Scotland and North-east England Post-2014 Debate
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Angus Brendan MacNeil
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Scotland and North-east England Post-2014
Angus Brendan MacNeil Excerpts(10 years, 8 months ago)
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Phil Wilson (Sedgefield) (Lab)
It is a pleasure to serve under your chairmanship, Mr Weir. This issue is of rising importance for the north-east of England. In six months’ time, the Scottish people will decide whether they want to remain part of Britain. Although it is right that that decision should be taken by them, it is not right to think that it will not affect the rest of Britain as well, especially the north-east of England.
Scotland and the north-east of England share an economic and industrial history, one based on shipbuilding, coal mining and steel works, for example. It is also fair to say that the Conservative party in both areas has been marginalised. That is a common identity that the north-east of England and Scotland share, and that economic history is important to the north-east of England even today. At Durham Tees Valley airport, some 35,000 passengers a year travel from my constituency to Aberdeen for the gas and oil industry, which shows how close Scotland is industrially and economically to the north-east of England.
Thousands of Scots and English cross the border between England and Scotland every day, without let or hindrance, to do a day’s work, but I believe that the Scottish National party has a twin-track approach to the English. On one hand, Alex Salmond has described the north-east as
“our closest friends in economic and social terms”,
and others have said that
“a stronger Scotland could act as a powerful advocate on issues of mutual concern to the north of England and Scotland”
and that there is
“a shared sense of values”.
That is great, but if all that is true, why does Scotland need independence to prove it further?
To the SNP’s internal Scottish audience, the English are those from whom the SNP wants independence, but to the north-east of England, according to Alex Salmond, we are Scotland’s closest friends. Call me old-fashioned, but I would not close the door on my closest friends by asking for independence from the rest of the UK.
Mr Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)
To follow the reasoning of the hon. Gentleman’s argument, is he saying that the Swiss are not friends with the Austrians or the people of Liechtenstein just because they do not share a Prime Minister? Surely, given that 250,000 people cross the Swiss border daily to work, that is an example of how people can be friendly without sharing a Prime Minister. It is not David Cameron who makes us friends.
Phil Wilson
The hon. Gentleman is correct. Little by little, hon. Members are dismantling the whole argument for independence.
Phil Wilson
I will just make this very important point, because I will now boast about the north-east of England, as it has a lot to offer.
The north-east is the only region in the country with a positive balance of trade in the export market, exporting £14 billion-worth of goods every year; its manufacturing industry is worth £7.5 billion; we have a strong and successful advanced engineering sector, leading the way in low-carbon technology and sustainable energy solutions; we have world-class research and engineering capabilities in wind, wave, tidal and solar power; we are home to successful knowledge-based economies, with 40,000 skilled individuals employed in the supply chain and more than 65,000 people working in the oil and gas sector; and more than 70% of the oil and gas platforms operating in the North sea are built in the north-east of England. On top of all that, a third of the north-east is designated as an area of outstanding natural beauty or is part of a national park. Why does the SNP want to put an international border between itself and an area as fantastic as the north-east?
Phil Wilson
No. I have given way twice to the hon. Gentleman, I want to make progress and I am sure that he will make some kind of speech later on.
I believe in co-operation between Scotland and the north-east of England, but building barriers will generate costs. Internal studies have proven that. When Czechoslovakia split into two states in 1993, the currency union between the two lasted 33 days and trade between the two fell significantly. I do not want to see that happen in our case.
International evidence also shows that flows of trade, labour and capital are much larger between two regions of the same country than between two similar regions in different countries. The best example is the trade between US and Canada. According to studies, Canadian provinces trade around 20 times more with each other than with nearby US states of a similar size, and the international border between the US and Canada reduces trade by 44%. If anyone believes in a strong Scotland and wants to see a prosperous north-east, why would they want to put barriers between the two, which would not be welcome and are not needed? Such a move cannot be good for Scots, English people or Britain.
I do not understand what is wrong with being part of the third largest economy in Europe and the sixth largest economy in the world. Why does the SNP want to be independent of that kind of success story?
Mr Straw
I congratulate my hon. Friend on securing this debate. First, the concerns and issues that he is raising for the north-east of England also apply to all colleagues of all parties in the north-west of England. Secondly, on his central point—that we are better together—does he think that a far better comparison than the one used by the SNP representative here in Westminster Hall, the hon. Member for Na h-Eileanan an Iar (Mr MacNeil), which compared Scotland with Liechtenstein—
Mr Straw
Or Austria. The better comparison is to look at what happened in Germany. Three centuries ago, Bavaria and Prussia were at war—Catholic versus Protestant. They finally came together and I do not think that anybody, either in Bavaria or Prussia, would argue that those regions have not been able to maintain their distinctive identities and institutions while hugely benefiting from the fact that they are part of a single union.
Phil Wilson
My right hon. Friend makes an excellent point. We can have 300 years of history, as we have between Scotland and England, and still keep separate identities. We have an identity in the north-east of England, which in some ways is similar to the Scottish identity; we even call our children “bairns”. From my perspective, the identity is there and it is a great thing, so why do we have to create independence and an international border between the two countries? To say that we need to do that to secure our identity is not true.
Currently, 70% of Scotland’s trade is with the rest of the UK, including the north-east of England, and 70% of Scotland’s imports come from the rest of the UK. If the SNP wants independence, why does it want to keep the pound? If it wants to keep the pound, why not stay as part of Britain? It would save—
Phil Wilson
I am sure that the hon. Gentleman will make a speech later. He has already intervened on me twice, and I am sure that he will let me intervene when he speaks.
Phil Wilson
However, I suppose that if it all goes wrong, the rest of the UK, including the population of the north-east of England, can pick up the tab.
Guy Opperman (Hexham) (Con)
I congratulate the hon. Member for Sedgefield (Phil Wilson) on securing this debate.
I speak as a mongrel Brit of immigrant ancestors, as the representative of a constituency that borders Scotland, and as someone who has repeatedly made the case that we are better together. I went to Scotland last year and did a series of events over about 10 days, debating this issue from Aberdeen all the way down to Argyll. I was struck by the fervour created by this point. The issue matters desperately to those of us who represent north-east constituencies, because it will have a significant impact on trade. Of course, trade and tourism will continue and, of course, Scotland will continue to exist as an independent country, but there is no doubt that the decision will have an impact on business and on job prospects in the border region.
When one analyses the case put forward by the Scottish National party, it is, on any interpretation, economically illiterate. When the hon. Member for Sedgefield made the point that the Scots wish to have their cake and eat it, the hon. Member for Na h-Eileanan an Iar (Mr MacNeil) wisely and intelligently said from a sedentary position, “That’s what cake’s for.” It is a policy totally devoid of any grasp of reality.
Looking at the currency issue, the SNP argues that it wishes to have the pound, but it does not want Mark Carney or the Bank of England having any controls, because when one takes independence, one forfeits huge amounts of control over the ability to tax, set interest rates, and the like. We are now in a position of sterlingisation, a policy best espoused by those legendary countries, Panama, Montenegro and Greece.
Mr MacNeil
The hon. Gentleman will, of course, furnish us with information about which countries have shared sterling in the past, and particularly about how many countries were sharing sterling in the 1970s.
Guy Opperman
The hon. Gentleman will be well aware that no sensible economist would say that a policy of sterlingisation would support a country’s banking and fiscal system. The desire that we all have for greater North sea oil prosperity is based on a fundamental need to secure the markets, and to secure bank finance, for example. That would be grossly affected by a floating sterling position in Scotland.
As for borders, my constituents in Northumberland are deeply concerned about that matter. It is worth analysing briefly the position in relation to immigration controls. For my sins, I have read the Scottish Government’s paper, “Scotland’s Future”, and I assure hon. and right hon. Members that it is a long, hard read. Chapters 6 and 7 set out the Scottish Government’s preference for an independent Scotland joining the EU, but staying within the common travel area. Others commented, rightly, on the fact that originally Scotland wished to join the euro; then it decided that it wanted the pound, and now it is sterlingisation.
However, in respect of immigration policy—not that we are in Woolworths, having pick ’n’ mix in any way—the Scottish Government prefer to have an EU policy and support that part of the EU. That is, of course, contingent on one thing. It is rare for a Conservative MP to praise a man called Barroso, but I am grateful to Mr Barroso for his amazing contribution to this debate, because the European leaders have made it acutely clear that, regarding the immigration control situation, were Scotland to go independent, it would have to apply to join the EU. That is not going to happen. [Interruption.] The hon. Member for Na h-Eileanan an Iar laughs and chunters, as always, from a sedentary position, but can he name an individual European politician—I will happily give way to him on this point—who has said that the border control situation will be acceptable if Scotland does not join the EU, and that it will be no problem at all?
Mr MacNeil
The hon. Gentleman will, of course, be aware of the example of the Republic of Ireland, which is in the EU and the common travel area and not in Schengen.
Mr Iain McKenzie (Inverclyde) (Lab)
It is a pleasure to serve under your chairmanship, Mr Weir. I congratulate my hon. Friend the Member for Sedgefield (Phil Wilson) on securing this important debate.
As a Scot, I believe that separation from the rest of the UK would present business on both sides of the border with an unnecessary barrier. In Scotland, there would be a barrier to trading with our biggest market—the UK—and to our long-established trading with the north-east of England, and that makes no sense at all. No one wants a barrier to our trade and connections with north- east England, except those who promote independence for Scotland.
Mr McKenzie
I will not give way at the moment.
We are all aware that the open border between Scotland and the north-east brings significant economic, trade and employment opportunities. We are also aware that, should Scotland vote yes in September, the border will be closed, with the new Scottish state being outside EU membership. Scotland’s languishing in a long line for EU membership would mean its being outside the EU and having a closed border—absolutely guaranteed—bringing about significant trade difficulties. We would lose our shared opportunities, despite the fact that we all agree that we need as many opportunities as we can get these days.
Cross-border private and public sector trading can do without this obstacle being put in the way of ease of doing business. Clearly, Scotland has an important economic relationship with north-east England and the UK as a whole. The facts speak for themselves: Scottish business buys and sells more products and services from the UK than any other country in the world. This enables the Scottish people to be part of a larger and more successful economy, and to trade and share easily with our neighbours in north-east England. Some 70% of Scotland’s exported goods went to other parts of the UK, and 70% of imports came from the UK, clearly demonstrating that Scotland’s economic performance is stronger because it is part of a larger integrated UK economy. Exit the UK and our border becomes a barrier that will impede and restrict ease of trade.
Even where free trade agreements exist alongside controlled borders, neighbouring countries with similar economies are affected by the presence of that border. As we have heard, we know this to be true. Hon. Members need only look at the US and Canada: their trade is thought to be some 44% lower than it could be—a result of that controlled border between them.
Mr MacNeil
I am listening to the hon. Gentleman carefully and wonder whether his argument is that Canada would be better giving up its independence and becoming part of the United States of America. That seems his logical position.
Mr McKenzie
The comparison I am making is between a closed border and an open border. As the hon. Gentleman is aware, it is not only business that will be disadvantaged. Labour migration between Scotland and the rest of the UK is estimated to be as much as 75% higher within an integrated UK. More than ever, we need to share skills and knowledge, so that both sides of the border can prosper. Without doubt, Scotland’s leaving the UK would create an unnecessary barrier to trade with our close neighbours in north-east England. More unites us than divides us. Common goals and common bonds have been built over generations, which is why I believe in a vision of working across an open border and a continuation of the ease in our trading relationship that we have come to expect and enjoy.
We remember and value our close association with those with whom we share a border, but it is a border in name only. The border is not a symbol of division, but a link spanned by friendship and a common understanding of the challenges that we face together. Scotland’s relationship with north-east England should be a constructive collaboration, not a destructive competition, as would undoubtedly transpire after Scotland’s separation from the UK. The SNP is always arguing both ways, telling its supporters that everything will change while telling people on both sides of the border that nothing will change.
If all that independence is about is getting away from a Government for whom Scotland did not vote, I would ask Members to join me in seeking independence for Inverclyde. We have never voted for an SNP Government. We have a Labour MP, a Labour MSP and a Labour-controlled council, yet twice we have had to suffer under an SNP Government. The difference is that we understand and accept democracy. I have visited north-east England many times, and I have always believed that the future of Scotland and of north-east England lie together in one country—the UK.
Sir Alan Beith (Berwick-upon-Tweed) (LD)
It is a pleasure to serve under your chairmanship, Mr Weir. I am sure you will know what to do if the hon. Member for Na h-Eileanan an Iar (Mr MacNeil) gets overexcited during the course of our proceedings.
I congratulate the hon. Member for Sedgefield (Phil Wilson) on securing this timely debate. People cannot get nearer to Scotland than my constituency. Indeed, Scotland surrounds us on two sides. My northern boundary and much of my western boundary are the national boundary. The passage of people across the border for work, shopping and family relationships, including my own, is constant. My constituency is very much involved, and there is a great deal of apprehension on what the consequences of a vote for independence might be. I will address those consequences in a moment, but I will first say a few things on the north-east’s relationship with Scotland that will apply whether the vote is yes or no.
The north-east is catching up, but it has significant economic problems. The north-east needs a much larger private sector and more jobs, but it has not had the resources that Scotland has had over the years. Successive Governments have failed to reform the Barnett formula, which gives between 10% and 15% more money per head for Scotland to spend on public services. The Barnett formula does so because it simply locks in the distribution from many years ago and applies it formulaically year after year when the needs of the north-east should have been recognised as they originally were. That is unfinished business for many of us who represent constituencies in the north-east of England.
We continue to fight for change on that front, but there are many signs of improvement in the north-east. We have seen the gross value added per head improve in the past couple of years, and we have seen growth in private sector jobs. We have seen marvellous investments by, for example, Nissan and the kinds of firms to which my hon. Friend the Member for Hexham (Guy Opperman) referred. Firms are investing on Tyneside in renewable and offshore technology. That is all encouraging, but it has to be recognised that, if we do not continue to press the case for the north-east of England, Governments of all parties appear ready to forget about the area. As north-east MPs, we must therefore continue to press our case very strongly.
There are two aspects of the relationship between the north-east and Scotland that I particularly need to emphasise today. Our economy significantly depends on the connectivity between the north-east and Scotland. One of the most obvious aspects is that it is absurd that we still do not have a dual carriageway connecting the north-east of England with Scotland. Parts of the road have been dualled over the years, but the job is still not completed. The previous Government dropped two very good schemes that would have dualled the road significantly. There is increasing trade between Scotland and England that requires good road communications, which is an important priority. I welcome that the Secretary of State for Transport and the Chief Secretary to the Treasury have both committed to completing the ongoing study and intend to proceed with the matter. We need progress.
Mr MacNeil
I hear what the right hon. Gentleman says about the roads being a serious matter. Can he think of a couple of independent EU countries in which the main arteries joining at the border—on the frontier—are so bad?
Sir Alan Beith
The hon. Gentleman makes a fair point. I was in Croatia on holiday, and the A1 in Croatia is a magnificent dual carriageway, but it suddenly stops at the border with Montenegro. There is a small break in the otherwise magnificent A1. If Croatia can do it, why on earth have we still not completed the dualling of the major link between England and Scotland on the east coast?
Rail connectivity is also important, and I am beginning to be concerned that the High Speed 2 proposals have led Railtrack to propose ideas for the future of the east coast main line that would provide unsatisfactory services between the north-east of England and Scotland. Those services have greatly improved in recent years. We now have very fast train services from Edinburgh and Newcastle to London. We also have a much improved service from Alnmouth in my constituency, which is an important part of our connectivity. If Railtrack wants to ensure that MPs in the north-east of England, and indeed eastern Scotland, support HS2, it must not pursue daft ideas that would undermine the service. That also means that we have to improve the east coast main line’s capacity, particularly to handle freight. There are possible investments, such as on the Leamside line, that could greatly improve the capacity of the east coast main line and cater for potentially growing freight traffic between the north-east ports and for links between the north-east ports and Scotland.
There are issues that would be of very serious concern to my constituents if there were to be a yes vote in the referendum. The debate so far has been about an idea, and only now are we beginning to consider the realities and facts. Of course Scotland could be independent, but there is a price to be paid by both countries if that were to happen. That price includes serious problems at the border. If the United Kingdom, minus Scotland, did not have control and did not know what Scotland’s immigration policy will be, it could not commit itself to an open border with Scotland. If the rest of the United Kingdom did not have any control of security in Scotland, it could not have a completely open border. Whether the rest of the United Kingdom has a continuous border control or just introduces a border control when it considers there to be a particular danger, there will from time to time be border controls to address the fact that the United Kingdom will have no control over who is admitted to Scotland. I am talking about, for example, a terrorist returning from Syria whom we would not want simply to move freely in Scotland.
Mr Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)
It is a great pleasure indeed, Mr Weir, to serve under your chairmanship. I congratulate the hon. Member for Sedgefield (Phil Wilson)—a fine MP—on securing the debate. Usually, the Scottish National party in the House of Commons finds itself the six against the 600. There are slightly better odds this morning, with one against 18, and that is much to the good.
It is absolutely fantastic that some of these arguments are being aired, because when the scares and fears are aired, they are quickly punctured. I am glad to see that the hon. Gentleman, together with the SNP Government and Standard Life, supports currency union with the rest of the United Kingdom. That is to be welcomed and is progress. If only some other Members—particularly those in the Treasury—had his enlightened view, we would get on much better. I encourage him to ask the Prime Minister to continue with pre-negotiations. He ruled them out, but of course he has broken his word on that already.
Barriers were mentioned and the truth is that we will not be erecting any barriers. I hope that the Prime Minister will not be erecting any barriers, and in the absence of either side erecting any barriers, there will be no barriers and we can continue to flow and interact with each other freely. The thing that will change is that the Government will move from Westminster to Holyrood, with the most democratic forum representing the Scottish people. I do not know what people can have against that, but I am shocked that people cannot be international. It is great to be an internationalist and fantastic to respect the independence of other nations and to look to engage and co-operate in an international manner. With that, I encourage people who feel that they cannot interact with people outwith their borders to think bigger, to hope for better and to look for a greater future. I am sure that if they search the depths of their hearts, they will find a way to look and to co-operate with their neighbours.
If people are struggling, there are international examples of that co-operation. Switzerland has 250,000 people crossing its borders every day. It is not in the EU, but those people come from EU countries. The population of Liechtenstein doubles during the working day as people come in to work in its advantageous employment environment. That would not happen if Liechtenstein was not independent. The people living around Liechtenstein would not have the possibility of finding employment in that area and would have to travel further afield. I am sure that the benefits that accrue to many places on the borders around Europe will also accrue to the north of England. If the hon. Gentleman was to look deeply at the issue, I am sure he would find many advantages, but it is to his political advantage—it will be off a Whip’s script that he has probably written himself—to up the fears and the scares and make it sound difficult.
Mr MacNeil
I will give way in a minute. All that will happen is that we will stop sharing a Prime Minister. It is not the need to have David Cameron as a Prime Minister that keeps the pair of us co-operating. Without David Cameron, I will still like the hon. Member for Sedgefield as much as I do.
Phil Wilson
Can the hon. Gentleman just answer this simple question? When it loses the referendum, what will be the point of the SNP?
Mr MacNeil
The hon. Gentleman asks a fantastic question, which gives me the opportunity to outline the point of the SNP, which is to put the Scottish people first, rather than power struggles in London, which, unfortunately, is the point of the London parties. It is all about who is in government in London, and that is not for the good of the people of Sighthill, Springburn, Castlemilk, Fort William, Inverness, Sutherland, Lochaber, Skye or Lewis. That is an awful tragedy. It should also be in our interest in Scotland to ensure that the good people of the north-east of England are benefiting as much as those in the regions of Scotland. I look forward to the day I witness people from the north-east of England finding chances of employment in Scotland, rather than having to go far afield to the south-east of England.
Guy Opperman
May I return the hon. Gentleman to the key issue of currency? Will he state for the House’s benefit what his proposal is on currency? Under the present position on a sterlingisation approach, he would surely be borrowing in a currency over which he had no control and in a monetary environment that is unsustainable in the long run for investors, who are so key to jobs and business prosperity.
Mr MacNeil
The reality, as he well knows, is that after the referendum victory on 19 September, George Osborne will take a different approach from his arrogant, dismissive bullying of the Scottish people. He will find some humble pie and dine on it very heartily. George Osborne understands the importance of his balance of payments and does not want to weaken sterling. Or is the hon. Gentleman saying that he would like to see sterling weaken? He knows that that is what will happen if Scotland is not in the sterling area. Does he disagree with that?
Sir Alan Beith
Has the hon. Gentleman not observed the situation with the euro, where Germany is pointing out that those countries whose fiscal policies cannot support use of the euro cannot have independent fiscal policy if they want to remain in the euro? How can Scotland remain independent in its fiscal policy if it uses a common currency with England?
Mr MacNeil
If I did not know the right hon. Gentleman better, I would imagine that he was threatening the Channel Islands and the Isle of Man, because they are in that situation. Is he saying that the Channel Islands and the Isle of Man will have to give up their independence? I think not. I think that he is quite a reasonable individual, and I do not think that he will go down that route. The argument about the euro is fallacious, because there are vastly different levels of productivity within the eurozone. The strains within the euro are not really between all the countries that use the euro—they are not between Germany, the Netherlands and France—but between Germany and the far more divergent economies of southern Europe, such as Greece.
I want to address the point that has been made about Canada and the United States of America. The comparison is erroneous because the populations of Canada and the United States are more contiguous, particularly in Canada, running east-west rather than north-south, and that is where the problems are. I am pleased to see that the hon. Member for Inverclyde (Mr McKenzie) was not encouraging Canada, which became independent of the United Kingdom, to become part of the United States of America. We must realise that 100 years ago, the world had 50 independent states. It now has 200 independent states—Europe alone has 50 independent states—and it is better for it. Intergovernmental organisations and others come together to deal with things, and the approach is far more mature than the one that existed in the days of empire. I encourage the hon. Gentleman to take further his support for the independence of Canada, of which I am a fervent supporter, and to realise that just as Canada is better off being independent of its 10-times-larger neighbour to the south, the same is true for Scotland. I do not see any animosity between Canada and the United States of America; I see friendship and people trying to get on with each other.
If there has been a discordant note in the debate, it was introduced by the Secretary of State for Business, Innovation and Skills, who described London as a “giant suction machine”. I am glad to say that that was repudiated by no less a figure than the SNP deputy leader Nicola Sturgeon, who said at University college London that the Secretary of State’s comment was a bit harsh. That happened to be on the day that the Chancellor went to Scotland to bully, threaten and harry the people of Scotland, with predictable reactions. I remember the headline from the London Evening Standard: “Chancellor bullies the Scots while Nicola Sturgeon charms London”. The SNP’s deputy leader spoke in a constructive tone not of fears and scares, but of optimism about the future.
The Parliamentary Under-Secretary of State for Scotland (David Mundell)
We did not see that last week.
Mr MacNeil
I hear Members, including no less a figure than the Minister, cackling and heckling. The same fears and nonsense about the idea that we would be diminished were no doubt present when Ireland and some of the Dominions were moving towards independence, but I argue that they were wrong. There is more trade between the UK and Ireland now than there ever was when Ireland was part of the UK. Things are better, and the aggregate GDP of the British Isles is higher because of an independent Ireland and an independent Isle of Man. It will be higher still when we have an independent Scotland, because of the giant suction machine that the Secretary of State for Business, Innovation and Skills alluded to. There is an issue, but the best way to solve it is to create a successful second centre of gravity in the island of Britain. The island of Ireland probably benefits from having two Governments, although it has not been helped by the psychopathic elements who have been involved over the past 100 years.
Guy Opperman
It is hard to follow the hon. Gentleman’s speech, but we are all trying. Can he enlighten us when it comes to the Barnett formula? If Scotland were to go independent, presumably that formula would not continue to operate and the hon. Gentleman would not seek for it to do so, given that Scotland would be an independent state. What is the SNP’s position if it loses the referendum? Will he decide that Scotland does not need the Barnett formula?
Mr MacNeil
The hon. Gentleman is quite correct to say that if Scotland were independent, it would not seek to operate a Barnett formula any more than Norway does. In Norway, of course, average wages are twice those in the UK, on a population of a similar size to that of Scotland with oil.
The hon. Gentleman asked what would happen if the referendum were lost. First, I do not think that the referendum will be lost, and secondly, the SNP will do what we always do, which is to put the interests of Scotland first. He should be aware that Scotland is 8.4% of the UK’s population and raises 9.9% of the UK’s taxes, and that over the past five years, taking tax and spend together, Scotland was £12.6 billion relatively better off.
If the hon. Gentleman is exercised by the Barnett formula, and he clearly is, the best thing that he can do is to join his brothers in Scotland and support independence, and then he can stop worrying about it. He will no longer be troubled by the green-eyed monster when it comes to someone getting a fraction more or a fraction less. Actually, that concern should not exist because, as I have pointed out, Scotland contributes 9.9% of the UK’s taxation although it accounts for only 8.4% of its population. In each of the past 32 years, Scotland has contributed more tax per person than the UK average.
Mr Russell Brown
The hon. Gentleman mentioned the population of Scotland in comparison with the rest of the UK, and he mentioned taxation. One of the important taxes for the man and woman on the street in Scotland will be income tax, and that income tax level is only 7.2% of the UK collection rate. He has also mentioned Norway. Would he like to share with us the income tax levels for people in Norway, and whether those living in an independent Scotland could actually stomach such rates of tax?
Mr MacNeil
The hon. Gentleman tempts me down an inviting road. As I have mentioned, average wages in Norway are twice what they are in the UK after tax. After adjusting for purchasing power, the average Norwegian has 43% more money, or £158 extra, each week in their pocket than the average person in the UK. In addition, inequality in Norway is lower than it is in the UK. If the hon. Gentleman is interested in making his constituents wealthier, he should follow the model that the SNP proposes, under which we would set up an oil fund and ensure that the gains of productivity were distributed far more equally in our society than they are at the moment in the UK. Inequality in the UK is the fourth highest in the OECD, and that is not something that he should be defending. He should join me in making Scotland a more egalitarian and wealthier place. Norway proves that that can happen with independence and oil.
Mr MacNeil
I would love to take the hon. Gentleman’s intervention, but you are inviting me to wind up, Mr Weir. I thought that I had been doing so quite successfully, but I shall bring my remarks to a close. I would just like to mention the pleasure that I alluded to earlier of reading that Standard Life agreed with the Scottish Government on the currency. It should be borne in mind that Standard Life has at various points in the past 20 years threatened to walk out of Scotland if this, that or the other happened. Of course, it has not and it will not.
Mr MacNeil
I am afraid that I cannot. The child care offer given by the SNP Government would be fantastic, and I am absolutely clear that nobody in Standard Life would want to leave, particularly when its employees were getting such a fantastic offer.
Mr MacNeil
It is not just Standard Life. British Airways and Ryanair are seeing opportunities coming through, which may well benefit those in the north of England. They may prefer to take cheaper flights abroad from Scotland rather than making the long and arduous journey down to the south-east of England through snarled-up traffic. British Airways demonstrates the nub of the issue.
Mr MacNeil
Language, please. The hon. Gentleman lets himself down.
My final point is that when we put all the scares and fears aside, we see that independence offers opportunities not only for Scotland but for the north of England, and that it will increase the aggregate GDP of the British Isles. Nobody would roll back the independence of any other countries that have become independent, and I wager that when Scotland becomes independent, nobody will roll that back either. The voices that try to scare us about independence are the same ones that endlessly tried to scare us about devolution. They repeat the same fears as before when it comes to independence. None of them wants to reverse the independence of any European country, however, and when Scotland has become independent, they will support it wholeheartedly. Those in the north of England and the Borders will tell us of their great relations with Scotland, and they will tell us that an independent Scotland is the best thing since sliced bread.
James Wharton (Stockton South) (Con)
It is a pleasure to serve under your chairmanship, Mr Weir, and it is a privilege to follow the party political broadcast for the Scottish National party—we look forward to the idea of “Scotland, the new Liechtenstein” being rolled out in the referendum debate. I feared that I would not get to speak, so I will be brief, to allow other Members to contribute.
In principle, I support allowing Scotland a referendum, so that the people can decide. How could I not, with my track record of advocating referendums? I am concerned, however, about the way in which the referendum has come about, and about its legitimacy, given who will be voting. I have never quite been resigned to the anomaly that allows 400,000 English people living in Scotland to vote, but 500,000 Scottish people living in England not to vote. It is strange that many of the Scottish people whom I represent will have no say, but my mother who lives in Hamilton will get a vote—she will, I am sure, vote to remain part of the United Kingdom.
We are primarily present, however, to discuss not the referendum, its format or how it came about, but what it might mean. There are two possible options. Scotland could, of course, vote to leave the United Kingdom. That is unlikely, because the Scottish people are sensible enough to want to remain part of the United Kingdom, but the possibility remains. They might be persuaded by the slogans and rhetoric of those who legitimately make the argument for independence. As we have discussed this morning, though, there would then be all sorts of problems and unanswered questions. How would they deal with taking a share of the national debt? How much would that share be, and what would the deal look like? What would the currency be, if it cannot be sterling? What would Scotland’s relationship with the European Union look like?
Mr MacNeil
I am surprised at some of the hon. Gentleman’s words. Would he be in favour of Scotland using sterling?
James Wharton
No, I would not, personally. It would be a suboptimal position, were Scotland to go independent, and I think that Scotland would not find it to be in its long-term interests.
Furthermore, how would Scotland deal with an exodus of companies that have made it clear that they would not be comfortable remaining based in Scotland were it to cast itself adrift from the United Kingdom? All those questions have been debated at some length, however, and I want to look at what is more likely to happen. It is more likely that Scotland will sensibly vote to remain part of the UK. That is why this debate is important, and I congratulate the hon. Member for Sedgefield (Phil Wilson) on it. What happens in that case could be important for the region that he and I represent; indeed, it could have an impact on the north-east and the north-west, and on the north of England as a whole. Without doubt, debate would quickly move on to further devolution, devo-max and what Scotland will look like as part of the United Kingdom, post the independence referendum. What would the new settlement be? I have no doubt that there would be a push for further powers to be devolved and further control to be transferred to the Scottish Parliament, and I fear what that would mean for the north-east.
We already have a competitive disadvantage in the north-east as a result of some of the powers that Scotland has devolved to it today. As regards competition with the north-east, Scottish Enterprise is able to give an extra push towards investing in Scotland, and to appeal to companies on where they bring their business, employment and investment. It is not necessarily the case that Teesside and Tyneside would prosper at the expense of places such as Aberdeen, but the reality is that companies choose where they will be located. There should be a level playing field, with fair conditions on both sides of the border, when companies make that choice.
James Wharton
I will not give way to the hon. Gentleman again, because we are short of time.
After Scotland votes to remain part of the United Kingdom, as I am sure it will, my concern is that the north of England will face a challenge. While we do everything we can to support the country, the economy and its growth as a whole, we must ensure that we do not allow an unfair competitive advantage that would damage the economies of the people and constituencies that we represent.
Bridget Phillipson (Houghton and Sunderland South) (Lab)
It is a pleasure to serve under your chairmanship, Mr Weir. I congratulate my hon. Friend the Member for Sedgefield (Phil Wilson) on securing this important debate. The impact of Scottish separation on the north-east has received little attention. I am pleased that we are able to discuss the consequences of separation for the north-east, as well as for Scotland.
My view, for the record, is that we all benefit from Scotland remaining part of the United Kingdom. My constituency is a bit further from the border than that of other Members present, but in common with many people throughout England who have family ties with Scotland and feel a real sense of connection, I am proud of the longstanding relationship that we enjoy with our Scottish neighbours. It is right that any decision on whether Scotland should leave the United Kingdom is a matter for Scotland alone, but the United Kingdom has benefited from Scotland being part of it, just as Scotland has seen many benefits from being part of the United Kingdom.
The challenges that we face in the north-east are all too familiar to the Scots, and are similar to their concerns in daily life. Our shared trading links are a massive advantage on both sides of the border. Businesses and other organisations, such as the North East chamber of commerce, have rightly expressed concerns about the undoubted negative impact on jobs, growth and trade of a vote for separation.
There are many unanswered questions about the practical implications of separation. Unfortunately, this morning we have had no answers from the hon. Member for Na h-Eileanan an Iar (Mr MacNeil), speaking on behalf of the Scottish National party, whether about border controls, currency or membership of the European Union. It is incumbent on those who propose independence as an ideal to offer answers to genuine questions on such important issues.
Mr MacNeil
The hon. Lady talked about sharing an affinity with Scotland. I have an affinity with Ireland, but I do not want us to share a Prime Minister, necessarily. Are there voices in north-east England expressing concern about jobs flooding into Scotland, as they might put it?
Bridget Phillipson
My concern is predominantly with the shared trading links between England and Scotland. We benefit from having an open border, without any hindrances. In the event of separation, that would simply not be the case.
Gordon Banks (Ochil and South Perthshire) (Lab)
It is a pleasure to serve under your chairmanship, Mr Weir. I congratulate my hon. Friend the Member for Sedgefield (Phil Wilson) on securing this important debate and on his passionate contribution, in which he argued for the strengths of the Union of the United Kingdom. We have heard a lot this morning—about the impacts of independence on the steel industry in Scotland and the north-east; border controls and barriers; connectivity between the north-east and Scotland; EU membership; euro membership and currency in general; farming; North sea oil exploration and engineering; and a history lesson about Bavaria and Prussia from my right hon. Friend the Member for Blackburn (Mr Straw).
I have seen things from both sides of the border. My father was a Scots miner, who married my mother, an Englishwoman, in Dunfermline abbey. They lived in Dunfermline, and then moved back to the north of England—that is where my mother was from. I was born in Acomb, in Northumberland, in the constituency of the hon. Member for Hexham (Guy Opperman). I lived in Northumberland and then Cumberland, as it was then, until I was 14, before moving to Clackmannanshire in Scotland, where I have lived since, and I now have the privilege of representing it as part of my constituency. In the 1970s and 1980s, I worked for 10 years for the UK’s biggest house builder, Barratt, a north-east company that has in the past seen excellent growth and rewards from its Scottish business ventures. That kind of relationship is under pressure from independence.
Gordon Banks
I will say this once and only once to the hon. Gentleman: I will give way once, and I hope his intervention is much better than his contribution.
Mr MacNeil
That is a disappointing tone to take. All I can say is that I am severely surprised. The hon. Gentleman has mentioned the different countries of his ancestry. Had his parents or grandparents been from countries outside the UK, would he have had a difficulty about that? Had he an ancestor from Denmark or Ireland, would he be internationalist on this issue, or does the fact that his ancestors are from the UK give him a particular difficulty?
Gordon Banks
It was not any better than the speech, at all. The hon. Gentleman really needs to be saved from himself in this place. My experience is of understanding the relationship between north-east England and Scotland, first hand. Those bonds demonstrate, I feel, the underlying strength of the Union, a sentiment that I know is shared by most Members present, with one obvious exception. Such links highlight that the debate surrounding independence does not affect Scotland in isolation but has significant implications for the rest of the UK. Nowhere is that felt more keenly than in north-east England.
My hon. Friend the Member for Sedgefield spoke with conviction about the common identity shared by Scotland and the north-east, and I am in full agreement with those sentiments. There can be no doubt about the bond in our industrial centres, such as Glasgow and Newcastle, or Sunderland and Dundee, based on our shared history, family and political perspective.
I, too, remember the 1980s, when Scotland and the north-east stood together against the poll tax and pit closures. People recognised then, as we do now, that any political change that we hope for can be reached only through the unity of shared identity and interests. That common bond would simply not be achievable if Scotland and the north-east were in separate countries.
The bonds of the 1980s can be felt just as strongly today, as can be seen by the fact that close to 150,000 people who were born in Scotland live in north-east or north-west England, and we have heard today about the many who travel across the border to work every day. Most of those people have made it abundantly clear that they do not want the break-up of the UK, as can be seen in a recent independent poll, which showed that 62% of Britons want Scotland to remain part of the United Kingdom. People want that not only because of the bonds that we share, but because of an underlying recognition that independence for Scotland could leave them worse off.
That brings me to an important point, echoed throughout today’s debate: independence has the potential to create uncertainty for our nearest neighbours, as well as for Scotland. John Tomaney, formerly of Newcastle university, has indicated that independence could have significant economic consequences for the north-east; in particular, he has highlighted the undesirable situation of Scotland competing directly with the north-east for investment. North-east England would be in the unfortunate position of being caught between a prosperous south and an independent Scotland fixated on implementing Irish levels of corporation tax. The end result would be a dangerous race to the bottom when it comes to wages and conditions, a scenario that would have serious implications for not only job security but the growth and development of the economies of both Scotland and the north-east.
That concern is not restricted to today’s debate; it has been voiced over a number of years. In evidence to the Calman commission on Scottish devolution in 2009, the North East chamber of commerce expressed its concerns about what it called
“the creation of a Scottish rate of Corporation Tax”,
identifying
“the potential for wasteful competition”.
That view was recently echoed by the chamber’s head of policy, Ross Smith, who has stated that the north-east
“will feel the impact of any competition from north of the border more keenly than others”
and that
“the future of Scotland is a big issue for many businesses”
in the region.
Those concerns are only reinforced by the fact that the nationalists still have no credible plans on what currency would be used in an independent Scotland—that issue has been explored today, and we are still waiting for an answer. The situation leads only to uncertainty for the thousands of companies in the north-east and north-west that trade directly with Scottish businesses. The separatists are putting economic output and jobs in north-east England in jeopardy.
With just over six months to go until the referendum, the SNP has simply not provided any substantial answers to those important questions and many others raised today. As a result, it is damaging Scotland’s prospects with its crossed fingers, and its strapline from Alex Salmond of “Trust me: it’ll be all right on the night.” It also runs the risk of damaging the north of England, part of the country that would be an independent Scotland’s biggest supplier and marketplace. That is why it is insincere of the SNP to assert that backing an independent Scotland would be in the best interests of the economy of north-east England, while not being straight about the impact on the north-east of its proposed cut to corporation tax.
We have a bigger idea than independence. As we heard from my hon. Friend the Member for Sedgefield, Labour is a national party, not a nationalist one. By their very nature, nationalists are separatists, whereas my party has its roots firmly in the whole of the UK, as has been shown today. I would encourage people to pay attention to the Institute for Public Policy Research’s “Borderland” report, which argues that the key to success for north-east England lies in more joint working with Scotland—a point we heard in contributions from hon. Members today. Working within the shared institutions of the UK is the obvious means of delivering and achieving that, rather than trying to forge a relationship with a newly formed foreign country.
This debate will go on, so perhaps we should have another debate on the same topic. The hon. Member for Na h-Eileanan an Iar (Mr MacNeil) bemoaned the 1:18 ratio among Members here today. Perhaps he can put in for a debate; then he could make a longer contribution, although that might be a bit of a challenge. However, today’s debate has made it clear that although the outcome of the referendum is rightly a matter only for people living in Scotland, the debate must be open to all. Open debate will be vital in the coming months if we are to provide any clarity in the uncertainty that the independence referendum poses for Scotland and the north-east. Independence for Scotland will do nothing to build jobs, improve social justice or raise the aspirations of people in north-east England.
As I said, I was born in north-east England, in the UK. I have lived in north-east England and in central Scotland, in the UK. I have worked in central Scotland and in this place, in the UK. I intend to make sure that, after 18 September, living in central Scotland and working in this place, I am still living and working in the UK. That is why I welcome today’s debate, and I hope there will be further opportunities to discuss these issues in the weeks and months ahead.
David Mundell
The hon. Gentleman makes an astute point. We all listened to the speech of the hon. Member for Na h-Eileanan an Iar (Mr MacNeil), but it did not contain many facts about what independence will mean for an independent Scotland, or what currency it will have. Mr Salmond needs to be clear that the message on the currency union is not a bluff. He needs to tell us what his alternative plan is. Sterlingisation would leave Scotland with no central bank, no lender of last resort and no control over its interest rates. The Scottish Government’s fiscal commission said that sterlingisation
“is not likely to be a long-term solution”.
Mr Salmond looks like a man without a plan. Perhaps the people of England will find out what the people of Scotland have not found out: his plan B for currency.
As a number of Members have pointed out, being part of a strong United Kingdom benefits us all, on whichever side of the border we live. We all benefit from the stability and certainly that comes from being part of the large and diverse UK single market of 63 million people, rather than the market of the 5 million people of Scotland. The UK really is greater than the sum of its parts; we all put something in and we all get something out.
As part of the UK, Scotland has a broad tax base that allows us to share risks across the UK, and enables us to deal with economic shocks such as the 2008 financial crisis, and to support our ageing population. We have influence on the world stage as a member of the UN Security Council, the EU, NATO, the G8, the G20 and the Commonwealth. At home, institutions such as the NHS and the BBC benefit us all. Scotland benefits from having a strong Scottish Parliament that can make decisions about the things that affect our everyday lives, such as our schools and hospitals. We can pool our resources in the good times and share risks in the bad times with our families and friends in other parts of the United Kingdom.
Mr MacNeil
The Minister says that we have a strong Scottish Parliament, but will he tell us why he left it to come to this place?
David Mundell
I left the Scottish Parliament because I was elected to Westminster. I am a supporter of the Scottish Parliament. I want to remind our friends who are not usually part of this debate that the Scottish National party did not support the devolution proposal in 1997, or the Calman commission’s proposal to give the Scottish Parliament additional powers in 2012.