The Parliamentary Under-Secretary of State for Scotland (John Lamont)
I beg to move,
That the draft Scotland Act 1998 (Increase of Borrowing Limits) Order 2024, which was laid before this House on 17 April, be approved.
I am grateful for the opportunity to debate this order, which is the result of collaborative working between the two Governments in Scotland and upholds the 2023 fiscal framework agreement. This order will increase the Scottish Government’s cumulative capital and resource borrowing limits to reflect inflation. The order is made under sections 67 and 67A of the Scotland Act 1998, which set out the amounts that can be borrowed under section 66. We are making this order with the Treasury’s consent, as required in those sections.
Scotland Act orders are a demonstration of devolution in action, and I am pleased to say that the Scotland Office has taken through more than 250 orders since devolution began. The 2023 agreement set out that the annual limits for capital and resource borrowing will increase in line with the Office for Budget Responsibility’s GDP deflator forecast at the time of the Scottish Government’s draft budget. The United Kingdom Government agreed, in the 2023 agreement, to amend the Scotland Act to increase these limits as necessary.
Angus Brendan MacNeil (Na h-Eileanan an Iar) (Ind)
What are the spending limits on the UK Government? Is it not the case that the UK Government have balanced their books in only 11 years since 1945, and have paid back only about 1.7% to 2% of the debt accrued, if that? It is entirely erroneous to try to put shackles on the Scottish Government and what the Minister often calls the most powerful devolved Parliament in the world. Scotland should be going in the same direction as any normal country, and towards independence.
John Lamont
This Conservative Government have prudently managed this country’s finances, unlike the Scottish Government, who continue to slash frontline public services across Scotland, despite a record-breaking block grant from the UK Government. Those spending choices were, of course, made by the SNP, rather than the UK Government. This order will increase the resource-borrowing limit by £29 million, from £1.75 billion to £1.78 billion, and the capital-borrowing limit by £50 million, from £3 billion to £3.05 billion. The exact figures are set out in the order we are considering. The timing of this order gives the Scottish Government certainty over the cumulative borrowing limits for the 2024-25 financial year. It is important to note, however, that the Scottish Government still remain accountable to the Scottish Parliament and the people of Scotland in how they choose to use these increased borrowing powers.
Angus Brendan MacNeil
Is it not a fact that had the recent blood scandal happened only in Scotland, the Scottish Government would not have had the means to do anything that might be asked of them, because of all these spending restrictions and the handcuffs put on them by Westminster? Are these real-world events not another reason that the Scottish Government should not be a hostage of the UK Government, as they or any Scottish Government are under the devolved set-up?
John Lamont
The hon. Member and his hon. Friends on the nationalist Benches continue to obsess about independence, but he seems to forget that the people of Scotland had their say back in 2014 and voted in record numbers to remain part of a strong United Kingdom. I suggest that SNP Members focus on delivering for frontline services in Scotland by supporting our NHS, schools and transport networks and get on with the day job of governing Scotland, rather than talking perpetually about referendums and independence.
In summary, the order amends UK legislation to increase the cumulative borrowing limits of the Scottish Government ahead of the next financial year. In doing so, the UK Government uphold their commitment to the 2023 agreement and deliver for the people of Scotland. It is positive to see both Governments working together. On that note, I commend the order to the House.
John Lamont
I am grateful to hon. Members for their important contributions to the debate. A number of Members expressed surprise that we are having this debate. I am surprised by their shyness and reluctance to come to the mother of Parliaments to debate this important matter. We are here on behalf of our constituents to talk about how additional resource will be allocated to people in Scotland. We should all welcome that rather than being slightly uncertain about it. I am certainly relishing the opportunity to talk from the Dispatch Box about the additional resource that the people of Scotland, including those in my constituency, will get.
Alison Thewliss
The Minister is talking about additional resource, but he cannot deny that there has been massive inflation in construction costs as a result of Brexit, covid and his previous Prime Minister. In that spirit, will he address the problems that have been caused by his Government, and will he commit to the extra £25 million needed for Windmillcroft Quay, the Citizens Theatre and the Govanhill baths in Glasgow, which have all seen huge inflation in construction costs?
John Lamont
I am grateful to the hon. Member for making that point, and I will come to some of the allegations made about Scotland’s budget shortly.
The hon. Member for Glasgow South made a number—[Hon. Members: “Edinburgh South!”] My apologies. The hon. Member for Edinburgh South (Ian Murray) made a number of points about how annual limits are calculated. Annual limits are calculated in accordance with the 2023 agreement and are based on the OBR’s GDP deflator forecast at the time of the Scottish Government’s draft budget. I can confirm that the GDP deflator used to calculate the new limits for this order was 1.677%.
Let me respond to the other questions asked by the hon. Member for Edinburgh South. Some £1.76 billion of the national loans fund long-term loan remains outstanding and counts against the £3 billion statutory limit, including the £300 million borrowed in March 2024. I will write to him on his other points. He made a general point about the levels of Government debt, but we should not forget that the reason we have such significant debt is the huge interventions that the Government made to support jobs and communities during the pandemic. Had we not made those interventions to support jobs, including in the hon. Member’s constituency of Edinburgh South, many people would be out of work and many more businesses would have struggled to survive the pandemic. If he and Labour Members are now saying they were opposed to those interventions, I think our constituents would want an explanation of why they would not want a Government to make those types of interventions to help during a pandemic. From my experience of my own constituency, I know that the furlough scheme, for example, and the huge amount of additional support that went in to support businesses were very much welcomed, but Labour Members now seem to be opposed to those things.
The hon. Member for Edinburgh East (Tommy Sheppard) suggested that this agreement has in some way been imposed on the Scottish Government. That is just not the case: it is a great example of both Governments working together, both at an official level and at a ministerial level. Again, the two Governments in Scotland working collaboratively to deliver for the betterment of our country is something that all of our constituents would expect to see, and would very much welcome.
Tommy Sheppard
All I am trying to establish is whether the UK Government are telling us that the quantum of these borrowing limits is to be agreed between the UK Government and the Scottish Government, or whether in law, that figure is determined by the UK Treasury. Which is it?
John Lamont
I could not be clearer that this is an example of both Governments working together to agree what is in the best interests of Scotland. It is now for the Scottish Government to decide how they use those additional spending and borrowing powers.
A number of hon. Members have suggested, both in speeches and in interventions, that the UK Government have in some way cut the capital budget for Scotland. The SNP has cut its own budgets by wasting so much taxpayers’ money on failed projects in Scotland. [Interruption.] Hon. Members scoff from a sedentary position, but the SNP spent more on trying and failing to build two ferries than it claims it would cost to set up a whole new state when it is proposing an independent Scotland. They have also suggested that the UK Government have cut Scotland’s overall budget, but Scotland’s block grant is at a record high. However, the SNP Scottish Government have hugely cut local government funding, which is impacting frontline services the length and breadth of Scotland—that is the cut that SNP Members should be talking about. A spokesman for the Convention of Scottish Local Authorities said that the SNP’s last budget was
“not a good budget for Scottish local government”.
I could happily put SNP Members in touch with that spokesperson, but I suspect that they are already in touch with that person, given that those were the words of an SNP councillor. Even their own side are complaining about the level of funding that the SNP is giving to local councils across Scotland.
To conclude, this order demonstrates the continued commitment of this United Kingdom Government to work with the Scottish Government to deliver for the people of Scotland and maintain a functioning settlement for Scotland. On that basis, I commend it to the House.
Question put and agreed to.
Resolved,
That the draft Scotland Act 1998 (Increase of Borrowing Limits) Order 2024, which was laid before this House on 17 April, be approved.
Business of the House (Today)
Ordered,
That at this day’s sitting, the Speaker shall put the Questions necessary to dispose of proceedings on the Motion in the name of Secretary Mark Harper relating to the High Speed Rail (Crewe - Manchester) Bill: Instruction (No. 3) not later than 90 minutes after the commencement of proceedings on the Motion for this Order; such Questions shall include the Questions on any Amendments selected by the Speaker which may then be moved; proceedings on that Motion may continue, though opposed, after the moment of interruption; and Standing Order No. 41A (Deferred divisions) shall not apply.—(Penny Mordaunt.)