from throughout the UK but from across the world. There is global competition for those highly skilled workers, which is why I, along with the industry, announced a working group to look into the issue. I share my hon. Friend’s concerns that if the Scottish Executive cannot ensure that Scotland has the highest quality workers and apprentices to exploit the opportunities in the oil and gas industry, that will be a blow to the Scottish economy.

John Thurso (Caithness, Sutherland and Easter Ross) (LD): Is the Secretary of State aware of the potential of marine energy in the Pentland firth to provide something in the order of 31 GW for Scotland’s future energy needs? Is he further aware that, although the Crown Estate has started applications for the licensing process, applications are being limited to 20 MW and five years, which is possibly a barrier to future development? Will he use his good offices to speak both to the companies that are making applications and the Crown Estate to see whether a better method can be found for applications?

Mr. Murphy: I listened with great interest to the hon. Gentleman’s genuine point. My hon. Friend the Under-Secretary and I recently met the Crown Estate, so I should be happy to meet him to discuss the issues that he raises. His point is important. For two centuries Scotland relied on its geology, through the exploitation of coal, for our energy. Now we increasingly have to rely on our geography, through the exploitation of natural resources, including wind and wave power.

Mr. Brian H. Donohoe (Central Ayrshire) (Lab): When he meets the energy companies, will my right hon. Friend raise the fact that although the prices of commodities in the market place have dropped like a stone in the past few months, that has not been passed on to consumers? What is he doing in that respect?

Mr. Murphy: It is entirely unacceptable if the energy companies do not pass on these lower prices to Scottish and UK consumers, and we will continue to press them on that point. Additionally, it is important that the social tariffs that have been announced are more highly publicised. They offer support for tens of thousands of Scots, and are worth hundreds of pounds. The energy companies must not only agree to the social tariffs but publicise them so that they can be taken up.

David Mundell (Dumfriesshire, Clydesdale and Tweeddale) (Con): Reference has already been made to the Scottish Council for Development and Industry report, but does the Secretary of State recognise that
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not only the business community but every other objective analysis suggests that if there are no new nuclear power stations in Scotland, the lights will go out? Can he offer any hope, not only on the security of energy supply in Scotland but on the economic benefits that the new nuclear development offers to constituencies such as my own, or does he share the nuclear industry’s pessimistic view that, because of the actions of the Scottish Parliament, there is no prospect of new nuclear development in Scotland in the foreseeable future?

Mr. Murphy: I should like to say to the hon. Gentleman:

[ Interruption. ] Hon. Members may scoff, but those are not my words; they are the words of Liz Cameron, the chief executive of the Scottish Chambers of Commerce. The fact is that the Scottish National party Government are isolated on this issue. Business, trade unions and experts know that the nuclear industry must be part of a balanced energy policy in the United Kingdom and in Scotland.

Post Office Card Account

3. Mr. David Hamilton (Midlothian) (Lab): What discussions he has had with ministerial colleagues on the use of the Post Office card account in Scotland. [240212]

The Parliamentary Under-Secretary of State for Scotland (Ann McKechin): My right hon. Friend and I have regular discussions with ministerial colleagues on a range of issues. I particularly welcome the awarding of the Post Office card account contract to Post Office Ltd.

Mr. Hamilton: I thank my hon. Friend for that answer. We should be talking about expanding post office services, and looking at the savings gateway project, which was announced by the Post Office last week. We should also be encouraging the roll-out of more free ATMs—many people are unaware that those operated by the Post Office are free. There are now only nine banks in my area, but there are 19 post offices, and we should also be considering expanding the post office network in such a way that it can become the people’s bank.

Ann McKechin: My hon. Friend is absolutely right. The Post Office is a trusted brand that is considered reliable, safe and secure, and I am delighted that the pre-Budget report announced that the savings gateway account will be available through the Post Office. We estimate that about 725,000 people in Scotland will be eligible to open an account from 2010. We all know that, in times of economic difficulty, saving even a small amount of money can make a real difference to the quality of people’s lives.

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