Scottish Independence and the Scottish Economy Debate
Full Debate: Read Full DebateDavid Duguid
Main Page: David Duguid (Conservative - Banff and Buchan)Department Debates - View all David Duguid's debates with the Scotland Office
(1 year, 9 months ago)
Commons ChamberI have already given way twice to the hon. Member, and I think I have been very gracious with my time.
As I said at the start, all the Westminster-imposed chaos comes with real consequences because the cost of the last six weeks, and the consequences of the last six years of constant crisis mean that the Tories are right back where they originally started—implementing austerity. This week, we have been deliberately bombarded by Treasury briefing about the “difficult decisions” that need to be made in order to fill the economic hole that the Tories dug themselves, but the return of austerity, if it ever truly went away, is not a so-called difficult decision. It is instead what it has always been—a Tory political choice to hit the poorest hardest.
No one should be fooled into thinking that there are not other choices. In the week that BP announced a quarterly profit of £7.1 billion, why not take the easy decision to bring in a proper windfall tax on excess profits? Why not take the easy decision to end non-dom tax avoidance? Why not take the easy decision to reinstate the cap on bankers’ bonuses? With all that new revenue, why not take the easiest decision of all, and protect those most at risk by uprating benefits and pensions in line with inflation? That, after all, was the promise the Prime Minister made when he was Chancellor back in May.
Until each and every one of those easy and essential decisions are taken, the Tories should not dare talk about the difficult decisions they are having to take. I fear, though, that the Tories and their new Prime Minister have already made their choice: they are gearing up to take a wrecking ball to public services and double down on austerity. That is exactly why we are now at such a critical juncture. It is clearer by the day that austerity 2.0 is the future awaiting the Scottish people unless we escape Westminster control for good. That is why independence is not just desirable; it is essential.
There is no better example of that necessity than the energy issue. The motion refers to the detailed and evidenced-based report by David Skilling, who has laid out the facts on the sheer scale of the energy opportunity awaiting an independent Scotland. I encourage hon. Members across the House to read that report. We have the potential to generate around 10% of Europe’s wave power and possess 25% of the potential European offshore wind and tidal resource. Let us not forget that it is Westminster that is holding back our tidal potential with its refusal to fund it to the rate that will be necessary to generate up to 11.5 GW of tidal energy by 2050.
I am not sure if I picked the right hon. Gentleman up right, but is he accusing the UK Government of not funding tidal energy, when in fact £20 million of contracts for difference were committed, as ringfenced, specifically for tidal stream energy?
I am delighted that the hon. Gentleman raises that because it takes us back to the discussions we had last year. The Royal Society report published just before COP26—a peer-reviewed report—indicated the potential to get to 11.5 GW of electricity from tidal. Incidentally, that would be 15% of the UK’s electricity production, which is the amount that nuclear contributes today, and by 2030 tidal would be cheaper than nuclear. We do not need nuclear to provide our baseload electricity because tidal does it. The fact remains that that £20 million, welcome as it is, does not go far enough for that industry to develop its potential. When we look at the programmes that are already live around these shores, about 70% of the value added from tidal comes from Scotland and about 80% comes from the UK. It is a domestically grown industry.
We heard earlier from my hon. Friend the Member for Kilmarnock and Loudoun (Alan Brown) about the contrast with the oil industry in Norway, but one of the key lessons from that is to make sure not just that we have the energy production, but that we control the supply chain. This is exactly an industry where we do control the supply chain. I say to the hon. Member for Banff and Buchan (David Duguid) that he should join me in pressing the Treasury to make sure we get the £50 million-a-year ringfenced pot—that is what would allow us to fulfil our potential—and at the same time to make sure that we get carbon capture and storage for Peterhead. Those two clear examples are direct demonstrations of how Scotland has been held back—held back on its ability to deliver green energy and on its desire to get to net zero in 2045. That is the cost of Westminster control for Scotland.
I did ask for respect and honesty in this debate, and I think that if the hon. Gentleman checks Hansard, he will find that I have said that on a number of occasions.
This is Scotland’s energy and it should serve Scotland’s people. The Skilling report shows that Scotland has the potential to boost our output by more than five times, increasing from 12 GW of installed renewable capacity to over 80 GW by 2050. Just think about that—80 GW of electricity by 2050. That is as much as four times the energy Scotland needs. It will provide the cheap, green energy that will allow us to have a new industrial revolution, and to see jobs come to the eastern highlands, the western highlands, the lowlands and the south of Scotland as a consequence of the economic opportunity that will be created. By expanding Scotland’s renewable capacity and becoming a green hydrogen exporter, we have the chance to pump as much as £34 billion into Scotland’s economy every year—an investment that would sustain up to 385,000 jobs, dwarfing the jobs that we have in oil in gas today. That is a real energy transition.
This is a plan for growth—green, sustainable growth for the long term, not the fantasy growth that we had from the Truss Government and the absence of any plan from the existing Government. Driving better productivity, driving an industrial green society, and driving our economy into the future—that is the plan on which an independent Scotland can and will be built. Apparently, the only UK Government response to that energy plan is the bizarre argument that we should ignore the vast renewable energy potential and instead turn to nuclear. Well, let us be very clear: we do not need nuclear in Scotland, we do not want nuclear power, and we will not be having nuclear power. We want the powers of independence so that Scotland’s energy can finally serve the needs of the Scottish people.
In the latest Scottish Government paper on independence, our First Minister set out all the economic opportunities that independence will unleash. Instead of Westminster anti-trade union laws, we could ensure fairer work with European-style labour market policies. Instead of an economic race to the bottom, we could build an economy based on human wellbeing, lifting people up so that they can contribute fully, not waiting for wealth to trickle down while the inequality gap grows. Instead of Brexit, we would be an EU member state in our own right and we would, for the first time, be in a position not just to benefit from EU trade deals, but to help shape them. Instead of a hostile environment and the disgrace of a Home Secretary who talks about “invasions”, we would have a humane immigration policy tailored to our needs.
I will happily give way to the hon. Gentleman if he will join me and ask the Home Secretary to apologise for the outrageous language that she used in this Chamber on Monday.
I genuinely thank the right hon. Gentleman for allowing me to intervene on the point he was making about an independent Scotland being in the EU—a point he made previously. Does he agree with his leader in Holyrood, First Minister Nicola Sturgeon, when she admitted that there could be hard borders and passport controls between Scotland and the rest of the United Kingdom?
Here we go: “Project Fear” all over again. Let me give the hon. Gentleman and the House the example of Ireland. Way back in the 1940s, close to 90% of Ireland’s exports were to the rest of the United Kingdom. Today that figure is less than 10%, but the value of Irish exports to the UK actually increased every single year, irrespective of the economic cycle. An independent Ireland was able to pursue policies that delivered growth and resulted in investment and trade opportunities. That is the opportunity for an independent Scotland.
I rise reluctantly to speak in this debate because, as will come as little surprise to Members of this House and to people watching, I do not believe Scotland should be separated from the rest of the United Kingdom, nor do I think there should be a referendum on the matter. I do not even believe we should be having this debate today.
Of course there are those who disagree with my position, not least SNP Members and the party they represent, and I respect their right to hold that view. However, I do not believe their view is shared by anywhere near a majority of people in Scotland, particularly in these challenging times. And they are challenging times, as we have heard today.
I do not deny that many of our constituents in Scotland and across the rest of the United Kingdom are facing real pressures. Contrary to the implication of the SNP’s motion, these pressures are not only faced in the United Kingdom. The whole world faced inflationary pressures as a result of the covid-19 pandemic and the strain on global supply chains as lockdowns were lifted at different rates in different places, and then there was the impact of Vladimir Putin’s aggression and the ongoing conflict in Ukraine, which has had an impact on energy prices.
The hon. Gentleman says our views are not felt or shared by the majority of people in Scotland. Will he therefore explain why the same people elected SNP Members to come to this Chamber and did not elect Scottish Conservatives?
I have previously debated this issue with SNP Members. Every Member is elected to this House by a plurality of their constituents, but the majority of voters across the whole of Scotland did not vote for the SNP. [Interruption.] SNP Members are indignant in their incredulity. They may have more Members in this House, but that is not how referendums work. The referendum they dearly want would be based on a majority of voters across the whole of Scotland. I will not debate that point, as it is not the subject of this debate.
In response to the challenges faced by the whole country, this UK Government have taken action to support domestic and business customers, particularly the most vulnerable and the hardest hit. The energy price guarantee is expected to save a typical household in Great Britain at least £700 a year. The energy bill relief scheme will protect businesses and other non-domestic energy users, including charities and public sector organisations, by providing a discount on wholesale gas and electricity prices of roughly a third of what they would have paid without the intervention. That is on top of the energy bill support scheme announced earlier this year, which provides at least £400 to every household with a domestic electricity supply. There is also a further £9 billion of targeted support to the most vulnerable households, including pensioners.
There is a £650 cost of living payment to every household on means-tested benefits, paid out to more than 8 million households in two instalments—one in July and one in the autumn—which works out at roughly a third of all households in Great Britain. There is a £300 cost of living payment to the approximately 8 million pensioner households in receipt of the winter fuel payment, and a £150 cost of living payment to the nearly 6 million people in receipt of disability payments.
Before I give way, I remind the hon. Gentleman that these measures were taken by the UK Government.
The hon. Gentleman talks of the pressures and challenges. He will be aware that mortgages are, on average, two percentage points cheaper in Ireland, that Irish pensions are higher and that the poorest 5% of people in Ireland are 63% better off than the poorest 5% in the UK. Does he think Ireland would want to rejoin the UK, or does he think Ireland is happy with its independence?
I am not here to speak on behalf of the people of the Republic of Ireland or, indeed, the people of Scotland, unlike the hon. Gentleman. I am here to speak on behalf of my constituents in Banff and Buchan, who I continue to argue have benefited greatly from being part of the United Kingdom.
If the hon. Gentleman will forgive me, I will continue listing the many benefits of being in this United Kingdom for the people of Scotland and everyone else.
The household support fund, which was launched at the 2021 autumn Budget, provided £500 million from October 2021 to March 2022. It was extended by the 2022 spring statement for the period from April to October this year, and the latest extension will cover the period from October 2022 to March 2023, bringing the total amount provided to £1.5 billion since October 2021. This is a devolved area of policy, but it has generated Barnett consequentials for the Scottish Government of £41 million in the last financial year and a further £82 million in the current financial year. As hon. Members have described, it is for the Scottish Government to decide how to fund mechanisms in Scotland as they see fit.
That £1.5 billion package is in addition to the more than £22 billion of UK Government support announced previously, including the £9.1 billion energy support package announced in February 2022, which had £296 million in Barnett consequentials for the Scottish Government as a result of the council tax rebate payment and the discretionary funding for local authorities in England.
The reduction in the universal credit taper rate and the increase in the work allowance announced in the 2021 autumn Budget meant an extra £1,000 to those on the lowest incomes. An increase in the national insurance primary threshold to £12,570, making it the same as the threshold for income tax from July 2022, and a lowering of the earnings limit were also announced in the 2022 spring statement. A fuel duty freeze was announced in the 2021 autumn Budget, and a 5p cut to fuel duty was announced at this year’s spring statement.
Do the national insurance changes not show how the Westminster Government make decisions for Scotland without consulting Scotland? After it was announced, we argued that a rise in national insurance was a regressive measure, and then the Westminster Government decided that they would reverse the rise. Scotland had no say on that. All the other measures that the hon. Gentleman mentions are not free money coming from Westminster. We pay our share in taxes, and we are paying billions in additional oil and gas revenues. Borrowing funds most UK Government spending, and Scotland is allocated a share of that debt, so it is not free money or a dividend. His lot decide what we get, and then they say, “By the way, here is what you are going to have to pay for it.”
I was going to talk about the reversal of the health and social care levy, which will save 2.3 million people in Scotland an average of £285 in 2023-24. I will return to the question of tax coming in, payments going out and the terms of the Union dividend.
I will continue with the list, which is not exhaustive. I am listing just some of the highlights of what this UK Government have provided to everyone in this United Kingdom. The national living wage has been increased by the largest-ever cash amount, meaning that 2 million full-time workers will be £1,000 a year better off. Another benefit of Scotland being in the UK is that the rest of the UK accounts for £52 billion-worth of Scotland’s exports, which is three times larger than the amount going to the EU. Half a million Scottish jobs are supported by trade with the rest of the UK.
The Union dividend, for those who are not aware, is the combined value of higher public spending and lower tax revenues in Scotland. In 2021-22, the Union dividend reached a record high of £12 billion, which works out, as the Secretary of State said, at £2,184 per person, up from £1,925 per person the previous year. This includes Scotland’s geographical share of North sea revenues, and it is comprised of £1,963 of higher expenditure per person plus £221 in lower revenues generated per person in Scotland.
The hon. Gentleman is talking about identifiable spending, which is a bit like the two of us going for a pizza, throwing away a third of it and then saying, “You got slightly more of the two thirds.” There is loads of non-identifiable spending in London—there is Crossrail, there are MPs’ expenses here in the evening, and whatever else—and we are not seeing Barnett consequentials for that. When we talk about this expenditure, he is telling only part of the story, and it is a misleading part of the story. If he wants to tell the real story, he must talk about the whole lot, and those figures are hidden.
I think I heard an invitation to join the hon. Gentleman for a pizza one night.
I would be happy to take the hon. Gentleman up on that, where we can discuss this further. [Hon. Members: “You’ll be left with the bill!”] Quite possibly. I accept the hon. Gentleman’s point that it is a complex issue but, as has been highlighted by the shadow Secretary of State, the Scottish Government’s own figures point out the Union dividend. They recently published a paper on the economy for an independent Scotland. I am not going to get into the detail but, as has been mentioned, it contains vague claims about how a new Scottish pound would be created, despite the central bank being in a different country. More recently, we have had confirmation from the EU that not only would rejoining the EU not be as straightforward as the SNP would have us believe, but it certainly would not be able to rejoin without committing to join the euro.
Finally, on the subject of that paper, let me read out the following quote from the Institute for Fiscal Studies:
“it skirts around what achieving sustainability would likely require in the first decade of an independent Scotland: bigger tax rises or spending cuts than the UK government will have to pursue…Scotland’s public finances are therefore expected to weaken relative to the rest of the UK… Experience from recent weeks suggests the markets may not look favourably on fiscal plans built on the uncertain hope of a substantial future boost to growth.”
These are challenging times, but the breaking up of our 300-year-old Union of nations is not the answer to those challenges. The Scottish people want both of their Governments—both of our Governments—to work together on delivering economic stability and quality public services, rather than pursuing a cynical, divisive second independence referendum. But rather than working collaboratively with the UK Government, the SNP continues to waste taxpayers’ money—the £250 million on ferries is just one well-known issue, and I could go on, but I am not going to take up any more of Members’ time—undermining the quality of vital public services and holding Scotland back, while constantly using the calls for an independence referendum as a distraction.
I know that happened during my time as a Minister, and I am sure that the new Under-Secretary of State for Scotland, my hon. Friend the Member for Berwickshire, Roxburgh and Selkirk (John Lamont), who will be responding to the debate, will continue, along with the Secretary of State, to seek to work productively and collaboratively with the Scottish Government as we work to deliver economic stability and improve vital public services for the Scottish people. That collaboration in the national interest is what the people of Scotland desperately want, not a damaging, divisive and distracting independence referendum.
I will respond to that challenge and I thank the hon. Gentleman, because I think I heard him say that Scotland would be a successful independent country. I think that is what he was saying.
If the hon. Gentleman is looking just for that quote, to edit it for the purposes of having a video clip, I am happy to oblige. But just as an independent or separate Scotland could possibly succeed, would he also argue that an independent England, an independent Wales or an independent Northern Ireland would succeed as well, but not nearly as much as a United Kingdom?
This is progress. I feel that I am on the right track with this, because what we are getting across the House is agreement to the assertion that Scotland would be a successful independent country. I have no doubts whatsoever that England, without Scotland’s contribution through its resources, would be equally successful as an independent nation; I believe that somehow it would just about muddle through without our support—
That is a little more encouraging, because I think we are moving towards the assertion that Scotland would be a successful country and it has more than what it takes to be one. Throwing this theme a wee bit further on, we could even suggest that Scotland is perhaps the best resourced country that has ever considered becoming independent. I think that is pretty incontrovertible. No country is better endowed to be an independent nation. When we look around Scotland, whether at our oil and gas reserves, our fisheries or our potential renewable energy, we see that no country is better prepared for this than Scotland. Can we agree to that?
I could not agree more with the hon. Member for Edinburgh West (Christine Jardine), who said that nobody would disagree with the hon. Gentleman’s assertion other than for the fact that the people of Scotland have repeatedly—or have when it counted—voted to stay in our United Kingdom. Being in the UK is better. [Interruption.] Let us all agree that Scotland is great. Scotland is fantastic. Scotland within the United Kingdom is even better. But will the hon. Gentleman confirm that the SNP’s proposals for an independent Scotland would mean rejoining the EU and therefore rejoining the common fisheries policy?
I am so grateful to the hon. Gentleman for raising the EU because of what I am going to say now. I suspect I will not get the same range of agreement around the House with this particular assertion: the only way for Scotland to be a member of the European Union is for it to become an independent nation. Do we all agree with that? [Interruption.] I am hearing a couple of noes, mainly again from the Liberal Democrats; I have to say that I am very disappointed with them. I thought I would have had a more encouraging response from them.
No; I have given way to the hon. Lady before.
Let us all agree that the only way for Scotland to rejoin the EU is by becoming independent. I will try another one; this one is probably not going to get there, but let us see. The only way for Scotland to get the Governments that it always votes for is as an independent nation.
The hon. Gentleman says that that does not make sense, but when I was elected in 2001 Scotland voted for Labour; it got the Government that it wanted. But since 2010, Scotland has never had the Government it voted for. What I am saying is uncontroversial: the only way for Scotland always to get the Government it votes for is as an independent nation. I thought we might have a little difficulty with that one, but the reaction does not seem too bad. I am a bit more encouraged, so I will see how much further I can get.
My hon. Friend the Member for Na h-Eileanan an Iar (Angus Brendan MacNeil) always refers to Ireland, and he is right to; it is a great example. If we look at other European nations such as Ireland, Iceland, Finland, Norway or Denmark—they are all roughly the same size as Scotland, at 5 million to 8 million people—we see that they are all much more successful than Scotland. They are all powering ahead, with economic growth and GDP figures that we could envy. Can we all agree that there is something about the constitutional arrangements of Scotland that does not let us prosper as our neighbours do?
I am grateful to my hon. Friend, who takes these issues seriously.
I have been a bit encouraged. Here is one that I am pretty certain Members from other parties will definitely agree to. I think we have to be honest about certain things and acknowledge that there will also, obviously, be difficulties. However, I think independence will be positive for Scotland; like our near-neighbours, we could be an incredible nation if we were in charge of our own affairs.
Let us see whether other Members agree—I am almost certain they will—that there would be issues at the starting point of Scottish independence because of the deficit we have as part of the United Kingdom. We can all agree with that: no objection from the Conservative Benches to that. Can we also agree that the way to resolve the deficit, as has been demonstrated by colleagues, is to remove the conditions that create it? Can we agree to that?
What we want is to have the full range of economic powers that will allow us to properly address the issue and to remove ourselves from the very institutions that give us the deficit as a result of being part of the United Kingdom. Can we agree to that? Other hon. Members are silent; I do not think they are agreeing—they are just humouring me now.
I seek clarification about what the hon. Gentleman is actually asking. Is he saying that by removing Scotland from the United Kingdom, Scotland’s deficit will no longer exist?
I will put it the other way round; it might be easier for the hon. Gentleman to comprehend. We have this notional deficit as part of the United Kingdom. We all agree that these other nations are powering ahead of us. According to the hon. Member for Edinburgh South (Ian Murray), we have a deficit that apparently means that we cannot be independent, but we have the deficit because we are part of the United Kingdom. What strikes me as the logical course of action is to extricate ourselves from the conditions that have given us the deficit. That means leaving the United Kingdom and ensuring that we get the full suite of economic powers to deal with the situation.
I think we all agreed that we as a people are resourceful enough to make a success of our independence and that, with its abundant natural resources, Scotland has what it takes to be an independent country. What is happening to make us have this deficit, according to the hon. Members for Edinburgh South and for Banff and Buchan (David Duguid)? We have the skills, the history of inventions, the creativity, the universities in the top 100, the oil and gas, the fisheries and the best potential for renewables in Europe. Why do we have a deficit? Maybe I am just not getting it, but I sense that it is to do with the constitutional arrangements that we find ourselves in.
I do not think I did too badly with all that; we got rough agreement on a lot. Let us park all this. Please—I never want to hear anybody suggest ever again that our nation, the people of Scotland, are somehow too wee, poor and stupid to make a success of independence. Never again! [Interruption.] I am hearing the hon. Member for Edinburgh South clearly. What I say to him is that I will make sure that no one in the Scottish National party utters that. Can he do the same in his party and can the hon. Member for Banff and Buchan do it in his? Let us never hear that suggestion again.
That was a useful kickaround. We have agreed all these things. What do we do now? How do we have the debate about going forward? We have to have the debate. People have knocked about opinion poll figures, but we are at 50-50 in the polls and the issue has to be resolved. It is intolerable that it should not be—we cannot continue into the future like this. Everybody says that we had a referendum in 2014, and yes we did, but Scotland in 2022 is almost entirely different from how it was in 2014. The United Kingdom today is unrecognisable from how it was in 2014. We have consistently and continually elected Governments with a commitment to holding a referendum and moving towards independence. SNP Members are here as representatives of that very mission. We have to resolve this.
My last plea is this: let us all demonstrate to the Scottish people that we are not some sort of hostage within the United Kingdom; that we are the equal partner that everybody talks about and that was described so eloquently during the last independence referendum—during our campaign to lead Scotland. Let us test this. Let us have the debate. Let us take all the pillars of the Better Together campaign—the things that sustained this tent that accommodated both Labour and the Tories, which was so catastrophic for the Labour party. The hon. Member for Edinburgh South is one of only a few Labour Members in his place. It was a terrible experience for Labour. All those central pillars are now gone. The case for staying in the Union has gone, particularly given the crisis and the chaos of the past few weeks. Scotland cannot put up with this anymore—we cannot be governed by incompetents who drove us to the very abyss of a pension crisis. We cannot go on like this. The last thing on which we can all agree is that we must have a referendum to settle this.
I will not take an intervention on pizza, thank you.
How is such spending to be managed? Where is the central bank to buy Government bonds? Where is the support of the UK taxpayer? How is Scotland to simultaneously build up the estimated £64 billion in reserves that it would need to join the EU? The welfare of millions rests on the answers to such questions, but the document is silent.
Moving on to the EU, the document notes that the single market accounts for a minority of Scottish exports, or about 18%, compared with the 60%—fully three times as much—exported to the rest of the UK. How then can trade with the EU compensate for cutting off Scotland’s biggest trading partner?
What would be the effect of customs checks on the border? How would those who travel across the border daily to buy groceries interact with stringent EU agrifood checks? How would farmers whose land is split by the border contend with the EU’s sanitary and phytosanitary checks—the same checks that have stopped tractors because of mud on their tyres and that have refused permission for loads to be taken to Ireland because blue ink has been used instead of black ink on the forms?
My hon. Friend gives a good example of why we need to stay together as a Union. On this Back British Farming Day, does NFU Cymru agree with the National Farmers Union of Scotland that keeping the integrity of the internal market of the United Kingdom is far more important than any other external market?
Indeed it does. The internal market we enjoy by virtue of being a United Kingdom is of huge importance to every farmer in every part of this United Kingdom. There is more I could say on that, but I will keep to the thrust of this debate.
I must agree with the hon. Member for Edinburgh South (Ian Murray): there is no plan. The SNP’s plan is no plan at all. It falls short on how key public services will continue to be funded and to operate. Further, it does not address the two biggest shocks to our economy in the past two years—a covid pandemic and a war in eastern Europe. The UK Government have responded to both by virtue of the strength of the United Kingdom economy, for the benefit of all parts of the United Kingdom. There is no provision, however, in the plans of the SNP and the Scottish Government for a response to such emergencies and no demonstration of the resilience necessary to cope with the global storms we must weather.
The plan fails to give those whose livelihoods depend on the UK an idea of how they would be able to provide for their families. It fails to offer anything to communities that would be split by a new border. In short, more than matters of the heart or even of the head, and more than the hard-nosed transactions of an economy, the plan fails in its moral duty to the people of Scotland.
That moral duty is real. The fate of Ukrainian refugees is a concern to us all, and we know that the people of Scotland and the Scottish Parliament extended a warm welcome to many of them. However, that warm welcome has been poorly served. We know that those people are being housed in temporary accommodation on ships, and that the space they are allocated on them is less than the amount a prisoner in a Scottish prison can expect by law to enjoy.