Lord Cameron of Lochiel
To ask His Majesty’s Government what steps they are taking to strengthen Scotland’s position within the United Kingdom.
The Lord Privy Seal (Baroness Smith of Basildon) (Lab)
My Lords, the people of Scotland deserve Governments who work together and are focused on delivering for them. Within the UK, Scotland will be the powerhouse for our clean energy mission, with Great British Energy’s headquarters being based there. We will restore decision-making over the allocation of structural funds to representatives of Scotland and we will champion Brand Scotland at home and abroad.
Lord Cameron of Lochiel (Con)
Of course, one way to strengthen Scotland’s position within the United Kingdom is to support our key industries. However, last week’s Budget saw a 2.7% increase in spirits duty—a move described as a betrayal by the Scotch Whisky Association. The whisky sector sustains thousands of jobs, mainly in Scotland’s most rural and remote communities. Can the Minister explain why this Government have chosen to punish such an iconic industry?
Baroness Smith of Basildon (Lab)
My Lords, if the noble Lord checks back to past Budgets, I think he will find that previous Chancellors from his side of the House put more of an increase on Scotch whisky, whereas this was an increase in line with RPI. If he looks at the Budget overall, he will see that the amount awarded to Scotland is actually significantly greater than at any other time since devolution.
Lord Browne of Ladyton (Lab)
My Lords, under this Government’s predecessor, with the SNP in government in Scotland, the relationship between Holyrood and Westminster was at best uneasy and too often characterised by mutual suspicion and sometimes open acrimony. Given Labour’s record on devolution, what lessons have been drawn from last month’s inaugural meeting of the Council of the Nations and Regions on resetting the relationship between the Scottish and UK Governments, which of course is a manifesto pledge?
Baroness Smith of Basildon (Lab)
My Lords, we have thought about this a lot and, going forward, it is key to how we work across government. It goes back to the idea that we are stronger together. Unless both Governments work together, in the interests of the people of Scotland, we will not get the best outcomes for them. I think it also means, as my noble friend will be aware, that devolution does not mean that the British Government should abdicate their responsibilities to Scotland. We have a very strong role, and we remain committed to strengthening the union.
Lord Bruce of Bennachie (LD)
My Lords, does the Minister accept that for many people in Scotland, especially young people and businesses, the benefits of being part of the United Kingdom would be considerably strengthened if the Government’s reset with the European Union included accepting the youth mobility scheme, rejoining Erasmus, securing flexible visa arrangements for our creative industries and working to rejoin the single market?
Baroness Smith of Basildon (Lab)
My Lords, that question goes a little wider than anticipated, but I admire the noble Lord’s ingenuity. The important thing for young people and older people across the UK is to know that they have a Government who work with the devolved Governments in their best interests. That is what has been lacking for some time.
Lord Foulkes of Cumnock (Lab Co-op)
My Lords, can the Leader of the House confirm that this is the best settlement in real terms since the Scottish Parliament was set up, and yet the services in education, health and other devolved areas are deteriorating in Scotland? Will the Government do everything possible to stop the Scottish Government spending money on vanity projects, such as “Air Miles” Angus—their pretend Foreign Secretary—travelling the equivalent of three times around the world already? Can they make sure that every penny the Scottish Government get is spent on devolved areas?
Baroness Smith of Basildon (Lab)
I think my noble friend hits the nub of the issue. Yes, he is right, and I am happy to agree with him: it is the largest real-terms Budget settlement for the Scottish Government in the history of devolution. It is £1.5 billion in this financial year and will be £3.4 billion in the next. The point he made is that how that money is spent is really important. We have seen poorer outcomes in Scotland for people in the National Health Service, with longer waiting lists, and educational standards have not increased as they should. This is where that money should be focused—to deliver real benefits for the people of Scotland.
Lord Stirrup (CB)
My Lords, would the Leader agree that the presence of one of the RAF’s main operating bases on the Moray Firth and one of the Navy’s at Faslane, along with a number of Army units, reflect the strategic importance of Scotland within the union? They bring significant economic benefit to those areas, a situation that would be greatly enhanced if this Government could ever get around to funding defence of the realm adequately.
Baroness Smith of Basildon (Lab)
There is always a sting in the tail, is there not? We do recognise the contribution they make, both to the defence of the country and the economy. The Government remain committed to reaching 2.5% GDP defence spend. The noble and gallant Lord will be aware, as will the House after the sterling efforts of my noble friend Lord Livermore, that we have been left with a £22 billion black hole—
Baroness Smith of Basildon (Lab)
The party opposite may not like it, but the reality is that we have to get the finances of this country on a stable footing, and I can assure the House that that is what we shall do.
Lord McNicol of West Kilbride (Lab)
My Lords, what discussions have His Majesty’s Government had with the Scottish Government following the launch last month of the UK industrial strategy? Have the specific Scottish commitments in it, on medicine manufacturing, offshore wind and the Advanced Forming Research Centre in Strathclyde, been welcomed by the Scottish Government?
Baroness Smith of Basildon (Lab)
My Lords, if they have not, they should be. The industrial strategy is the core of our mission for economic growth, and the meetings so far have been very positive. We have published the Green Paper, which will kick-start our programme on this. It is a modern industrial strategy for the days and years ahead for this country. It will be published next spring, and it will be in line with the multiyear spending review. Unless we take advantage and make the most of growth across the whole of the UK, we will deny the people of Scotland and of this country the benefits of a strong economy that they deserve.
The Earl of Kinnoull (CB)
My Lords, the last quarterly report on intergovernmental relations between the four Governments was produced by the Department for Levelling Up, Housing and Communities, as it then was, and it arrived in December last year. Will these quarterly reports still be produced? Will they move to the Cabinet Office?
Baroness Smith of Basildon (Lab)
I do not have a precise answer for the noble Earl, but I will look into this. It is important that this is at the heart of government, with the responsibility lying there. I am confident that we will find a way of making progress and of marking that progress in a way that is easily understood. I will take a precise note of the noble Earl’s question and come back to him with a fuller answer.
Lord Fox (LD)
My Lords, the reason behind the breakdown in the relationship that the noble Lord pointed out was that, through the last Parliament, there was a continual flow of legislation that trod on the toes of the devolution process. The noble Baroness knows well that the common frameworks process was set up explicitly to deal with these kinds of issues. Can she update your Lordships’ House on where we are with the common frameworks and when we will see them back in the process of making sure that toes do not get trodden on again?
Baroness Smith of Basildon (Lab)
The noble Lord makes an important point. In some ways it is the opposite—the other side of the coin—to that made by the noble Lord, Lord Foulkes. We have reserved and devolved matters, and it is about making sure that we stick to our responsibilities and work together. The only way this works is with each Government having respect for the other and working together, so I assure him that that is what we seek to do and will continue to do.
Baroness Liddell of Coatdyke (Lab)
My Lords, is the noble Baroness aware that £47.7 billion was given to the Scottish Government last week—the highest amount in history? Will she join me in congratulating the Chancellor on that distinctive amount of money? But will she also call into question some of the expenditure mentioned by the noble Lord, Lord Foulkes, on vanity projects, rather than turning round the economy of Scotland, as it deserves? Incidentally, the money was made available because of a former Member on this side of the House, Joel Barnett—Lord Barnett—and it was supposed to be only a short-term measure, but it has been about 40 years now.
Baroness Smith of Basildon (Lab)
My Lords, it sometimes feels like 40 years can go by in the blink of an eye in your Lordships’ House. I remember Lord Barnett well. The noble Baroness is absolutely right: the real-terms increase of £3.4 billion next year takes Scottish funding to £47.7 billion—the largest settlement ever in devolution history. Of course, that is on top of the £125 million confirmed for GB Energy. We have also committed funds to Brand Scotland, which will promote investment opportunities in Scotland. The noble Baroness’s basic point is important: the additional money is supposed to directly benefit the people of Scotland, in the economy, health and education. We look forward to working with the Scottish Government to make sure that that is the case.