Scotland and North-east England Post-2014

Phil Wilson Excerpts

Tuesday 4th March 2014 Westminster Hall

[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.

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[Phil Wilson]

The hon. Gentleman is not necessarily comparing like with like. Scotland and England, and the rest of the UK, have a shared history that goes back 300 years.

I read something recently on the blog “Open Democracy” by Gerry Hassan and James Mitchell, two pro-separatist academics based at the university of West Scotland and Edinburgh university. They state that the metropolitan establishment have pronounced on the currency union, and go on to say:

“London is where the problem lies. But our friends in the north of England have long understood this.”

Speaking as an MP for the north-east who has lived in the north-east all his life, I say to those commentators and the SNP that they should not patronise the north-east of England by pretending that they speak for my region—they do not—or offer friendship with one hand while building a wall between us with the other.

I agree that there should be deeper economic cross-border relations between Scotland and the north-east of England; I have no problem with that. The IPPR North study “Borderlands”, commissioned by the Association of North East Councils, points out that there should be closer cross-border relations, especially between local authorities on either side of the border. Who could argue against that, especially when it comes to issues such as transport? I understand that the SNP agrees, which I am pleased to hear, but surely that would be much easier to do across the existing border than across an international border between two independent states.

[Guy Opperman (Hexham) (Con)]

I congratulate the hon. Gentleman on securing this important debate. I accept entirely the point that he is making: cross-border economic relations of every kind will be affected and harmed if Scotland becomes independent, whether by different tax rates, border controls or fundamental changes to the transport systems, two of which would not meet.

[Phil Wilson]

The hon. Gentleman has raised the point that I was going to make next with some statistics. At present, more than 23 million vehicles, 15 million tonnes of freight and 7 million rail passengers a year cross the border between England and Scotland in both directions. If Scotland becomes an independent state, the current border will become an international border. Scotland will have to take control of its border and introduce the relevant regulations to manage it. The present UK is a true domestic single market: businesses in Scotland have easy access to customers throughout all parts of the UK, as does the north-east of England. Anyone who has the people and their benefit in mind will surely see that as a key reason why Scotland should not be independent, and why we should work together for the benefit of all the people who live in the UK.

An international border would create a barrier to all that. For example, as I have said, 40,000 people travel each way across the border every day to work. An independent Scotland would not have the membership of the EU or the common travel area that it now enjoys. It would have to renegotiate travel arrangements with the rest of Britain.

[Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab)]

My hon. Friend makes an excellent point. It is also about access to European markets. Currently, steelworks in Scotland such as Dalzell and Clydebridge roll Scunthorpe steel. Every single bit of slab steel that goes to Dalzell and Clydebridge in Scotland is from Scunthorpe. Independence would undermine a crucial, constituent part of the steel industry not just in England but in Scotland. It is a UK steel industry.

[Phil Wilson]

I think there will be a lot of consensus on this side of the argument. We have a lot of common ground among all parts of the UK. Why we would want to disrupt and dismantle that, I do not know. It can only cause additional burdens to the Scottish and English people who currently take for granted the journey across the border. If Scotland managed to renegotiate entry into the EU, it would have to join the Schengen agreement, meaning that passports would have to be shown at border crossings such as Berwick.

[Ian Swales (Redcar) (LD)]

The hon. Gentleman is making a powerful case. On that point, I am sure he shares my concern that because new entrants to the EU must join the euro, we will end up with two currencies.

[Phil Wilson]

The hon. Gentleman is correct. Little by little, hon. Members are dismantling the whole argument for independence.

[Mr MacNeil]

Will the hon. Gentleman give way?

[Phil Wilson]

Go on, then.

[Mr MacNeil]

Croatia joined the EU in July 2013. When did Croatia join the euro?

[Mr Jack Straw (Blackburn) (Lab)]

You’d be obliged to join the euro.

[Phil Wilson]

My right hon. Friend says that Scotland would be obliged to join. The position of the Scottish National party is that once it believed Scotland should join the euro. Then it wanted Scotland to have its own currency, and now it wants to stay with the pound. Can SNP members make up their mind? It is not possible. They want to have their cake and eat it.

Thousands of north-easterners would have to take their passports to go to work in Scotland, and Scots would have to take their passports to travel from Scotland to England. I have relatives in Scotland who visit my family in south Durham every week. My brother is English and his partner is Scottish. They make that journey every week without let or hindrance, and now the SNP wants to put border controls there. Scotland will not be a member of the EU or of the common travel area, and cannot have it both ways.

[Guy Opperman]

It is fair that we keep making the point by giving particular examples. The hon. Gentleman will be aware that the North East chamber of commerce has expressed specific concerns about the currency issue, and the Northern Farmers and Landowners Group, which represents the cross-border farming community, including many farmers who farm both sides of the border, has also expressed significant concern that if independence went ahead the ability of the farming community to function would be gravely impeded.

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[Phil Wilson]

The hon. Gentleman makes an excellent point yet again. Over time, employment regulations may not be an incentive for people to cross the border, a factor that in itself might disrupt economic development in both the north-east of England and Scotland.

I do not understand why the SNP wants to put up barriers between Scotland and the north-east of England. By putting up such barriers, Scotland will potentially lose out on—

[Mr Iain McKenzie (Inverclyde) (Lab)]

Will my hon. Friend give way?

[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?

[Mr MacNeil]

Will the hon. Gentleman give way?

[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?

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[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—

[Mr MacNeil]

Will the hon. Gentleman give way?

[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.

[Mr MacNeil]

Absolutely.

[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.

[Mr David Hamilton (Midlothian) (Lab)]

My hon. Friend makes some good points, and I congratulate him on securing this debate.

There is far more that combines us and brings us together than ever divides us. However, one of the things that is quite concerning is the question of what Britain will pick up from Scotland if we become independent. Standard Life has just announced that it would look to go to its marketplace and its marketplace is England, and that would also be the case with the Royal Bank of Scotland. That is not scaremongering. In fact, what we are doing is creating a division when we do not need to create one.

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[Phil Wilson]

Again, that is an excellent point from my hon. Friend and fellow Whip.

If someone really believes in the future of Scotland, why would they want to create so much uncertainty for the economy in the future by having this rose-tinted view of independence, when in fact independence is not in the best interests of the Scottish people, although I believe they should have the right to decide whether or not they stay part of the UK?

The issue of Scottish independence is very important to the north-east of England. At one time—

[Ian Swales]

Has the hon. Gentleman been surprised, as I have, by the lack of logic in wanting to stay in the European Union but wanting to leave the United Kingdom Union?

[Phil Wilson]

The whole SNP philosophy on independence is just full of contradictions. It wants to create a barrier between England and Scotland, but it also wants to join the EU, where there is free movement of labour and free trade in goods. Obviously there is a contradiction in that.

I think that I have already said it but I just want to repeat that the SNP wanted, at one time, to be a member of the euro; then, the pound was a millstone around Scotland’s neck. Now the SNP wants to keep the pound. How can it keep the pound without fiscal, monetary and political union? We are better together because we already have that union, and it offers stability.

It is okay having some rose-tinted image of Scottish independence, which is all thistles, sporrans and Bannockburn, but the practicalities for the Scottish people should make them think twice, if not three times. Labour is a national party, not a nationalist party, and any further settlement on devolution should bear that in mind: devolution of air passenger duty would affect the airports in the north-east of England; any kind of variation in corporation tax would have an effect as well; and any change in income tax could have a detrimental impact on other parts of the UK, including the north-east of England. It seems that there is another contradiction, whereby the SNP wants to offer cuts in corporation tax and in APD to business, while at the same time saying to the rest of the population that it will maintain good, decent public services. How will it raise the tax to do that?

I belong to the Labour party, a left-of-centre people’s party; that is how we see ourselves. As such, our belief in people does not stop at the borders, but if someone is a nationalist I believe that it does. Those pushing for independence want to have their cake and eat it. They want to keep the pound and the Queen, stay in the EU and NATO, and keep the BBC. They have all those things now, and it is called the United Kingdom. My advice to those seeking independence is that if it ain’t broke, don’t fix it, because we are, after all, better off together.

[Several hon. Members]

rose—

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[Guy Opperman]

Answer came there none, I am afraid.

[Phil Wilson]

People leaving southern Ireland and going to Belfast do not have to show their passports, but if they continue their journey to Liverpool by ferry, they do.

[Guy Opperman]

It is worth assessing the UK Government’s position, which is that if Scotland were to become an independent state, the boundary between Scotland and the rest of the UK would, by definition, become an international border between two separate states, with everything that that entails. The evidence locally in the north-east, whether from farming bodies or the North East chamber of commerce, is extensive: there is huge concern that this will have an impact on trade, businesses and jobs. I met a number of oil and gas producers, several of whom are building huge sites on the Tyne at the moment. Hon. Members know that the two biggest construction sites are for construction projects in the North sea. The producers are concerned that, if there were independence, those projects would be affected, and there would be greater difficulties.

It is, self-evidently, for the Scots to make this decision, but it is incumbent on all of us, not just—with great humility and respect—to analyse the weak arguments of the SNP, but to make the case to all the Scots whom we know, and to get up to Scotland and encourage all those in Scotland to analyse deeply whether they wish to do this, because, self-evidently, we are better together.

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[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.

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[The Parliamentary Under-Secretary of State for Scotland (David Mundell)]

It is a pleasure to serve under your chairmanship, Mr Weir; I commend the fair way in which you have performed your duties. I congratulate the hon. Member for Sedgefield (Phil Wilson) on securing the debate, and I welcome the contributions from Members from both sides of the border and of all political persuasions. Some Members are new to the debate on Scotland that we are regularly subjected to—or take part in, depending on one’s perspective.

Today is an important day in the referendum debate, because I hear from the BBC that Mr Alex Salmond is coming to England to reach out over the heads of the “Westminster elite”—I do not know whether that is us—to the people of England. I understand that he will tell them that they have no right to have a say in whether England enters into a currency union with Scotland, and that if Scotland becomes an independent country in the EU, English students will still have to pay tuition fees, contrary to EU law. That sounds like a very friendly message, which will be much welcomed.

[Phil Wilson]

I have seen the coverage of Alex Salmond’s speech, too. It is being described as an emotional appeal. It always seems to be emotional, but it never gets down to the nuts and bolts of the economics and the impact on people’s lives.

[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.