Smith Commission

Alistair Carmichael Excerpts

Thursday 27th November 2014 Commons Chamber

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

With permission, Mr Speaker, I shall make a statement to the House about the further devolution process in Scotland and the publication of the heads of agreement resulting from Lord Smith’s five-party talks. As the Prime Minister has already said this morning, we back the agreement and its recommendations, and will produce draft legislation in January.

The referendum on independence that was held on 18 September 2014 saw Scotland vote decisively to remain within our UK family of nations of England, Wales, Scotland and Northern Ireland, backed by the strength, security and stability of the United Kingdom. The turnout across Scotland was nearly 85%, and more than 2 million people made a positive choice for Scotland to remain part of the UK.

During the referendum campaign, the Prime Minister, the Deputy Prime Minister and the Leader of the Opposition made a joint commitment to deliver more powers to the Scottish Parliament. The Smith commission, chaired by Lord Smith of Kelvin, was up and running on 19 September, and Lord Smith convened cross-party talks to reach agreement on the proposals for further devolution to Scotland. The process has been thorough and extensive. The party representatives were drawn from the five main political parties in Scotland; this was the first time ever that all five had participated in a devolution process.

I would echo the comments of Lord Smith in the foreword to his report:

“This agreement is, in itself, an unprecedented achievement. It demanded compromise from all of the parties. In some cases that meant moving to devolve greater powers than they had previously committed to, while for other parties it meant accepting the outcome would fall short of their ultimate ambitions. It shows that, however difficult, our political leaders can come together, work together, and reach agreement with one another.”

In preparing the report, Lord Smith heard from a wide range of Scottish civic institutions and members of the public. Over 400 submissions were received from organisations and groups, and over 18,000 submissions, including e-mails, letters and signatures to petitions, from people across Scotland.

The Smith commission has today produced comprehensive heads of agreement ahead of the St Andrew’s day deadline contained in the timetable. This is a significant achievement and historic moment for Scotland. I thank Lord Smith and the party representatives for their work. They have worked hard against a challenging timetable, covering an enormous area of ground. This work will deliver a substantial package of new powers to the Scottish Parliament.

The heads of agreement provide for a durable but responsive constitutional settlement for Scotland within the United Kingdom. They give greater financial responsibility to the Scottish Parliament, with an updated fiscal framework for Scotland, consistent with the UK fiscal framework. For the first time, over 50% of the money spent by the Scottish Government will be raised by the Scottish Government. That is an important step which builds on the measures brought forward by this Government in the Scotland Act 2012, and further increases the financial accountability of the Scottish Parliament to the Scottish people.

The recommendations provide for key welfare measures to be designed by and delivered in Scotland. That will give the Scottish Parliament the tools—and the responsibility—to tackle a range of issues with specific consideration of local circumstances, including those related to social care, long-term unemployment and housing, while continuing to benefit from the strength and stability of the UK-wide system.

The recommendations build on the already significant powers of the Scottish Parliament in social justice and a range of other policy areas. Together, those recommendations give greater responsibility for more decisions affecting Scotland to be made in the Scottish Parliament and paid for by revenue raised by the Scottish Parliament. However, further devolution is just one part of this story. People in Scotland were unequivocally clear on 18 September that Scotland should retain the security of being part of our United Kingdom. The Smith commission’s remit was clear—to set out proposals for further devolution within the United Kingdom—and that remit was signed up to by all parties participating in the process, including the Scottish Government. The conclusions reached by the parties ensure a set of proposals that do not cause detriment to the UK as a whole or any of its constituent parts. The Government are committed to ensuring that Scotland and the whole of the United Kingdom continue to prosper from our single domestic market, our social union and the strength that comes from the pooling and sharing of risks.

People in Scotland voted on 18 September for the jobs and opportunities that are created by being part of a larger United Kingdom with one currency, no borders and more money to spend on public services. People in Scotland want to keep the advantages of the UK pound, UK pensions, UK armed forces and a strong UK voice in the world. The package that has been announced today allows that to happen.

As the Prime Minister has already made clear, the Government back the heads of agreement and their recommendations and we shall get on with producing draft legislation. The draft clauses will be produced by Burns night, 25 January, meeting the next phase in our commitment to the people in Scotland. That work begins today. A team has been brought together with leading officials in the Scotland Office, HM Treasury, the Department for Work and Pensions and the Cabinet Office. That team will work closely with all lead policy Departments within the UK Government. The team will remain in place to deliver a Bill in the UK Parliament following the next general election.

To support the preparation of the draft legislation, I have invited key Scottish stakeholders representing a wide range of sectors to form a stakeholder group. I shall provide further details of the membership and terms of reference of the group in due course, but it is my intention that it will support the Government’s work translating the heads of agreement into the draft legislation that we shall publish by 25 January. As Lord Smith said in his foreword:

“Through this process I have worked closely with people who can argue passionately with one another while sharing an equal concern and love for their country. I would like to thank them all for their input, challenge and support. I hope that, in the end, they can work together, maintain their energy and use it to create a Scotland which is even stronger and even better.”

Having a more powerful Scottish Parliament inside a strong United Kingdom is the best outcome for the people of Scotland and the people of the United Kingdom. This is what we voted for on 18 September. Today’s report is an affirmation of the vow that was made in September. It is a historic moment for Scotland.

The cause of home rule has been at the heart of Scottish politics since the days of Gladstone. This agreement provides a modern blueprint: Scottish home rule within our strong United Kingdom—home rule for Scotland that can open the door to constitutional reform for the rest of the United Kingdom. We can achieve home rule all round.

[Margaret Curran (Glasgow East) (Lab)]

I thank the Secretary of State for advance sight of his statement, and join him in thanking Lord Smith of Kelvin for his work and his report, and indeed all the commissioners. I want to pay particular tribute to my right hon. Friend the Member for Kirkcaldy and Cowdenbeath (Mr Brown), whose proposals during the referendum set us on the way to delivering this momentous agreement to deliver a powerhouse Parliament.

As the Secretary of State has said, this is a historic day for Scotland. Ten weeks ago the people of Scotland—in overwhelming numbers—confirmed Scotland’s place in the United Kingdom. It was a decision made on the highest turnout ever seen in these isles, and it was a vote for change: change in the way Scotland is governed, change that will see more decisions taken closer to people, but safer, faster, better change as part of the United Kingdom. This is a promise kept and an agreement delivered.

The Labour party was very clear that we would honour the promises made during the referendum, and we have delivered. As the Secretary of State has said, this has been achieved in a co-operative and constructive process, working in the spirit of consensus that people across Scotland expect. That is why we wholly endorse the recommendations of the Smith commission and we give our guarantee to the people of Scotland that if—or, rather, when—we are in government after May, we will legislate for these powers in our first Queen’s Speech.

This agreement will see more powers over tax, welfare and jobs transferred to the Scottish Parliament. We have secured guarantees over the voting rights of Scottish MPs on the Budget and on the continuation of the Barnett formula. We believe this provides the best deal for the people of Scotland. In fact, today’s deal is more radical and goes further than many had anticipated. We on this side of the House believe that the principle we have worked for today—pushing power closer to people—is one that should be followed across Britain. That is why we will continue to call for a constitutional convention to be established to consider how this can be achieved, working with all the nations and regions of the United Kingdom.

Now that agreement has been reached, will the Secretary of State tell the House how the recommendations of the Smith commission will be implemented and what the timetable will be, and will he specifically and in detail outline how hon. Members will be involved in this next stage of the process, as the draft clauses are produced? Given the success of cross-party working that is inherent in the work of the Smith commission, will the Secretary of State outline how the parties will be involved in this stage, and how the Opposition will be consulted on the details he announced in his statement?

As Lord Smith pointed out in his statement this morning, these additional powers will also mean that the Scottish Parliament’s own processes will need to be strengthened to enable it to hold the Government to account. Will the Secretary of State tell the House what consultation there will now be with the Scottish Parliament to ensure that it is well prepared for this transfer of powers?

Lord Smith also recommended closer working between the Scottish Parliament and Government and the UK Parliament and Government. How does the Secretary of State intend to take forward that recommendation and ensure that Members of this House become involved?

For the past two years, our country has been divided along yes and no lines. Today marks an important moment. There are no longer yeses and noes, just Scots with new powers, and we look forward to working across Scotland to deliver them. Labour will deliver those new powers in our first Queen’s Speech in May. More power is now in Scotland’s hands, and it is for all of us to work together to create that better Scotland.

[Mr Carmichael]

I acknowledge that this process has not been easy for any of the parties; it has involved compromise on all sides. I pay tribute to the hon. Lady and her colleagues in the Scottish Labour party for the compromises and progress that they have made. They have acted in accordance with the spirit that was expected by the people of Scotland following the referendum vote.

The hon. Lady mentioned the proposals for the rest of the United Kingdom. As I have said at the Dispatch Box on a number of occasions in recent weeks, that debate is now happening and I welcome it. I share her enthusiasm for a constitutional convention. She will be aware that the Government have set up a Cabinet Committee to look into the wider issues of devolution in other parts of the United Kingdom, and I deeply regret that her party has chosen not to take part in that. I hope that, even at this late stage, Labour Members will change their minds. She and her right hon. and hon. Friends can anticipate receiving an invitation soon to contribute to the Command Paper that the Government will be bringing forward, so if they have proposals, we will be interested to hear them.

The hon. Lady asked about the implementation of the heads of agreement. As I explained in my statement, a stakeholder group will be set up, and I anticipate there being opportunities for all parties—and, indeed, for groups beyond the political parties—to have a role in that. I will update the House on that as soon as possible.

One of the most important and prescient observations that Lord Smith made in his personal recommendations was that there should be closer working not only between the two Governments—which has long been accepted to be the case—but between the two Parliaments. Indeed, it was suggested that you, Mr Speaker, might soon consider meeting the Presiding Officer of the Scottish Parliament to build that co-operation between the two Parliaments and the two Governments. Those recommendations have a great deal to recommend them. The hon. Lady asked how the recommendations in the report would be implemented, and I can tell her that they will be implemented without hesitation, reservation or equivocation.

[Mr Speaker]

I meet the Presiding Officer of the Scottish Parliament regularly—a fact of which I suspect colleagues might be aware—and I am very happy to meet her as necessary.

[Sir Gerald Howarth (Aldershot) (Con)]

May I say to the Secretary of State that this is no way to introduce massive constitutional change to our country, given the major implications for the rest of the United Kingdom, which has not been consulted at all, not least on the question of how English votes are to be applied to English laws? Does he believe that these proposals will contain or further inflame separatist sentiment in Scotland?

[Mr Carmichael]

In Scotland, on 18 September, we decided that we wanted to remain part of the United Kingdom. That was clear and unequivocal, and it is that position that we are now entrenching. To answer the hon. Gentleman’s last question, I believe that these proposals will strengthen the position of Scotland and the United Kingdom for the future. I am sensitive to his concerns about the need for constitutional change in other parts of the United Kingdom and I understand that there is an imbalance within our current constitutional framework. Let me tell him that that was the case before we set up the Scottish Parliament in the first place—it was one of the reasons we set up a Scottish Parliament. The process has been an evolutionary one across the UK and that evolutionary process must now continue. I hope that he and his colleagues, in England in particular, will now take to that debate with enthusiasm and build a consensus that can bring forward the change that is necessary.

[Mr Alistair Darling (Edinburgh South West) (Lab)]

I, too, welcome the proposals being made by the Smith commission today, transferring, as they do, not just more powers but significant new responsibilities that will be taken on by the Scottish Parliament. As we implement those and discuss, as we must, further devolution to other parts of the United Kingdom, will the Secretary of State ensure that we do nothing that undermines the integrity and the strength of the United Kingdom? In particular, will he ensure that we do not undermine the fiscal union, which is one of the central pillars of that United Kingdom? The majority of people in Scotland voted clearly to stay within the United Kingdom, and I believe the majority of people in the entire United Kingdom want to see it continue. We must be very careful to manage this carefully—other big countries have done it and we can do it, too.

[Mr Carmichael]

I do not disagree in any way, shape or form with what the right hon. Gentleman says. Indeed, the sentiment he refers to was reflected in the remit we gave Lord Smith and then in the principles that underpinned his work—the principles agreed by all five parties to the discussion. I believe that what they have brought forward today is entirely consistent with those principles.

[Sir George Young (North West Hampshire) (Con)]

Does my right hon. Friend agree that it is important for the integrity and credibility of the political process in this country that commitments given by political leaders during the referendum campaign are honoured? Does he further agree that the proposals he has just announced further accentuate the imbalance in the British constitution between England and the rest of the United Kingdom? Does he therefore agree that it would be wrong, as some have proposed, to kick the McKay proposals into the long grass? They now need to be addressed with some urgency.

[Mr Carmichael]

I could not agree more with the right hon. Gentleman on the importance of honouring the vow that was made, and that is what we are about today. As I have acknowledged, there is currently an imbalance within the UK constitutional framework. As a federalist, I have long believed that that needs addressing. I do not think anything should be kicked into the long grass. He has been involved in the management of this House in various capacities for many years now, so he will be as aware as I am that once these things are changed it is difficult to change them back if we get them wrong. There is a need for constitutional reform and it goes far beyond the Standing Orders of this House.

[Stewart Hosie (Dundee East) (SNP)]

I thank the Scottish Secretary for his statement, and Lord Smith and the commissioners for their work. The substantive parts of this are the devolution of less than 30% of Scotland’s tax base and of less than 20% of welfare, and the assignation of a share of VAT. Although that is interesting as far as it goes, I note the absence of other substantive job-creating powers. The Scottish National party will not stand in the way of these powers; it is important to put that on the record, and I do welcome the report as modest progress. However, will the Scottish Secretary confirm that however they are dressed up, these proposals do not reflect the powerhouse Parliament that many in Scotland believed they had been promised before the referendum?

[Mr Carmichael]

First, let me try to adopt a more appropriate tone than the hon. Gentleman has perhaps just done and congratulate him on his recent election to the position of deputy leader of his party. It is unfortunate that he did not use the word “welcome”; there are significant job-creating powers in this package and the Scottish Parliament already holds significant job-creating powers. If Nicola Sturgeon is sincere when she says that she wants to govern for the whole of Scotland, she should get on and use the powers that she has, welcome the ones that she is getting and use them for the benefit of the people of Scotland.

The hon. Gentleman predictably and depressingly seeks to suggest that this is not a fulfilment of the vow. Well, the vow is on the front page of the Daily Record. For the benefit of the House, I have brought that paper with me today. The front page says, “The vow delivers.” Let me draw the House’s attention to the article itself. On page 3, it says that

“it’s is now clear that they”—

David Cameron, Nick Clegg and Ed Miliband—

“have stood behind this agreement to deliver change. Lurid claims to the contrary by some pro-Yes commentators”—

it must have known what the hon. Gentleman was going to say—

“have been shown to be false.”

That is the assessment of one of Scotland’s leading papers. It is more to be relied on than the views of the hon. Gentleman.

[Sir Menzies Campbell (North East Fife) (LD)]

My right hon. Friend can now be assured of some favourable remarks in relation to what he has just said about the Daily Record. He will not be surprised that I, rather less grudgingly, welcome both the process behind the proposals and the proposals themselves. Does he understand that I welcome the accusation that these proposals are federal in nature, because it is in federalism that we will find the best constitutional solution to meet the aspirations of all four of our nations and, at the same time, secure the advantages of a secure United Kingdom? Is not the truth now that we should all be federalists?

[Mr Carmichael]

Speaking for myself, I always have been a federalist. Indeed, I understand that I can now count on the support of the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown) in that aspiration. May I also recognise the pivotal role that my right hon. and learned Friend took in the formulation of my own party’s proposals? His commission was the first intervention in this debate, and it very much established the tone and set the bar at a level that others felt it necessary to clear. Ultimately, a federal structure is what this country needs. It works perfectly well—in fact it works much better—in countries around the world. Clearly, it will take time. What we are about here today is delivering in the here and now on the pledge that we made in the referendum.

[Mr Ian Davidson (Glasgow South West) (Lab/Co-op)]

I seek clarification from the Secretary of State as to whether the support of the Smith commission was unanimous. If that is the case, great credit is due to the Greens and to the SNP in particular for being willing to sit down and collaborate with the Liberals, the Conservatives and Labour to find something around which we can all agree. I hope the right hon. Gentleman agrees that if we have had unanimity in producing the report of Smith, we now must have unanimity in implementing it.

[Mr Carmichael]

That unanimity is important. I understand that that was the basis on which the agreement was made. Unfortunately, given the tone of some of what we have heard today, John Swinney, who by all accounts performed a significant role in the commission, has not been able to bring everyone in his party with him. That is to be regretted.

[Mr John Redwood (Wokingham) (Con)]

Does the Secretary of State agree that once Scotland is determining her own income tax rates and bands in the Scottish Parliament, it would be quite wrong for Scottish Members of this Parliament to be trying to fix those bands and rates for the English?

[Mr Carmichael]

I commend to my right hon. Friend the terms of the Smith report, which make it clear that income tax means a tax shared between the two Parliaments.

[Mr Graham Allen (Nottingham North) (Lab)]

I welcome the report. This is a great day for democracy and what is good enough for Scotland is now good enough for England. The Secretary of State will have seen in The Times today a letter from local government leaders from the greatest to the smallest asking for devolution in England. Rather than having to drag it out of Whitehall over 20 years, as Scotland did, through lobbying and referenda-ising, we should get to this quickly. If we do not, through our sloth the Secretary of State might create in England the same nationalism as was evident in Scotland, which I think he would regret. Will he not keep putting this off and talking about constitutional conventions that might never report? We know what we need to do: put it in the manifestos, unite the House and give England local devolution, as Scotland is now getting.

[Mr Carmichael]

I congratulate the hon. Gentleman, as I suspect that that is the first time that Hansard will have been required to record the word referenda-ising. It is novel and creative. I am not entirely sure whether the growth of nationalism in the different parts of England will be a consequence, but having sat through a six-hour debate just a few weeks ago in this House on the subject of devolution across the whole United Kingdom, I would say the one thing that was clear at the end of the debate was that there is not yet consensus—[Interruption.] It might well need leadership, but leadership alone will not be enough to build consensus. The hon. Gentleman would do well to listen to the words of his own Front Benchers on the question of a constitutional convention. That is not a delaying tactic, as he seems to think. In my view, it is the only feasible way of building consensus to get the change that is wanted.

[Mr Andrew Tyrie (Chichester) (Con)]

The report is a welcome first step towards stabilising the Union, redressing a Scottish grievance, and the Treasury Committee will consider it as part of its inquiry into fiscal devolution. Does the Secretary of State agree that another crucial step must be to redress an English grievance: that Scottish MPs vote on English laws? That must end, notwithstanding the curious wording of paragraph 75 of the agreement. Does he further agree that the English must have a veto on all laws that largely or exclusively affect them, and that the case for that is all the stronger with full devolution of income tax? Nothing less will do.

[Mr Carmichael]

It is because we understand the need for change—as I have said already, I and the whole Government are sensitive to that wish for change—that we have set up the process that is being led by my right hon. Friend the Leader of the House, which is aimed at building consensus to bring about that change.

[Ann McKechin (Glasgow North) (Lab)]

I welcome the comprehensive cross-party consensus to work together for the benefit of the whole of Scotland that the Smith commission has achieved. The Secretary of State will be aware, as I mentioned this to him in Scottish questions yesterday, that there is a growing tax gap, given that there is a higher proportion of basic rate taxpayers and we still do not know how those on the highest incomes, such as Brian Souter, might divert their tax bases so that they do not become liable for Scottish tax rates. Before we produce a White Paper next year, may we have a full analysis from the Treasury of the tax base, so we can make sure that any final block settlement accurately reflects the tax raised in Scotland and ensures that we do not end up with Scotland having a worse deal?

[Mr Carmichael]

Today’s publication and the agreement we have offer us a range of opportunities in Scotland. In particular, we can do the things for the Scottish economy that will produce the growth that will expand that tax base. The important point is that, having made this decision, we should get on and implement it and then start using the powers, rather than constantly talking about our constitutional position.

[Mr Christopher Chope (Christchurch) (Con)]

How does today’s report fit in with the promise made by the Prime Minister on 19 September that any change giving more devolution in Scotland would go in tandem with, and at the same pace as, changes in the rest of the United Kingdom?

[Mr Carmichael]

No. I have to contradict my hon. Friend. It has been made perfectly clear all along, and the Prime Minister himself has said, that the change that was promised to Scotland will go ahead according to the timetable that was given to the people of Scotland. It is not contingent on other changes.

[Mr Jim Murphy (East Renfrewshire) (Lab)]

I welcome today’s statement and I think people across Scotland will welcome it. The referendum changed Scotland, and today’s statement is confirmation that we need to respect the wishes for change of the no voters and reach out to many of those who voted yes as well. In welcoming the tax powers, may I point out that the new welfare powers are just as crucial? Will the Secretary of State confirm that the new welfare powers total perhaps as much as £3 billion of new responsibility for the Scottish Parliament and the Scottish Government, and that he is minded to enable the devolution of those powers at a pace and in a manner that will enable Scotland to challenge poverty and the generational disadvantage that blights far too many families?

[Mr Carmichael]

I can confirm the figure that the right hon. Gentleman has put to the House. What is being offered to the Scottish Parliament is the power to design a welfare system that is fit for purpose in Scotland. That will be one part of tackling the generational issues of poverty and social exclusion to which he refers. The increased powers in job creation and taxation, especially income tax, and the powers to grow the economy in Scotland, can be used to tackle the issues that the right hon. Gentleman is so right to highlight.

[Sir Robert Smith (West Aberdeenshire and Kincardine) (LD)]

During the referendum campaign, the four party leaders made commitments to the Scottish people. Today we see three party leaders delivering on the vow that they made. Does my right hon. Friend agree that the best way forward for Scotland is for the SNP to acknowledge their leader’s statement that this would be a once-in-a-generation referendum?

[Mr Carmichael]

Indeed; I could not agree more. The Prime Minister, the Deputy Prime Minister and the Leader of the Opposition made a vow during the referendum campaign. Today we honour that vow. The former First Minister and his successor—Alex Salmond and Nicola Sturgeon—also made a vow. They said that they would respect the outcome of the referendum and the decision of the people of Scotland. There is no reason from today for them to do anything other than to make it clear that we will not be returning to this question in a referendum, as they said, in a generation.

[Dame Anne Begg (Aberdeen South) (Lab)]

I, too, welcome the announcement today. It has delivered more than the vow—perhaps we could call it the vow plus. There is certainly more in the statement than was expected.

I welcome the fact that quite a lot of welfare is to be devolved, but it is right that pensions, especially the state pension, should remain reserved, because throughout the campaign and in all the polling, Scottish people, even many yes voters, thought that pensions should remain part of the UK. When can we expect to see the detail of how some of this will work in practice? Not until the detail is available to all Members will we know whether it is practical or not that some of these powers should be devolved.

[Mr Carmichael]

I like the hon. Lady’s formulation, “the vow plus”. My party leader in Scotland, Willie Rennie, said this morning that this was “the vow max”. I agree with him on that. The hon. Lady is right to highlight that the state pension will remain part of the United Kingdom welfare system. That is one of the most significant parts of the social union that the people of Scotland chose to remain part of on 18 September.

As for the detail, as Chair of the Work and Pensions Committee, the hon. Lady will doubtless have an important role to play in working it out.

[Mr Andrew Robathan (South Leicestershire) (Con)]

When a healthy majority of our fellow countrymen in Scotland voted to remain in our country, the United Kingdom, it seemed to me that they voted against the petty-minded, mean-spirited and spiteful nationalism that we see from the SNP, yet these proposals seem to be delivering deeper and greater separation between the component parts of the United Kingdom. When Tony Blair introduced his proposal for devolution, which I considered pretty half-baked, he said that it would end the rise of nationalism and cement the United Kingdom. Will my right hon. Friend explain what it is about today’s proposals that will cement the United Kingdom and not lead to yet greater demands for separation of the structure of our country?

[Mr Carmichael]

In the course of the referendum campaign all three parties made a vow. It is absolutely essential that we deliver on that vow in the way we are doing today. The UK constitution is a dynamic model—it always has been and it always will be. It is one of the advantages of having an unwritten constitution, as we do. So yes, as I said earlier today, I remain sensitive to the wish of people in England in particular to see a reformed constitution working better for them. It is up to them to decide exactly what that means. We have done it for ourselves in Scotland. They now need to follow suit.

[Sandra Osborne (Ayr, Carrick and Cumnock) (Lab)]

I am pleased that, contrary to reports, it has been decided not to recommend devolving abortion, which would have caused all sorts of problems. This is a very exciting day for Scotland, a day we should celebrate. I was going to say that we should put the cynicism and division of the past few years behind us, until I heard the hon. Member for Dundee East (Stewart Hosie). Will the Scottish people be informed on an individual household basis of the eventual legislation that comes forward, as happened during the referendum? May I ask the Secretary of State to come to the birthplace of our national bard on 25 January to announce the draft legislation?

[Mr Carmichael]

That sounds an enticing prospect. Subject to diary commitments—my own diary gets fairly full around Burns night—I would be more than happy to accommodate the hon. Lady’s request if at all possible. She raised the matter of abortion, the terms of the report in relation to which she will have seen. There is a clear statement that it is considered by the commissioners to be an anomalous reservation, and I can understand why they take that view. However, we have always dealt with abortion differently—we have always made it the subject of a free vote in this House, for example—and the commission reached a sensible compromise by recognising the current anomaly, but saying that a new process will have to be devised to deal with that. I hope that process can involve parliamentarians and civic groups beyond the two Parliaments, which might in some way build a measure of consensus.

[Sir Edward Leigh (Gainsborough) (Con)]

Unfortunately, there appear to be a number of lacunae, inconsistencies and unanswered questions in the report. If we rush this process, we are in danger of throwing petrol on the embers of English resentment and Scottish separatism. I pose one question out of many: paragraph 95(5)(a) states:

“The Scottish Government’s borrowing powers should be agreed by the Scottish and UK Governments”.

Does this mean that their borrowing will be underwritten by the UK Parliament?

[Mr Carmichael]

No. Obviously, if the Scottish Government were to borrow, they would have the liability under the borrowing powers. On the hon. Gentleman’s earlier observations about what he perceives as lacunae, the resulting measure, when introduced as legislation in the Queen’s Speech following the election, will still be subject to the full scrutiny of this House and the other place, whoever is standing at the Dispatch Box at the time. I am confident of the abilities of this House and the other place, and that what we will have at the end of the day will work.

[Cathy Jamieson (Kilmarnock and Loudoun) (Lab/Co-op)]

If the Secretary of State manages to visit the constituency of my hon. Friend the Member for Ayr, Carrick and Cumnock (Sandra Osborne), he would be most welcome to cross the border into Kilmarnock and Loudon—of course, Robert Burns lived in the village of Mauchline and had his works published in Kilmarnock. Will the Secretary of State confirm that the powers that will now be given, in addition to welfare and taxation, include responsibility for the Work programme? That will give the Scottish Parliament a real opportunity to add to its existing powers in respect of economic development in order to get people back to work, which is what many of our constituents will be concerned about.

[Mr Carmichael]

I would be delighted to join the hon. Lady in her constituency as part of this grand Burns tour that I seem to have signed up to—I just hope that Opposition Members will not start complaining about the cost. She will see that the Work programme is to be devolved, which I think is sensible. Indeed, it was something John Swinney spoke about many times when I shared platforms with him during the referendum campaign. They have the powers; they just have to get on and use them.

[Sir Tony Baldry (Banbury) (Con)]

Should not those of us who believe in lower taxes welcome this proposal’s potential to encourage a healthy competition between London and Edinburgh over which sets the lowest rate of income tax? If Edinburgh sets a significantly higher rate than this Parliament, there will be a movement of talent from Scotland down south. Likewise, if we set a higher rate than Edinburgh, people will start moving to Scotland. That competition should hopefully lead to lower rates of tax.

[Mr Carmichael]

That is indeed one of the possible consequences. The truth of the matter is that the Scottish Parliament will, for the first time since it was set up, control both sides of the books for the areas for which it has responsibility; how it spends money and how it raises it. It will then have to be accountable to the voters for how it taxes them. I think that in time, that will have a transformative effect on Scottish politics.

[Thomas Docherty (Dunfermline and West Fife) (Lab)]

In 2011 the people of Wales had a referendum on greater powers. The Secretary of State might wish to consider the arguments for giving the people of Scotland a referendum on these powers, if for no other reason than to flush out exactly where the SNP stands on the Smith commission.

[Mr Carmichael]

That is an interesting idea, but the real purpose of proceeding according to the timetable we have set out is that we will be able to put the proposals to the people next May, which will be the referendum that matters.

[Mr Alan Reid (Argyll and Bute) (LD)]

I congratulate my right hon. Friend, who is implementing a long-standing Liberal policy and succeeding where Gladstone did not. I am delighted to see that the Crown Estate is to be devolved and that the Smith commission recommends further devolution of its assets to the island authorities. Will he support devolution of the Crown Estate’s assets to other coastal and island communities, such as those in Argyll and Bute?

[Mr Speaker]

It is a matter of debate whether the Secretary of State is as great a man as Gladstone, but thankfully his statements to the House are notably shorter.

[Mr Carmichael]

I do not think there is much debate, Mr Speaker; I do not set myself up for that claim. On the Crown Estate, my hon. Friend is right: that is one of the report’s most significant proposals for our coastal and island communities. Indeed, it requires the Scottish Government, when they have devolved control of the Crown Estate, to pass it on to coastal and island communities. We all know what happens when power is devolved to Edinburgh: it tends to stick there. Scotland now has, as a result of seven years of SNP government, one of the most centralised Governments anywhere in Europe. The report mentions Orkney, Shetland and the Western Isles, as my hon. Friend says, but it begins that recommendation by referring to

“local authority areas such as”.

I think that could well include his constituency.

[Pete Wishart (Perth and North Perthshire) (SNP)]

I too welcome the Smith commission’s proposals for Scotland. [Hon. Members: “Hooray!”] I will support any process that transfers powers from unelected Tories in Scotland to the Scottish people. Does the Secretary of State even start to recognise the palpable sense of disappointment that exists in Scotland this morning, whether among Scottish people who wanted maximum devolution and expected something close to home rule following the type of talk in the run-up in the referendum, whether among those in the voluntary sector who expected the full transferral of welfare powers, or whether among those in the trade union movement who wanted real job-creating powers and say that they are underwhelmed by the proposals? While we all welcome the proposals, does he at least start to recognise the disappointment at the fact that they could have gone much further?

[Mr Carmichael]

I fully accept that the hon. Gentleman wants independence and always has done. That is why we had a vote. It pains me to tell him that he lost, however, and it is about time that he and his party came to terms with that. For him to try to use this process to get independence by the back door does not respect the views of the Scottish people as expressed on 18 September. It is perhaps about time that he thought he has a duty to speak for the 60.19% of his own constituents who rejected independence on 18 September.

[Andrew Bridgen (North West Leicestershire) (Con)]

In the fall-out from the recent Scottish referendum—in which only people in Scotland had a vote, but the people of England, Wales and Northern Ireland were bound by the result—the Scottish nationalists now object even to the prospect of a UK-wide referendum on our membership of the European Union, claiming that Scotland would be bound by the British consensus. Does my right hon. Friend detect, as I do, more than a whiff of tartan hypocrisy in this stance?

[Mr Carmichael]

I suspect, Mr Speaker, that if I used the word “hypocrisy” you would call me back into order, and for that reason I do not use it.

[Kevin Brennan (Cardiff West) (Lab)]

Of course, as hon. Members have pointed out, this agreement affects all parts of the United Kingdom—Wales, England and Northern Ireland as well as Scotland. Will the Secretary of State explain the implications for the Barnett formula of the tax measures in the agreement? In particular, if the Scottish Parliament decided to reduce the level of income tax, what implications would that have for the Barnett formula?

--- Later in debate ---

[Mr Carmichael]

The Barnett formula remains in operation, but only for the portion of the budget going to the Scottish Parliament that is not accounted for by the taxes that are currently reserved here and are going to be devolved. Detailed technical work is currently under way on this between the Treasury and the Scottish Government. Announcements will be made on its practical application in relation to the 2012 powers in fairly short order.

[Iain Stewart (Milton Keynes South) (Con)]

I particularly welcome Lord Smith’s comment in his foreword to the document,

“that neither the Scottish nor UK Governments will lose or gain financially from the act of transferring a power.”

Following on from the remarks of my right hon. Friend the Member for Banbury (Sir Tony Baldry), does that not underline the fact that if a Scottish Government wanted significantly to increase public spending in Scotland, Scottish taxpayers would foot the bill, and that is good for the accountability of Holyrood?

[Mr Carmichael]

I could not agree more. The Scottish Government keep telling us that they want to spend more money; well, now they can, and in order to do so they will have to raise taxes or cut money elsewhere. That is how politics works.

[Roberta Blackman-Woods (City of Durham) (Lab)]

It sounds as though it is thanks to Labour that the Smith commission is proposing such an excellent deal for Scotland. Is the Secretary of State having discussions with his ministerial colleagues about devolving power to English regions via their local authorities?

[Mr Carmichael]

I caution the hon. Lady about seeking to claim too much credit on behalf of her party, or any other. As I said, this required us all to participate in good faith, and we all had to make compromises. No individual party should seek to claim too much credit; it was a joint effort. She knows that I am sympathetic to devolution to parts of England, but a concrete proposal has to be worked out. We did that over many years in Scotland, and I am afraid there is no quick or easy way for her and her communities now to do it for themselves.

[Alec Shelbrooke (Elmet and Rothwell) (Con)]

The Scottish referendum showed without doubt that a large number of people who voted for the SNP may not necessarily have wanted independence. May I urge my right hon. Friend to ensure that, when the SNP wipes out the Labour party next May, it is seen as a rejection of the Labour party rather than a reflection of the need for further devolution or separation?

[Mr Carmichael]

I think we should all be cautious of trying to predict the outcome of next May’s election.

[Ian Murray (Edinburgh South) (Lab)]

May I commend the work of all the commissioners on the Smith commission, particularly—not to single anyone out—my hon. Friend the Member for Cumbernauld, Kilsyth and Kirkintilloch East (Gregg McClymont)? There is a perception that politicians do not keep their promises, but the truth is that the solemn promise we made to the Scottish people during the referendum campaign has today been not only delivered, but delivered with bells on. May I encourage the Secretary of State to look seriously at double devolution, to make sure that today’s announcements and the commission report create not just a powerhouse Scottish Parliament, but powerhouse local authorities and, more importantly, powerhouse local communities?

[Mr Carmichael]

Indeed. The hon. Gentleman will see some support for his latter proposition in the report’s foreword, under the heading, “Devolution from the Scottish Parliament”. Lord Smith articulates, in a very measured way, the galloping centralisation we have seen in recent years in the Scottish Government. I appreciate the way in which the hon. Gentleman did not single out the hon. Member for Cumbernauld, Kilsyth and Kirkintilloch East. In the same tone, I should not single out my right hon. Friend the Member for Berwickshire, Roxburgh and Selkirk (Michael Moore), who, along with my constituency colleague, Tavish Scott, played a tremendous role in getting this deal.

[Philip Davies (Shipley) (Con)]

In the Scottish referendum, if people voted yes they were voting for full independence, but it now seems that if people voted no they were voting for more independence. Will the Secretary of State explain how those people who wanted the status quo should have voted in the September referendum? Will he personally accept that, as more power is given to the Scottish Parliament, it is unacceptable and unjustifiable for Members of Parliament from Scotland to continue to vote on issues that affect only England?

[Mr Carmichael]

As the Prime Minister himself said this morning, he always said that a vote for no was never going to be a vote for no change. Indeed, when the people of Scotland went to the polling stations, all parties had put out their detailed proposals on what would follow in the event of a no vote. As I have said on a number of occasions today, on the question of constitutional change in England, a process is now under way, led by my right hon. Friend the Leader of the House.

[John Robertson (Glasgow North West) (Lab)]

May I congratulate the right hon. Gentleman and my hon. Friend the Member for Glasgow East (Margaret Curran) on their hard work? I also congratulate the six SNP Members in particular—it must have been very difficult for them to compromise on an area on which they do not usually compromise in any shape or form. [Interruption.] Does the Secretary of State agree that now is the time for the Scottish people—the families and friends who were split and the people who did not talk to each other because of grievances caused by the referendum—to get back together and put Scotland first?

[Mr Carmichael]

I apologise for missing the early part of the hon. Gentleman’s question because of the constant sotto voce commentary from the hon. Member for Perth and North Perthshire (Pete Wishart).

[Pete Wishart]

I was shouted down!

[Mr Carmichael]

Did I say it was sotto voce? It seems to have ratcheted up a little. The hon. Gentleman had his chance when he was called by you, Mr Speaker.

The hon. Member for Glasgow North West (John Robertson) is absolutely right. This is a time to heal the divisions and bring the people of Scotland together. We had a vote, prior to which we said we would deliver change and today we have told the people of Scotland what that change will be. It is time to get together and use the powers that the Scottish Parliament has and will get, and to use them for the good of the Scottish people and the Scottish economy.

[Julian Smith (Skipton and Ripon) (Con)]

It is already a tough market for north of England and Yorkshire airports. Does the Secretary of State agree that, if Scotland is going to get flexibility on air passenger duty, north of England and Yorkshire airports have to get it, too?

[Mr Carmichael]

The question is how the Scottish Government choose to use any flexibility they have. If they choose to cut air passenger duty, they will obviously have to cut some public service provision or raise some other tax. The hon. Gentleman should not assume that flexibility only goes one way.

[Geraint Davies (Swansea West) (Lab/Co-op)]

In Wales, we are required to have a referendum before we have income tax devolution of a much more modest nature. The devolution of income tax in Scotland will have profound implications for migration. In particular, if the Scots lower the top rate of tax, richer people will naturally move to Scotland. If unemployment goes up in Scotland, they will raise tax at the lower rate and reduce public services, because they do not have compensatory borrowing powers. Given that, should there not be a referendum of not just the 8% of people who live in Scotland, but of the rest of the UK? We should not be driven by the 4% of people who voted for independence; the profound implications for migration, taxation and all the rest of it should be decided by the whole of the United Kingdom.

[Mr Carmichael]

That is not how we have done these things in the years since the late 1970s, when such decisions were first mooted. The hon. Gentleman has outlined all sorts of scenarios, many of which are possible, and some of which we may even see. That is what we mean when we say that the United Kingdom changed for ever on 18 September. The duty is on all of us in the political parties and the body politic to come up to the mark and to meet that change. As far as referendums are concerned, I am afraid that I have had enough to be going on with.

[Mark Hunter (Cheadle) (LD)]

May I congratulate my right hon. Friend the Secretary of State on his considerable achievement in helping to secure this historic agreement? I also pay tribute to his predecessor, my right hon. Friend the Member for Berwickshire, Roxburgh and Selkirk (Michael Moore). I invite the Secretary of State to agree with me that, as the hon. Member for Nottingham North (Mr Allen) said earlier, what is good enough for the Scots is good enough for the English, too. Does the Secretary of State support a similar constitutional arrangement for England?

[Mr Carmichael]

I thank my hon. Friend for referring to me and my right hon. Friend the Member for Berwickshire, Roxburgh and Selkirk (Michael Moore). My hon. Friend is right to say that constitutional change has to come to other parts of the United Kingdom. However, it is not for me to tell the people of England how they want to govern themselves. They have to have that conversation and make the decision for themselves.

[Ian Lucas (Wrexham) (Lab)]

Will the Secretary of State confirm that the amount of revenue raised by income tax in Scotland will not affect the amount paid to Scotland under the Barnett formula?

[Mr Carmichael]

No, the amount taken from income tax will now be divorced from the Barnett formula. The Barnett formula will operate for that part of the public expenditure grant to Scotland and the Scottish Parliament that remains after that process.

[Mr Andrew Turner (Isle of Wight) (Con)]

If legislation on elections is a Scottish matter, does that mean that Scotland decides who gets a vote in Scotland, or is that only so for the Scottish Parliament, while Westminster decides who gets a Westminster vote?

[Mr Carmichael]

That is in fact the case. That matter is dealt with in some detail by Lord Smith in his report. The responsibility in relation to elections to local authorities and to the Scottish Parliament will be devolved to the Scottish Parliament. However, this House will retain control over elections to it.

[Sheila Gilmore (Edinburgh East) (Lab)]

I do not envy the Secretary of State his task of going in January to all of the parts of Scotland where Robert Burns dallied and romanced. The important point, however, is that a lot of people in Scotland want to be involved in this debate and discussion. They want to be fully informed about what is happening, not just to be told what they think or to be told that there is some form of betrayal. What arrangements will the Secretary of State make to ensure that people are fully involved in these debates?

[Mr Carmichael]

The hon. Lady is right to highlight that one of the great successes of the whole referendum experience was that we got the widest possible range of engagement across Scottish society. We have to make sure that that does not now just wither away; we have to do what we can to harness and nurture it. I recently met representatives of the Scottish Council for Voluntary Organisations, the Scottish Trades Union Congress, the Church of Scotland and the National Union of Students to discuss exactly that process. Not everything of this sort has to be done by Government and through the party political process. The most effective civic engagement is that which grows out of civic groups themselves.

[Mr Philip Hollobone (Kettering) (Con)]

Scotland receives from English taxpayers an additional annual public subsidy, over and above what any English region receives, not because there is an extra level of deprivation, but simply because Scotland is Scotland. What proportion of the funds that are given to Scotland under the Barnett formula will be affected by the ceding of tax-raising powers to the Scottish Parliament?

[Mr Carmichael]

It was of common accord between the parties that the Barnett formula would remain. As I have made clear to the House, the amount of money that goes to Scotland under the Barnett formula will be reduced, because what is taken in taxation directly by the Scottish Parliament will be taken out of the equation. It is an important truth that, although the Barnett formula produces some anomalies, no party has ever been able to produce a better option.

[Chi Onwurah (Newcastle upon Tyne Central) (Lab)]

Communities across Britain want power to be held and wielded closer to them. I therefore welcome Scotland’s increased self-determination. However, we in the north-east also want more powers to be devolved to us. The Secretary of State told my hon. Friend the Member for City of Durham (Roberta Blackman-Woods) that there were no easy answers, but will he at least confirm that he is looking for solutions? Specifically, how will he enable us to ensure that Newcastle international airport can compete with Scottish airports in respect of air passenger duty?

[Mr Carmichael]

The Government have already embarked on that process through the programme of city deals and growth deals over the past four and a half years. I do believe that there needs to be greater devolution to all corners of the United Kingdom. My family stretches to the south-west of England, where my in-laws come from. They understand that the needs of people in the south-west of England are as badly served by the conventional centralised model of government from Whitehall as the needs of the rest of my family in Scotland ever were. It is now for the hon. Lady and her communities to come forward with a coherent plan for exactly what that change should be.

[Mr Robin Walker (Worcester) (Con)]

Further to that answer, in which the Secretary of State talked about devolution to all parts of the United Kingdom, does he not accept that when addressing issues such as English votes for English laws, which many of us feel passionately and strongly about, and the balance between local and central Government, it should be this sovereign Parliament of the United Kingdom that takes the final decisions, not some remote constitutional convention, as is suggested by those on the Opposition Front Bench?

[Mr Carmichael]

Perhaps I should explain how constitutional conventions work. A constitutional convention brings together the political parties and the voices of business, the trade unions, civic groups, the Churches and all the rest of it. They build the consensus, as they did in Scotland, but it was this House that passed the Scotland Acts in 1998 and 2012. There is no question of our subcontracting legislative responsibility.

[Mike Gapes (Ilford South) (Lab/Co-op)]

The commission and the parties recognised that foreign affairs would remain a reserved matter. The report refers to vital “national infrastructure” in respect of the security and defence of the United Kingdom. Will the Secretary of State confirm that all parties involved in the Smith commission, including the SNP and the Greens, signed up to that? Will he therefore have discussions with the Scottish Government to make it clear that it is this House and this United Kingdom that are responsible for the foreign and defence policy of our country?

--- Later in debate ---

[Mr Carmichael]

I confirm that it was an agreement of all the parties. I hope that all parties will demonstrate good faith and honour that agreement. Obviously, I cannot account for everyone.

[Andrew Percy (Brigg and Goole) (Con)]

Apparently, home rule for Scotland and the creation of a powerful Scottish Parliament can be decided on in the blink of an eye, but the issue of English votes for English laws needs to be kicked into the long grass, with a constitutional convention. Is it not the truth that, unless these proposals go along with English votes for English laws, my constituents in Brigg and Goole and the people of England will continue to get the fluffy end of the lollipop?

[Mr Carmichael]

Well, there’s no accounting for taste I suppose.

In the blink of an eye? I have been a political activist for 34 years, and this issue has dominated Scottish political discourse during that time, and I suspect for some time before that. A substantial amount of work was done on today’s proposals by the Liberal Democrats, the Conservatives and Labour before the referendum, so it is not a rushed or ill-considered piece of work but has considerable background. On English votes for English laws, the hon. Gentleman should be careful about devolving power within Parliament without tackling the same question within the Executive, as that would risk creating another instability.

[Jonathan Edwards (Carmarthen East and Dinefwr) (PC)]

The signature policy of the Smith commission concerns the full devolution of income tax receipts. The Wales Bill, which completed its passage through the House of Lords on Monday, devolves only a small partial element of income tax receipts, and only following another referendum many years down the line. When will Westminster stop treating Wales like a second-class nation?

[Mr Carmichael]

I thought the only grievance we would get today would be from the Scottish nationalists; I had forgotten we had Plaid Cymru here as well. I commend to the hon. Gentleman the positive approach taken by all parties in building a consensus in Wales. We have always known that for different historical reasons, devolution across the different nations in this country emerges at different paces, which is absolutely right. If he wants more progress, he should try to learn from the Scottish nationalists—or at least from what they were doing before today—and work with other parties to build that consensus.

[Mr John Denham (Southampton, Itchen) (Lab)]

Scotland will get what Scotland wants, but when will England get what it wants? Does the Secretary of State agree that we need much more radical change in Westminster than has currently been contemplated, more radical devolution within England than has currently been delivered or offered, and a much more open, inclusive and democratic process than that being led by the Leader of the House?

[Mr Carmichael]

I am confident that England will get what England wants when England decides exactly what it is she wants.

UK Government: Scotland

Alistair Carmichael Excerpts

Thursday 16th October 2014 Commons Chamber

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

I congratulate the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown) on securing today’s debate. Further, I congratulate, and commend him, on the role he played in the course of the independence referendum campaign. Nobody who heard his speeches and witnessed his passion and enthusiasm would have been in any doubt about the importance of the contribution he made in securing a united future for us all on 18 September. I know that he, like me, felt that he was fighting a campaign not just for himself but for his children and their generation. I venture to suggest that his contribution to it gives him a legacy of which they, in time, will come to be truly proud.

I want to make a few observations on the general state of the debate today. Shortly thereafter I will come on to address the points that have been made by the right hon. Gentleman in his speech. This has been a week when the topic of the referendum and its consequences have never been far from the Chamber. This is the fourth day this week, in fact, that I have been at the Dispatch Box. I welcome that. It is a good and right thing for the United Kingdom Parliament to be considering this issue.

Right hon. and hon. Members across the House have expressed their support for our still United Kingdom, a good illustration of what it means to be part of a country that shares risks and pools its resources. Scotland has come through years of fundamental uncertainty. The referendum outcome has put an end to it. With a positive choice from more than 2 million people in Scotland to remain within the United Kingdom, now is the time for us all to put aside party interests and to work to build a better United Kingdom for all: a future with a strong Scottish Parliament within a secure United Kingdom, because that was the clear verdict handed down by the people of Scotland.

The First Minister and the Deputy First Minister said during the campaign that, in their view, the referendum was a once-in-a-generation, perhaps once-in-a-lifetime, event. Both Governments agreed from the outset that the objective was to hold a referendum that would be legal, fair and decisive. That referendum was delivered. But decisive means that a decision has been made, not that the question should be asked again in three years’ time. Had the result gone the other way, it would have been considered unacceptable for those of us who campaigned to keep the United Kingdom together to demand a re-run in 2017, and so it is wrong now for nationalists to manoeuvre for that outcome. People voted clearly and decisively to reject the Scottish National party’s core proposition. It is not for anyone to tell them that they got their answer wrong. Uncertainty will only try people’s patience and sap business confidence, just as it did in Montreal. The SNP has been given an answer by voters in Scotland. Now is the time to acknowledge and accept it and work in the interests of 100% of the people of Scotland.

[Pete Wishart]

I grateful to the Secretary of State for giving way, unlike the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown). It took two hours for the Prime Minister to come up with English votes for English laws after the referendum. It has now taken four weeks for the Barnett formula. Seventy Members of Parliament have signed a motion for a debate for Barnett to be reviewed. Barnett was in the vow. Is Barnett safe?

[Mr Carmichael]

Yes. Barnett is safe, because it was in the vow. I caution the hon. Gentleman. He seeks time and again to suggest that, somehow or another, the vow made by the party leaders—[Interruption.] The hon. Gentleman asked his question, now he can sit and listen to the answer. He says time and again that somehow the Prime Minister, the Leader of the Opposition and the Deputy Prime Minister were not acting in good faith. He seeks at every turn to undermine public confidence in the vow. If he still wants to pursue the cause of independence, and if he wishes not to accept the verdict of the people of Scotland expressed on 18 Sept, that is fine. But if he and his party are taking part in the Smith commission in good faith, frankly they should accept that all of us are doing so in good faith.

For the SNP to accept the verdict of the people, they must accept that the Smith commission’s work will not deliver the content of its White Paper or other outcomes detrimental to the core unity of the UK family—and this comes to the heart of the contribution from the right hon. Member for Kirkcaldy and Cowdenbeath. The SNP will not get independence by the backdoor. The vow given by the party leaders during the referendum campaign and the timetable that he and others supported are designed to strengthen Scotland within a secure United Kingdom. That is what people voted for, and that is what they will get—more powers for the Scottish Parliament within a modernised United Kingdom and delivered to the timetable we promised. In fairness, the soon-to-be First Minister has acknowledged in her party’s submission to the Smith commission that the outcome of this joint working will not be independence. It is important that negotiations take place with a genuine recognition of that fact.

The right hon. Gentleman listed 16 areas in which agreement could easily be sought. He will forgive me if I do not address all 16 now, not least because, with the Government having tasked Lord Smith with constructing a consensus, it would be wrong for me, as a Minister, to second-guess the outcome. However, the Smith remit states that his heads of agreement should be consistent with respect for the decision of the people of Scotland on 18 September. In other words, they must be consistent with the continuation of the constitutional framework and integrity necessary to maintain a United Kingdom. The four nations within the family must continue to operate as a single country.

I also draw to the right hon. Gentleman’s attention the terms of the Command Paper published on Monday. Chapter 2 reminds us of the principles that underpin the Scotland Act 2012: any proposal should first have cross-party support; it should be based on evidence; and it should not be to the detriment of other parts of the UK. On all three points, if Smith came up with proposals that undermined our constitutional integrity, they would not be consistent with the framework that we have set him in the Command Paper. I hope the right hon. Gentleman will take comfort from that.

I have always said that—and this is truer today than it has ever been—the independence referendum offered us the opportunity not just to finish the job of devolution to the Scottish Parliament by giving it the extra powers the right hon. Gentleman and I believe it needs in relation to taxation, welfare and so on, but to implement a process of constitutional change across the whole of the UK. I respectfully say to him and the rest of the House that ultimately the logical conclusion of this journey is a federal structure within the UK. The only way to achieve that in our lifetime is by building the strongest, broadest consensus, and that requires a constitutional convention of the sort to which he referred. Indeed, he and I both know, because we have been around this course several times in Scotland, that that is the way to deliver constitutional change.

That requires us to bring together others besides just the political parties—it will always fail if it includes only the political parties, because unfortunately they always see things through the prism of their own self-interest. For that reason, we have to bring in wider voices—civic society, the business community, the trade unions, the Churches and just interested citizens who have something to say. It is for that reason that, as somebody who passionately believes in the United Kingdom, I see an opportunity opening out to us now to build a new constitutional architecture. In that respect, I very much hope that the right hon. Member for Kirkcaldy and Cowdenbeath will remain engaged in the debate, because I believe he has a substantial contribution to make to it.

We have an unprecedented opportunity. The Smith commission can move forward through the collective endeavour of all five of Scotland’s biggest political parties. Never before has so wide a spectrum of parties come together in Scotland’s interests. That is something to applaud and welcome. All those taking part in this work must be willing to compromise, as the right hon. Gentleman has said today—again, I commend him for the thought that he has obviously put into this already. We have an opportunity to harness the energy of both sides of what was a quite remarkable debate and, as a result, secure a better deal for all of Scotland. The Commission will look at serious and weighty issues: taxation, welfare and the role of the Scottish Parliament in our public life. The challenge is to empower Holyrood further and, as a result, make it more accountable to those who elect it. Lord Smith of Kelvin is an able man facing a considerable task. With genuine good will on all sides, he is also the man who can see that task through.

Of course, this process is not without consequences for the rest of the United Kingdom. The right hon. Gentleman has already touched on the subject of English votes for English laws. It is clear from the debate we had in the House on Tuesday, and indeed from contributions at Scottish questions yesterday, that that will be a live debate for some time to come. As I said at Scottish questions yesterday, in my view it is a solution that, if seen as an end in itself rather than a step along the road, risks creating new problems to replace the ones that already exist in our current constitutional settlement. However, this is a genuine issue that requires genuine consideration within that wider context. The debate itself showed the strength of feeling and brought to light the complexities and intricacies of finding a solution that will strengthen the United Kingdom’s democracy. Again, the one thing that was apparent at the end of six and a half hours’ debate—I was here for nearly all of it—was that there is not yet any clear consensus in England on what the future shape of the constitutional architecture should be.

[Cathy Jamieson (Kilmarnock and Loudoun) (Lab/Co-op)]

indicated assent.

[Mr Carmichael]

I see nods coming from the hon. Lady, who also sat through most of that debate.

[Ian Murray (Edinburgh South) (Lab)]

I know that time is short, and I appreciate the time the right hon. Gentleman has spent at the Dispatch Box this week re-emphasising that the vow and the timetable are on track, but will he at least acknowledge that the Prime Minister’s clumsy, inappropriate and highly political speech on the morning after the referendum has opened up the door for these kinds of questions to be asked? If he had not done that and had abided by every single part of that vow, we probably would not have been in this position this week.

[Mr Carmichael]

What I would say to the hon. Gentleman is that I think the Prime Minister was reflecting questions that are being asked in other parts of the United Kingdom. However, I am able to give him an assurance from the Dispatch Box today—this is an assurance that repeats the comments of the Prime Minister himself—that, as my right hon. and learned Friend the Member for North East Fife (Sir Menzies Campbell) put it the other day, change in Scotland will not be held up while England catches up. These two debates obviously have issues that have a symmetry and run in parallel, but one debate will not be allowed to hold up the progress of the delivery of the vow in Scotland. As I have said, it is pretty clear that we have already done much of the work and built much of the consensus there that is still required in the rest of the United Kingdom.

[Pete Wishart]

That’s all right, then.

[Mr Carmichael]

I am glad that the hon. Gentleman accepts at last that the United Kingdom parties are proceeding in good faith. It would be a shame if he were unable ever to stand up and say it in public. [Interruption.] We are getting on with it. The hon. Gentleman sits there chuntering from a sedentary position, but he ignores the fact that we have already delivered, ahead of timetable, the Command Paper that was part of the vow. He might not like to accept that we are delivering—that we are doing what he said—but he cannot deny it and that is why he remains in his seat.

In the few seconds that remain to me, let me say that it is clear that the referendum was won decisively. It might not have been welcomed by the nationalists, but everybody else was pleased that we got the decision that we wanted and that will indeed be good for our children in the future as the years progress.

Question put and agreed to.

Scotland within the UK

Alistair Carmichael Excerpts

Monday 13th October 2014 Commons Chamber

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

With permission, Mr Speaker, I wish to make a statement to the House about the position of Scotland within the United Kingdom.

As hon. Members will know, on 18 September the people of Scotland voted in a referendum on independence. I am pleased to report to the House that, by a margin of 10.6%, or by 55.3% to 44.7%, the people of Scotland voted to remain part of the United Kingdom.

The referendum was underpinned by the Edinburgh agreement, signed between the United Kingdom Government and the Scottish Government in October 2012. That agreement ensured that the referendum would have a clear legal base, that it would be conducted in a way that commanded the confidence of both Parliaments, Governments and people, and, most importantly, that it would deliver a fair, legal and decisive expression of the views of people in Scotland—a result that everyone would respect.

More than 2 million people made a positive choice for Scotland to remain part of the United Kingdom. The franchise for the referendum included, for the first time ever in this country, 16 and 17-year-olds. At a time when our elections have suffered from declining participation, the turnout across Scotland was nearly 85%—something that I am sure all across the House would welcome. Politics works best when people take an active interest in supporting the things that matter to them most. It also adds emphasis to the democratic result.

The decision of the people of Scotland was clear: they voted to continue to be part of this family of nations; they voted to continue to work alongside people in England, Wales and Northern Ireland; and they voted for all of us to remain together as a United Kingdom. It is important that everyone now accepts that result. We should all move on from being part of the 55% or the 45% to working for 100% of the people of Scotland.

That is what we are doing. The vow made by the Prime Minister, the Deputy Prime Minister and the Leader of the Opposition during the referendum campaign is already being put into practice. The Smith commission, chaired by Lord Smith of Kelvin, was up and running on 19 September. He will convene cross-party talks to reach agreement on the proposals for further devolution to Scotland. His terms of reference make it clear that the recommendations will deliver more financial, welfare and taxation powers, strengthening the Scottish Parliament within the United Kingdom. But that process is not just about the parties; the referendum opened up civic engagement in Scotland across sectors, communities and organisations, and Lord Smith has made it clear that he wants to hear from all those groups to ensure that the recommendations he produces are informed by views from right across Scottish society.

By St Andrew’s day, Lord Smith will publish “Heads of Agreement”. The Government are committed to turning those recommendations into draft clauses by Burns night 2015. The timetable is demanding, but that is because the demand is there in Scotland to see change delivered, and it is a demand we shall meet. On Friday 10 October, all five main Scottish parties submitted their proposals to the commission. In the case of the Labour, Conservative and Liberal Democrat parties, the proposals reflect the positions published by the parties prior to the referendum campaign. The Scottish National party and the Green party agreed to join the cross-party talks after the referendum, and they too submitted proposals on Friday—a development that we welcome.

Today I can confirm that the Government are meeting the first step in the further devolution process by publishing a Command Paper. The Command Paper we are presenting today provides a clear, factual summary of the proposals for further devolution in Scotland published by each of the three pro-UK parties, as we committed to do during the referendum campaign. Those plans encompass a broad, complex and often interlinked range of topics, from taxation to borrowing and from welfare to regulation. To inform and assist consideration of each of those proposals, the Command Paper also sets out factual information about the current situation in the key policy areas, as well as presenting some background information about devolution in Scotland to date. The publication is wholly without prejudice to the work of the Smith commission, which will look at proposals from all the parties and others and seek to establish the ground for consensus. This will be the first time in the development of Scotland’s constitutional future that all its main parties are participating in a process to consider further devolution. It is a truly historic moment, and one that I very much welcome.

With all five main Scottish parties working together in collaboration, I am confident that we will reach an agreement that will provide the enhanced powers to the people of Scotland and accountability for the Scottish Parliament while retaining the strength and benefits of being part of the United Kingdom. That was the message heard loud and clear during the referendum campaign, and it is one that this Government, and all Scotland’s political parties, are committed to supporting.

[Margaret Curran (Glasgow East) (Lab)]

I thank the Secretary of State for advance sight of his statement.

Only three weeks ago, in unprecedented numbers, the people of Scotland voted to remain part of the United Kingdom. It was a historic decision, and the result was emphatically clear: the Scottish people voted for pooling and sharing resources across the United Kingdom; they voted to continue with devolution; and they voted for a stronger Scottish Parliament. I wish today to pay particular tribute to my right hon. Friends the Members for Edinburgh South West (Mr Darling) and for Kirkcaldy and Cowdenbeath (Mr Brown), who put the case with so much passion throughout the campaign.

Following the referendum, we can say with confidence that devolution is the settled will of the Scottish people and that we shall have a stronger Scottish Parliament. A vital part of the campaign was the commitment made by the Leader of the Opposition, the Prime Minister and the Deputy Prime Minister to have a strengthened and empowered Scottish Parliament. Led by my right hon. Friend the Member for Kirkcaldy and Cowdenbeath, we guaranteed a clear and definitive timetable for further powers, and I am pleased that the Secretary of State has published the Command Paper ahead of time today. Can the Secretary of State confirm that a motion now appears on the Order Paper detailing that timetable?

The process now ongoing under the leadership of Lord Smith of Kelvin will guarantee that more powers will come to the Scottish Parliament. The Labour party will enter the talks this week in a spirit of partnership and co-operation with the other parties. We will apply a simple test to reaching a conclusion: what outcome respects the result of the referendum and will make the people of Scotland better off? The people of Scotland have voted for pooling, sharing of resources and greater prosperity, and that should guide the commission’s discussions.

The referendum attracted the highest level of participation of any national poll ever held in Scotland. It is important that, as we develop this next stage of devolution, we reflect that. The Secretary of State has mentioned how voluntary organisations can participate. Will he lay out how individual members of the public can contribute to that process too and tell the House how Lord Smith intends to engage with people across every area of Scotland?

We debated the agreement for the referendum two years ago, as the Secretary of State said. At that time, I said that we would spend the campaign vigorously defending devolution from those who would seek to bring it to an end. Over these last two years, that is exactly what the Labour party has done. Not only does this campaign conclude with the devolution settlement secured; that settlement will be strengthened. We will continue to argue that the best future for Scottish people comes from pooling and sharing resources inside the United Kingdom and from a powerhouse Parliament that can again change the lives of people across Scotland. That is what the people of Scotland want, and it is what the Labour party will fight for.

[Mr Carmichael]

I thank the hon. Lady for the very constructive tone of her response. Working with people across parties has been an interesting experience, as it always is in Scotland, and it is clear that the process of cross-party working will have to continue if the will of the Scottish people expressed on 18 September is to be honoured. That will become all the more challenging, although I still believe it will be more effective as a result, for having members of the Scottish National party and Scottish Green party on board. A high price will be paid by any political party that does not enter the Smith commission and the process that follows in good faith.

I echo the hon. Lady’s comments about her right hon. Friends the Members for Edinburgh South West (Mr Darling) and for Kirkcaldy and Cowdenbeath (Mr Brown). All Members from Scotland, and a number from beyond it, played their role in giving leadership across the referendum campaign, but her two right hon. Friends indeed played a particularly important and significant role.

The motion on the Order Paper honouring the timetable has indeed been tabled. On the approach of the Labour party and the Government, I should remind the House that under the Scotland Act 2012 any proposal should have cross-party support, should be based on evidence and should not be to the detriment of other parts of the UK. It is the Government’s view, as expressed in the Command Paper today, that that should also be the guiding principle in relation to the current process.

[Dr Liam Fox (North Somerset) (Con)]

Does the Secretary of State accept that throughout the House many believe that further devolution to Scotland can occur only if there is a rebalancing of the entire constitutional settlement, with English votes on English issues? Does he agree that those who say that that would create two classes of MP are being disingenuous? The House has had an imbalance since devolution; many Members have been able to vote on issues such as health and education in England without having to answer to a single voter for those decisions.

[Mr Carmichael]

I have said many times that the completion of the job of devolution in Scotland and the process we are now undertaking would unlock the door to further constitutional change across the whole of the United Kingdom, and I believe that to be the case. Let me be clear, however, that the timetable we have set out here will be honoured. If other parts of the United Kingdom are able to take advantage and to move along in our slipstream, so to speak, that will be to their advantage, but we will not delay the implementation of the proposals in Scotland for other parts of the UK.

[Anas Sarwar (Glasgow Central) (Lab)]

Scotland has decided and spoken, and it is now the accepted sovereign will of the Scottish people to work in partnership with the rest of the United Kingdom and support it through devolution. One of the lessons from the referendum campaign, though, is that although our country may not be broken, people believe that our political, social and economic model is broken and does not work for ordinary people. That is why I urge the Secretary of State and, indeed, the entire Government not to fall into the trap of thinking that we can just talk about which politician has what power in what building; more important is what politicians choose to do with the powers they have to make a genuine difference to people’s lives. Will the Secretary of State confirm that the process being talked about is separate from the process being mentioned by others—that of English votes for English laws?

[Mr Carmichael]

On the hon. Gentleman’s latter point, I think I have already made that clear. I very much hope that once we have done this piece of work, we will in Scotland at last be able to move on to using the powers of the Parliament rather than just talking about them.

[Sir Malcolm Bruce (Gordon) (LD)]

rose—

--- Later in debate ---

[Sir Menzies Campbell]

Does my right hon. Friend understand the general welcome there has been in Scotland for the fact that change in Scotland should not be held up to enable England to catch up? Having agreed that position, is it not right for the Government, and indeed for him today, to say that, although not in lockstep, there will undoubtedly be progress on constitutional change for the other nations that form the United Kingdom? Particularly with regard to any possible change in the role of Scottish MPs, does he agree that however superficially attractive it might appear, changes to the Standing Orders would be inappropriate, and that such a change to the role of Scottish MPs should undoubtedly be enshrined in primary legislation?

[Mr Carmichael]

My right hon. and learned Friend is entirely correct about that. This should be something that does more than just affect just the Standing Orders of this House. Indeed, even if it were to be done in that very narrow way, he would, I suspect, be one of the first to remind me that the House guards very jealously, through your office, Mr Speaker, its right to determine its Standing Orders for itself. It has never normally been the practice for Government to lead on these matters.

[Mr William Bain (Glasgow North East) (Lab)]

Does the Secretary of State agree that the Smith commission process will require compromise and good faith from all political parties in Scotland? Does he also agree that in the agreement that comes we must see the sharing of resources across the United Kingdom? Is not that in keeping with the spirit of the way in which the Scottish people voted on 18 September?

[Mr Carmichael]

I think Lord Smith has already made it clear that he is not going to deliver independence by the back door. Whatever proposals he comes up with on St Andrew’s night in relation to further devolution, they will be in the context of there continuing to be a United Kingdom, and the constitutional integrity of the United Kingdom will be respected.

[Mr Bernard Jenkin (Harwich and North Essex) (Con)]

Does my right hon. Friend agree that we ought to learn some lessons from this near-death experience of the United Kingdom and the fact that we did not intend the winning margin to be as narrow as 10%? Does he also agree that if we are to avoid another referendum, Westminster politics and Westminster politicians must raise the tone of debate with our Scottish counterparts in order to ensure that we develop more of a relationship of mutual respect, with less opportunity for the nationalists to make mischief?

[Mr Carmichael]

There are indeed many lessons to be learned from this, and their full extent will probably not be apparent for some time to come. This statement is an important part of the process, because it is very important that the Government, with the official Opposition as well, are able to demonstrate to the people of Scotland that we are making good the commitment that we made in the course of the referendum campaign. Politicians doing what they say they will do in that way is probably the most important thing we can do to restore faith in politics.

[Pete Wishart (Perth and North Perthshire) (SNP)]

The Secretary of State is, of course, right: the referendum was an incredible, transformational event that gripped and energised our whole nation. I am sure he will want to join me in congratulating the Scottish people on the way in which they went about that business. He is also right to say that Scotland is moving on. According to one opinion poll, two thirds of the Scottish people want devolution maximum—everything devolved, other than foreign affairs and defence. Three quarters have said that they want all taxation devolved to Scotland. This is the thing, isn’t it? There might be a Command Paper, but the people in charge of this process are the Scottish people themselves and we will be judged by their good judgment on what they want for their future.

[Mr Carmichael]

May I say again that I welcome the participation of the hon. Gentleman’s party in the Smith process? I very much hope—in fact, I believe—that that is being done in good faith. However, perhaps the hon. Gentleman should take heed of the 60.19% of the people in his own area who voted to remain part of the United Kingdom. If he tries to subvert the Smith process by getting independence through the back door, as others have said, he will pay a heavy price.

[Sir Malcolm Rifkind (Kensington) (Con)]

Should we not all be grateful to the Scottish National party for having called the referendum? Has it not in fact provided an opportunity for the Scottish people in the 21st century to show that they have come to the same conclusion as their ancestors in 1707 that the best interests of all the peoples of this island are to have a British citizenship in a United Kingdom?

[Mr Carmichael]

There are, indeed, occasions when we should be grateful to the Scottish National party; they are few and far between, but this may, in the way the right hon. and learned Gentleman describes it, be one of them. It was not, of course, the Scottish National party that called the referendum; it was an agreement between Her Majesty’s Government here and the Scottish Government in Edinburgh—the Edinburgh agreement—that gave the basis for it to happen. It would be helpful for the SNP leadership to now make it clear that we have met the terms of the Edinburgh agreement, that the decision was fair, legal and decisive, and that, accordingly, we will not revisit the process.

[Gregg McClymont (Cumbernauld, Kilsyth and Kirkintilloch East) (Lab)]

As a Labour nominee to the Smith commission, may I welcome the Secretary of State’s constructive comments? In that spirit of constructive dialogue, as we approach the debate about further devolution will he consider bringing forward the public information campaign on the raft of tax powers that are to be transferred to the Scottish Parliament by 2016?

[Mr Carmichael]

I wish the hon. Gentleman and his colleagues well on the Smith commission; he has a job of work to do, but he is very well qualified to do it. I will give consideration to his question about our public information campaign on the powers already coming from the 2012 Act.

[Sir Hugh Robertson (Faversham and Mid Kent) (Con)]

The Secretary of State is to be commended for introducing the Command Paper in such a timely fashion. Has any thought been given to the lessons learned from this campaign, particularly whether a simple majority of 50% plus one is sufficient for a matter of such far-reaching constitutional implications?

[Mr Carmichael]

I have thought of little else in the past few weeks. I know that when referendum processes are undertaken in other parts of the world a debate often takes places on the point raised by the right hon. Gentleman. My view continues to be that 50% plus one should be the threshold for any referendum in a democracy.

[Mr John Denham (Southampton, Itchen) (Lab)]

It is clear that Scotland will now get what Scotland wants, and so England must get what England wants. The Secretary of State has outlined a process through which the debate about Scotland’s future reached every corner of Scottish society. Does he agree that, in determining our future, England must have that same opportunity and that to push changes through a narrow Cabinet Committee on an artificially short time scale would be absolutely unacceptable?

[Mr Carmichael]

In relation to the work of the Cabinet Committee, there is not of course a time scale, except that we are looking towards the next general election in May 2015. I would say to the right hon. Gentleman that we are perhaps more familiar with the process in Scotland than in the rest of the United Kingdom. We have been round this course at least twice: first with the constitutional convention, and then with the Calman commission in 2008. On each occasion, we brought together political parties and the voices of business, trade unions, churches, local authorities and others to build consensus, and then we implemented it. That is the way that people are best guaranteed to get the constitutional change they want.

[Mrs Cheryl Gillan (Chesham and Amersham) (Con)]

The Secretary of State knows that, with the advent of devolution under the previous Labour Government, the number of seats for Scotland in this House was reduced from 72 to 59. With further devolution, will he support a reduction in the number of seats for Scotland in this House?

[Mr Carmichael]

No.

[Tom Greatrex (Rutherglen and Hamilton West) (Lab/Co-op)]

Further to that question, I note that the Secretary of State has made it clear that implications for other parts of the United Kingdom will follow from this process, and some of those points are set out in the Command Paper. Will he clarify that? On page 43 of the Command Paper, it states that the Liberal Democrat commission’s view is that

“the present level of Scottish representation at Westminster should be retained until a federal structure for the UK has been delivered”.

Does that remain his position and that of his Front-Bench colleagues?

[Mr Carmichael]

That remains the position of my party.

[Sir Malcolm Bruce (Gordon) (LD)]

May I first welcome my right hon. Friend’s Command Paper? As somebody who led our party in the constitutional convention, I welcome the fact that the Scottish Parliament will now get proper tax-raising powers. Does he agree that anything more than 50% looks a lot like home rule and a shared partnership? To those who want devolution within England, may I say, “You have our support, but it is quite difficult to support something that is unclear”? We need a constitutional convention. I suggest that devolution has in every case been accompanied by electoral reform and proportionality, and that should also be a condition in England.

[Mr Carmichael]

It is an important point that devolution has in every case been accompanied by electoral reform, and that institutions to which power is devolved are always elected proportionately. I cannot add a great deal to my answer to the right hon. Member for Southampton, Itchen (Mr Denham) on the need to build consensus in whichever way people in England choose. In Scotland, we have done it in a way that has worked for us twice, and will I believe now work for us a third time. It could work for people in England, but it is for them to make up their own minds about that.

[Ian Paisley (North Antrim) (DUP)]

I welcome the Secretary of State’s statement. I welcome more the resounding result of our Scottish kith and kin choosing to stay within the Union, and I welcome the way in which the debate was fought and won. The implications go well beyond the Scottish highlands and islands or the borders: where Scotland goes with devolution, Northern Ireland invariably follows. What engagement will the Smith commission and Lord Smith have with parties in Northern Ireland to ensure that the outcome reflects the needs of all the United Kingdom in all its diversity, especially the needs of Northern Ireland?

[Mr Carmichael]

Lord Smith has been charged with building a consensus in relation to further powers for the Scottish Parliament. I am sure that if the hon. Gentleman has a view informed by his experience of devolution in Northern Ireland, Lord Smith will certainly be interested to hear it. Given the remit that we have given Lord Smith, however, I do not expect him to say anything in relation to changes for Northern Ireland.

[Iain Stewart (Milton Keynes South) (Con)]

Will my right hon. Friend assure me that the business community on both sides of the border will be fully consulted on the further devolution of powers over personal taxation, because they shoulder much of the administrative burden? Much as further devolution might be desirable, it must not increase the regulatory burden on wealth and job creators on both sides of the border.

[Mr Carmichael]

Indeed, the voice of business is very important in this process, as it was throughout the referendum campaign. I know from my discussions with the CBI, the chambers of commerce and others that they are working on their proposals. I urge all collective organisations, individual businesses and individual citizens who have something to say to come forward and say it—this is their time.

[Graeme Morrice (Livingston) (Lab)]

Will the Secretary of State confirm that the decisive no vote was not a vote for the status quo, but a vote for continued change, and that we in this House must deliver and be seen to deliver on our commitments to further Scottish devolution quickly, inclusively and decisively, without tying them to any decentralisation plans for south of the border?

[Mr Carmichael]

I am happy to give the hon. Gentleman that assurance, which I have already given on two or three occasions this afternoon. There are few things that would be worse for the constitutional integrity of the United Kingdom than our not delivering on the promises that we made or not meeting the timetable. It is because I care so much about keeping the United Kingdom together that I am determined that we will meet the timetable that we have laid out.

[Sir William Cash (Stone) (Con)]

Today’s Command Paper does not contain a section dedicated to the supervening question of the position of European law in relation to Scotland. That is a reserved matter under the Scotland Act 1998. Will the Secretary of State give an absolute and categorical assurance that, having saved the Union of the United Kingdom, under no circumstances will we surrender the Scottish functions to the European Union?

[Mr Carmichael]

I would be more than happy for the hon. Gentleman to engage directly with Lord Smith. Indeed, I will make every effort to explain to Lord Smith what he might expect.

[Mr Brian H. Donohoe (Central Ayrshire) (Lab)]

In his statement, the Secretary of State said:

“It is important that everyone now accepts this result”.

The $64,000 question is how long it will be before the SNP demands another referendum.

[Mr Carmichael]

Demands for a further referendum would have an exceptionally damaging effect on Scottish businesses, Scottish jobs and the Scottish economy. We know that because we can see what happened in Quebec in Canada when the separatists did not accept the outcome and came back a second time. We know what happened to the financial services sector in Montreal. I do not want that to happen in Scotland. Unfortunately, I cannot dictate what the Scottish National party will do, but I say to it that if it does not make it clear that it accepts this result and if it does not engage in the Smith commission in good faith, it will suffer.

[Crispin Blunt (Reigate) (Con)]

As my right hon. Friend congratulates the people of Scotland on the 85% turnout in the referendum, I hope that he will reflect on the 85% of people in the United Kingdom who did not get a vote on the Union: namely, the people of England. He has no mandate from me or my constituents to devolve further powers to Scotland, while expecting my constituents to bankroll it and failing to address the issue of English votes for English laws.

[Mr Carmichael]

I fear that my hon. Friend does not quite reflect the intricacies of the settlement in the United Kingdom. I invite him to reflect on that at some leisure. I understand completely the concerns that he expresses about the position of England within the United Kingdom. Of course that discussion needs to take place. We have had such a discussion for decades in Scotland and I wish the people of England well in having it, but I cannot emphasise too strongly that that discussion cannot and will not hold up the delivery of the powers to the Scottish Parliament.

[Cathy Jamieson (Kilmarnock and Loudoun) (Lab/Co-op)]

A key principle during the referendum debate was the delivery of fairness in Scotland. I was pleased to hear the Secretary of State confirm that the principle of pooling and sharing resources across the United Kingdom will be fundamental. Will he say more about whether Lord Smith will have access to various resources within the Treasury and the Government so that he can produce further analysis of the various proposals that have been put forward by the different political parties, with the principle of the pooling and sharing of resources in mind?

[Mr Carmichael]

The secretariat for Lord Smith’s commission is already supported by civil servants from the Scotland Office, the Cabinet Office and the Treasury. I met Lord Smith on the Monday following the referendum and I told him then—I am happy to repeat this commitment publicly—that any resources that he felt he needed would be given, such is the importance that we attach to the work with which he has been tasked.

[Sir James Paice (South East Cambridgeshire) (Con)]

Does my right hon. Friend agree that one of the holes in the current devolution settlement, as some of us pointed out at the time, is that effectively the Scottish people have representation without taxation? We must ensure that the Scottish Government have not only the power but the obligation to raise some of their taxes, thus increasing their accountability and enhancing democracy.

[Mr Carmichael]

My right hon. Friend is absolutely right. The completion of the job of devolution requires the Scottish Parliament to be given control of at least half its budget—preferably more in my view, although we will see what Lord Smith comes forward with on that in the fullness of time. It is important for the rebalancing of the political debate in Scotland that we have a Parliament that debates not only how to spend money, but how to raise it.

[Katy Clark (North Ayrshire and Arran) (Lab)]

Does the Secretary of State agree that the high level of participation among ordinary members of the public in the referendum debate was incredibly important, and a stark contrast to the debate leading up to the Scotland Act 2012, which of course delivered substantial further powers to the Scottish Parliament on the taxation and indeed borrowing that come to it? Does he agree that we must listen to the message of that debate, which was that whether people voted yes or no, they wanted change and we have failed to deliver on social justice? Will he hold a public education campaign and ensure that the Government talk not only about the powers that need to be delivered, but about how those powers can be used by the Scottish Parliament to deliver social justice?

[Mr Carmichael]

Having a short process such as the one we have outlined allows early delivery of those powers, and that will allow us to get on to talking about how we use those powers, not just where they are. I share the hon. Lady’s commitment to progress and social justice, and one thing that is clear from 18 September is that people in Scotland, and elsewhere, understand that these are often complex and subtle problems that we cannot solve just by drawing a line on the map.

[David Mowat (Warrington South) (Con)]

Does the Secretary of State agree that part of this settlement needs to be a public spending agreement that is fair to all four nations of the UK? On that basis, will he be reviewing the Barnett formula to ensure that it continues to reflect relative need and will do so in the future?

[Mr Carmichael]

Part of the vow made by the three party leaders was that there would be no change to the Barnett formula, and that remains Government policy.

[Jonathan Edwards (Carmarthen East and Dinefwr) (PC)]

With the Wales Bill about to proceed to the other place, what improvements will the UK Government bring to the Bill to reflect the changing constitutional landscape following events in Scotland?

[Mr Carmichael]

I am afraid that the answer to that question will have to be delivered by my right hon. Friend the Secretary of State for Wales.

[Mike Crockart (Edinburgh West) (LD)]

I thank my right hon. Friend for his statement, and may I echo his call for all of Scotland, whether part of the 45%, 55%, or indeed 65% of my constituents in Edinburgh West who voted no, to now set aside our differences and party affiliations and ensure that the will of the Scottish people is delivered?

[Mr Carmichael]

I echo that sentiment, and having campaigned on a number of occasions with my hon. Friend in his constituency during the referendum campaign, I was not in any way surprised that his constituents voted by such a handsome margin; it was almost as good as the decision in Orkney—[Interruption.] Shetland also voted no very heavily. The best way to capitalise on that magnificent result is for us in this House to demonstrate good faith in relation to the vow.

[Jim McGovern (Dundee West) (Lab)]

I am mindful of the previous hon. Member’s contribution. At the risk of sounding partisan, we see the separatists’ turnout here today. Are they really the party that stands up for Scotland? They cannot even turn up for Scotland.

[Mr Carmichael]

I am sure there are good reasons why hon. Members are here or not, and they can explain that for themselves.

[Andrew Percy (Brigg and Goole) (Con)]

The Secretary of State is absolutely right that the vow must be made good on, but the devolution of considerable additional powers to Scotland has a particular impact on the north of England and we need a long-term solution to our constitution. One thing that could very quickly enhance the voice of the north is to deliver English votes for English laws. Can the Secretary of State confirm that there is absolutely nothing to prevent that happening in tandem with the new powers for Scotland?

[Mr Carmichael]

To make any change of that sort, it will be necessary for the parties to build consensus and to deliver it through this House. That is something that goes beyond my responsibility.

[Mrs Anne McGuire (Stirling) (Lab)]

Given the enthusiasm of the Scottish electorate during the referendum campaign, how will the Secretary of State maintain the enthusiasm, engagement and transparency of the process, so that on 30 November it does not look as though we have delivered a fix, instead of something that has support among the Scottish people?

[Mr Carmichael]

I will be more than happy to play my role in the process that the right hon. Lady outlines. There is a duty and an opportunity for all of us, across all the parties, to play a role. The electorate has rebooted politics in Scotland. It is for us now to respond to the initiative that has been taken by the people.

[Mr Philip Hollobone (Kettering) (Con)]

I am told that on all sorts of measures Kettering is the most average borough in England. I would contend that Kettering people are the most fair-minded people in England. I am sure that my constituents would be very happy for Scotland to have lots more powers so that it can decide things for itself. However, what the fair-minded people of Kettering cannot accept—I would like the Secretary of State to try to explain it to them—is the Scottish people receiving premiums for public services, over and above what the average English taxpayer gets in England, unrelated to relative deprivation.

[Mr Carmichael]

The flow of money between the different parts of the United Kingdom comes and goes at different times over the years. What we have—Scotland has just said that it wishes to continue to be part of this—is a situation in which we all share and pool risks and resources. That is what the people of Scotland have voted for. I hope the hon. Gentleman will sign up to that too.

[Sheila Gilmore (Edinburgh East) (Lab)]

In relation to greater devolution, one proposal that my party made was for the devolution of housing benefit. I appreciate that to some extent that cuts across one of the current Government’s pet projects, universal credit, but will the Secretary of State assure me that his colleagues on the Government Front Bench will be as flexible as possible and willing to see changes that will really help people in Scotland. Incidentally, this proposal might get his Government off one of their uncomfortable hooks—a policy that is not even going to work.

[Mr Carmichael]

Time will tell exactly what the change to universal credit achieves. On the devolution of housing benefit and other matters, we will wait and see what Lord Smith comes forward with. It is not appropriate at this stage for me, as a Minister, to second-guess what he might come up with, but the Government will respond in good faith when we see his heads of agreement.

[Mrs Anne Main (St Albans) (Con)]

The Secretary of State will be aware that very late in the campaign all three party leaders promised significant extra powers to the people of Scotland. What calculations were done on the costs of implementing any additional powers? I heard the Secretary of State say that all resources would be given in terms of making up the deal, but when will the House see any figures associated with what will happen in the name of giving extra powers to Scotland?

--- Later in debate ---

[Mr Carmichael]

May I gently correct my hon. Friend on one point? The proposals of the three parties that support the continuation of the United Kingdom were published, in some cases, 18 months ahead of the independence referendum, and all certainly were published well before the summer. What was made clear in the latter stages of the referendum campaign was the timetable that would be followed. That was the essence of the new commitment that was made. On the figures that will be available, I am afraid that my hon. Friend will, like the rest of us, have to wait until Lord Smith comes forward with his heads of agreement on 30 November, because we cannot put figures on something that we do not yet know the details of.

[Sandra Osborne (Ayr, Carrick and Cumnock) (Lab)]

These powers are, of course, extremely important, but may I join colleagues on the Opposition Benches in emphasising the need for further devolution to deliver on social justice and equality? That is what the Scottish people voted for, and it is what they want to hear. We are very proud of our young people and the way they conducted themselves and engaged with the campaign, but does the Secretary of State agree that it is illogical to give them a vote for just one election?

[Mr Carmichael]

I certainly join the hon. Lady in congratulating 16 and 17-year-olds on the enthusiasm and vigour that they brought to the campaign, which was one of the most heartening aspects of the whole process. Although this goes beyond the next general election, I think it would be difficult for any future Government to resist such a change across the whole of the United Kingdom, and, having seen its effect in Scotland, I do not see why anybody would want to.

[Michael Connarty (Linlithgow and East Falkirk) (Lab)]

I commend the Secretary of State for being able to take the heat out of a situation better than almost anyone else in politics. He has taken some heat himself during the campaign. Will he assure me that the people who do not shout the loudest—people who do not gang up on others—will be heard by the Smith commission? I am talking about the quiet people—the 10,000 contacts I had from constituents who said they wanted this to be solved, whether they voted yes or no, and who wanted their group, whether it was a non-governmental organisation or a charity, to be heard by whoever designs the future of Scotland within the Union.

[Mr Carmichael]

The hon. Gentleman commends me for taking the heat out of the situation. I wonder if that is perhaps an oblique way of saying I am boring if that is what is necessary. I have certainly been accused of an awful lot worse than that during my 13 years as a Member of this House.

In terms of engaging the quiet majority who spoke, the hon. Gentleman is absolutely right: it should not just be the squeaky wheel that gets the grease. Anybody who has a view on how Scotland can be better governed should be able to express that view and expect it to be given the respect it will undoubtedly deserve.

[Gemma Doyle (West Dunbartonshire) (Lab/Co-op)]

The people of Scotland have made a positive choice to stay in the UK. There is clearly support for the further devolution proposed by the three parties, and that must now happen and that process must move forward. I understand that there need to be discussions about devolution to other parts of the UK, but will the Secretary of State urge calm among his colleagues? It will be ludicrous if the result of this vote is that we start to rip apart this Parliament because of their ill-thought-out and rushed proposals.

[Mr Carmichael]

I cannot restate too often the importance of building the broadest possible consensus. It has taken us decades to do that in Scotland, and the Smith commission is just the latest iteration. I believe that parties in England, Wales and Northern Ireland now have to enter that process with the same good faith we are showing in Scotland. There is no alternative to building that sort of consensus. Reflecting on some of the efforts of this Government, I see no other way of achieving constitutional reform than by building that consensus.

[Ms Gisela Stuart (Birmingham, Edgbaston) (Lab)]

I wish the Secretary of State well in completing the process of devolution to Scotland, but it cannot be denied that that will leave unfinished business in the form of devolution in England to our great cities outside London such as Birmingham. In his capacity as a Cabinet member of the United Kingdom Government, is he talking to his colleagues—particularly the Minister responsible for cities—about how the greater devolution of power to cities in England can take place in tandem with the work that he is doing in Scotland?

[Mr Carmichael]

I reiterate that I hesitate to use terms such as “in tandem” because they might suggest a link that could cause delay for one process or the other. It is apparent to me that there is an increased appetite for discussing constitutional change, especially in England. I see that among my own family living in England. I think that it is entirely healthy, and I will encourage it in any way I can. The hon. Lady mentioned devolution to cities. I believe that this Government’s record on city deals and on giving opportunities and resources to cities represents one of our biggest successes. It has probably brought more significant change to the way in which England is governed than many people realise.

[Wayne David (Caerphilly) (Lab)]

I strongly support more powers for the Scottish Parliament, but as the Secretary of State has said, there is a growing appetite for more devolution throughout the whole of the United Kingdom, perhaps in different forms. Will he therefore support the sensible suggestion that the way forward might well be to have a constitutional convention?

--- Later in debate ---

[Mr Carmichael]

I have already made it clear that I am something of an enthusiast for that process, having been through it north of the border. I have always thought that there were applicable lessons for the rest of the United Kingdom, but I have to tell the hon. Gentleman that I do not see us resolving that issue this side of the general election.

[Mr Iain McKenzie (Inverclyde) (Lab)]

I do not think that it is lost on the Secretary of State, or on any of the hon. Members in this House who took part in the referendum campaign, that there are now deep divisions among the Scottish people. Does he agree that, if those divisions are to be healed to allow people to come together, a good starting point would be for the leadership of the Scottish National party to acknowledge that the question of Scottish independence is now dead for decades?

[Mr Carmichael]

I have already made it clear that I expect the leadership of the Scottish National party—in whatever shape or form it eventually emerges—to give that commitment to the Scottish people. That was what the party signed up to in the Edinburgh agreement and that was what it was saying in the week before the referendum. I see no reason why it should not stick to that position.

[Chris Bryant (Rhondda) (Lab)]

I am absolutely certain that the events in Scotland will lead to further devolution in Wales and in England, but what analysis has the Secretary of State made of the proposals on English votes for English laws? Would it not be bizarre if Scottish MPs were barred from voting but Scottish peers were allowed to vote on exactly the same legislation? Such peers could include the ninth Earl of Arran, the 14th Earl of Stair, the 16th Earl of Lindsay and, for that matter, Lord Smith.

[Mr Carmichael]

Lord Smith is not an hereditary peer. As my right hon. Friend the Member for Yeovil (Mr Laws) has already said, where we have devolved, we have devolved to a legislature, be it a Parliament or an Assembly, that is elected proportionally. That has been an important part of the way in which we have gone about the process of devolution, and I think that the people of England should be entitled to that as well. The essential difficulty that the hon. Gentleman touches on is that it is—[Interruption.] He knows my views on an unelected House of Lords. It is very difficult to devolve within Parliament but not the Executive, and that is something that those who want changes of this sort will have to address and explain.

Oral Answers to Questions

Alistair Carmichael Excerpts

Wednesday 2nd July 2014 Commons Chamber

[Mike Freer (Finchley and Golders Green) (Con)]

1. What assessment he has made of the potential for international inward investment in Scotland after 2014.

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

As part of the United Kingdom, Scotland has an impressive track record of attracting international inward investment, which recent figures have put at its highest level for 16 years. Scotland has strong potential to build on that record as part of the UK, the No. 1 location for Europe-bound foreign investment.

[Mike Freer]

Does my right hon. Friend agree that inward investment is boosted by Scotland being part of a single market and having a single currency?

[Mr Carmichael]

Indeed; I do agree with my hon. Friend. The people of Scotland very much understand that access to the pound sterling as our currency and access to that larger UK market benefit them, and they value them, especially the business community. We know that, because that is why the nationalists are constantly telling us that even in independence we would still be able to keep those things. They are wrong; it is cynical; and as we saw from yesterday’s poll, nobody is really being fooled by it.

[Mr Brian H. Donohoe (Central Ayrshire) (Lab)]

11. However, it is the case that inward investment is faltering. I have had experience after experience of talking to foreigners who are not investing in Scotland as a result of the uncertainties and the possible likely divorce. Are we not by far better off as a united kingdom than we would be with a separate Scotland?

[Mr Carmichael]

We are very much better off as a result of being part of the United Kingdom, and I long for the day when again Ministers here and in Edinburgh can all concentrate on doing their day job of working together to get the maximum benefit to Scotland and Scotland’s economy, and jobs for the people of Scotland that come from inward investment—instead of a referendum distraction.

[John Thurso (Caithness, Sutherland and Easter Ross) (LD)]

My right hon. Friend will be well aware that marine renewable energy presents a considerable opportunity for inward international investment as well as for export, based on the knowledge we have acquired. In that regard, it is vital that MeyGen’s project goes ahead. What discussions has he had with either the Department of Energy and Climate Change or the Crown Estate to enable that to happen?

[Mr Carmichael]

I have had a number of discussions, as I think my hon. Friend is aware, involving my colleagues in DECC and in the Crown Estate. I am very keen to ensure that no procedural difficulties will stand in the way of the development from MeyGen, which, as he and I both know, is a very exciting and potentially lucrative development for his area.

[Angus Robertson (Moray) (SNP)]

Inward investment into Scotland is at a 16-year high under a Scottish National party Government and in the run-up to an independence referendum. That contrasts with all the claims of doom and gloom from the Chancellor of the Exchequer. Given that the UK Government were spectacularly wrong in their claims on inward investment, why should anybody trust the myriad Westminster scare stories?

[Mr Carmichael]

I am delighted that the hon. Gentleman gives me the opportunity to remind the House that of the 111 inward investment projects that were successful in 2012-13, 84 were supported by UK Trade & Investment. That is the sort of heft that is given to Scottish business by being part of the United Kingdom; that is what he wants us to walk away from.

[Angus Robertson]

The UK Government have launched a confrontational approach to the European Union. The Prime Minister went to Brussels last week and was outvoted 26 to 2. If smaller countries have no say in the European Union, why is it that a Luxembourger is the new President of the European Commission—from a country smaller than the city of Glasgow?

[Mr Carmichael]

I will take absolutely no lectures from the Scottish nationalists on the subject of confrontational approaches. It really is a mark of the desperation of the position in which they find themselves that that is the best they can come up with.

[Mrs Anne McGuire (Stirling) (Lab)]

The Secretary of State commented on the Ernst and Young report, and it also identified that although investment was increasing, the number of jobs related to that inward investment was decreasing. I wonder what action the Minister can take, hopefully in co-operation with the Scottish Government, to ensure that there is greater correlation between investment and jobs created in Scotland.

[Mr Carmichael]

The right hon. Lady points to a direction in which sensible politics ought to go, and I would love to be working in that way with the Scottish Government. Unfortunately, however, it takes two to tango.

--- Later in debate ---

[Pete Wishart (Perth and North Perthshire) (SNP)]

3. What steps he is taking to inform the public about the Scottish independence referendum.

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

To inform the debate, a variety of information, including a range of detailed analysis papers and a booklet for each household in Scotland, has been published. I have also participated in public debates and will continue to do so to set out the benefits of Scotland’s remaining in the United Kingdom.

[Pete Wishart]

For which we are eternally grateful, but is not the best way to inform people to debate? Instead, we have the leader of the no campaign, his right hon. Friend the Prime Minister, running a mile, feart to do just that? What about the substitute-designate? It will be a slaughter worse than the Bannockburn re-enactment if they put up the angry, agitated Alistair to debate with the First Minister. The Secretary of State himself could do it; he is good at this stuff—he could even take Rhona with him. But what we really need is the organ grinder, not one of the Alistair monkeys to debate with the First Minister.

[Mr Carmichael]

That was pitiful. I cannot believe it sounded good even when the hon. Gentleman rehearsed it in the mirror this morning. It is typical, though, of what we hear from the Scottish nationalists. They are desperate always to talk about how we will debate. They do that only because they want to avoid the actual debate, because they know that the force of argument is on the side of those of us who want to remain in the United Kingdom.

[Iain Stewart (Milton Keynes South) (Con)]

15. Will my right hon. Friend make sure that before 18 September the public have full information at their disposal about the significant extra powers for the Scottish Parliament for which this Parliament has already legislated? It is perfectly possible for Scotland to have more autonomy without ripping up our country.

[Mr Carmichael]

That is exactly the position. As of next year, as a result of the Scotland Act 2012, the Scottish Parliament will have control over stamp duty land tax and the landfill tax, it will have a borrowing power and, come 2016, it will have the power to set a Scottish rate of income tax. Those are significant tax-raising powers. I want to see us go further on that. Of course, that will require Scotland to decide to remain part of the United Kingdom.

[Graeme Morrice (Livingston) (Lab)]

Does the Secretary of State agree that third parties such as businesses and trade unions need to be able to make their voices heard in the referendum debate? Will he join me in condemning those people who continue to intimidate those who speak out against independence?

[Mr Carmichael]

I absolutely 100% and without any reservation condemn any intimidation, wherever it may appear. This is by a country mile the single most important issue that we, the people of Scotland, will ever have to resolve for ourselves. Nobody should feel that they are constrained in having their say or asking questions about what it would mean for them, their family or their business. Anybody who tries to silence people on the other side of the debate should be no part of it.

[Sir Menzies Campbell (North East Fife) (LD)]

Is not the role of our Government to provide answers to the questions that those arguing for independence refuse to provide—either because they do not know the answer or because they do not want us to know the answer?

[Mr Carmichael]

Indeed, that is the case. It has been remarkable that on every occasion when we could have been given hard facts and information by the Scottish Government throughout this exceptionally long campaign, we have instead been given opinion and assertion. People are not stupid, though. They draw their own conclusions from that, as was apparent from yesterday’s YouGov poll in The Times.

[Margaret Curran (Glasgow East) (Lab)]

This is the last Scottish questions before the referendum. People across Scotland know the magnitude of this decision and that if there is a yes vote, it is irreversible. That is why people need as much information as possible. Does the Secretary of State agree that when presented with the facts, most Scots do not want to turn their backs on the United Kingdom, and that a message of a strong Scotland with a strengthened Scottish Parliament is gaining support in every part of Scotland?

[Mr Carmichael]

The most important message that the people of Scotland have to get from any source is that the decision we make on 18 September is a decision from which there will be no going back. This has to be a once and for all decision. From that point of view I agree completely with the hon. Lady. Over the past 300 years, as part of the family of nations that is the United Kingdom, we have achieved a great deal of which we should be proud, and I and the people of Scotland do not want to walk away from that.

[Margaret Curran]

I thank the Secretary of State for that answer, which is particularly important this week, as we celebrate the naming of HMS Queen Elizabeth. Will he ensure that people across Scotland are informed about the value of such UK contracts to the shipbuilding industry in particular? Does he agree with the shop stewards at Rosyth and on the Clyde that the best way to protect the shipbuilding industry in Scotland is to say no thanks in September?

[Mr Carmichael]

I absolutely agree with the hon. Lady and with the shop stewards at Rosyth and on the Clyde, all of whom I have met on a number of occasions in recent weeks. They are clear and unambiguous about the message that the hon. Lady has just articulated. The House should remember that that is not the view of a politician; that is the view of trade unionists—people who are charged with protecting the best interests and the jobs of their members. If they thought for a second that independence would be good for their members and that it would help to protect their jobs, I have no doubt that the trade unions on the Clyde and at Rosyth would be supporting it. The fact that they are not tells us all we need to know.

[Sir Gerald Howarth (Aldershot) (Con)]

Will the Secretary of State ensure that Scottish voters understand that if they vote for Scotland to become a foreign country, they will lose the pound and all the stability and economic advantage that goes with it? Will he also make it clear that many of us in England—indeed, the vast majority—want Scotland to remain a vital and important part of our United Kingdom so that we can jointly share in our future prosperity?

[Mr Carmichael]

I agree with my hon. Friend that that is the view of most people in England, and in Wales and Northern Ireland. I look at how we have tackled the challenges we have faced over the past 300 years, and I see that over that time we have identified the problems and reached out from Scotland, to communities such as Liverpool, Newcastle, Manchester, Cardiff and Belfast, and tackled them by making common cause. That has worked for us, and I believe that it will continue to work for us.

[Jim McGovern (Dundee West) (Lab)]

4. What assessment his Department has made of the effect of the regional air connectivity fund on Scotland.

--- Later in debate ---

[David Mowat (Warrington South) (Con)]

5. What assessment he has made of the potential effect of Scottish independence on energy flows between Scotland and the rest of the UK.

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

Scotland has a thriving energy sector which benefits from unrestricted access to the integrated Great Britain energy market. That supports jobs, keeps bills lower and spreads the substantial costs over 30 million households and businesses.

[David Mowat]

The Scottish Government have now decided to generate 100% of electricity from renewables by 2020. The implied subsidy for that is £4 billion a year, or £1,000 per voter a year. Has the Secretary of State had any discussions with the Scottish Government about who would pay for that in the event of independence?

[Mr Carmichael]

What I can tell my hon. Friend is that at the moment the cost of the subsidy required for the development of renewables is spread across the whole United Kingdom market. In an independent Scotland, that cost would have to be met by households in Scotland, which would mean a difference of between £38 and £189 in Scottish energy bills. We do exceptionally well from the subsidies that come to Scotland as part of the United Kingdom.

[Fiona O'Donnell (East Lothian) (Lab)]

Does the Secretary of State think there would be a market in the rest of the UK for expensive renewable energy from an independent Scotland, or is a single regulated energy market best for Scotland and best for the UK?

[Mr Carmichael]

The benefits and opportunities that come to generators of renewable energy in Scotland from being part of that single integrated market speak for themselves. The fact that we are being asked to leave that should be of concern to them.

[Sheila Gilmore (Edinburgh East) (Lab)]

6. What discussions he has had with his ministerial colleagues on the transition costs of an independent Scotland.

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

I have regular discussions with ministerial colleagues, to ensure that people in Scotland have the full facts about the economic consequences of independence. The Scottish Government have repeatedly refused to publish their own workings. I call on them today to publish the work they have carried out.

[Sheila Gilmore]

I thank the Secretary of State for that reply. The Scottish Government’s own Finance Secretary calculated, in an internal memo, that the cost of setting up a new tax authority alone would be some £650 million. Is it not right that the Scottish Government should give that and other, similar information they have to the Scottish people before asking them to vote for a pig in a poke?

[Mr Carmichael]

It is worth reflecting that that figure is in the public domain only because the document was leaked. The truth of the matter is that, whenever there is any difficult news to be had, the Scottish Government will go to any lengths to suppress it, because, frankly, they are prepared to tell us anything that they think will make us more likely to vote for independence.

[Mr Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)]

13. With the renovation costs of the Westminster Parliament expected to be £400 million a year every year for 10 long years, Professor Patrick Dunleavy said yesterday at the London School of Economics that the set-up costs for an independent Scotland would be £200 million and not the £1.5 billion that is on the Treasury website. Will the Secretary of State see to it that that figure is corrected and that the Westminster Government apologises both to Professor Dunleavy, an expert in this area for 30 years, and to the people of Scotland for that error and misinformation? [Interruption.]

[Mr Speaker]

Order. The hon. Gentleman is talking out his colleagues.

[Mr Carmichael]

The hon. Gentleman is out of date. I can tell him exactly what Professor Dunleavy said yesterday:

“Scotland’s voters can be relatively sure that total transition costs over a decade will lie in a restricted range, from 0.4 of one per cent of GDP (£600 million), up to a maximum of 1.1 per cent (£1,500 million). This is a step forward in debate”.

He was agreeing with Professor Iain McLean and said:

“I am grateful to Iain for helping to bring it out.”

The hon. Gentleman should also be grateful.

Government's Legislative Programme (Scotland)

Alistair Carmichael Excerpts

Thursday 5th June 2014 Written Statements

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

Nine of the 11 new Bills mentioned in the Queen’s Speech for this Session of Parliament contain provisions that apply in Scotland, either in full or in part.

In this legislative Session we will take measures that will help build a fairer society and a stronger economy across the United Kingdom.

Thousands of working families in Scotland will benefit from help to meet child care costs. The speech also outlines the reforms to the pensions system, giving savers greater discretion over the use of their retirement funds.

The Government will also help hard-pressed small businesses with measures to help them more easily secure the vital finances that they need to grow.

We will maximise North sea resources, helping to ensure future energy supply by implementing recommendations of the Wood review. We will also take forward proposals to give communities the right to buy a stake in their local renewable electricity scheme and gain a greater share in the associated financial benefits.

We will also legislate to ensure that armed forces charities are able to receive Government payments under the commitments of the armed forces covenant and we will increase the accountability of Members of Parliament by introducing a mechanism for the recall of Members where serious wrongdoing has occurred.

Other measures will help tackle serious crime across the UK including in Scotland, for example in clamping down on drug-cutting agents, and we will work with the Scottish Government on various measures including extending the use of serious crime prevention orders to Scotland and bringing forward amendments to the Prohibition of Female Genital Mutilation (Scotland) Act 2005 to help crack down on that abominable crime.

The speech also reiterated the commitment of the Government to making the case for Scotland staying in the United Kingdom in 2014. The Government will fight for a secure Scotland within a strong and prosperous United Kingdom and will continue to work to help create a stronger economy and a fairer society both in Scotland and the United Kingdom.

During this Session we will also reaffirm our commitment to strengthening devolution by commencing vital provisions of the Scotland Act 2012. From April 2015, UK stamp duty land tax and landfill tax will be switched off in Scotland and the Scottish Parliament will introduce new Scottish taxes to replace them. Scottish Ministers will also have enhanced borrowing powers and access to a cash reserve to manage revenues from the two taxes. This will increase the accountability of the Scottish Government and Parliament for raising funds as well as taking decisions about how they spend them.

From April 2016, a Scottish rate of income tax will also be introduced, giving the Scottish Parliament additional flexibility in how it raises funds for devolved spending.

This statement provides a summary of the legislation announced in the Queen’s Speech and its application to Scotland. It does not include draft Bills.

The Government are committed to the principles of the Sewel convention, and we will continue to work constructively with the Scottish Government to secure consent for Bills that contain provisions requiring the consent of the Scottish Parliament.

The Bills listed in section 1 will apply to Scotland, either in full or in part, on introduction. Section 2 details Bills that will not apply in Scotland at introduction.

Section 1—Legislation applying to the United Kingdom, including Scotland (either in full or in part):

Armed Forces (Service Complaints And Financial Assistance)

Childcare Payments

Infrastructure

National Insurance Contributions

Pensions Tax

Private Pensions

Recall Of Members Of Parliament

Serious Crime

Small Business, Enterprise And Employment

Section 2—Legislation that will not apply in Scotland:

Social Action, Responsibility and Heroism

Modern Slavery

Oral Answers to Questions

Alistair Carmichael Excerpts

Wednesday 7th May 2014 Commons Chamber

[Rory Stewart (Penrith and The Border) (Con)]

1. What assessment he has made of the potential effects of Scottish independence on border parliamentary constituencies.

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

As a United Kingdom, we all have better job opportunities, employment and mobility. Every day, 30,000 people travel between Scotland and England for work. If Scotland were to leave the United Kingdom, our border constituencies would be the first to feel the effects of the creation of an international border.

[Rory Stewart]

Does the Secretary of State agree that one of the challenges of separation would be that our focus would be lost and our energy dissipated by looking at the details of administration and borders, rather than all the opportunities in the world, from Brazil to Indonesia?

[Mr Carmichael]

That is one of the many downsides a vote for independence would bring. It would be an unnecessary distraction that would indeed remove our focus from the opportunities that being part of the United Kingdom give us to develop Scottish business by looking overseas.

[Mr Brian H. Donohoe (Central Ayrshire) (Lab)]

On the question of separation, surely it is understood that divorce can be messy and that in this case it certainly would be messy? What I have been told by businessmen in my area is that they will move out of Scotland if separation takes place.

[Mr Carmichael]

I think we all know that what matters to business is the bottom line: the profit and loss account and the balance sheet. If businesses felt that independence was going to be good for them, they would be lining up to support it. Since the turn of the new year, we have heard a steady chorus from the business community, who have all been coming out to underline the risks and uncertainty that would come from independence. [Interruption.] These are voices that the hon. Members on the nationalist Benches may wish to drown out with their incessant chatter, but they will not do it.

[Michael Moore (Berwickshire, Roxburgh and Selkirk) (LD)]

Anybody who pauses at the top of the hill on the Carter Bar on the A68 is able to reflect on one of the most beautiful views of Scotland and on one of the most beautiful views of England, and reflect on the fact that these two countries have so much in common and so much shared family experience. Does my right hon. Friend share my hope that that will always be the case, rather than it marking the border point between two separate states?

[Mr Carmichael]

I very much agree with my right hon. Friend. I always think of the United Kingdom as being a family of nations. Of course, like all families, we do have those moments where we have disagreements, and we do occasionally want to do things in a slightly different way, but as a family the ties that bind us are so much greater than the differences that divide us. That is why I believe that Scotland, come 18 September, will choose to remain part of that family of UK nations.

[Angus Robertson (Moray) (SNP)]

But the people of the borders and the rest of Scotland are being subjected to the self-styled “project fear” campaign, which its own supporters describe as negative, nasty, and threatening, and who also say that the Prime Minister is toxic in Scotland. Why are even the Secretary of State’s own colleagues saying this?

[Mr Carmichael]

I have to say that it is a bit rich to hear the right hon. Gentleman talking about “project fear” when the First Minister went to Carlisle on St George’s day to deliver a lecture that I can only describe as project ridiculous. The fact of the matter—there is no escaping this for the nationalists—is that for people living in the constituencies on either side of the border, there are real benefits to being part of the United Kingdom. The nationalists want us to walk away from those benefits.

[Angus Robertson]

Leading members of the right hon. Gentleman’s own campaign have told people in the borders and the rest of Scotland that they will have to show a passport at the border; drive on the right-hand side of the road; worry about their pensions, when in this place people are being told that they are safe; and that they will not be able to use their own currency, when the media in London are being briefed that that will be safe. Why do his colleagues think that the people of the borders and the rest of Scotland will fall for this demeaning, insulting nonsense?

[Mr Carmichael]

The question of the borders highlights perfectly how the Scottish nationalists want to have their cake and eat it. On the one hand, they tell us that we could have a common travel area, which works very well with the Republic of Ireland at present. At the same time, they tell us that we will have a widely divergent immigration policy, which the Republic of Ireland does not have. They can have one thing or the other: they cannot have both. That is why their prospectus is flawed.

[John Stevenson (Carlisle) (Con)]

In places such as Carlisle, many businesses have branches and offices on both sides of the border. Does the Secretary of State agree that if Scotland votes yes there is a real danger that there will be such an additional burden on those businesses that it will have an effect on jobs and economic prosperity on both sides of the border?

[Mr Carmichael]

Inevitably, an independent Scotland would have a different taxation system, different national insurance provisions and different economic regulations, and that would impose an extra cost on business. The financial services sector, which supports 200,000 jobs in Scotland, has already issued serious warnings about what would happen to its business and how it would organise itself if Scotland became independent.

[Katy Clark (North Ayrshire and Arran) (Lab)]

2. What discussions he has had with his ministerial colleagues on the effects of housing benefit changes in Scotland.

--- Later in debate ---

[David Mowat (Warrington South) (Con)]

4. What discussions he has had with Ministers in the Scottish Government on the potential role of the Bank of England in the event of Scotland becoming an independent country.

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

I have not had any discussions with Ministers in the Scottish Government on the potential role of the Bank of England. If people in Scotland vote to leave the UK, they are voting to leave the UK institutions that support it, such as the Bank of England, which will continue to operate on behalf of the continuing UK.

[David Mowat]

I thank the Secretary of State for that answer. The majority of my constituents hope very much that Scotland will stay in the Union, but for the avoidance of doubt, will he confirm that in the event of a yes vote, there are no circumstances under which my constituents will underwrite the borrowing and spending plans of an independent Scotland, whichever currency it uses?

[Mr Carmichael]

I thank my hon. Friend for his support for the continuation of Scotland within the United Kingdom. The position on any currency union or central banking arrangements if Scotland were to vote for independence has been made very clear recently by the Chancellor and the Chief Secretary and also by the shadow Chancellor: there will be no such arrangements.

[Ian Murray (Edinburgh South) (Lab)]

In the event of an independent Scotland, will the Bank of England’s Monetary Policy Committee take its instructions from the UK Treasury or the Scottish Government?

[Mr Carmichael]

The Bank of England will continue to take its instructions from the UK Treasury. It is a UK institution and that would not change.

[Mr Philip Hollobone (Kettering) (Con)]

If Scotland separated from the United Kingdom, how would the UK’s foreign exchange reserves be reallocated?

[Mr Carmichael]

That would be a matter to be determined in the event of Scotland voting to leave the United Kingdom. I very much hope that will not come to pass.

[Stewart Hosie (Dundee East) (SNP)]

The Bank of England has already sensibly engaged in technical discussions with the Scottish Government. As each day passes and a yes vote on independence becomes more likely, is it not about time this Government abandoned their bellicose scaremongering and also engaged in sensible discussions with the Scottish Government on how these institutions can continue to work, in the best interests of both countries?

[Mr Carmichael]

Both Governments agreed in the Edinburgh agreement that there would be no question of pre-negotiation. That was a sensible situation and I am astonished that the hon. Gentleman now seeks to walk away from it.

[Sir Malcolm Bruce (Gordon) (LD)]

Does the Secretary of State agree that the Bank of England is not an asset to be shared but an institution that belongs to the United Kingdom which Scotland chooses to leave? Does he also agree that it is an extraordinary kind of independence where one wants to hand over control of one’s fiscal and monetary policy to a foreign bank?

[Mr Carmichael]

My right hon. Friend puts it perfectly. The difference between an asset and an institution is not a difficult one to understand, but the Scottish nationalists do seem to struggle with it.

[Michael Connarty (Linlithgow and East Falkirk) (Lab)]

5. What discussions he has had with Ministers in the Scottish Government on a potential currency union with an independent Scotland.

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

I have not had any discussions with the Scottish Government about the prospect of a currency union. The Chancellor, Chief Secretary and shadow Chancellor have all said there will not be a currency union. The only way to keep the UK pound is to stay in the UK.

[Michael Connarty]

I thank the Secretary of State for that reply. Having read the fiscal commission’s report, it is clear that it took the advice that I have been giving Scottish National party colleagues here that they would be destroyed if they went into the eurozone, where the stability and growth pact would destroy their economy. If they have no currency union with the UK, exactly what prospects are there for the 8% deficit that Scotland is running at the moment?

[Mr Carmichael]

The position is very clearly laid out: the difficulties that would be created by the currency union would be difficulties for the whole of the United Kingdom, but particularly for the people of Scotland. If we are to be independent, we need to be independent with all that that means. It is not possible to be half independent.

[Michael Fabricant (Lichfield) (Con)]

Is my right hon. Friend aware that Moody’s has stated that if Scotland were to gain its independence it would downgrade Scotland’s credit rating to B? What effect would that have on Scotland’s interest rates?

[Mr Carmichael]

The comments and report by Moody’s last week have to be taken very seriously and read with some care. Moody’s makes it clear that on its estimation an independent Scotland would be rated two levels below the rating the UK currently enjoys. For the people of Scotland that would mean more expensive store cards, more expensive overdrafts and more expensive mortgages. We are cheaper as part of the United Kingdom.

[Gemma Doyle (West Dunbartonshire) (Lab/Co-op)]

12. Does the Secretary of State agree that all the currency options that have been put forward for an independent Scotland by the nationalists would actually involve constraints on decision making on fiscal policy?

[Mr Carmichael]

Every option that is put forward by the Scottish nationalists is inferior to what we currently have as part of the United Kingdom. That is the unpalatable truth that they do not want to hear, but from which there is no escaping. The people of Scotland know that truth.

[Mr Alan Reid (Argyll and Bute) (LD)]

The success of the Government’s economic policy is proven by the fact that the number of people claiming unemployment benefit in my constituency reduced by 419 in the past year. Does my right hon. Friend agree that the best way to keep this sustained economic growth is to stay within the UK and with the common currency that we have at the moment?

[Mr Carmichael]

Indeed. My hon. Friend gives me an opportunity to remind the House that the United Kingdom has the fastest growing economy in the G7, and that Scotland is the second wealthiest part of that economy.

[Mr Michael McCann (East Kilbride, Strathaven and Lesmahagow) (Lab)]

10. The people of Scotland want facts, so will the Secretary of State tell us on what date, if Scotland chooses to separate, will it either have to begin printing its own money or, failing that, start using the pound as a foreign currency?

[Mr Carmichael]

The hon. Gentleman invites me to look into the future and make a prediction, which is never an easy prospect—it is an unwise prospect for anyone in politics. The truth of the matter is that all these things are uncertain, and they bring enormous risks in areas where we do very well as a result of being part of the United Kingdom.

[Sir Menzies Campbell (North East Fife) (LD)]

To echo the hon. Member for Moray (Angus Robertson), what could be more demeaning and insulting than to lead the Scottish people to believe that there are no risks in independence, and that a currency union is a foregone conclusion?

[Mr Carmichael]

The only foregone conclusion about a currency union is that it will not happen. It will not happen because that is the advice that has been given by the permanent secretary to the Chancellor of the Exchequer. That advice is not going to change, and the outcome of that advice is not going to change.

[Pete Wishart (Perth and North Perthshire) (SNP)]

The Chancellor’s sermon on the pound was supposed to bring the Scottish people back into fearful line, but as the opinion polls have shown, the Scottish people will not be discouraged by this; instead, they are emboldened and angered. The Scottish people will no longer be told by Westminster. Will the Secretary of State tell us what has happened to the search for the Minister who told the truth? Have they made any progress, or do they perhaps need our help?

[Mr Carmichael]

Mr Speaker, I am delighted that you were able to fit the hon. Gentleman in; otherwise, we would all have missed his monthly comedy turn. It is quite remarkable that he chooses to ignore the advice given by the permanent secretary to the Chancellor of the Exchequer, setting out why a currency union would be bad for the rest of the United Kingdom and bad for an independent Scotland. Why does the hon. Gentleman want something that would be bad for Scotland?

[Gordon Banks (Ochil and South Perthshire) (Lab)]

Last week, 18% of members of Scottish Chambers of Commerce confirmed that they are making plans to move out of Scotland in the event of a yes vote, and 63% believe that an independent currency or the euro would be bad for business. Today we have heard from the British Chambers of Commerce that 85% of their businesses are against independence, and nearly half identified currency concerns as the most important issue for them. What reassurances can the Secretary of State give the House about currency for businesses on both sides of the border?

[Mr Carmichael]

The only reassurance I can give is that if people in Scotland vote no, they will continue to enjoy the use of the pound and they will continue to have the Bank of England as a lender of last resort. Beyond that, everything is uncertain.

[Iain Stewart (Milton Keynes South) (Con)]

6. What assessment he has made of the potential effects of Scottish independence on cross-border trade and employment.

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

Scotland’s place in the United Kingdom means we have a truly single domestic market, with no barriers to trade and employment across the United Kingdom. Independence would fundamentally change that. The resulting “border effect” would disrupt trade and free movement of workers, reducing real incomes by, it is estimated, around £2,000 per Scottish household per year.

[Iain Stewart]

My constituency is home to a large number of national logistics and distribution companies. Is my right hon. Friend aware of the growing concern in that sector that separation could make some cross-border routes less attractive, as they would become international rather than domestic ones?

[Mr Carmichael]

Indeed, and I hear the same message from a range of business interests. The financial services industry, for example, says that independence would bring extra costs with different taxation and different regulation. The supermarkets have made it very clear that extra costs would fall to Scottish consumers if Scotland were independent.

[Mr Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)]

According to the House of Commons Library, 200,000 UK jobs depend on trade with the Republic of Ireland—double that of Canada and Norway. Ireland used to be part of the UK, but trade between the two has never been higher. The UK is Ireland’s No. 1 trading partner, and among the recently independent nations of the European Union, foreign direct investment rose by 215% in the first four years of independence. For those realities, what scare stories will the Secretary of State use?

[Mr Carmichael]

It is not a scare story to point out that the White Paper presents a prospectus and a future where there would be barriers and where the mere existence of a border would be an extra cost. If the hon. Gentleman wants to know the truth of the matter, he need look no further than at the situation that exists between Canada and the United States. The hon. Gentleman might not like it, but that is the truth.

[Graeme Morrice (Livingston) (Lab)]

What discussions has the Secretary of State had with the Scottish Government regarding the possibility of border controls between an independent Scotland and the rest of the UK, if an independent Scotland had a separate immigration policy?

[Mr Carmichael]

It is an inescapable fact that if, as the nationalists tell us in the White Paper, Scotland were to have a widely divergent immigration policy, which would be necessary for such of their economic plans as they have been prepared to tell us about, the operation of a common travel area of the sort that currently works well with the Republic of Ireland simply would not operate. You cannot have your cake and eat it on this occasion.

[Mr Speaker]

Last but not least, Mrs Anne McGuire.

[Mrs Anne McGuire (Stirling) (Lab)]

Given the First Minister’s threat to blockade Scottish fishing grounds if he does not get his own way on EU membership and given that licences are held across the United Kingdom, what analysis has the Secretary of State done on the impact on employment in the Scottish fishing industry?

[Mr Carmichael]

The impact on employment would be serious in some of the most economically fragile communities in Scotland in our coastal and island communities. I have to say that the First Minister’s comment about blockading Scottish waters went beyond the ridiculous, but it makes me wonder whether that is why he seems so desperate to cosy up to Vladimir Putin.

The Prime Minister was asked—

Oral Answers to Questions

Alistair Carmichael Excerpts

Wednesday 19th March 2014 Commons Chamber

[Mr Ian Davidson (Glasgow South West) (Lab/Co-op)]

1. When he plans to respond to the fifth report from the Scottish Affairs Committee on the Crown Estate, HC 889.

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

I welcome the Committee’s continued interest in the Crown Estate’s activities in Scotland and the publication of its latest report. I am working on the UK Government response with colleagues in HM Treasury and we will publish it as soon as possible.

[Mr Davidson]

Does the Secretary of State agree that this is indeed a fine report, which should be accepted in full by the Government? In particular, does he accept the proposal that the devolution of powers from London should be not simply to the black hole that is Edinburgh, but to the local communities and authorities of the highlands and islands of Scotland?

[Mr Carmichael]

I pay tribute to the hon. Gentleman because, under his stewardship, the Scottish Affairs Committee has become one of the most productive Committees in the House. He knows that I have a particular interest in this issue. He highlights one of the real challenges facing us. People in our island and coastal communities have seen power and influence systematically stripped away by the Scottish Government since they took power in 2007. I do not see any particular attraction in replacing a centralised system from London with a centralised system in Edinburgh.

[Mr Alan Reid (Argyll and Bute) (LD)]

A social enterprise has bought the Ardroy outdoor education centre in my constituency, but it needs to acquire from the Crown Estate the rights to a sewage pipe over the foreshore. After months of legal correspondence and thousands of pounds of legal bills, the matter is still not sorted out. Will my right hon. Friend meet me to help resolve the problem?

[Mr Carmichael]

Unfortunately, my hon. Friend highlights a constituency case of the sort that has been all too familiar to me over the years. In fact, in many ways, it makes the case for the need for reform. I would be more than happy to meet him and his constituents and assist them in any way that is open to me.

[Angus Robertson (Moray) (SNP)]

It is now nearly three years since all three UK parties were resoundingly defeated by the Scottish National party. In those three years, there was plenty of time for the coalition Government and indeed the official Opposition to consider further devolution, including that advocated by the Scottish Affairs Committee. Will the Minister confirm whether they will or will not publish a comprehensive joint devolution proposal?

[Mr Carmichael]

The hon. Gentleman will get the Government’s response at the same time as everyone else, but he cannot get away from the fact that his Government in Edinburgh have systematically stripped power, influence and accountability away from island and coastal communities. They are not to be trusted with this.

[Angus Robertson]

The coalition parties and the official Opposition have spent the past three years expressing nothing but groundless, relentless negativity about the future of Scotland. They have dubbed it “project fear”. The Conservative party said that it had a line in the sand and that there would be no further devolution. The Labour party is proposing even less than a few years ago, and the Liberal Democrats are in favour of federalism in a lopsided model that will never ever work. Why should the electorate believe a single word of any of the three parties on the issue of devolution—

[Mr Speaker]

We are grateful, but too long.

[Mr Carmichael]

It is not lost on the House that the hon. Gentleman’s question has absolutely nothing to do with the Crown Estate. My constituents and those of other hon. Members representing coastal and island communities will no doubt conclude that that is simply because his Government do not care about them.

[Alison McGovern (Wirral South) (Lab)]

2. What assessment he has made of the extent of the use of zero-hours contracts in Scotland.

--- Later in debate ---

[Dr Thérèse Coffey (Suffolk Coastal) (Con)]

4. What assessment he has made of the financial benefits for Scotland of being part of the UK.

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

As part of the United Kingdom, Scotland’s economy is doing well. We benefit from being part of the large, integrated UK domestic market.

[Dr Coffey]

I thank my right hon. Friend for that answer. He illustrates very clearly the benefits of Scotland staying in the United Kingdom, which will be good for everybody in this country. Having already mentioned the private sector recovery and jobs, does he agree that the Barnett formula provides a generous amount of public sector funding?

[Mr Carmichael]

Indeed. The Barnett formula has been part of Scotland’s political landscape for almost 40 years and delivers a good level of public spending for people in Scotland—in the region of £1,000 per head each year over the figure for the rest of the United Kingdom. That reflects Scotland’s distinctive needs. That is why it is here to stay.

[Mr Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)]

There is huge and growing inequality. Staggeringly, according to Oxfam, five families in the UK own as much as 20% of the population do. The Financial Times stated on Monday that the burden of austerity has fallen most heavily on the least well-off. Can the Secretary of State explain to the growing number of people using food banks in Scotland the benefits of being in the UK? They are not better together; they are at the food bank.

[Mr Carmichael]

No subject, apparently, is so complex or involved that it cannot be trivialised by the Scottish nationalists. The reasons people have to resort to using food banks are complex, and many of them have more to do with the difficulties they face in work than with being on benefits. I am quite prepared to listen to representations from every part of the House about what the Government can do, but frankly I do not expect to hear anything constructive from the hon. Gentleman.

[Mr Charles Kennedy (Ross, Skye and Lochaber) (LD)]

Does my right hon. Friend agree that there is more than a sense of irony about the fact that the devolution cause—to maintain but reform the United Kingdom—was based largely on the correct analysis that too many economic decisions were being concentrated here in London. Yet, now in Scotland, if we look at Highlands and Islands Enterprise and the Crofting Commission, to take just two examples, we see that too many economic decisions are being centred politically in Edinburgh? Does he agree that Scotland’s long-term financial benefit is in the UK, but that we also need a more devolved Scotland?

[Mr Carmichael]

Indeed. We see Scotland’s constitutional position as an evolving one. The experience to which my right hon. Friend points is exactly the same as that which I and my constituents see. Week in, week out, the Scottish Government take power and influence away from constituencies and communities such as ours, which know best what will work in growing their economies, and what we get is what people in Edinburgh think we need, rather than what we want.

[Mr Speaker]

I ask the Secretary of State to face the House so that we get the full benefit of his mellifluous tones.

[Ian Murray (Edinburgh South) (Lab)]

There are tens of thousands of financial services jobs in my constituency, and my constituents are getting increasingly upset by the uncertainty around the independence referendum and the fact that many financial institutions might leave Scotland. What can the Secretary of State say to my constituents to ensure them that those jobs will not only stay, but increase in the future?

[Mr Carmichael]

The best way to ensure that those jobs stay is to vote no on 18 September and ensure that Scotland remains part of the United Kingdom. In recent weeks we have seen a growing number of companies—Standard Life, Royal Bank of Scotland and Alliance Trust Ltd—explaining that, if Scotland was to become a foreign country, as good Scottish companies operating through the whole of the United Kingdom, they would be required to remove their headquarters from Scotland to the rest of the United Kingdom. That would not be good for Scotland’s economy.

[Mel Stride (Central Devon) (Con)]

5. What recent discussions he has had with the Scottish Government on the prospect of a currency union with an independent Scotland.

[Mark Menzies (Fylde) (Con)]

8. What recent discussions he has had with the Scottish Government on the prospect of a currency union with an independent Scotland.

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

I have not had any discussions with the Scottish Government about the prospect of a currency union. The Chancellor, the Chief Secretary to the Treasury and the shadow Chancellor have all said that there will not be a currency union. The only way to keep the pound is to stay in the United Kingdom.

[Mel Stride]

Alex Salmond claims that an independent Scotland will still use the pound. Given that there is no likelihood of a currency union between the remainder of the United Kingdom and any future independent Scotland and that Scotland would therefore not have the backing of the lender-of-last-resort facility of the Bank of England, does my right hon. Friend agree that such a path is disastrous for Scotland—particularly its financial and banking sector?

[Mr Carmichael]

Indeed. If Scotland made herself a foreign country to the rest of the United Kingdom, there would be no question of the Bank of England and the taxpayers who underpin it continuing to stand behind banks headquartered in that foreign country. That simply does not happen. As we have already explained, a number of financial services and banking companies north of the border have rightly identified that as a risk to their continued future governance.

[Andrew Bridgen]

Following the First Minister’s admission at the weekend that his own fiscal commission working group is looking at not only a plan B but a plan C, D, E and F, is it not the truth that the Scottish National party can offer no certainty for the people of Scotland about currency provision for an independent Scotland? They cannot keep the pound, because—

[Mr Speaker]

Order. The hon. Gentleman has had his say, but it did not remotely resemble a question.

[Mr Carmichael]

On currency, we started with a White Paper and we have now been given an alphabet soup. I cannot believe that the First Minister does not have a plan B; I cannot believe that, six months from an independence referendum about which he appears to be serious, he has not actually decided what that is going to be. What worries me is that he seems so reluctant to tell the people of Scotland.

[Mark Menzies]

The First Minister, Alex Salmond, has previously described the pound as a millstone around Scotland’s neck and insisted that it was sinking like a stone. Does my right hon. Friend know what has changed?

[Mr Carmichael]

My hon. Friend invites me to look into the workings of the First Minister’s mind—not a particularly edifying enterprise, and one that goes beyond even my ambition. My recollection is that when the First Minister made that remark, he wanted us to be independent in Europe. I cannot remember whether that was the time when we were going to be part of the arc of prosperity, but it seems to be all change these days. The truth of the matter is that the First Minister does not care about the pound or anything other than independence.

[Stewart Hosie (Dundee East) (SNP)]

On 29 January, the Financial Times reported that on independence, with £100 billion of sales, Scotland would be one of the top 35 exporting countries in the world. If the Secretary of State has his way—I am sure that he will not—when does he intend to run around to the good people of England explaining the impact on their currency when £100 billion of Scottish export sales are no longer receipted in sterling?

[Mr Carmichael]

The hon. Gentleman should listen to some of the experts. The Institute of Directors, for example, has said in terms, that the well rehearsed risks of a currency union far outweigh the problems of the sort of transaction costs that the hon. Gentleman is talking about. He needs to listen to the experts and tell us what he is going to do instead.

[Sir Menzies Campbell (North East Fife) (LD)]

Does it not tell us all we need to know about those arguing for independence that when the Governor of the Bank of England, in an impartial and carefully produced speech, draws attention to the reservations he has about a currency union, he is dismissed out of hand by the Scottish National party?

[Mr Carmichael]

In that respect, the Governor of the Bank of England is in very good company—he is with the President of the European Commission, the Prime Minister of Spain and the permanent secretary to the Treasury. The truth of the matter is that, day by day, bad news comes to those who want to remove us from the United Kingdom, and they are just not prepared to listen to it.

[Mr William Bain (Glasgow North East) (Lab)]

If and when the Secretary of State does speak to the First Minister, will he remind him that any attempt to use sterling informally without a central bank would mean that an independent Scotland would not meet the terms of entry to the European Union? What could be more damaging for jobs and growth in Scotland than that?

[Mr Carmichael]

The nationalists are always very keen on telling us about their vision. In fact, if we were to use sterling without the central bank in the Bank of England, the relationship between Scotland and the rest of the United Kingdom would be like that between Panama and the United States of America. That is not a vision; it is a nightmare.

[Gregg McClymont (Cumbernauld, Kilsyth and Kirkintilloch East) (Lab)]

The Minister will be aware that there is nothing more important in a pensions system than—[Interruption.]

[Gregg McClymont]

I am delighted by such a reception, Mr Speaker.

The Minister will be aware that nothing is more important as regards the certainty of a pensions system than clarity about the currency in which pensions are paid out and saved. Does he therefore agree that the lack of clarity from the Scottish nationalists about the currency that an independent Scotland would use is very damaging for Scots and their pensions?

[Mr Carmichael]

Indeed. The future of the pensions industry and the security of pensions for Scots post-independence is one of the biggest risks that comes from that lack of clarity. It is quite remarkable that six months out from the independence referendum date, we still do not know what the nationalists are offering us by way of a currency.

--- Later in debate ---

[Graeme Morrice (Livingston) (Lab)]

9. What assessment he has made of the potential effect of Scottish independence on investment in the North sea oil industry.

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

We have already heard from senior business figures that independence presents risk for investment in the North sea oil industry. The sector is facing new challenges, and the United Kingdom offers the strongest basis to unlock the investment needed and ensure that we maximise its potential in future.

[Graeme Morrice]

The Secretary of State will be aware that the Scottish Government’s own figures show that oil revenues dropped by £4.4 billion last year. Does he agree, therefore, that the figures serve to demonstrate the weakness of basing the economic argument for a separate Scotland on unstable oil revenues?

[Mr Carmichael]

The figures illustrate perfectly the opportunities that come to Scotland from being part of the United Kingdom. For an economy that is highly dependent on offshore oil and gas, the size of the UK economy offers us the opportunity to absorb the peaks and troughs that are inevitably part of that commodity.

The Prime Minister was asked—

Supplementary Estimate 2013-14

Alistair Carmichael Excerpts

Wednesday 12th February 2014 Written Statements

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

Subject to parliamentary approval of the necessary supplementary estimate the Scottish Government’s DEL net of depreciation and impairments will be increased by £218,114,000 from £28,304,169,000 to £28,522,283,000. Within the total DEL change, the impact on resources and capital is set out in the following table:

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.

Oral Answers to Questions

Alistair Carmichael Excerpts

Wednesday 5th February 2014 Commons Chamber

[Nicholas Soames (Mid Sussex) (Con)]

1. What steps his Department is taking to encourage Scottish business leaders to participate in the independence debate.

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

I speak to businesses from across Scotland regularly and frequently. In those meetings we highlight the importance of the decision the Scottish people will make on 18 September, and encourage them to get involved in this important debate.

[Nicholas Soames]

Has my right hon. Friend seen the recent intervention of Bob Dudley, the chief executive of British Petroleum—which, after all, has a major stake in Scotland—whose views should be taken seriously? Does he agree that other business leaders with a big interest in Scotland’s future should follow that example, and set out clearly the implications and consequences of independence for their employees, suppliers, and shareholders?

[Mr Carmichael]

I have seen and studied the intervention from Bob Dudley yesterday. The terms of that intervention do not surprise me at all as they very much reflect the concerns expressed to me when I speak to businessmen and women across Scotland who represent businesses of all sizes. They all tell me the same: they see independence as being bad for their business. It brings uncertainties, uncertainty means risk, and that is bad for their business future.

[Mr Brian H. Donohoe (Central Ayrshire) (Lab)]

11. Has the Secretary of State had any meetings with Sir Tom Hunter, who has been pretty vocal about the whole issue, and, if he has not, will he have such a meeting?

[Mr Carmichael]

I recently met Sir Tom Hunter at a business breakfast organised by the Prime Minister in No. 10 Downing street. The hon. Gentleman will have seen the recent initiative by Sir Tom, which is interesting and valuable, and sits well with the efforts of Her Majesty’s Government to ensure a solid base of information to inform the electorate about the decision they are being asked to take.

[Caroline Dinenage (Gosport) (Con)]

14. Will the Secretary of State assure the House that he is aware of the fears and concerns of businesses about the uncertainty posed by an independent Scotland, not only the currency but the fact that interest rates and borrowing costs could be set from outside Scotland?

[Mr Carmichael]

Indeed, the hon. Lady makes a point that was made eloquently—and, I thought, in a very measured way—by the Governor of the Bank of England in his speech last week in Edinburgh. He made the point that a currency union such as that proposed inevitably involves ceding some degree of national sovereignty—the very opposite of what independence is supposed to be about. One wonders why any nationalist would, in all sincerity, genuinely want one.

[Angus Robertson (Moray) (SNP)]

This week the Financial Times reported that an independent Scotland should have healthier state finances than the rest of the UK. So far, more than 1,200 business owners and directors have declared their support for a yes vote by joining the pro-independence business group, Business for Scotland. Does the Secretary of State recognise their role in the Scottish economy and welcome their contribution to the referendum debate?

[Mr Carmichael]

I will, of course, speak to businessmen and women of all views at any time in Scotland. The difficulty for the hon. Gentleman is that the most recent polling exercise undertaken in the business community showed that roughly three quarters of business people in Scotland intend to vote no. They know that independence would be bad for their business.

[Angus Robertson]

All the evidence from polling in recent weeks shows a substantial swing to the yes campaign, and the polls also show that by a majority of 4:1, the public wish to see a debate between the Prime Minister and First Minister Alex Salmond. How long can the Prime Minister continue supporting everybody else becoming part of the debate, but run away from one himself?

[Mr Carmichael]

Make no mistake, Mr Speaker, we know exactly why the nationalists want that debate between the Prime Minister and Alex Salmond: they are trying to set the decision up as a contest between Scotland and England, which it absolutely is not. This is about Scotland’s best-placed constitutional future, and it is to be decided by Scots in Scotland.

[Sir Menzies Campbell]

My right hon. Friend will be aware that the First Minister dismissed Mr Dudley’s remarks as purely a personal opinion. In the light of that, may we take it that all those in the business sector who have apparently subscribed to independence can have their opinions dismissed in the same way?

[Mr Carmichael]

I would dismiss nobody’s opinion and I would engage with people of all shades of opinion across this debate, but the fact is that Bob Dudley is not a lone voice. He is part of a growing chorus from the business community in Scotland who highlight the dangers that would come from independence. They all say the same—it would be a risk to their business because of the uncertainty of the future position of the currency and membership of the European Union. On those two key issues, the nationalists have no comfort for business.

[Margaret Curran (Glasgow East) (Lab)]

As the Secretary of State has said, it is welcome that the chief executive of BP and the outgoing chief executive of Sainsbury’s have both spelled out substantial concerns about independence. Does the Secretary of State agree that all businesses, trade unions and voluntary organisations have a right to be heard without insult, intimidation or fear of the consequences, regardless of which side of the debate they are on?

[Mr Carmichael]

I do, absolutely, and in that regard I commend the efforts of the Scottish Daily Mail, which in recent weeks has sought to highlight the poison coming into the debate from some of the cyber-interventions. Other hon. Members have also raised this issue. Whatever the outcome on 18 September we will all have to work together in Scotland for its best future, and that will not be possible if we allow the well to be poisoned in the way the cyber-Nats in particular seem determined to do.

[Margaret Curran]

I thank the Secretary of State for that response, but may I press him a little further? Business leaders have told me of intimidatory tactics being used in an attempt to stop them intervening in the independence debate. One leader of a FTSE company told Robert Peston of the BBC that the Scottish Government “became very aggressive” when he tried to raise concerns about independence. Just yesterday, Bob Dudley of BP was dismissed by the yes campaign as “a British nationalist”. Will the Secretary of State join me in condemning the pattern of behaviour that we are beginning to see in Scotland and say, in the strongest possible terms, that it has no place for us Scots as we debate our future?

[Mr Carmichael]

I agree with the hon. Lady on that point in the very strongest terms. She knows as well as I do that the incidents she highlights are by no means isolated—we hear them anecdotally all the time. I encourage anyone who is bullied or intimidated in that way to follow the example of Chris Whatley, an academic from Dundee university who appeared at a Better Together event before Christmas, following which a Scottish Government Minister was on the phone to his employers saying he should be silenced. That is deplorable and no way in which to conduct the debate on Scotland’s future.

[Dr Eilidh Whiteford (Banff and Buchan) (SNP)]

2. What recent discussions he has had with Scottish local authorities on changes to housing benefit.

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[Katy Clark (North Ayrshire and Arran) (Lab)]

4. What change there has been in average household energy bills in Scotland since May 2010.

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

Rising energy bills are a serious concern for consumers in Scotland and across the rest of the UK. We are sustaining vital financial support for the most vulnerable consumers. Our reforms are opening up the market to competition and we are working to ensure that suppliers put customers on the cheapest tariff possible.

[Katy Clark]

As the Minister knows, energy prices have risen dramatically since the coalition came to power. In rural and island communities people pay an even greater proportion of their income on fuel. Citizens Advice Scotland says that there was a sevenfold increase last year in people approaching it for advice on mis-selling in the energy sector. Does he not agree that it is now time for a radical reform of the energy sector, and for a price freeze until we put that reform in place?

[Mr Carmichael]

I say gently to the hon. Lady, who I know has taken a long-term interest in and has a notable record on this issue, that the phenomenon of energy price increases did not just start in 2010. It was a feature of the years of the Labour Government too, as a consequence of the reduction in the number of companies operating in the market. That problem would be recreated if we were to undertake her policy of a price freeze. We have already seen the number of energy companies operating rise from six to 14. A price freeze would be a real threat to that.

[Anas Sarwar (Glasgow Central) (Lab)]

It is now clear that we have two Governments who are choosing to side with the big energy companies rather than people struggling with the cost of living crisis. Is it not now clear that the only way for families across the UK to see some relief in their cost of living, with a freezing of their bills and breaking up the monopoly of the big six energy companies, is to vote no in the referendum and return a Labour Government in 2015?

[Mr Carmichael]

I certainly agree with the first part of the hon. Gentleman’s prescription that a no vote in September is very important, but I have to remind him that in one year alone under Labour there was a 20% increase in energy prices, and there was no suggestion of a price freeze then. When Labour Members were in government, they knew the reality: a price freeze would see prices going up before the price freeze and prices going up again afterwards. We are delivering help to vulnerable people in the here and now.

[Mr Mike Weir (Angus) (SNP)]

Whatever the headline average price increase, the fact is that that hides a multitude of sins. A constituent who approached me this week is a low electricity user and is facing a 50% increase in his unit cost. Others are finding that they are being hammered by high standing charges. Is it not time for the Government to take action and stop these practices?

[Mr Carmichael]

These are all reasons why it is important to improve transparency in the market and the range of tariffs available. That has been the result of the action this Government have been taking. Under the previous Government there were at one point no fewer than 400 different tariffs available, so it was no surprise that people were confused. Simplicity is the way ahead and the Government are working on that, along with the regulator.

[Gordon Banks (Ochil and South Perthshire) (Lab)]

We know that energy bills have rocketed under the Secretary of State’s Government and that Labour will freeze energy prices. As my right hon. Friend the Member for Don Valley (Caroline Flint) said this morning, one third of British investment in renewables comes to Scotland, but Scots contribute less than one tenth. That means that the rest of the UK supports Scottish renewable generation through their bills. Does the Secretary of State agree that the best future for renewables in Scotland, and the best way to keep costs down for Scotland, is for Scotland to stay part of the United Kingdom?

[Mr Carmichael]

That is absolutely the case. Scotland has a tremendous opportunity to contribute to the growth of renewable energy as part of the United Kingdom, but that will take subsidies that come from consumers’ bills, the cost of which is spread across the whole nation, not simply the households of an independent Scotland. It would be madness for the renewable energy industry to support Scottish independence.

[Mr Ian Davidson (Glasgow South West) (Lab/Co-op)]

5. How many cases of non-payment of the minimum wage have been detected in Scotland since 2010; how many such cases have been prosecuted; and how many employers have been named and shamed for non-payment.

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[Mel Stride (Central Devon) (Con)]

6. What assessment his Department has made of recent developments in the job market in Scotland.

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

It is very encouraging news that employment has increased to near-record highs of more than 2.5 million and that unemployment has fallen to 6.4%, which is the lowest rate in more than four and a half years. Those figures reflect how well Scotland is doing as part of the UK and demonstrate that the Government’s long-term economic plan is working.

[Mel Stride]

I thank my right hon. Friend for that positive response, which shows how well Scotland is doing as part of the Union. Does he agree that the biggest threat to Scottish jobs is the fantasy-land promise of the SNP and its attempt to remove Scotland from the Union and the UK labour market?

[Mr Carmichael]

That is indeed the case. When we talk about business people having concerns, we are talking about a threat not just to business, but to jobs. The UK is now the fastest-growing economy in the G7, and unemployment in Scotland is at 6.4%, which is significantly lower than the average across the UK, which is 7.1%. We have achieved that because we are part of the UK, not despite it. It is a result of Scotland, with her own Parliament, being represented here and having the best of both worlds.

[Sheila Gilmore (Edinburgh East) (Lab)]

Unfortunately, unemployment levels in my constituency appear to have stagnated. Does the Secretary of State agree that the Scottish Government need to do more even for people living in Scotland’s capital city still without jobs?

[Mr Carmichael]

There remains a great deal to do. I suspect I share many of the hon. Lady’s concerns about the continuing high level of youth unemployment and the number of people who have been unemployed for a longer period. I see encouraging signs of progress in these areas, but they are by no means to be taken for granted. There are tremendous opportunities for the two Governments in Scotland, along with councils in Edinburgh, Glasgow, Aberdeen and elsewhere, to work together to get the best possible arrangements for the unemployed.

[Mr Charles Kennedy (Ross, Skye and Lochaber) (LD)]

When the Secretary of State visits the highlands and addresses a Burns supper in Inverness on Friday night, I am sure he will hear a lot from those present about one of the most exciting job prospects for the highlands and for Scotland as a whole, which is the potential of the Kishorn site in my constituency for offshore wind development. May I encourage him and his colleagues to continue to work with Edinburgh to promote the interests of this exciting project? I wanted to get my plug in now because, due to a previous long-standing engagement, I will not be there on Friday night myself.

[Mr Carmichael]

I shall, in fact, be carrying out other engagements, although I understand that tickets for that Burns supper are still available and are very reasonably priced. In relation to Kishorn, my right hon. Friend raises an important local concern for his constituents, as he has a long and proud record of doing. I certainly look forward to hearing the detail about that. We are seeing such developments growing across the United Kingdom, particularly in Scotland, and it is because our plan has worked.

[Gemma Doyle (West Dunbartonshire) (Lab/Co-op)]

The Secretary of State may think that everything is rosy, but is it not a fact that we are seeing the most sustained fall in real wages since records began 50 years ago? Is it not also a fact that the jobs market is not working for ordinary Scots and that both Governments are failing the people we represent?

[Mr Carmichael]

I wish the hon. Lady and her colleagues could find it within themselves to recognise the substantial progress we are making with the improving employment situation in Scotland. There is significant progress, which makes a real difference for her constituents and mine. Wage levels will doubtless need some improvement to catch up; that is an inevitable consequence of the steps we had to take to clear up the mess that she made.

[Lindsay Roy (Glenrothes) (Lab)]

7. What assessment he has made of the Scottish Government’s White Paper entitled “Scotland’s Future”; and if he will make a statement.

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

The Scottish Government’s White Paper shows that the case for independence is unravelling. They promised answers, but failed to address key referendum issues such as currency, costings and EU membership.

[Lindsay Roy]

I thank the Secretary of State for his candid answer. Can he explain why there would be issues with the funding of pensions if Scotland were to become a separate state?

[Mr Carmichael]

In that regard, the most pertinent intervention came from the Institute of Chartered Accountants of Scotland—not a political party or a body that has an axe to grind, but people who know what they are talking about. They told us what we already know: there are substantial questions on pensions and other areas, and the Scottish Government have still failed to answer them.

[Sir Robert Smith (West Aberdeenshire and Kincardine) (LD)]

Surely one of the great weaknesses of the White Paper is on the future of the pound in Scotland. Surely the simplest way in which the people of Scotland can guarantee to keep the pound is to vote no in the referendum.

[Mr Carmichael]

That is indeed the case and I am confident that they will do so, because the people of Scotland value having the pound sterling as their currency. They value having the Bank of England as a lender of last resort and they value the fact that, as a result, risks and opportunities are spread across the whole United Kingdom.

[Mr Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)]

The White Paper has caused ripples. The polls are tightening and the Tories, with their Labour friends, are worried, but still the Prime Minister is afraid to debate with Alex Salmond, the First Minister of Scotland. This week the Financial Times tells us that an independent Scotland could expect to start with healthier state finances than the rest of the UK. Our GDP per head is higher than France’s and Italy’s. Will the Secretary of State use his position to ensure that people know these facts and stay away from scares and fears designed to stop them making the best decision for Scotland?

[Mr Carmichael]

Indeed I will, because these are all things that we have achieved as part of the United Kingdom. It all demonstrates what is possible for Scotland as part of the United Kingdom. As for any question of debate, we have dealt with that already, but is it not remarkable that when Scottish National party Members could be answering questions, all they want to do is have a debate about the debate?

[Gregg McClymont (Cumbernauld, Kilsyth and Kirkintilloch East) (Lab)]

8. What discussions he has had with Ministers in the Scottish Government on the funding of pensions in Scotland after 2014.

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

Despite having published a paper specifically about pensions in September and the much vaunted White Paper in November, the Scottish Government have left many questions about pensions unanswered.

The hon. Gentleman will be aware that the UK and Scottish Governments have agreed that there will be no negotiation on any issues, including pensions, before the independence referendum in September.

[Gregg McClymont]

The Institute of Chartered Accountants of Scotland published its first report on pensions in an independent Scotland before the publication of the White Paper, and we were told by the Scottish National party that the answers to our questions about pensions would be in the White Paper. This week the institute issued its response: the White Paper does not contain the answers that would give Scots certainty about their pensions. Is the Secretary of State aware of any intention on the part of the Scottish National party to answer the crucial questions about Scots’ pensions?

[Mr Carmichael]

I am pretty certain that any answers that would come from the nationalists would not find favour with the people of Scotland, so I am also pretty certain that we will not be hearing much by way of answers in the future. The people will have heard what the Institute of Chartered Accountants of Scotland had to say, and they will now want to hear from the Scottish Government what their answer is, but I am not expecting to hear much.

The Prime Minister was asked—