Scotland’s Place in the UK

Alistair Carmichael Excerpts

Thursday 6th February 2014 Commons Chamber

[The Secretary of State for Scotland (Mr Alistair Carmichael)]

Let me begin by congratulating the hon. Member for Glasgow North East (Mr Bain) on securing the debate and expressing my gratitude to the Backbench Business Committee for selecting it. It has been an excellent debate, made all the better by the fact that we have heard voices from the whole of the United Kingdom. It has brought contributions of both passion and intellect, and I think we should thank all who have taken part in it.

This is one of Scotland’s two Parliaments, and it is right that we should take the opportunity to discuss Scotland’s future at a crucial moment in our history. This Parliament makes key decisions for Scotland as part of the United Kingdom in many areas: the economy, defence, international relations and pensions, to list but a few. As an integral part of the United Kingdom, this Parliament, and those within it who represent constituents throughout the UK, make decisions on behalf of the whole of the United Kingdom. However, this Parliament also recognised in 1997 that some decisions are better taken closer to the people, and it was through this House that the Scotland Act 1998 was delivered, providing real devolution of power within a strong United Kingdom. That decision was revisited by the work of the Calman commission in 2008, and implemented in the Scotland Act 2012.

The balance of powers between this Parliament and the Scottish Parliament is a dynamic settlement, and will rightly continue to be so. The debate on where that balance is struck is a debate that presupposes our continued membership of the United Kingdom family, but the question that will face us on 18 September is quite different: should we remain part of that family, or should we become an independent country?

Choosing to leave the United Kingdom would be a fundamental and irreversible step. As part of the UK family, we have a shared history and share many common values. As part of the United Kingdom, those of us in Scotland—like people living in England, Wales and Northern Ireland—benefit from the UK’s size and scale. We also benefit from the UK’s international influence, and from its economic strength. Scotland, like the rest of the UK, contributes to those benefits. We contribute in all manner of ways: economically, culturally and socially. As the hon. Member for Carlisle (John Stevenson) put it: together, we are truly greater than the sum of our constituent parts.

If we vote for independence, however, we walk away from those benefits. Scotland’s future would be based on a series of protracted negotiations with dozens of different states and organisations. Which currency would Scotland use? How would Scotland join the EU, and what terms of membership would it be able to secure? Would Scotland have to join the euro or become part of the Schengen arrangements? These are all questions to which the people of Scotland want answers. The nationalists owe them answers, but so far they have failed to deliver them. The truth is that all these issues would require detailed negotiations to pull Scotland out of the United Kingdom family of which it has been an integral part for over 300 years and to establish a new set of international relationships. Independence is a 20th century—or maybe even a 19th century—solution in search of a 21st century problem. Across a world in which change comes at a breathtaking pace, the prevailing trend is to pull down barriers and borders, not to put them up.

[Mr MacNeil]

The right hon. Gentleman says that some questions need to be answered. We know that some of them can be answered only by the European Commission. As Scottish Secretary, he should be Scotland’s man in Westminster, rather than Westminster’s man in Scotland. Will he ensure that the UK Government go to the European Commission and get answers to those questions that he describes as vital?

[Mr Carmichael]

The answers to those questions, if they were ever to be posed, would not be given by the European Commission; they would be given by the 28 member states of the European Union. The hon. Gentleman gives me the opportunity to remind the House that we have already heard from a number of them that this would not be a straightforward, painless process. If Scotland walked away from the United Kingdom, she would walk away from membership of the EU and would be required to negotiate her way back in.

As part of the United Kingdom, Scotland enjoys the best of both worlds. We have a strong Scottish Parliament in charge of key areas of Scottish life: health, education, transport and criminal justice. When it makes sense to do so, key decisions of the state are reserved to the UK Government and Parliament here to be taken on behalf of all citizens across the United Kingdom. Ours is a flexible settlement. When it makes sense to do so, we revise the settlement to provide further powers and to increase the Scottish Government and Parliament’s responsibility and, crucially, their accountability, not just for spending money but for raising it too.

The Scotland Act 2012 will substantially increase the Scottish Parliament’s powers, and it does so on the basis of evidence, consensus and consideration, ensuring that we adapt and evolve, but never at the expense of losing what works well and what works in the interests of all, right across the United Kingdom. All this—the creation of a Scottish Parliament and the incremental provision of further powers for it—has been designed by Scots and delivered by Scots for Scots, through this United Kingdom Parliament. Our devolution settlement is well and truly stamped “Made in Scotland”.

Right now, however, the issue on which we are all focusing is whether Scotland will remain part of the Union. Let me turn to the question of currency. It has featured strongly in this debate, and little wonder. The currency that we use is vital to all of us. It is vital for individuals buying food and paying off loans; for businesses paying employees, and trading with one another and across borders; for our banks and financial institutions; and, of course, for Scotland’s economy as a whole. Last week, the Governor of the Bank of England, Mark Carney, set out his views on currency unions in very measured and, as he described it, “technocratic” terms. Governor Carney highlighted the principal difficulties of entering a currency union: losing national sovereignty; the practical risks of financial instability; and having to provide fiscal support to bail out another country. A currency union would involve giving up some national sovereignty over economic policy. Why would it be in an independent Scotland’s interest to join a currency union?

[Mr MacNeil]

rose—

[Mr Carmichael]

It was not worth taking the hon. Gentleman’s last intervention, so I am not going to take this one.

Joining such a union would result in severe limits to Scotland’s economic freedom and a risk of losing economic resilience and credibility. What about the continuing UK? We heard about this from the hon. Member for Chichester (Mr Tyrie). A currency union would expose the continuing UK to the risk of bailing out banks in an independent Scotland if they were to get into difficulties again—these would be banks over which it would have no control, their being regulated under a different system in a foreign country. That is why we have consistently said it is highly unlikely that a currency union could be agreed, because it is highly unlikely that a currency union could be made to work. No one should vote for an independent Scotland on the basis that they will get to keep the UK pound sterling. Independence means leaving the UK’s monetary union; the only way for Scotland to be sure of keeping the UK pound as it is now is to stay in the UK. Nothing the Scottish Government have asserted changes that reality.

Earlier this week I was asked by a journalist what I expected to be doing on 19 September this year. I was able to reply that I am almost certain that I shall be celebrating the continuation of a highly successful Union, one that has been built on shared effort, common endeavour and, yes, love—19 September will be my 27th wedding anniversary. As I celebrate that anniversary with my English-born wife and my half-English, half-Scottish children, I am confident, but by no means complacent, that we shall be able to toast the continuation of that other highly successful Union, the one between England, Scotland, Wales and Northern Ireland.