This was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government
Lord Wallace delivered the UK Government address at the 'Our Island Our Future' conference held in Kirkwall on 19th-20th September 2013
Introduction - the road to devolution
Congratulate the Islands Councils on holding this conference
Very often I hear people speak at conferences about the welcome they have received and how they have been made to feel at home.
In my case, I am very much at home here in Kirkwall today.
I have had the honour of serving as the elected Member of the UK Parliament for Orkney and Shetland for over 18 years; and Orkney’s Member of the Scottish Parliament for 8 years.
I joined the Scottish Liberal party at the age of 17, not least because of its policy of a Scottish Parliament within a United Kingdom.
But consistent with that Liberal outlook, I argued during the 1997 referendum and beyond that devolution doesn’t stop in Edinburgh. The new Parliament should be sensitive to the needs and aspirations of Scotland’s many diverse communities and not least the islands.
The Scottish Parliament is responsible for many areas of policy that affect each of us and our families every day. It was a milestone in the decentralisation of power.
And it has delivered changes that matter, not least in its operation and policies for our islands.
Tavish Scott, when Transport Minister, delivering the air discount scheme;
Kirkwall Airport having an instrument landing system;
EMEC established in Stromness;
a power of local initiative given to local authorities.
I recall the significant reform of the Common Agricultural Policy in 2004-05. The input and level of consultation with local NFUs in shaping that policy was greater than could ever have been achieved when the decisions were Whitehall-centric.
You may recall how the first Scottish Government pursued a relocation policy - often in the face of opposition from vested interests - decentralisation, taking civil servants out of the centre, changing minds sets and perspectives. For example, Crofting grants to Tiree; gov telephone no to call centre in Kinlochleven and yes, SNH to Inverness.
It is worth reflecting that today’s young Scots cannot remember a time without a Scottish Parliament, and no one seriously suggests putting the clock back.
But even from a Westminster perspective, devolution didn’t stop in 1999. This Government has continued that process of devolution.
The Scotland Act 2012 will see fundamental reforms to the way that we all pay our tax.
From 2016 the Scottish Parliament will have responsibility for setting a tax rate, that will determine what services we can afford, and what competition we want to provide for our businesses and communities to thrive.
UK Government working with communities
And as a Government we firmly believe in devolution – not just transferring power from London to Edinburgh.
As Cllr Gary Robinson from Shetland Islands Council said yesterday – devolution should not just stop at Edinburgh. We agree. Nor, indeed, should it stop at Kirkwall, Lerwick or Stornoway.
One of the challenges of today is to identify the most appropriate level for decision-making, As a Government, we believe in passing power right to the individuals and communities who know the best decisions to take for local people, and we are open to discussions on how to pursue that.
I am well aware of local views on management of the Crown Estate, and the calls for more involvement in decision-making.
There are ways to make this work sensibly, and some have already happened.
In fact, I probably have longer experience than most here in dealing with the Crown Estate.
A historical perspective will remind us that because of the Zetland County Council Act and the Orkney County Council Act the islands authorities were responsible for the works licences for aquaculture developments in harbour area waters.
The councils to all intents and purposes undertook a marine planning role, which the Crown Estate performed in other coastal areas.
It is almost certainly a testimony to the effectiveness of that arrangement that marine planning responsibilities were subsequently extended to all relevant local authorities
Coming up to date, earlier this year, Local Management Agreements were finalised, with North Uist and Skye serving as pilot projects. These are now bedding in as a vehicle for local asset management, and showing positive results.
Indeed, North Uist can take much credit for pioneering these agreements, not just in a Scottish but also a UK context.
I am delighted to announce today that the Crown Estate has agreed to invest £380,000 to support development at Lochmaddy in North Uist, as a result of this agreement. And Gigha has just confirmed that they too will adopt a Local Management Agreement for their community.
The Coastal Communities Fund is also a step forward. Drawing on 50% of the Crown Estate revenues from marine renewables, this is helping communities benefit directly from the advances that we see around us.
Last month, the Fund was boosted by 5% to £29 million, and the next round of successful bids will be announced later this autumn.
So far, the Fund has granted hundreds of thousands of pounds to some excellent, creative projects in the islands, including creation of a new modern harbour in Barra and refurbishment at Ardminish Bay on Gigha.
With this funding, both ventures have been able to do something practical to assist the fishing industry and marine tourism.
And there is encouraging institutional change underway - much of it as a result of the Calman Commission - with establishment of a Scottish Commissioner and new structures at the Crown Estate’s operations in Scotland.
There is more to do – something I have discussed with both the Secretary of State and the Chief Secretary to the Treasury in recent days. But we are witnessing a real shift in how the organisation is doing its business in a more flexible, open way.
Things have moved on since the late 1980s when the First Crown estate Commissioner, the Earl of Mansfield, reportedly described a lunch with the six Highlands & Islands MPs as the most radical bunch of lefties he’d ever sat down with. AndI think it’s fair to pay tribute to those locally engaged by the Crown Estate in seeking to transform and improve the organisation.
The UK Government is also firmly committed to collaborate with the islands to realise renewables potential and create green jobs.
Here in Orkney, the renewables revolution is staring us in the face.
The European Marine Energy Centre - supported by millions of pounds of funding from both the UK and Scottish Governments – is something that we can be extremely proud of.
The islands have plenty of natural resources and the UK Government is working hard to get the right economic framework in place for investment to take off.
Earlier this week, my colleague Energy Secretary Ed Davey confirmed a unique draft “strike price” for onshore wind energy produced on the Scottish islands.
The proposed higher strike price of £115 per MegaWatt hour will provide an incentive for renewables companies to invest in wind and attract green jobs.
This is great news for the industry and for island communities. And there are two relevant lessons here.
Firstly – this is the first time that the UK Government has announced a different strike price for a particular part of the UK.
And this was made possible by clear commitment by the UK Government, Scottish Government and island councils to recognise the unique circumstances and potential of Scotland’s Islands.
But secondly, this measure is economically viable only because of the islands’ unimpeded access to the large UK consumer market.
Matching the same levels of subsidy from a smaller Scottish consumer base alone would inevitably affect energy bills.
Benefits of the UK
This brings me to my central point about the benefits for those of us who live on the islands gain from being part of the United Kingdom.
We here in the islands are very comfortable with more than one identity – Orcadian, Shetlander or from the Western Isles - Scottish, British, European. A decision to lose one of those must be based on more than misplaced sentiment or disagreeing with a particular aspect of government policy.
This is a fundamental decision. One for which there is no going back. And we need to consider the facts of what the United Kingdom offers.
This Government has a track record of using the advantages of the size and scale of the UK to help recognise the unique nature of island life.
The rebate on fuel duty, the new strike price, the Coastal Communities Fund - we are tapping into the economic strength and diversity of the UK to address the particular circumstances of island communities.
Think of some of our islands’ key industries and how closely ingrained they are to the UK’s economic priorities.
North Sea oil and gas production – so important to Shetland in particular – will be sustained for the longest possible period by billions of pounds of fiscal incentives by the UK Exchequer.
Exports for world-class products like Harris Tweed, the whisky industry and the wider food and drink sector are supported through one of the largest, most well-regarded trade promotion networks in the world, UK Trade & Investment.
With more than 1,000 staff in over 100 countries, UKTI has helped over 500 Scottish companies to export last year alone. With a bigger UK market, we have greater ability to break down trade barriers and get our local products into new markets.
And I don’t want to see that diminished in any way.
And like every other community up and down the country, the islands too benefit from the certainty and pooled economic strength of the UK - retaining the pound as our currency, safeguarding pensions, backing the banks – things we all rely on, and so often take for granted.
Powers and principles
There are real benefits for the islands as part of the UK, and our constitutional settlement already allows us considerable flexibility to change our governance arrangements. We just need to make the case.
From the Prime Minister down, the Government has made clear our commitment to keep transferring power away from London.
We have a track record of delivering devolution in Scotland and in passing power to local authorities in England.
On our part, we are open to change.
And for this to make sense, it’s important that we establish some key principles to guide decisions.
The Secretary of State has always considered there to be three conditions for transferring power – (1) that granting new power to one part of the UK is not done at the expense of another; (2) that there is widespread consensus, across parties and the community in support of change; and (3) that proposals for change are solidly based on evidence.
Those three tests were applied during the development of the Scotland Act 2012. They should apply here too.
And to do that, we must work together to examine the evidence and look at the facts.
Working together not just as Government and Council leaders, but with our communities and people across the Islands.
Many of the opportunities for change identified by the Councils – on agriculture, transport, education, culture, language, public sector reform – are for the Scottish Government to consider as devolved matters.
There are some important areas that are for the UK Government to consider as well – control of the seabed, energy, relations with the European Union.
And we will consider these.
As the Secretary of State’s three conditions highlight, it is important that proposals for change are not just a wish list. They must be robustly planned and justified.
I readily understand the Councils’ desire to use the referendum debate to focus on what is best for the islands. But we must not just be opportunistic – we must have solid, thought through plans.
So the Secretary of State, when he meets with the three Council leaders later this year, will want to examine the detail of the proposals from the Islands.
Thinking through the consequences, considering the evidence.
That was the way of the Scottish Constitutional Convention and of the Calman Commission.
It is a proven process. It works. We should apply those principles again.
So as a member of the UK Government, a long-time believer in devolution – as an islands resident now for over 30 years - I welcome the campaign that the Island Councils have launched.
I look forward to seeing the outcome of the work that the UK Government and the Islands will take forward together.