Scotland’s Place in the UK

Debate between Graeme Morrice and Iain McKenzie

Thursday 6th February 2014 Commons Chamber

[Graeme Morrice]

I welcome the right hon. Gentleman’s intervention and fully understand that there are major cultural links between the people of Scotland and the people of Northern Ireland. Indeed, I have many friends and relatives from Northern Ireland.

The single market within the UK affords significant economic, trade and employment opportunities to people on both sides of the border, and our membership of the European Union, through the United Kingdom, provides a vast marketplace for Scottish exporters. Together, we have a place at the top table of the European Council of Ministers, we are one of the G8 forum of the world’s largest economies and we are a permanent member of the United Nations Security Council, all of which allows us to wield unprecedented influence on the European and global stages. As a member of NATO, we have collectively benefited since the war from international security and defence co-operation on a grand scale.

When it comes to the economy, Scotland has a very important relationship with the rest of the United Kingdom. Scotland benefits from access to a market comprising tens of millions of people within a single jurisdiction. Scots are employed by firms based in the rest of the UK, and people in the rest of the UK benefit from employment opportunities with Scottish-based companies. Indeed, Scotland’s exports to the rest of the UK are worth double its exports to the rest of the world.

[Mr Iain McKenzie (Inverclyde) (Lab)]

Does my hon. Friend agree that upon independence the border would become a barrier to business with the rest of the UK?

[Graeme Morrice]

I am grateful to my hon. Friend for that intervention. On day one of independence, were Scots to vote for it, the rest of the United Kingdom would remain within the European Union but Scotland would not, so it clearly would not benefit from the EU single market, to the great detriment of Scottish business and Scotland overall.

Mr Deputy Speaker—[Interruption.] Welcome, Madam Deputy Speaker; it is great to see a Scot in the Chair this afternoon. [Interruption.] And a woman, my hon. Friend the Member for East Lothian (Fiona O'Donnell) reminds me.

In addition to the shared opportunities, the pooling of resources across the UK allows risk as well as reward to be spread, as seen most notably in the bail-out of the Scottish-based banks during the financial crisis, when the UK, led by a Scot, injected an amount of capital into the banks well in excess of the Scottish Government’s total budget. The pooling of resources also allows for distribution on the basis of social need across the welfare state. Were Scotland outwith the UK, that would place a major question mark over its ability to continue to fund benefits at current levels and to meet state and public sector pension commitments.

Of course, Scotland has its own devolved Parliament, with significantly more powers to come as a result of the Calman commission and the Scotland Act 2012. It can therefore be argued that Scotland has the best of both worlds: local decision making, but under the financial umbrella of the UK Barnett formula, giving Scots more funding per capita than anywhere else in the UK.

Manufacturing in the UK

Debate between Graeme Morrice and Iain McKenzie

Tuesday 14th January 2014 Westminster Hall

[Mr McKenzie]

I thank the hon. Gentleman for his intervention. I will touch on education later in my speech.

The UK’s innovation performance is generally weak, although I concede that there are some exceptions. However, UK manufacturing companies overall spend less of their turnover on innovation than their European peers, while, oddly, the opposite is true for UK service companies. Other countries, notably the Nordic countries, Singapore, South Korea, Taiwan, and Israel, have significantly increased innovation as measured by US patenting. The UK has grown innovation output slowly and from a relatively low base.

[Graeme Morrice (Livingston) (Lab)]

I am grateful to my hon. Friend for giving way and of course congratulate him on securing this important debate. We both represent Scottish constituencies, and my hon. Friend will be aware that some 70% of Scotland’s exports are to England, Wales and Northern Ireland. As we strive to develop the manufacturing base in Scotland and seek to become more innovative, does he agree that it makes no sense whatever to turn our biggest customer into our biggest competitor, which is what would happen if the Scottish Nationalists got their way?

[Mr McKenzie]

I will not try the Chair’s patience by travelling down the route of an independence debate, but I and—I hope—Scotland could not agree more with my hon. Friend.

Current levels of UK innovation are insufficient to drive growth and to close the gap with key competitors. UK business enterprise research and development as a proportion of GDP has remained below that of other leading economies such as Japan, the US, Germany and France. Furthermore, there has been a slight downward trend in the intensity of business enterprise research and development in the UK, unlike in most other advanced economies. We need to combine public and private investment better to ensure that we do not fall behind.

Jason Lippitt, managing director of TMAT, which is an acoustic components manufacturer, argues that even with limited resources, smaller businesses must find a way to use research and development if they want to survive.