16:16 - The House divided: - Ayes: 43 / Noes: 260 - Question accordingly negatived.
The Parliamentary Under-Secretary of State for Scotland (John Lamont)
I am grateful to have the opportunity to speak in the debate this afternoon. Cost of living increases are impacting households and businesses right across the country. It is right that this Parliament should be concerned about how we mitigate those impacts to ensure that the people of Scotland thrive. However, a debate that starts from the unfounded position that the UK’s exit from the European Union is to blame for any and all woes is not the best use of this House’s time. Putin’s illegal invasion of Ukraine coupled with the economic aftershocks of covid have caused huge disruptions to the global economy. No country is immune from that. However, we are benefiting from the swift action taken by this United Kingdom Government to mitigate the worst of those impacts. [Interruption.] I will make some progress if I may.
Announcements made at the spring Budget 2023—[Interruption.] Madam Deputy Speaker, this is a serious subject, but SNP Members laugh and shout down the Government’s representative as we try to respond to some of the points that they have made.
John Lamont
I will make some progress. Rather than shouting and laughing, I encourage SNP Members to listen to the points I am making. We are benefiting from the swift action that this United Kingdom Government are taking to mitigate the worst of these impacts. Announcements made at the spring Budget 2023 bring the UK Government’s total cost of living support to £94 billion over the current and next financial year, averaging at more than £3,300 per UK household. Those interventions will not only help ease some of the pressures on those most in need, but stimulate the economy and contribute to our long-term recovery from these unprecedented global challenges that we have faced in the past few years.
As has been said in the House previously, Government Members would warmly welcome a serious debate on ways to build on those foundations and to improve Scotland’s economy, because Scotland’s economic growth has lagged behind that of the UK during the SNP’s time in Holyrood.
Several hon. Members rose—
Christine Jardine
The Minister knows that he and I will never agree on Brexit and its impact, not just on Scotland—[Interruption.] We do not agree on that. Does he share my amusement that the SNP cannot see the irony in complaining that Scotland was dragged out of the European Union—a successful political and economic union—yet wants to drag Scotland out of an even more successful and economic Union?
John Lamont
Indeed, there is little consistency in the SNP’s position, particularly given the importance of the rest of the UK market to Scotland’s economy. We cannot blame the poor performance of Scotland’s economy on our departure from the EU. Export figures from the Scottish Government show that the rest of the UK remains by far Scotland’s most important market. Around 60% of total exports are destined for the rest of the United Kingdom, accounting for approximately three times the value of exports to European Union countries. In the opposite direction, around two thirds of Scotland’s imports originate from the rest of the UK.
Drew Hendry
The Minister will know as well as I do that, looking at the figures from the Scottish Government, the vast majority of Scotland’s manufactured goods—the things we make in Scotland—are exported outside of the UK to the US, European markets and other places. The figure is some 63%. He will also know that the vast majority of exports to the rest of the UK are financial services, insurance and things such as gas, oil, water, renewable energy and so on—things that people down here would not like to do without if they were taken away.
John Lamont
I am very disappointed that the hon. Member is belittling these important parts of the Scottish economy and how much they contribute to the economic growth of Scotland through trading with and importing from the rest of the UK. More than half of Scottish firms sell to other UK nations, compared with a UK average of just a third. The success of the Scottish economy is dependent on the rest of the UK market.
Clearly Scottish businesses value seamless access to the UK market too, but that could not be guaranteed under the SNP’s plans to attempt to rejoin the European Union. Make no mistake, Madam Deputy Speaker—I do not underestimate the challenges facing the people of Scotland, but it is simply outrageous to suggest that leaving the EU is responsible for driving those challenges.
To give another example, Germany, Sweden, Portugal and a number of other countries in Europe have all seen food price inflation of more than 20% recently. That is driven by global factors, such as the loss of grain supply from Ukraine and unseasonable weather in places such as Spain and Morocco. Do SNP Members really want us to believe that Brexit is responsible for bad weather, too?
Alan Brown (Kilmarnock and Loudoun) (SNP)
Coming back to the Minister’s opening comments, he complained yet again about the SNP bringing forward a debate. He never seems to agree, whatever debate topic we bring forward. If it is independence, he stands up and says, “Why are we debating independence? We should be debating the cost of living.” Now we are debating the cost of living and he is complaining about that. If he fundamentally disagrees that Brexit is having a negative impact, will he start explaining the benefits that Brexit has given us?
John Lamont
I have not complained about the SNP bringing forward this debate. The cost of living is an issue facing every single one of us in this House and each one of the households and residents we represent here. What I am complaining about is SNP Members laughing and trying to shout down Government Members just because they do not agree with the points we are making. I also disagree with the fact that, when we should be talking about the measures that both Governments in Scotland are taking to address the cost of living, SNP Members choose to talk about independence, rather than anything else. Your obsession—
Madam Deputy Speaker (Dame Rosie Winterton)
Order. I do not have an obsession. If the Minister is saying that he is not going to take interventions, Members should please not just stand up and shout at him. I am sure the Minister will indicate if he wants to give way, but Members should not keep standing up for too long, because otherwise it is difficult to hear what he is saying.
John Lamont
Thank you, Madam Deputy Speaker. My frustration is with SNP Members’ continual focus on independence, rather than on the measures that both Governments of Scotland—the UK Government and the Scottish Government—should be taking to address those challenges that all our constituents are facing. Yet again, SNP Members focus on independence.
The SNP argues that the Scottish Government do not have the financial powers required to mitigate the increases to the cost of living. I strongly suggest that that is simply not the case. The UK Government are providing the Scottish Government with a record block grant settlement of £41 billion a year. In real terms, that is the highest settlement since the start of devolution for Scotland. The spring Budget provided the Scottish Government with £320 million over the next two years, and that is on top of the £1.5 billion of additional funding we provided at the autumn statement in 2022. This funding is still set to grow in real terms over the spending review period.
David Linden
Going back to the substance of the motion we have brought before the House, can the Minister briefly outline the Government’s objection to each of the eight paragraphs of the proposed new Standing Order?
John Lamont
If the hon. Member shows a little patience, I will deal with those points head-on further on in my speech.
People in Scotland benefit from being part of a strong United Kingdom, with the pooling and sharing of resources that that brings. The strength of the United Kingdom, and Scotland’s place within it, is even more important during these challenging times. The UK Government will continue to support Scotland and the rest of the UK as we recover from the economic shocks I have mentioned.
The UK Government are also directly investing in Scotland through programmes such as the city and regional growth deals, the levelling-up fund and the UK shared prosperity fund. That is on top of the £52 million of UK Government funding for the creation of two freeports centred on the firth of Forth and the Cromarty firth. Together, these two freeports aim to attract over £10 billion in public and private investments, and to create an estimated 75,000 jobs. I am also pleased to report that I am seeing great progress on investment zones, with our two Governments working together to co-create an approach in Scotland. Each zone will be backed by £80 million of UK Government funding.
Amy Callaghan (East Dunbartonshire) (SNP)
Will the Minister explain to my constituents in East Dunbartonshire, who voted overwhelmingly to remain in the European Union, what sum of the £40 billion Scotland’s economy has lost he thinks they should be grateful for?
John Lamont
The hon. Lady’s constituents also voted overwhelmingly to remain part of the United Kingdom, and I suspect they are very frustrated that the SNP Government and the SNP continue to push for further division, rather than focusing on dealing with the cost of living pressures that households are facing. All the initiatives I have outlined will help stimulate growth and ensure Scotland’s economy is more resilient to future shocks, whether they stem from overseas conflicts or global health crises.
The SNP likes to claim that the Scottish Government do not have the policy levers required to mitigate the impacts of the cost of living increases. I would suggest otherwise, and I respectfully ask what the SNP Government have been doing to grow the Scottish economy, with Holyrood’s extensive powers on education and skills, economic development, transport and planning. Instead, SNP Members continue to talk down Scotland and the United Kingdom and to talk up their own separatist ambitions with our European partners, which only damages investor confidence in Scotland. Despite what the SNP says, Scottish exports and foreign direct investment continue to increase to above pre-Brexit levels, during which time the UK Government have secured trade agreements with 71 non-EU countries and the EU worth £808 billion in 2021. Surely that demonstrates the advantage of Scotland being an integral part of the UK market, with the trading power that that creates for the entirety of Scotland.
I have a challenge for SNP Members: would any of them like to tell us what the impact of splitting Scotland from the rest of the UK would be on the cost of living crisis? How would prices be helped by a hard border at Berwick? How would mortgage rates fall if a new untested currency was introduced? How on earth would energy prices be brought down by closing down development in the North sea sector, as Humza Yousaf, the First Minister of Scotland, seems to want to do?
John Lamont
I give way to the hon. Member for Glasgow East (David Linden), who I am sure can answer those questions.
David Linden
One impact is that in a normal independent country, we would not have more food banks than branches of McDonald’s. That is precisely why we want to ensure that our constituents are not going to food banks as a result of a cost of living crisis on which the UK Government are asleep at the wheel.
Madam Deputy Speaker (Dame Rosie Winterton)
Order. Excuse me, but before the Minister has even answered that point, it is not really fair to ask him to give way straightaway.
John Lamont
Scotland is already a normal country, despite what the hon. Member for Glasgow East might suggest. Talking down Scotland is not something I am here to do; I am very proud to promote Scotland. If the SNP Government in Edinburgh perhaps used some of the powers they are responsible for, then some of the challenges in the Scottish economy and in other aspects of Scottish society that we are dealing with would not be as great as they are. I am very clear that what this Parliament should be focused on is how the Scottish Government, along with the other devolved Administrations, could and should work with this United Kingdom Government to build a better future for the people of Scotland.
The SNP motion to establish a Select Committee to look at the cost of living crisis is not only unnecessary duplication of other work by this Parliament, but a complete waste of taxpayers’ money. The total anticipated cost to the House of Commons of this crackpot idea is in the region of £463,000 per annum. In addition, there would be extra costs to adapt Parliament’s Committee Rooms to accommodate this massive new Committee. I suggest that that would be a complete and utter waste of taxpayers’ money.
Sarah Atherton (Wrexham) (Con)
SNP Members bleat on about the cost of living, but would the Minister please explain why the SNP Government wasted £500 million on two ferries that do not float?
John Lamont
My hon. Friend makes an excellent point. Thankfully, it is not my job to defend the decisions of the SNP Government and the huge mistakes they have made in relation to ferries. What I do know is that this is having a huge impact on many of our island communities in Scotland and on economic development in those communities, because of a complete cock-up by the Scottish Government in delivering those ferries.
Dr Luke Evans (Bosworth) (Con)
I notice that the memorandum by the accounting officer that was released for this motion states at paragraph 3:
“Current select committee meeting rooms are not equipped for a committee of the proposed size and would need to be adapted to accommodate the Committee. The costs stated in this memorandum do not include the additional costs associated with such adaptation.”
Do the Government have any idea how much this adaptation would cost, or perhaps someone from the SNP could intervene and say?
John Lamont
My hon. Friend is absolutely right to highlight that. As I have pointed out, the estimated cost simply to set up this new Committee is almost £500,000 per annum. As he has correctly identified, there is the additional cost of adapting the existing Committee Rooms. I know many of my constituents in Berwickshire, Roxburgh and Selkirk will be asking why on earth the SNP are proposing this when there are so many pressures on budgets for households and businesses. The SNP is proposing to spend more taxpayers’ money on this crackpot idea, which is a complete and utter nonsense.
The people of Scotland want their two Governments to be focused on tackling the cost of living, ensuring our future energy security and investing to support growth, and they want us to work together to do so. I therefore respectfully suggest that the SNP motion before us is not what we should be focusing on, and I urge right hon. and hon. Members to reject it.
Several hon. Members rose—
Alan Brown (Kilmarnock and Loudoun) (SNP)
It is a pleasure to follow the hon. Member for City of Durham (Mary Kelly Foy). I agree with what she says, and she certainly gave the hon. Member for Banff and Buchan (David Duguid) a lesson in what “relatively brief” actually means. I am still reeling from his zinger accusing the SNP of pushing a political agenda. Who knew that politicians advance their own arguments and beliefs? It is news to me.
As always, the Minister said that Scotland has all the powers we need—the typical Unionist mindset. Will he explain to me why Northern Ireland has powers over energy, pensions, the civil service and the welfare state, but Scotland is somehow blocked from having these powers? Why is that? Why does Scotland not have better borrowing powers? There is no way that we have the powers we need. It is a weak Unionist argument.
John Lamont
It is unfortunate that the hon. Gentleman is making comparisons with Northern Ireland, which clearly has a very difficult and very different history compared with Scotland. The history of Scotland cannot be compared to the history of Northern Ireland, thankfully. The point I was making in my opening remarks was that, despite all the levers they have, the SNP Scottish Government are failing to expand economic growth or to look after the most vulnerable in society. They continually blame Westminster and ask for another independence referendum, which frustrates me and my constituents.
Alan Brown
The Minister does not explain why Northern Ireland has these powers and Scotland cannot have them. Of course I recognise the difficulties caused in Northern Ireland by the Democratic Unionist party, his brothers in arms. It would be good if it helped to get the Northern Ireland Executive up and running.
We might have thought that Brexiteers, who claim that Brexit is a good thing, would welcome this motion to set up a new Committee. When the Committee looks at the impacts of Brexit, perhaps it will unearth the Brexit dividends that the Minister and the hon. Member for Banff and Buchan have not been able to explain.
We know that Labour and its Front Benchers are not in favour of the motion, hiding behind the fact that the Committee would be too big for a room in Parliament and would cost too much money—the Minister said that, too. Well, I have an idea: we could abolish the House of Lords and the Committee could sit in there. That would save money, too.
As for the omission of the Education Committee, perhaps we should accept members of the Education Committee—Labour could have tabled an amendment—because that would allow greater insight into the impact on higher education in Scotland of the Tories’ student visa rules and of not being in Horizon for two years. Having members of the Education Committee on a cost of living Committee might be quite helpful.
Labour obviously does not support the Committee because it would expose Labour’s mantra of making Brexit work without rejoining the internal market, rejoining the customs union or restoring the free movement of people. Their mantra is a vacuous statement. Their position, like the Tory position, means continuing labour shortages in the health and social care sector. It means crops continuing to be left unpicked, and it means the home-grown food stock will shrink because farmers will plant less in future. It means continuing rules of origin issues that affect manufacturing in the automotive industry. And it will mean food prices increase further, given the imminent checks that will be made on food imports.
Shane Brennan, the director of the Cold Chain Federation, has said:
“It is crazy that one week the government is holding a crisis meeting in Downing Street to discuss out-of-control food inflation and the next is willing to nod through a multimillion new import tax on EU food imports.”
Meanwhile, despite what Conservative Members have said, farmers will have to compete with Australian and New Zealand lamb imports, thanks to the deal that a former Secretary of State for Environment, Food and Rural Affairs has said was an absolutely duff deal pushed through by the former Prime Minister.
The biggest issue created by Brexit and Tory Government policy is the cost of living crisis, which has too many aspects to quantify and discuss. That is why a cross-party Select Committee would be kept meaningfully busy.
Another great Brexit lie is that energy bills would be cheaper if we left the EU. That one has aged as well as Scotland being told in 2014 that our energy bills could only remain as they were, or be lowered, by staying in the UK. We have acknowledged that the Russian invasion of Ukraine is, of course, the main factor in soaring energy bills, but there is a quantifiable Brexit impact. By leaving the single electricity market and creating a standalone trade and co-operation agreement, the post-Brexit cost of trade in electricity is higher. Energy UK estimates that these arrangements cost more than £1 billion a year, which is added directly to our electricity bills. There is a so-called Brexit dividend: higher energy bills. We were promised that VAT on our energy bills would be cut post Brexit, which is another broken promise that has not materialised.
This is in stark contrast to the 2016 Vote Leave briefing on taking control of energy, which said:
“Because of silly EU rules”—
Vote Leave loved that phrase—
“EU energy regulation will cost the UK economy about £90 billion… Instead of spending money on patients, the NHS has to instead spend millions every year on energy costs.”
Can anybody with any credibility tell us that, post Brexit, the NHS is saving money on energy and other matters? And where is the mythical £90 billion saving we are supposed to see?
Another Brexit dividend and cost impact on both energy and wider goods comes from the drop in the value of the pound. This means higher costs on imported goods, and the fact that oil and gas are traded in dollars means another financial hit for the UK. The EU is moving much quicker to decouple gas and electricity prices, to bring down the cost of electricity, and it has also taken much stronger action to try to combat the US Inflation Reduction Act.
And what do we hear from the Energy Secretary? “Oh, everyone else is 10 years behind the UK, so we do not need to do anything because the US is playing catch-up.” The reality is that investors are looking at moving elsewhere. If the Government will not do anything about it, it will have another long-term impact on the green transition.
The Government argue that they have led the way on renewable energy, and they have been a leading light at some points in the deployment of renewable energy, but the reality is that there have been so many missed opportunities in supply chain development. We are always told that it was the EU that prevented contracts for difference auctions from incentivising UK and local content in the supply chain, which is, frankly, utter rubbish. Over the years, their narrative was always that EU procurement rules meant lowest price only. People said that other countries did not stick to the rules, unlike the good old Brits, and that that hampered us.
We are talking about the same leavers who now want to break international treaties. The reality is that tender assessments can consider wider impacts and quality. More than 20 years ago, I was procuring civil engineering contracts under EU laws, so I have always been well aware that if a robust scoring assessment system is in place, the argument that we need to go only for the lowest price is false.
The notion that the EU is forcing imports from the far east because of competition laws is also palpable nonsense, because that is where so many of the components come from. So it is high time that the procurement process for the contracts for difference auctions suitably incentivises the creation and establishment of a UK-based supply chain. What is the point of talking about energy security when so much of the renewable energy deployment and so many of the ongoing grid upgrades depend on imports and there are waiting lists of years for some of the components?
The UK Government have at least finally acknowledged the need for some change in supply chain development, but they have cut the overall CfD budget for allocation round 5 by 30%, at a time of rampant inflation. That is happening with projects already struggling to hit allocation round 4 strike prices. That is further proof of their saying one thing and doing another. Tidal stream technology needs to be backed; with 80% of its supply chain content being UK based. However, the ringfencing for that has been halved.
The Parliamentary Under-Secretary of State for Wales (Dr James Davies)
I thank Members across the Chamber for their contributions to this debate on the cost of living. We have heard extensive and thoughtful contributions from those on the Front Benches, as well as from an array of Beck Benchers, including my hon. Friend the Member for Banff and Buchan (David Duguid) and the hon. Members for Midlothian (Owen Thompson), for Cynon Valley (Beth Winter), for Coatbridge, Chryston and Bellshill (Steven Bonnar), for City of Durham (Mary Kelly Foy), for Kilmarnock and Loudoun (Alan Brown), for Argyll and Bute (Brendan O’Hara), for Glasgow East (David Linden), for Motherwell and Wishaw (Marion Fellows), and for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry)—I agreed with some of them more than with others.
Although I am pleased that we are having this debate, I emphasise that the cost of living challenges faced by people across the United Kingdom are a global challenge. We are not alone, and countries across western Europe and, indeed, the rest of the world are seeing the same trends, driven largely by Putin’s illegal war in Ukraine, and the aftermath of the covid pandemic—that has been acknowledged by many if not all Members.
The Conservative Government have been taking action to help people by providing cost of living payments. This year, we have provided £900 for households on means-tested benefits, £300 for pensioner households and a £150 payment for people receiving disability benefits. In Wales, those payments have supported more than 400,000 people through some challenging times. In fact, last winter, the UK Government paid almost half of household energy bills through the energy price guarantee and by providing £400 off those energy bills. In addition, last year we provided £650 for households receiving means-tested benefits, £300 for pensioner households, £150 for the disabled, a £150 council tax rebate for households in council tax bands A to D, a 5p cut to fuel duty, which has been extended to 2023-24, and a permanent increase in the amount that someone can earn before national insurance contributions are charged. That is, of course, on top of a 40% real-terms increase in the personal allowance since 2010. Going forward, the removal of the premium paid by those on prepayment meters will save 4 million of the poorest households £45 a year. All in all, the Government’s cost of living support amounts to an estimated £94 billion.
Of course, we as Conservatives believe that work is the best way out of poverty. We are extending the support that our jobcentres offer to low-paid workers so that they can increase their hours and move into better paid, higher quality jobs. In the Budget, we on the Conservative Benches confirmed the biggest expansion of free childcare in living memory. That will reduce costs for parents, who can get back to work, and ensure that a career break does not become a career end. Alongside that, we will see universal credit provide childcare costs up front. We are supporting people with the largest ever increase to the national living wage.
Alan Brown
I thank him for giving way. Rather than just reading his pre-prepared speech, will he answer any of the points raised in the debate? For example, I pointed out that Energy UK has observed that post-Brexit energy trading arrangements are adding £1 billion to our energy bills. What Brexit dividends are offsetting that £1 billion that has been added to our bills?
Dr Davies
I will come to the benefits of Brexit in due course, if the hon. Member will kindly wait.
We have increased the national living wage to £10.42 an hour in recent times, which is an increase of 9.7%. We have also cut the universal credit taper rate and increased the work allowance. We are supporting those on the state pension and those receiving pension credit and working age and disability benefits with a 10.1% uplift to match inflation.
What have the Opposition parties done? The SNP’s motion fails to recognise the support given by the UK Government to people across Scotland and commits instead to spending almost half a million pounds of taxpayers’ money every year on an unnecessary Select Committee. SNP Members say that they want to investigate matters relating to increases in prices, but while we know that global factors are at play, they seem to blame Brexit alone. That is the same Brexit that has enabled us to take back control of our laws, our money and our borders, and the same Brexit that is enabling UK fishermen to catch an additional £146 million-worth of fish a year.
David Duguid
Without rehearsing the earlier debate on whether Brexit is good or bad for fisherman, does my hon. Friend agree with the chief executive of the Scottish Fishermen’s Federation who has said that
“whatever issues the industry has with Brexit and labour issues”—
those were mentioned earlier—
“these pale into insignificance if fishermen are banned from fishing”,
as they would be through the SNP and Green Scottish Government’s shambolic plans for highly protected marine areas?
Dr Davies
My hon. Friend is quite right. He champions the Scottish fishing industry, and rightly so.
The Procurement Bill, which we considered yesterday, will allow SMEs across the UK more easily to access £3 billion-worth of revenue and let us rewrite the rules on support for places and regions—including in Wales and Scotland—to deliver levelling up. The same Brexit has allowed two new freeports each for Wales and Scotland, and allowed the UK to lead the way in the roll-out of the covid vaccine, saving lives and putting the country back on track.
Dr Whitford
The hon. Gentleman must be aware that June Raine, the head of the Medicines and Healthcare products Regulatory Agency, pointed out in December 2020 that covid licensing was done under the rules of the European Medicines Agency and was nothing to do with Brexit.
Dr Davies
We will have to disagree. This country showed the way on the management of the pandemic and the development of vaccines.
The SNP wants to discuss the cost of living, but it would rather import oil and gas from overseas than support tens of thousands of jobs in Scotland.
I would also like to look at the solutions proposed by the Labour Government in Wales. They seem to think that charging people to use motorways, bringing in a tourism tax and scrapping meal deals is the way to help people. Let us not forget the money squandered by the Welsh Government on a racing circuit never to be built, an airport where barely any planes take off and £150 million on a report into the M4 relief road which was then axed. And let us never forget Labour’s record on the economy. No Labour Government have ever left office with unemployment lower than when they came to power. It would perhaps be remiss of me not to remind the House that when Labour left office in 2010, the then Chief Secretary to the Treasury wrote, “I’m afraid there’s no money left.”
We will take no lectures on tackling the cost of living crisis from the Opposition parties. The UK Government are delivering an unprecedented package of support across the whole of Britain. The Prime Minister has been clear that it is his priority to halve inflation, ease the cost of living and give people the financial security they want and deserve. While the Opposition play politics, we are getting on with the job and delivering for the people of the United Kingdom.
Question put.