Scotland: Economic Recovery and Renewal

Lord Bruce of Bennachie Excerpts

Thursday 9th December 2021 Lords Chamber

[Lord Bruce of Bennachie (LD)]

My Lords, first, I congratulate the noble Baroness, Lady Fraser, on initiating this debate. I reflect that we do not debate Scotland—or indeed the other devolved Administrations—enough in this Chamber. I hope that we will do so more in future. We have heard a variety of speeches and contributions. I take from the noble Baroness that there is an attempt to be positive and constructive, although I think that it is sometimes difficult not to depart into some areas of criticism and concern at the state in which we find ourselves.

My view is that, given the right policies and a following wind, Scotland is well placed to make a positive contribution to the UK’s recovery post Covid. Scotland accounts for a significant and rapidly changing energy sector, and I welcome the contribution of the noble Lord, Lord Goodlad, to which I will come back. We are leaders in food and drink. We have world-class bioscience and healthcare capacity, although I agree that, sadly, there has been a diminution in the support for health in recent years. Scotland is the UK’s second most important centre for financial services, and is a world-class destination for tourism and culture. Until a few years ago, I would also have recorded that Scotland had an outstandingly good education system. Sadly, that is no longer the case, thanks to a flawed secondary school curriculum and a wholly dysfunctional exam system.

What is incontrovertible is that Scotland’s economy and well-being are closely integrated into the rest of the UK. Those who try to change that will likely find it difficult and destructive. As the Library briefing points out, 62% of Scotland’s exports go the rest of the UK and 38% elsewhere. Scotland has a trade deficit with the rest of the UK—something you do not hear north of the border. It is further worth noting that our two most important exports are financial services and utilities. In the case of utilities, our success in exporting electricity is largely due to feed-in tariffs paid for by customers in the rest of the UK.

As for financial services, Scotland’s long history of canny financial management is a valuable reputation which, however, probably would not survive if Scotland adopted a currency other than sterling. For 50 years, Scotland has been at the sharp end of the development of the UK’s offshore oil and gas resources. Parking for a moment the claim that it is or was Scotland’s oil, the industry has been a huge driver of the Scottish and UK economies for two generations. It created hundreds of thousands of jobs, the majority in England, underpinned world-leading technologies and delivered substantial balance of payments benefits, both in reduced imports of oil and gas and in exports of products and services. The UK is a major supplier of subsea systems and technology.

Even without the urgent pressure to tackle climate change, the UK continental shelf is a mature province and production is in decline. The question is how we manage it. Since the establishment of the nationalist/Green coalition in Scotland, the Government have joined forces with campaigners to promote the accelerated shutdown of Scotland’s offshore industry. Having built the case for independence during the referendum on that very oil and gas industry, the SNP is asking us to believe that we could do it just as easily without it. Knowing that the decision rested with the UK, Nicola Sturgeon called for the cancellation of the Cambo field, and it appears that that may have contributed to Shell’s decision to pull out of the project. Regardless of the merits of Cambo, the accelerated shutdown of the North Sea, pressed for by Green Ministers, will make achieving net zero harder, take longer and be more costly.

These are the facts. The oil and gas industry currently supports around 200,000 jobs across the UK, 71,000 of them Scotland, and 90% of those jobs are transferable into renewables and net-zero technology. That is demonstrated in a very good report produced by Robert Gordon University, demonstrating how we can use oil and gas technology, expertise and capital to achieve the transition. It shows that a managed transition can reverse the decline in employment. We need that capital and expertise to achieve this and to do it without further damaging the economy by importing oil and gas that we could produce and losing billions of pounds of export opportunities for our technical expertise. If we do it right, we will accelerate to net zero and go from a low of 160,000 jobs and falling to 200,000 jobs and rising across the UK.

The Greens, incidentally, also want to close down salmon farming, which is obviously very important in Shetland and the Highlands, and are pretty hostile, generally, to our livestock industry and related food processing. The Scottish Government have chosen to intervene in the Scottish economy in failing sectors, with a spectacular lack of success. They have acquired an airport with no flights, a fabrication yard with no orders, a shipyard unable to complete its construction and ferries that do not operate. They have underwritten an aluminium smelter, to the tune of an eyewatering £586 million, which has so far secured only 50 jobs; that is more than £11 million per job. Another £1.35 billion was spent on a new Forth Bridge, which not only appears to have been unnecessary but has had to be closed because of icing, with traffic diverted to the original bridge. Rail investment has been concentrated in the central belt and those of us in the north-east of Scotland still face a single track between Aberdeen and the south. I can only wait with trepidation for Ministers with the track record of success I have just summarised to take over responsibility for running our rail services.

I have to say that the UK Government are also not entirely blameless in inhibiting Scotland’s potential to contribute to recovery. Prime Minister Boris Johnson won a referendum on the slogan “Take back control” and a general election on the mantra “Get Brexit done”. Neither of these things has been achieved. Trade deals are looking weaker than those we had in the EU and involve more concessions to secure them. In turn, this threatens Scotland’s livestock industry, which has responded to the deals with New Zealand and Australia with outrage: it was not consulted, of course. The UK economy is weaker because of a botched Brexit—I am not going back over the ground, but Brexit has not been delivered effectively—and decisions of incompetence, and the Scottish economy is weaker because of the obsession with independence and poor policy decisions. If these are addressed, Scotland and the UK can flourish together.

I welcome the very thoughtful report of the noble Lord, Lord Dunlop, which was a long time being published. The whole point of his very thoughtful contribution was that we can achieve far more by co-operation. Indeed, the Common Frameworks Committee, of which the noble Lord, Lord Foulkes, and I are members, had the Constitution Secretary of the Scottish Government in front of us this week. He used every opportunity to promote the case for independence, but he was not prepared to acknowledge that we live in a devolved settlement and that the Government have a responsibility to operate within that and not to use the Scottish Parliament just as a lever to break up the United Kingdom. Of course, as the noble Lord, Lord Foulkes, said to him, the problem is that making devolution work would undermine the case for independence, which is why they do not want to do it. As a passionate home ruler who worked to deliver a Scottish Parliament, for which I have no regrets, and worked with the Labour Party to do that, and to ensure that it was representative and had adequate powers, I never believed or intended that the Scottish Parliament should be used simply as a lever to crack open the United Kingdom. That is not what it is fit for.

This is a plea to the people of Scotland, who I think are split down the middle, and to those who may not be sure which camp they are in, to wake up and smell the coffee about what they are being led into, because it is not something that will achieve what this Motion wishes to achieve. I genuinely believe that Scotland and the UK are interdependent in every way, not just economically but socially. We are married to each other—literally, in many cases. We are family and it is absurd to treat, as Scottish nationalists do, England as the enemy and the UK Government as a hostile agent while looking across to countries of which Scottish people know less, and whose language they do not speak very well, compared with the islands we all share. I am somebody who was born in England with an incontrovertibly Scottish name and three Scottish grandparents and who has spent my entire adult life in Scotland, through choice. I am proud to be Scottish and British: why on earth should I have to choose?