Scottish Separation

Lindsay Roy Excerpts

Tuesday 10th July 2012 Westminster Hall

[Graeme Morrice (Livingston) (Lab)]

It is a pleasure to serve under your chairmanship, Sir Roger. I am delighted that I have been able to secure this Westminster Hall debate on a vital issue to the future of Scotland and its people, in view of the pending referendum.

Before I move to the substantive part of my contribution, I should like to say a few words about the referendum campaign so far. I congratulate those responsible on the recent launch of the cross-party Better Together campaign, which will lead the debate on the positive economic and social case for Scotland’s remaining an integral part of the United Kingdom. In stark contrast to the vacuous and celebrity-driven launch a few weeks earlier of the campaign by those who advocate separation, the Better Together launch, ably fronted by my right hon. Friend the Member for Edinburgh South West (Mr Darling), drew on the experiences of real Scots the length and breadth of the country who spoke passionately about why they believe we are stronger within the UK. This grounded campaign is based on hard facts and figures, exploring the many positive benefits of being part of the UK and exposing the deficiencies in the separatist plan to end this highly successful political, social and economic union.

On the other side of the debate, the Scottish National party and the Trotskyist fringe parties had, somewhat predictably, fallen out among themselves even before Alan Cumming had had time to board the plane to return to his New York home. The splits quickly became even wider when the recently appointed head of the so-called yes campaign ruled out a second referendum question on devo-max, an option Alex Salmond and the SNP are desperately clinging to as they face up to the fact that they cannot win the first question. Even the well-respected senior Scottish nationalist, Margo Macdonald, called at the weekend for a single, simple question on separation and criticised the yes campaign for refusing to spell out the details of what independence would mean.

[Lindsay Roy (Glenrothes) (Lab)]

It is a pleasure to serve under your chairmanship, Sir Roger. I congratulate my hon. Friend the Member for Livingston (Graeme Morrice) on securing this vital debate. Can he explain why he believes that a referendum should be based around a single question? What are the problems with multi-option referendums?

[Graeme Morrice]

I am grateful to my hon. Friend for his intervention. As I continue with my contribution, I will come to that point and develop an argument accordingly.

According to reports yesterday, it now looks like the Greens could soon follow Margo Macdonald’s lead, potentially leaving the SNP in the ludicrous position of being the only party supporting a multi-question referendum on the issue that it has spent its entire existence campaigning for.

--- Later in debate ---

[Graeme Morrice]

I am coming on to the meat of the debate. The hon. Gentleman doth protest too much.

I shall now move on to the meat of this morning’s debate—the economic consequences of Scottish separation. Some Scots regard the potential economic consequences of breaking away from the UK as neither here nor there. So important to them is the dogma of Scotland going its own way that even if every shred of available evidence demonstrated beyond any doubt whatever that Scotland would be worse off outside the UK, they would still not hesitate to break up Britain. To most Scots, that stance—call it the “Braveheart” factor, or whatever—is simply not credible. Although the debate is and should be about more than economics, there is little doubt that at its crux are the economic consequences of separation. The vast majority of our fellow citizens are interested in what will improve their lives and those of their families and the communities in which they live.

It is hard to deny that, in these turbulent economic times, the size, strength and stability of the UK economy gives Scotland’s businesses a huge advantage over their competitors on the continent and elsewhere. Scotland’s biggest market is the rest of the UK and it has undoubtedly benefited from being an integral part of the world’s oldest and most successful single market. I believe that most people in Scotland already recognise and embrace this. A survey conducted by the Scottish social attitudes survey at the end of last year showed that fewer than one in three Scots back separation, which was roughly the same figure as in 2005. Hon. Members will also have noted the results of the latest opinion poll on separation, conducted by TNS BMRB after both campaign launches, which puts those opposed to separation on 50% and those in favour on just 30%. The latter figure is the lowest received in favour of separation in five years of surveys by the Edinburgh-based pollster and means that in just six months a deficit of nine points for those backing separation has more than doubled. Judging by these figures, even the most ardent nationalist would struggle to argue that the yes campaign had got off to a good start.

Putting opinion polls aside and accepting the premise that, to coin the well-known phrase from American politics, “it’s the economy, stupid” that will determine the outcome of the referendum, let us turn to the available evidence on the key economic questions. Some of the most interesting expert contributions to the debate so far have come from Professor John Kay, a former economic adviser to Alex Salmond. Writing for The Scotsman shortly after the Scottish Parliament elections in May last year, Professor Kay said:

“Independence, if achieved, would bring complications—both political and economic. The reality is that Scotland would gain little by full independence. In the modern world, economic sovereignty for small nations is inescapably limited, and political sovereignty is largely symbolic.”

More recently, while speaking at The Scotsman’s “Economics of Independence” conference, Professor Kay spoke of his belief that Scotland faces five years of economic uncertainty if it opts to separate from the UK.

The potential economic damage ensuing from a long period of transition to a separate Scotland was highlighted at the same conference by oil expert Professor Alex Kemp of Aberdeen university. Professor Kemp said that the complex process of transferring responsibilities from UK Departments to a separatist Scottish Government would involve

“negotiations extending over a considerable time”.

Such fears about the potential impact of a vote for separation, and the instability and uncertainty inflicted on Scotland’s economy, have been voiced by many other academic and business leaders over the past few months. Even one of the SNP’s highest-profile supporters and financial backers, the highly successful businessman Sir Tom Farmer, does not support its separation plans. He stated in a recent BBC interview:

“I’ve never seen or heard anything yet that’s convinced me independence is the right way forward for Scotland. It’s not just about money, but, if it ended up that the country was going to be in dire poverty because of independence, I don’t think anybody wants that.”

For my part, I have drawn on the best available evidence for the likeliest economic impact on Scotland of separating from the UK. I want to focus on three aspects of the economic debate: oil and gas revenues; the share of the UK’s public debt that Scotland would assume if it were to separate from the UK; and a separate currency in Scotland.

Those three vital economic and financial questions were among several highlighted in the excellent Select Committee on Scottish Affairs report on “The Referendum on Separation for Scotland: Unanswered Questions”, published in February this year. I take the opportunity to pay tribute to the Committee’s excellent work. Under the skilled chairmanship of my hon. Friend the Member for Glasgow South West (Mr Davidson), it has embarked on a forensic investigation of the many unanswered questions that hang over the separation debate. My hon. Friend and his colleagues—I see one present today—deserve the thanks of all Members of this House for the detailed and meticulous way in which they are examining so many important points worthy of further detailed consideration, not least the economic matters on which I will now focus.

[Lindsay Roy]

Of the many unanswered questions, which one gives my hon. Friend the greatest cause for concern?

[Graeme Morrice]

That question begs the question: many questions give me concern—not least, defence.

I now move on to North sea oil, which has long been regarded by the supporters of separation as the jewel in the crown of a Scotland outwith the UK. The Library standard note on “Scotland’s economy: current situation and issues related to independence”, published in April this year, highlights three key issues when considering this critical question—the division of the UK continental shelf and, therefore, of the oil reserves; future production levels; and the price of oil.

The argument has always been that a separate Scotland should be due the lion’s share of the North sea’s oil, and that the tax revenue from the fields would therefore accrue to Scotland. The suggestion that a separate Scotland would be due most of the North sea’s oilfields, however, is very much open to debate, and most experts agree that nothing concrete could be concluded before the negotiations on separation. Furthermore, the boundary issue aside, the reality is that oil and gas can simply no longer be relied upon in the way that the SNP has always suggested, because of the production and price questions.

Fossil fuels are a declining resource, and the trend of reduced production is now clear. Oil and gas production is falling rapidly; in 2011 it was down by 19% on the previous year, and recent Department of Energy and Climate Change figures show that oil production fell by 13% in the first quarter of this year and gas production by 14%. Future projections suggest that many North sea fields will have ceased production by the 2020s, while the cost of extraction is increasing year on year.

Oil also has a history of price volatility. The Library note shows that it has varied in recent years from a low of nearly $9 a barrel in November 1998 to a peak of almost $150 a barrel in July 2008. The price of oil is closely linked to production, with a low oil price making it less economical to invest in hydrocarbon extraction. In terms of tax revenues from oil, the 2008 Kemp and Stephen paper referenced in the Library note stated:

“It should be stressed that the projections of tax revenues are subject to much uncertainty. Thus oil prices have been very volatile and this should remain the case over the next few years.”

Oil and gas of course remain an important part of the Scottish and UK economies, and will do so for many years, but to bet Scotland’s economic future on the sector is naive at best and foolhardy at worst. Those latest figures highlight the importance of a balanced economy that is not over-reliant on one industry. They also demonstrate one of the many benefits of Scotland being part of the UK economy: we are able to work together in partnership to share the risks and rewards involved in harnessing our energy resources.

Scotland Bill

Lindsay Roy Excerpts

Thursday 26th April 2012 Commons Chamber

[David Mundell]

With the leave of the House, I shall respond specifically to the points raised by my hon. Friend the Member for Warrington South (David Mowat), because I understood all the other Members who have spoken to be expressing support for the amendments, some more grudgingly than others.

I do not wish to question the accuracy of my hon. Friend’s analysis of the debates that have taken place in the House of Lords and the Scottish Parliament, but according to my reading of Bruce Crawford’s contribution to the Scottish debate, he made no reference to the no-detriment principle. He did, however, refer to the Holtham approach. There are two separate issues in play. The Holtham approach is about the adjustment of the block grant.

[Lindsay Roy (Glenrothes) (Lab)]

Can the Minister confirm that the same Bruce Crawford did not describe the Bill as a poison pill, a dog’s breakfast, and dangerous?

[David Mundell]

I accept the hon. Gentleman’s recollection of what Mr Crawford may have said about the Bill on previous occasions, but as I said earlier, I welcomed his constructive approach in his dealings with me, with the Secretary of State and with the UK Government in taking the Bill through the Scottish Parliament by way of a unanimously expressed legislative consent motion.

During the debate in that Parliament, Mr Crawford referred to the Holtham approach, which, as I said a moment ago, relates to the adjustment of the block grant and is separate from the no-detriment principle. The Government have accepted that, as in relation to Wales, the Holtham methodology should apply for calculating block grant adjustments. That is the basis on which we will move forward. I do not accept that over the past 12 years or so the Scottish Parliament and Government have been deprived of funds. As others have said, no matter how much money is allocated to the current Scottish Government under whatever mechanism, it would never be enough.

The no-detriment principle refers to how the financial system will operate after the Scottish rate of income tax comes into force. Under that principle, the UK Government would either compensate the Scottish budget for the costs of their policy change on the devolved tax base through the block grant, or receive funds back if the Scottish budget benefits from the policy change in raised receipts. The cost or benefit to the UK from decisions taken on the income tax structure is therefore exactly the same as it would have been before this Bill devolved 10p on income tax to Scotland, and the Scottish budget would be no better or worse off.

The Office for Budget Responsibility will forecast the impact of UK decisions on the Scottish rate of income tax, and we will take steps to ensure that the Scottish budget is compensated. There is therefore a principle of reciprocity. Where one Administration either gains or loses as a result of decisions taken by the other Administration, across the shared income tax there are measures in place to compensate for that loss or gain. This is simply a matter of common sense. It is based on the principle of accountability, which lies at the heart of the statement of funding policy.

I assure my hon. Friend the Member for Warrington South that where decisions taken by any of the devolved Administrations have financial implications for UK Departments, or where UK decisions lead to additional costs for any of the devolved Administrations, the body whose decision leads to the additional cost will meet that cost.

Lords amendment 2 agreed to.

Clause 10

Continued effect of provisions where legislative competence conferred for limited period

Oral Answers to Questions

Lindsay Roy Excerpts

Wednesday 18th April 2012 Commons Chamber

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

5. How many people in Scotland will be affected by the Chancellor of the Exchequer’s proposal to withdraw the additional personal allowance for people over 65 years of age.

[Lindsay Roy (Glenrothes) (Lab)]

9. How many pensioners in Scotland will be affected by the Chancellor of the Exchequer’s decision on age-related personal allowances.

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

10. How many pensioners in Scotland will be affected by the Chancellor of the Exchequer’s decision on age-related personal allowances.

--- Later in debate ---

[David Mundell]

It will not surprise the hon. Gentleman that I do not accept his analysis. He and others who scaremonger on this issue fail to point out that more than half of those in Scotland aged over 65 will not pay any tax at all.

[Lindsay Roy]

Is the Minister not ashamed of his Government’s decision to reduce tax for the wealthiest Scots while at the same time penalising pensioners with a tax grab, whereby they will lose up to £322 per annum?

Oral Answers to Questions

Lindsay Roy Excerpts

Wednesday 11th January 2012 Commons Chamber

[Mark Menzies (Fylde) (Con)]

10. What representations he has received from the Scottish Government on the holding of a referendum in Scotland on independence from the UK.

[Lindsay Roy (Glenrothes) (Lab)]

11. What recent discussions he has had with the First Minister for Scotland on the referendum proposed by the Scottish Government on Scotland’s independence from the UK.

[The Secretary of State for Scotland (Michael Moore)]

Yesterday, I made a statement announcing a consultation to seek views on how any referendum can be made legal, fair and decisive. I discussed this yesterday with the First Minister, and I hope to have further discussions with the Scottish Government, along with other politicians and people from across Scottish civic society, during the consultation.

--- Later in debate ---

[Michael Moore]

My hon. Friend is focusing on some of the central issues that we need to be able to get on to debate in the decision about whether Scotland should go its own way or continue to be part of the most successful multi-nation state in the history of the world, as I think it is vital it does. So let us get on and devolve the power to make it a legal referendum. Let us have a fair referendum and let us make sure it is decisive.

[Lindsay Roy]

The Select Committee on Scottish Affairs has already embarked on an inquiry to identify those issues, such as defence, which need to be resolved before a referendum is held. Does the Secretary of State plan to contribute to that debate with the Select Committee?

[Michael Moore]

I certainly do. What is really important is not just our debate now about the future of Scotland, but ensuring that everybody in the country gets the opportunity to participate in the consultation on the shape of the referendum, and I hope that people will respond to that. I hope that everybody across the country—not just politicians—will get involved in debating defence, welfare and the state of our economy, all of which, I believe, are much safer within the United Kingdom. [Interruption.]

Scotland’s Constitutional Future

Lindsay Roy Excerpts

Tuesday 10th January 2012 Commons Chamber

[Michael Moore]

We will not restrict this consultation to people who consider themselves Scots. Wherever they might live—in Monaco or elsewhere—they will be entitled to take part in this consultation. When it comes to the vote, I think that, following internationally agreed precedents, it would be important that it is the people in Scotland who make that decision.

[Lindsay Roy (Glenrothes) (Lab)]

What approaches has the Secretary of State made so far to discuss referendum issues with the Scottish Government, and what has been their response?

[Michael Moore]

As I mentioned, I spoke to the First Minister earlier this afternoon, and I hope we will be able to meet soon to discuss the proposals that we have set out in the consultation. We have, of course, for some time been discussing with colleagues in the Scottish Government when they were going to bring forward their own proposals on a referendum. None has been forthcoming, although I hear that today they might be hurrying that up. We have provided the basis for a discussion, and I hope the two Governments can work well together for the people of Scotland.

Public Sector Pensions

Lindsay Roy Excerpts

Thursday 8th December 2011 Commons Chamber

[Lindsay Roy (Glenrothes) (Lab)]

I congratulate the SNP and Plaid Cymru on their choice of debate today. I take part in this debate with a heavy heart, and with genuine anger and frustration at the way in which public sector workers, who have done such invaluable work in our communities, have been treated by this Government. Some of what I have to say is constructive reinforcement of points already made, rather than unnecessary duplication. These raw sentiments reflect the views of hundreds of public sector workers in my constituency.

One of the hallmarks of a civilised society is the way we treat our citizens—people who have contributed immensely to society throughout their working lives. Indeed, for years there was a genuine trust and confidence in the public sector that, in return for often smaller salaries—although sometimes not—compared with the private sector, they would receive a fair, if generally modest, pension on retirement, and those pensions had been negotiated in good faith. That trust has well and truly evaporated. However, that erosion in trust has not occurred because of the Hutton report, which recognised again the need to review pension contributions as people live longer, but because of the cavalier way this Government have proceeded, on a unilateral basis, to disguise the real purpose of the precipitate 3% increase for public sector workers. To put it bluntly, public sector workers feel that they are sacrificial lambs.

The immediate increase has nothing directly to do with the present affordability, fairness and sustainability of public sector pensions, but everything to do with a cynical attack on ordinary working people at a time of pay freezes, increased VAT, higher fuel costs and a dramatic increase in living costs. The real reason for this smash and grab raid on the public sector was blatantly to contribute to the deficit reduction plan, as highlighted by the hon. Member for Arfon (Hywel Williams).

[David Mowat]

I have listened carefully to the hon. Gentleman’s argument and he seems to be saying that he supports the proposals in the Hutton report, but does not support what the Government have done. Which aspects of what the Government are doing are not in the Hutton report?

--- Later in debate ---

[Lindsay Roy]

The Government pre-empted Hutton and were precipitate in taking forward the action with the 3% increase.

Not only have public sector workers been penalised, but the wealthier owners in our society, particularly the bankers, have not been challenged in the same way. As taxpayers, we have bailed out the bankers, so some of the richest people in our society continue to be rewarded, and it was some of them who created this financial crisis. Patently, we are not all in this together.

As a cover for their actions, the Government continue to peddle a number of myths, which, if Members will pardon the pun, I will try to scotch. First, it is said that public sector pensions are gold-plated. As we have heard, there are varying figures for this, but they vary between £3,000 to £5,000.

Secondly, it is said that the public sector unions were spoiling for confrontation. Nothing could be further from the truth.

[Roger Williams (Brecon and Radnorshire) (LD)]

The hon. Gentleman is making a powerful point, and many of us have sympathy for those on small and medium incomes, but there are people on large incomes who also receive very large pensions. People pay taxation to provide those high pensions and that is a matter of concern.

[Lindsay Roy]

I do not want to be drawn to the lowest common denominator. We have already heard the issues surrounding tax relief in the private sector.

Industrial action is a last resort and a signal of anger and frustration among our constituents. Most of my constituents had never taken industrial action in their life and hope not to do so again.

The third myth was that the immediate 3% increase was recommended by Hutton; it was not. The fourth is that the intensive and serious negotiations between senior Ministers and senior trade union officials had continued right up until the 11th hour; they had not. Senior leaders last met on 2 November. To add insult to injury, this coalition Government decided to break the pension link with the retail prices index and move to the consumer prices index, thereby having a significant detrimental effect on the value of pensions, with a drop of between 11% and 14%.

All mainstream political parties fully recognise that there needs to be a comprehensive review of public sector pensions to ensure fairness, sustainability and affordability. At no time did we pretend that challenging decisions would not have to be made about contributions, entitlement and retirement age. Reform was to be strategic and phased and it would inevitably involve difficult decisions as people are living longer. It is now incumbent on the Government to engage as a matter of urgency in serious and meaningful negotiations at the most senior level and as immediately as possible with trade unions to agree an acceptable settlement.

Fundamentally, we need to draw up a long-term plan for decent pensions in the public sector, to continue to engage high-quality recruits, to retain the many committed public servants who do a tremendous job on our behalf and to reward fairly those who reach their pension age. I therefore urge the Government to go home and think again, rescind these unfair short-term changes and to bring to the table a fair, affordable and sustainable plan for long-term pension reform.

Oral Answers to Questions

Lindsay Roy Excerpts

Wednesday 9th November 2011 Commons Chamber

[The Prime Minister]

I will certainly join my hon. Friend in doing that. I know that the whole of the south-west—and the whole country—is incredibly proud of the Marines, and we are proud of 3 Commando Brigade, who will be marching through Plymouth. I send my very best wishes for the homecoming parade, and we should also put on record what they have achieved in Task Force Helmand. They carried out 37,000 patrols, found more than 400 improvised explosive devices and trained more than 1,300 Afghan uniformed police patrolmen. They have made a real difference to the safety and security of that country, and to the safety of our country too.

[Lindsay Roy (Glenrothes) (Lab)]

Q3. Does the Prime Minister think it right and proper or in any way defensible that the Royal Bank of Scotland, which received a massive bail-out during the crisis, should be paying out more than £500 million in bonuses this year?

[The Prime Minister]

No, I do not think it is acceptable. RBS has not yet set its figures for bonus payments. The British Government are a seriously large shareholder in RBS, and we will be making our views known.

Oral Answers to Questions

Lindsay Roy Excerpts

Wednesday 1st December 2010 Commons Chamber

[The Prime Minister]

My hon. Friend is entirely right to raise that issue. People who are victims of terror, whether at home or overseas, deserve our support, as he says. People might not know, but my hon. Friend’s brother was tragically killed in the Bali bombing—that horrific attack that took place some years ago. We are looking at this very difficult issue of trying to make sure that, when we consider criminal injuries compensation and what has been proposed for injuries overseas, we have a fair and reasonable system. The Justice Secretary is looking at that, and we will come forward with proposals.

[Lindsay Roy (Glenrothes) (Lab)]

Q3. The Prime Minister’s Government are spending £4 billion so that councils can promote wellness, £2 billion on reorganising the NHS, £100 million on electing police commissioners and £2 million on a happiness survey. Does that not demonstrate that the Prime Minister has lost touch with reality?

[The Prime Minister]

No, it does not. Let me take—[Interruption.] Generally speaking, I think the hon. Gentleman should cheer up a bit. Let me take the issue of NHS reform. Even with the settlement that we have set out for the NHS, which involves real-terms increases each year, if we stand still with the NHS and keep the current system, we will find it running into very severe problems each and every year. So, it is necessary to reform the NHS, it is necessary to cut out bureaucracy and it is necessary to reduce management costs, so that we have a system where we actually try to create a healthier nation and, therefore, reduce the demands on our NHS. That is what our reforms are all about.

Oral Answers to Questions

Lindsay Roy Excerpts

Wednesday 21st July 2010 Commons Chamber

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

4. What recent assessment he has made of the recommendations of the final report of the Commission on Scottish Devolution.

[Lindsay Roy (Glenrothes) (Lab)]

5. What the proposed timetable is for implementation of the Calman commission’s recommendations.

[The Secretary of State for Scotland (Michael Moore)]

As I outlined in response to questions from hon. Members on 16 June, I have asked officials to work for the autumn introduction of a Bill to take forward legislative proposals, with non-legislative recommendations taken forward under a similar time scale.

--- Later in debate ---

[Michael Moore]

As I have set out, we intend to engage fully with the different sectors in Scotland that will be affected by the changes. As the hon. Gentleman will be aware, we are heavily engaged with the Treasury and HMRC to work our way through the changes that will come as a consequence of Calman, which I believe his party still supports.

[Lindsay Roy]

Does the Secretary of State agree with the leader of the Liberal Democrats in the Scottish Parliament, Tavish Scott, when he says:

“Politicians should not be able to take easy spending decisions without the responsibility of accounting for this money. Blaming Westminster should not be a get-out clause”?

[Michael Moore]

I am in complete agreement with the hon. Gentleman.