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Gregor Poynton (Livingston) (Lab)
I beg to move,
That this House has considered the fiscal impact of the Autumn Budget 2024 on Scotland.
It is a pleasure to serve under your chairmanship, Ms Vaz. I am delighted to begin this important debate on the fiscal impact of the UK 2024 Budget on Scotland. The Chancellor delivered a Budget on 30 October that was the largest settlement for the Scottish Government in the history of devolution. It means an additional £1.5 billion for the Scottish Government to spend in this financial year, and an additional £3.4 billion in the next. That amounts to a total of £47.7 billion for Scotland’s budget in 2025-26, the biggest financial settlement in the history of devolution.
The Budget keeps Labour’s promises to Scotland and the Scots, who put their faith in a Labour Government. The road ahead is not easy, nor were all the individual decisions made in the Budget, but the appalling economic inheritance left to this Government by the Tories, who gave us austerity, Brexit chaos, Boris Johnson and Liz Truss, needs clearing up.
After 14 years of Tory chaos, division and decline, the Budget turns the page on those lost Tory years, fixing the foundations and rebuilding our country. It supports Scottish businesses to get the Scottish economy motoring again. It provides funding for green freeports, city growth deals, Great British Energy and hydrogen projects to fire up growth and deliver good jobs across Scotland. It will remove connectivity black holes, through Project Gigabit and the shared rural network, boosting 4G coverage in the highlands and islands, and provide £125 million for GB Energy, headquartered in Aberdeen, with hubs in Edinburgh and Glasgow. It will fund two hydrogen projects in Cromarty and Whitelee, and extend the innovation cluster in the Glasgow city region for a further year.
The Budget will implement the 45% and 40% rates of theatre, orchestra, museum and galleries tax relief, to provide certainty to businesses in Scotland’s thriving cultural sector. It will provide Scotland’s world-renowned whisky industry with up to £5 million for His Majesty’s Revenue and Customs to reduce the fees charged by the spirit drinks verification scheme, and end the mandatory duty stamps on spirits from May this year. It will kick-start growth at a local level by investing £1.4 billion in local growth projects across Scotland for the next 10 years, including £26 million for the Forth green freeport.
The list goes on. The Budget supports working people by boosting the national living wage, resulting in a pay rise to around 200,000 of the lowest-paid Scots, and extends the temporary 5p cut in fuel duty, benefiting an estimated 3.2 million people in Scotland by £58 a year. The Budget also supports Scottish pensioners and those on welfare benefits. The Government’s commitment to the triple lock will see over 1 million Scottish pensioners benefit from £8.6 million a year more during this Parliament.
Pension credit is up, benefiting 125,000 of the neediest pensioners in Scotland. The Budget uprates working-age benefits by inflation, resulting in 1.7 million families in Scotland seeing their working-age benefits going up by an average of £150. It also reduces the maximum level of debt repayments that can be deducted from a household’s universal credit payment each month, from 25% to 15%. That will benefit the average Scottish family by more than £420 a year. And that is not all: Labour’s manifesto commitment to Brand Scotland has been realised. An initial investment of £750,000 this year will fund trade missions, promote Scottish goods and services around the world, and help Scottish businesses export for the first time.
This Budget also marks the end of the era of austerity. It provides billions of investment in public services and prioritises investment in our economy to jump-start growth, while raising money from those with the broadest shoulders. It provides significant increases in investment to ensure that we have the public funding available for Scotland’s NHS, schools and public services. In short, this Budget is good for Scotland.
Mr Alistair Carmichael (Orkney and Shetland) (LD)
One other thing that the Budget did was to remove the ringfence around agricultural support payments. Surely an intervention as significant as that in the operation of a UK-wide market should be made on a UK-wide basis. I do not understand the rationale for the Treasury decision. Can the hon. Gentleman explain it to me?
Gregor Poynton
As I said at the start, not all the decisions in this Budget were easy. We had been left a horrible economic inheritance by the Tories, and we needed to make decisions to tackle that and clear the mess up that they made.
The decisions in the Budget mean that the Scottish Government are receiving more per person than the equivalent UK Government spending for the rest of the UK. As I said, in 2025-26, we will see the biggest financial settlement to the Scottish Government in the history of devolution. Sadly, however, we know from bitter experience that more money to the Scottish Government does not guarantee success, because the Scottish National party is taking Scotland in the wrong direction and being careless with Scotland’s money.
Seamus Logan (Aberdeenshire North and Moray East) (SNP)
The hon. Gentleman speaks about the ending of austerity, but how can he say that when we have seen the removal of the winter fuel payment and a refusal by the Labour Government to end the two-child cap?
Gregor Poynton
We have delivered the largest budget settlement in the history of devolution—that is the end of austerity. [Interruption.] Well, you have it to spend.
SNP decisions have left a black hole in Scotland’s finances. The billions in extra cash delivered in this Budget must not be used simply to cover up the SNP’s “buy now and pay later” policies. That money must reach the frontline, to bring down waiting lists and drive up educational standards. The SNP has nowhere to hide now.
Harriet Cross (Gordon and Buchan) (Con)
The changes to national insurance contributions mean that Aberdeenshire council has to find an extra £13 million in its budget this year. How will that help with education standards and health in Aberdeenshire?
Gregor Poynton
The largest settlement ever received by the Scottish Government in the history of devolution is driving up additional funding that can be spent in Scotland. The SNP has nowhere to hide; it has no more excuses. It cannot continue to blame others for its economic and financial incompetence, because the problems in Scottish public services are not solved by simply having more money to spend. The Scottish Government need to get much, much better at spending it.
Dave Doogan (Angus and Perthshire Glens) (SNP)
I am grateful to the hon. Gentleman for giving way, and I apologise for chuntering from a sedentary position earlier; that was not very polite of me. He says that we need to see an end to the SNP’s “buy now and pay later” approach. Of course, he will be familiar with the fact that the SNP Government, or any other Scottish Government, must have a balanced budget every year, so what does he mean by “buy now and pay later”?
Gregor Poynton
You can borrow to invest. Also, the hon. Gentleman’s party has announced that it is ending the two-child cap but with no money to pay for it—that, to me, is “buy now and pay later”.
Scots can see that the SNP has lost its way and is out of ideas, and that its Ministers are incompetent and wasteful with public money. Scots earning over £29,000 a year pay more in tax in Scotland than people in the rest of the UK, which Scottish Labour will look at if we win the next election. What do Scots get for those higher taxes? They get a Government who waste millions on delayed discharge and agency staff in our NHS, ferries that do not sail and pet projects that do not deliver for Scotland, all while decimating local community funding, which means that vital services are lost.
Where, for example, is the vision for reform of Scotland’s NHS, which lurches from crisis to crisis? What was once an annual winter crisis now stretches further and further into other seasons. Our heroic NHS staff do a fantastic job under the most difficult circumstances, but they and the Scottish public are being badly let down by their political leadership, who waste millions on delayed discharge and agency staff.
This week, we have seen the UK Labour Government commit to a plan to get waiting times down from 18 months to 18 weeks, and to put in place the firm foundations to deliver proper social care services. Where is the SNP’s ambition on either of those two issues?
Pete Wishart (Perth and Kinross-shire) (SNP)
Labour colleagues like nothing more than to talk about the Scottish Government—they do it every time they get the opportunity. But does the hon. Gentleman not understand the depth of anger right across Scotland about this Budget, whether it comes from pensioners who are freezing in their homes right now, child poverty campaigners who are disappointed that it will do nothing about the two-child benefit cap, employers who are paying the cost of the national insurance rise, or farmers?
Pete Wishart
Is this the reason behind the massive fall in Labour support in Scotland?
Gregor Poynton
That was a long intervention. As I said before, they have the powers and the money, and it is up to the Scottish Government to make the decisions that SNP Members talk about. They complain about every single penny that we have raised in this Budget, but that money is being invested in Scottish public services. They cannot enjoy the money that is being spent on the one hand and complain about every penny piece that has been raised on the other.
A National Care Service Bill that was ill-thought-through has now been binned, and there is no plan to reform or be ambitious for Scotland’s NHS to deliver the care our constituents need. The proposed East Calder medical centre in my constituency is a textbook example of how these failings manifest themselves at a local level. Patients, doctors, the local community and the health board all agree that we need a new health centre in East Calder. The one thing holding it back is the Scottish Government’s management of NHS resources. With this year’s unprecedented Budget settlement, the funding is now there to deliver projects such as this, and there can be no more excuses.
Where is the planning reform to unleash growth and get Scotland building again? There is a terrible shortage of planning officers in Scotland and no plan to tackle it. There is no substantive commitment to build more homes or any sign of the action needed to make that happen. The drift and lack of vision is summed up in the Scottish Government’s behaviour around the proposed Berwick bank offshore wind farm. The planning application was submitted in December 2022 but still awaits a decision from Scottish Government Ministers. What are they waiting for? Why are they dithering? Why is it taking so long for Scottish Ministers to get a grip of this important decision? As the Aberdeen & Grampian chamber of commerce has said, all they are achieving is putting potentially billions of pounds of investment and thousands of high-quality green jobs at risk.
And the list goes on. Where is the investment in skills and in the future of our young people, our economy and our country’s prosperity? We know what the jobs of the future are. There are many sectors in which Scotland has the potential of competitive advantage if only the Scottish Government would take action and get ahead of the curve. But we have seen the precise opposite of urgency, ideas and energy from them. Why are we not preparing and supporting our workforce, young and old, with a wartime-like effort to train our people to take advantage of these enormous opportunities and grow our economy? There is just more dither, delay and a lack of ambition and vision for Scotland.
What are we doing to arrest the decline in educational attainment and the widening attainment gap? Nicola Sturgeon once said that closing the attainment gap was the “defining mission” of her Government. Instead, it is getting worse. Educational attainment for all children is down. For those children from the poorest homes, it is down most of all. What a shameful record of almost 18 years in power. For John Swinney, just being a bit better than Humza Yousaf is not good enough. This is a Government not holding themselves or Scotland’s public sector to anything like the high standards the Scottish people deserve.
I applaud the Chancellor’s Budget of 30 October. I applaud, above all, the huge investment in Scotland and the highest ever budget settlement for the Scottish Government, but the ball is now in the Scottish Government’s court. They have nowhere to hide. They must halt the drift, the buck-passing and the managed decline. They must seize this opportunity to unleash the enormous potential of Scotland or make way for a Scottish Labour Government who are ready and eager to make that happen.
Several hon. Members rose—
Valerie Vaz (in the Chair)
A number of hon. Members wish to speak, and we will have to take the wind-ups at about 3.28 pm.
Dave Doogan (Angus and Perthshire Glens) (SNP)
It is a pleasure to serve under your chairmanship, Ms Vaz—we always have to say that, but in this instance, I genuinely mean it. I am grateful to speak on this issue. When I saw this coming up on the agenda for Westminster Hall, I thought, “Goodness me, who has brought this?” It turns out that it is the Government. I thought, “That is all right. Well, let’s see what the facts are because this Budget had precious little in it to be welcomed in Scotland.”
I will start with that which could be welcomed for Scotland. Thankfully, the Chancellor heeded the SNP’s manifesto call to change the fiscal rules to allow more investment in capital infrastructure. That was good and welcome, and it will be helpful. They also heeded the SNP’s pre-Budget call for greater investment in the NHS, which will be very welcome as we try to recover from covid and staffing challenges. But aside from those two things, on which the SNP gave the Government a menu, the Budget has been an unmitigated disaster for Scotland and Scotland’s economy. It has imposed billions of pounds of service cuts and tax rises that will hit working Scots in the pocket and do very little, if anything, to deliver on the promise that the people of the United Kingdom were offered as a prospectus in the run-up to the election.
Torcuil Crichton (Na h-Eileanan an Iar) (Lab)
Would the hon. Gentleman describe £50 million for Argyll and the Isles and £20 million for the Western Isles as a “disaster”?
Dave Doogan
I hope that that money will be spent and make a great difference, but it will not compensate the Western Isles and the Northern Isles one bit for the money that they have lost as a consequence of Brexit. The hon. Member for Livingston (Gregor Poynton) and many of his colleagues herald this as the largest Budget settlement for the Scottish Government, as though Budget settlements go up and down. But they continually go up: every latest Budget settlement is the biggest Budget settlement since the last one.
As various Bills have passed through the Chamber, I have not run out of opportunities to point out to the Government how the basics of fiscal policy and economics work, and here we are again. All power to the communities of the hon. Member for Na h-Eileanan an Iar (Torcuil Crichton). I hope they get great benefit from that money but it does not fully compensate them for what they have lost, and no mistake.
The tax rise of £40 billion represents the biggest since Norman Lamont in 1993. Do not forget that when this Government came in, they inherited the highest tax burden in living memory, or certainly since the end of the second world war at least—
Dave Doogan
Yes, the highest—so it is not as if there was some kind of low-taxation holiday spree and the Labour Government came in and put taxes up to compensate for it. Taxes were already the highest that anybody can remember and now they have gone up again by the highest amount in 32 years. It is absolutely eye-watering. The Chancellor’s refusal to step back from cutting the winter fuel payment from around 900,000 pensioners is absolutely—[Interruption.] They are chuntering that the winter fuel payment is devolved.
Dr Scott Arthur (Edinburgh South West) (Lab)
Will the hon. Gentleman give way?
Dave Doogan
No.
Let us get it on the record that the fuel payment did not use to be devolved and that, at the same time as it was devolved, they went and cut the budget. That is the Labour Government at a UK level for you. So yes, I know it is devolved.
Dave Doogan
No. If the hon. Gentleman can get one of his colleagues to intervene, I will give way to them.
The Government’s decision to raise national insurance was like them showing that they do not know how the real economy works without showing that they do not know how the real economy works. It is a punitive lowering of the floor and increasing of the rate to try to wring out of employers the money required to recover the economy. It is a drag on employment, investment and wage rises. It is absolutely unforgiveable and totally counter to what the Labour party stated, ahead of the election, was its aim: to create a Budget for growth. There will be absolutely no growth as a consequence of that autumn statement. The Government think they will raise over £20 billion but, by the Treasury’s own measure, that figure is down to around £10 billion after they have made all the compensations. It is a massive swage of pain for very little gain in investment.
In moving the motion, the hon. Member for Livingston said that we in the SNP are keen to spend the extra money we will get but not to say how we would raise it. Actually, I will tell him how we would raise it, and our way would be much more cogent than what the Labour Government in Westminster have said they will do. Over and above that, in a Scotland-specific context the hike in duty on Scotch whisky was, in the words of the industry itself, “an indefensible tax grab”. Yet somehow we are expected to believe that everything will be okay because Anas Sarwar is going to speak to the Chancellor about it. The Chancellor will presumably then do what the UK Government always do when Labour in Scotland ask them to do something: absolutely nothing, if not the exact opposite.
The hon. Member for Livingston also talked about energy. He should go up to the north-east of Scotland to talk about energy: we are six months into this Government and there is no evidence whatever of GB Energy making any impact in Scotland. The last time I checked, it had one employee and was based in Manchester. The hon. Member also talked about the investment that would be realised. Somehow, the Acorn project in Scotland —the most deliverable carbon capture, usage and storage project across GB—is still not being funded by the Labour Government, despite their funding a further two CCUS projects in England, in addition to the two already there. Sadly, it is England 4, Scotland 0—it is like a football match.
Tracy Gilbert (Edinburgh North and Leith) (Lab)
The point about green jobs and giving consent at Berwick Bank was made earlier. I ask the hon. Gentleman: when will that happen, to enable investment to come forward? That is another example of things being held back.
Dave Doogan
Like the hon. Lady, I am very hopeful that we will see Berwick Bank approved and into the construction phase as quickly as possible, to cement Scotland’s enviable position as the renewable powerhouse of Europe. She shares that ambition with me, but what we are talking about is due process. It ill behoves elected Members of any stripe or any Parliament to meddle in the statutory process of a consenting major development; that will unwind in the way it unwinds, but I very much hope it is positive and expedient.
I turn to the Women Against State Pension Inequality—the WASPI women. They will absolutely have been left wondering what they have done to deserve such a catastrophic betrayal by the Labour party of their very modest and reasonable ambitions. During the debate on the autumn statement, I said that it was fantastic news that the Government, to be fair, had made sure that the money was there for the infected blood scandal and that the postmasters were properly compensated. Neither of those two scandals was of the UK Government’s making—well, not deliberately of their making; certainly not the infected blood scandal—but the WASPI women’s situation was. We now know the Government have turned their back on those people in the most reprehensible way possible.
The Chancellor promised a growth Budget and the hon. Member for Livingston says it is a growth Budget, but sadly it will
“leave GDP largely unchanged in five years”.
The inflation forecast will compound that. Inflation is set to rise to 2.6% and interest rates by 0.25% just; mortgage rates, after a brief period of respite, are on course to rise again. For years, people up and down these islands, especially in Scotland, have been hammered by the cost of living crisis. They, alongside small businesses, will be looking at this hatchet job by the Labour party and wondering what on earth will be coming next. The Institute for Fiscal Studies, no less, has pointed out that somebody will pay for these higher taxes; that somebody will be the ordinary working person. The Office for Budget Responsibility estimates that there is only a 54% chance that the Labour Government will meet their own fiscal rules through this Budget, raising the question of why the Chancellor thinks this amount of economic pain is worth such a low level of fiscal gain.
What about investors in the agricultural sector? Scotland’s agriculture is a very much larger part of its economy than overall UK agriculture is of the UK economy, but I am sure the Chancellor never bothered to speak to anybody in Scotland about her raid on farms through her farmers’ death tax. Labour could have done something progressive to stop outside investment and farmers disrupting that market, but they did not and they threatened the very existence of Scottish agriculture.
What would the SNP have done? We would certainly not have put this colossal fiscal drag on the economy of Scotland. We would have made sure that what we did was progressive and proportionate and that it would increase economic growth. I am sure Labour Members are not very supportive of an income tax in Scotland—
Torcuil Crichton
Can I ask the hon. Member which taxes the SNP would raise?
Valerie Vaz (in the Chair)
Order. I remind the hon. Member for Angus and Perthshire Glens that he has spoken for 10 minutes already. If every other hon. Member takes that amount of time, we will not be able to hear from everybody.
Dave Doogan
That is fine, Ms Vaz; I am just closing now. I do not think Members will be speaking for 10 minutes, but that is not my job.
On the progressive income tax regime implemented by the SNP in Scotland, I should say that Labour criticised us when we had the powers and did not use them, and criticised us when we had the powers and did use them. If the UK Government had mirrored our fiscal policy on income tax, they would have raised about £16.5 billion across the United Kingdom. That would not have been reduced to £10 billion because of compensations that they would have had to make, because there would not have been a raise on employer’s national insurance; they would not have had to compensate anybody. They do not want to talk about Brexit, but I do, because it cost the UK £30 billion a year and Scotland £10 billion a year, which would otherwise have been a great increase in the economic output of Scotland and the rest of the UK.
My final point is that the UK Government could scrap nuclear weapons. In four years, the estimated budget has gone up from £44 billion to £100 billion over a 10-year period. An awful lot of investment could be made in Scottish communities with that money, which would boost Scotland even more. We already enjoy the highest number of GPs, nurses, midwives and teachers per head in Scotland; nowhere else in the United Kingdom can touch our level of provision. The Labour party are just going to have to suck that up.
Valerie Vaz (in the Chair)
The hon. Member obviously has the title of Mr Scotland. I am afraid I will have to impose a very informal time limit of around four minutes so that everyone is able to get in.
John Grady (Glasgow East) (Lab)
It is a pleasure to serve under your chairship, Ms Vaz. I thank my hon. Friend the Member for Livingston (Gregor Poynton) for securing this debate, and for his excellent survey of the considerable benefits of the Budget for Scotland.
On economic forecasts, I am a somewhat boring Member of Parliament—I like to read the Financial Times. It wrote a leader a few days ago that was, in some parts, somewhat critical. However, the article pointed out that
“Britain’s economic outlook in fact looks quite robust compared to other advanced economies. According to the Financial Times’ annual poll, economists reckon that the UK will outgrow France and Germany this year…Labour’s strong parliamentary majority is another positive for investors as political uncertainty ramps up elsewhere.”
I could go on. I simply point out that this Government are pro-growth and pro-industry; people understand that and economists understand that.
The Budget delivered by my right hon. Friend the Chancellor delivers on our commitments to the electorate. It adds VAT to private school fees, providing more funds to state schools, including in Glasgow; it tackles poverty by increasing the national living wage, giving thousands of my constituents a pay rise; it provides pensioners with over £400 this year due to our commitment to the triple lock; and it reduces the level of deductions that can be made for universal credit payments—a boost to struggling families in Glasgow.
If one were to listen to the SNP, one might think that the Budget was terrible news for Scotland and an absolute disaster. In fact, it delivers the largest settlement ever for a Scottish Government, with £4.9 billion of additional funding over the next two years—a UK Labour Government and 37 Scottish Labour MPs delivering for Scotland. That significant boost to Scotland’s public finances is critical, with nearly one in six Scots on an NHS waiting list. As we heard just before Christmas, there are many people who have been waiting for more than two years for NHS treatment in Scotland—many more, proportionally, than in England.
One in three Scots children is regularly absent from school, and there are declining police officer numbers on the street at a time when people are petrified about crime. Scotland’s public services are in utter crisis after almost 18 years of SNP misrule. This Government have provided the SNP Government with the money. They have no excuses; they must use the funding wisely to clear up their mess.
SNP and Tory colleagues have repeatedly criticised the Government’s Budget, but failed to offer a credible alternative. Time and again, they say we should spend more money but fail to explain where the funding should come from. That is not credible. One hears about “magic money tree” economics—here we have a whole forest of magic money trees. Yes, we have made difficult decisions in our Budget, but government is about confronting difficult decisions to manage public finances carefully. Independent experts are clear that the SNP has failed to manage the Scottish public finances. There have been three years of in-year emergency budget cuts due to their mismanagement and £5 billion wasted on failed SNP pet projects, while, for example, ferries do not sail and the islands suffer from appalling connectivity.
John Grady
No, I will not. Time is marching on, and many people wish to speak.
The SNP cannot be trusted with public money—remember that this is the public’s money. People in Glasgow East face much higher income tax rates than their counterparts in England because of the SNP Government’s mistakes. As my friend, the Scottish Labour leader Anas Sarwar, set out yesterday, after nearly two decades of SNP failure in government, Scotland needs “a new direction”. It needs a new Government, with
“new hope, new thinking, new solutions”,
not more of the same divisive politics of the last two decades.
On 4 July, the people of Glasgow made a choice: that our great city, in its 850th year, shall be represented by a Labour Government. That Labour Government have delivered for Scotland by providing a record funding settlement. Scotland chose a Labour Government, electing 37 Labour MPs. This Budget, with its record increase in funding for Scotland, demonstrates this Labour Government’s absolute commitment to Scotland.
Harriet Cross (Gordon and Buchan) (Con)
I congratulate the hon. Member for Livingston (Gregor Poynton) on securing this debate, although I find it odd that Scottish MPs have been celebrating the Budget, as if it was the best thing ever to come to Scotland, given that it is nothing short of disastrous for so many of the key sectors that underpin Scotland’s economy, communities and livelihoods.
The Chancellor spoke, and still does, about protecting working people—and, indeed, about growing the economy in order to help working people—yet her decision to increase employers’ national insurance contributions does exactly the opposite. This £25 billion tax grab from businesses impacts on their resilience, growth, investments, hiring decisions and longevity. The scale of this tax rise and the betrayal by Labour, who promised not to raise taxes on working people, including national insurance, is completely unprecedented.
For the avoidance of any doubt, and because I know that Labour seems to struggle with this, business owners are working people, and they employ working people—they are working people who contract working people and supply working people, who then can work elsewhere. This NICs rise is a tax on working people across Scotland and the UK, and there is no credible way that that can be denied. It is also an up-front tax and a tax for having employees. Businesses pay it just for having employees on the books, before they even open their doors. Take weeks like this in Scotland, including in my Gordon and Buchan constituency, where many businesses have not opened because of snow and ice; the bill for this tax is still racking up, despite them not being able to trade.
Of course, the effects of NICs are felt more widely, not just by businesses. Charities, GPs, pharmacies and local authorities are all also impacted. I have met with my local medical practice in Inverurie, and its NICs bill is going up by £75,000. It cannot pass on that cost, and if it reduced services, its funding would be reduced. What do the Labour MPs who are celebrating the Budget suggest that that practice should do? As I have mentioned, Aberdeenshire council now needs to find £13 million to cover the NICs rises, and that is on top of the £40 million black hole it already faced due to north-east councils being so poorly funded by the Scottish Government.
Moving on to other matters, the changes to business property relief and agricultural property relief are cynical, cruel, misguided and absolutely damaging to the key sectors of our economy. Family businesses up and down the country, including in Scotland, are the backbone of our economy. These changes will decimate family businesses, who have been nurturing for generations, who are the centre of their communities and who employ over 14 million people nationwide. The changes to APR, which I have spoken about a lot, demonstrate the Government’s complete disconnect from rural farming and ways of life. We know that the Treasury figures are incomplete. They do not consider farms where only BPR had been claimed. Labour seems to think that all farmers are married, that both spouses will be able to pass on the farm at the same time and that, effectively, it is okay to force farmers into early retirement—for them to have to leave their family home or pay full market rent to stay at the property where they have lived their entire lives.
The Treasury is hiding behind the claim that only 2,000 estates will be affected, but the Country Land and Business Association, the National Farmers Union and the National Farmers Union of Scotland say that the number of farms affected will be more like 70,000. These figures need to be considered. The Chancellor, as we know, is literally making farmers decide between selling their farm, their land, their buildings or their machinery to raise the funds. This will leave farms commercially unavailable or severely damaged, and we are talking about farms in our constituencies across Scotland, including many of those of the Labour Members here.
We have heard others talking about whisky, so I will touch on that just briefly. The Prime Minister stood in a whisky distillery in Scotland and promised to back the Scotch whisky industry to the hilt, but he failed to mention that he was going to increase tax by 3.6%, bringing the tax on a bottle of whisky to over £12 for the first time.
Dr Arthur
The hon. Lady is making heartfelt points, but we are yet again hearing a long list of our money-raising initiatives that the Conservatives opposed while being cheered on by their SNP colleagues. I would be interested to know how the Conservatives would have raised the money needed to get public services in Scotland back on track. An extra £5 billion is going to the Scottish Government to fund services such as the NHS in my constituency and in the hon. Lady’s constituency. Where would her party have found that money?
Harriet Cross
As I said, the Government can give with one hand and take with the other, which is what is happening with NICs; they are taking that money out of councils, so the increase is completely irrelevant. The removal of the ringfence from some budgets has meant that there has been no real-terms increase in the rural affairs budget in Scotland, and that has impacted our farmers—it goes round in circles.
On oil and gas, the changes to the energy profits levy and the removal of the investment allowances in the Budget had an instant impact. Apache announced very soon afterwards that it would pull out of the North sea, citing the onerous impact of the EPL. The Aberdeen and Grampian chamber of commerce warned that 100,000 jobs are at risk, and Offshore Energies UK said that 35,000 jobs tied to specific projects are at risk. Those changes in the Budget have real-life consequences across Scotland, but particularly in Gordon and Buchan, Aberdeenshire, Aberdeen and north-east Scotland.
The Budget shows the Labour Government’s fundamental misunderstanding and undermining of Scotland’s economy and communities. From family farms and businesses to distilleries, our energy sector and the high street, the Government have chosen to burden, rather than support, businesses across Scotland.
Valerie Vaz (in the Chair)
We are going to have to go down to an informal three-minute limit to get everyone in.
Torcuil Crichton (Na h-Eileanan an Iar) (Lab)
It is a pleasure to serve under your chairmanship, Ms Vaz. I pay tribute to my hon. Friend the Member for Livingston (Gregor Poynton) for securing this important debate. I join him in welcoming this record settlement of more than £4 billion for the Scottish Government, but I would not want Members to go away with the impression that the SNP Government are somehow benignly mismanaging the economy, carelessly not controlling the NHS or accidentally running down educational standards in Scotland. They are involved in nothing less than the wilful destruction of the pillars of public life and public services in Scotland, because they are neglecting to make difficult decisions. They are putting off the reckoning that there must be in education; we must leave educationalists to educate and teachers to teach. They are also wilfully neglecting transport in the Western Isles and the west coast, and the health needs of constituents like mine.
My hon. Friend the Member for Livingston said that one in six Scots are on waiting lists. My constituents in the Western Isles are not on waiting lists; they are waiting for the sound of a helicopter to take them to hospital, because the NHS does not properly function in the Western Isles thanks to the Scottish Government’s neglect and the lack of resources given to it. In the Western Isles, people do not take an ambulance or a taxi to hospital; they take a bus to an airport, to take a small flight to another airport, to take a flight to a mainland airport, to take a taxi to hospital to get chemotherapy. That is the state of the NHS in Scotland under the SNP.
Torcuil Crichton
I will give way. I would love to hear the hon. Gentleman’s excuses.
Dave Doogan
The hon. Gentleman mentions the litany of failures, as he sees them, in Scotland’s NHS. How then does he explain that spending per head is greater than it is the rest of the UK, that the number of doctors per 100,000 people is higher than it is the rest of the UK, that the number of nurses per 100,000—
Valerie Vaz (in the Chair)
Order. You have had 10 minutes, Mr Doogan. I am really sorry, but this is unfair to other Members.
Torcuil Crichton
I understand the hon. Gentleman’s passionate defence of his own position, but the truth is that, despite higher spending per head in Scotland, that money is inefficiently used on a massive management structure—boards upon boards and quangos upon quangos—that does not put patients first, as evidenced in the Western Isles.
There is no better evidence of these issues than the transport decisions made over my constituents. We have three companies—a Bermuda triangle—running ferry services: CalMac, Caledonian Maritime Assets Ltd and Transport Scotland, with hardly an island representative.
Valerie Vaz (in the Chair)
Order. I must ask you to address the Chair, Mr Crichton.
Torcuil Crichton
I am sorry, Ms Vaz.
On ferries, we welcome the very late arrival of the Glen Sannox and soon the Glen Rosa. A minor earthquake welcomed the Glen Sannox through the Sound of Mull as she made her test run. We are glad they are there, but that is only one ferry crisis; there is also the inter-island ferry crisis. The two ferries that connect and hold our Western Isles chain together are limping on, but under the SNP’s replacement scheme they will not be replaced for another decade. Those ferries are meant to have four engines but are running on three. Our road between the isles has also been neglected and run down by the SNP.
I know that time is short, so I will not detain the House much longer. I have mentioned the neglect of rural areas. We see that in rural housing, where we are facing a depopulation crisis and where, from a budget of £25 million for rural housing, only 17 homes have been built in rural Scotland. All this happens because the Scottish Government have a bigger budget. We have no transparency on where that budget is going or how the money is spent. The SNP Government have one year to turn that around. They had better shape up or ship out.
Jamie Stone (Caithness, Sutherland and Easter Ross) (LD)
It is a pleasure to serve under your chairmanship, Ms Vaz—and I mean that most genuinely. One of the things Members should never do in this place is bore the House, but I am afraid that I am about to do so, because I am going to sound like a cracked record.
How many times have I mentioned the ongoing scandal of pregnant mothers having to travel a 200-mile round trip from Caithness to Inverness to give birth? In weather like the stuff we are having right now in the north of Scotland, you have to be joking. The A9 was blocked at Helmsdale a view days ago, and thank God no pregnant mum tried to make the journey down to Inverness. I have gone on again and again to the Scottish Government about having a safety audit done on this perilous policy. We had a consultant-led maternity service based in Wick in Caithness.
Torcuil Crichton
I take what the hon. Member says about pregnant mothers having to travel long distances. In my own constituency, pregnant mothers have to travel two weeks before their baby is due to another island where they are given an overnight allowance of some £50 or £60 in a tourism economy where beds cost £120—so they are having to pay out of their own pocket for their pregnancy.
Jamie Stone
It is a nonsense. Constituents like the hon. Gentleman’s and mine are losing out and have lost out for years. We had a consultant-led maternity service in Caithness until, hey presto, this SNP Government took over; very shortly after, it was downgraded and got rid of—as simple as that. I and others have written to John Swinney inviting him to come north to Wick to get in the back of an ambulance in winter and make the journey for himself to see what it is like. I do not believe we have had an answer, and I expect a dusty one when it comes. It is a scandal and a disgrace, and it is on the watch of the SNP Government.
Right now, we have one psychiatrist in the north of Scotland—just one—and we have a huge problem with the mental health of young people. This morning I rang a mother from Caithness, Kirsteen Campbell, who thinks it will be two or three years before her child can be seen by a professional to sort out their problem. During the election, I spoke to a mother in Evanton in Easter Ross, who told me how her child—who I will not name for obvious reasons—had not been to school for a number of years because the school could not deal with the issues that this poor, wretched child had. It is a scandal.
In the short time available, I have given just two examples of failures. Turning to the subject of debate, I sincerely hope and pray that the Scottish Government will use this extra money to address these issues finally, before it is too late and something terrible happens on the youth mental health front or a mother or child loses their life. We had an issue where a mother was pregnant with twins, but one twin was born in Golspie and the other had to be born in Inverness. Imagine how awful that is for a family—it is a shocker.
I close with this: the two issues I have outlined are issues that really, really matter to ordinary people. We can talk about this or that in politics, but these are the big, chunky issues on the doorsteps. People are not stupid out there. I hear my good friends in the SNP sitting to my left, and they are good personal friends, but something happened in July, when the hon. Member for Na h-Eileanan an Iar (Torcuil Crichton) was returned with the bump that he was and when my majority went up from 204 to just 11 votes shy of 10,500. That, I think, is the Scottish people telling us something, and anyone who does not listen to that is simply whistling in the hurricane.
Martin Rhodes (Glasgow North) (Lab)
It is a pleasure to serve under your chairship, Ms Vaz.
The Budget of autumn 2024 marked a significant change—a break from the recent past. For too many years, Scotland and the rest of the UK have suffered from an era of austerity, bouts of ideologically charged fiscal and economic illiteracy, and a failure to invest in the present to deliver for the future. The UK Budget heralded a new era of growth and investment for Scotland. It keeps the promises to Scotland made at the general election: ending the era of austerity, providing billions for public services and prioritising economic growth. As has been highlighted, the Budget delivered the largest funding settlement for Scotland in the history of devolution. In this Budget, we get an end to the flawed, ideologically driven years of austerity—replaced with investment, sound public finance and redistribution. The Budget delivered a pay rise for 200,000 of the lowest paid in Scotland through increases in the national living wage.
A key test of any Budget is how it balances the cost of expenditure with the raising of revenue to cover that expenditure. The significant test is who gains benefits and who covers costs, and how they are balanced. Inevitably, in most Budgets, costs and benefits are spread, but what is key is how the distribution is stacked up. This Budget shows a very clear pattern of redistribution: those with the most bear the greatest costs, and those with the least gain the greatest benefits.
The Budget, together with the Government’s commitment in the new deal for working people and the Employment Rights Bill, indicates a significant and welcome change in direction at the UK level, with direct benefits for Scotland running through it, including investment for economic growth, resources for our public services, an end to austerity and a commitment to redistribution. The Chancellor’s approach—this break from the recent past—needs to be built upon by the Scottish Government; sadly, their recent budget proposals fail to show the leadership required. Despite the record level of funding in the UK Budget for the Scottish Government, the SNP Government have failed to use the opportunity to deliver better outcomes for the people of Scotland in their budget proposals.
I thank my hon. Friend the Member for Livingston (Gregor Poynton) for securing the debate. It is important to have such an opportunity to reflect on the scale and ambition in the UK Budget, turning the page on the recent years of economic ineptitude and missed opportunities and, in their place, securing investment for economic growth, public services and the redistribution of resources. It is a Budget for Scotland and for the rest of the UK.
Valerie Vaz (in the Chair)
I call Seamus Logan. Oh, do you not want to speak?
Seamus Logan (Aberdeenshire North and Moray East) (SNP)
I was not going to speak, but seeing as you have asked me to, Ms Vaz, I will speak briefly. I am grateful to serve under your chairmanship.
I thank the hon. Member for Livingston (Gregor Poynton) for securing this important debate. I have only one point to make, because we are short of time. Labour Members continually mention to us the ferries—I have heard the ferries mentioned more times than I heard Slade played over Christmas, and that was quite a lot—but they never mention High Speed 2. The people of Scotland are paying for that. They are also paying for Trident and for Hinkley Point.
Seamus Logan
No, I am not giving away—in retaliation.
Hinkley Point reactor 1 has now been delayed until 2029 or maybe 2031, we have no date for reactor 2, and as for reactor 3—
Torcuil Crichton
I hope the hon. Member will forgive me for not giving way to him when I was mid-flow during my own speech. We are waiting until 2031 or 2032 for our ferries. We need ferries this winter, not next decade.
Seamus Logan
The point I am trying to make is that Labour Members continually refer to fiscal mismanagement, when in fact I have described examples of fiscal mismanagement that the people of Scotland are paying for. I will leave it there, Ms Vaz; thank you very much for inviting me to speak.
Johanna Baxter (Paisley and Renfrewshire South) (Lab)
It is a pleasure to serve under your chairmanship, Ms Vaz. I thank my hon. Friend the Member for Livingston (Gregor Poynton) for securing the debate.
This Labour Government have committed £47.7 billion in funding for Scotland for 2025-26—the largest Budget settlement in the history of devolution. That includes £3.4 billion allocated through the Barnett formula, supporting Scotland’s public services to get back on their feet. The settlement prioritises investment in key public services, including significant funding for our NHS. That is an additional £789 million in health-related consequentials for 2024-25 and £1.72 billion for Scotland’s NHS in 2025-26. Despite that unprecedented financial support, Scotland’s NHS remains in crisis. One in six Scots now sits on an NHS waiting list.
Social care remains a significant area of concern under the SNP’s leadership. Whereas our UK Government have announced plans for an independent commission on social care and have put in place an interim package of support, the SNP has had to abandon its National Care Service (Scotland) Bill, wasting millions of pounds of taxpayers’ money while 9,000 people in Scotland wait for social care assessments and support.
My constituents in Paisley and Renfrewshire South would no doubt question why, given the level of financial support the Scottish Government have, the local SNP-controlled Renfrewshire council has just made the disgraceful decision to approve £19.1 million of cuts to health and social care provision across my constituency. That decision will directly affect the most vulnerable people in the communities in my area. It comes on the back of cuts already made with the closure of the Montrose care home and cuts to vital services such as the Falcon day services, which support people with disabilities. They are further evidence of the SNP’s lack of a coherent plan to fix social care in Scotland.
We are running short of time, so to enable others to get in I will leave it here. The Labour Government’s investment in Scotland marks a new chapter for Scotland—one that prioritises investment in public services that work for Scottish people and fixes the foundations of our country. The SNP has no excuses now and nowhere to hide. It should use the money it has been given to support the most vulnerable people in our communities.
Kenneth Stevenson (Airdrie and Shotts) (Lab)
It is an honour to serve under your chairship, Ms Vaz. I thank my hon. Friend the Member for Livingston (Gregor Poynton) for securing this debate.
It is right that we recognise the positive impact the Budget will have on Scotland. For too long residents in my Airdrie and Shotts constituency have been let down by Governments who have treated working people as an afterthought. They have been let down by incompetence from Conservative Governments here in Westminster and SNP Governments in Holyrood. They have felt the impacts in their pockets and can see the impacts in their depleted public services. However, this Budget puts us on a positive journey towards changing that.
The Budget delivers the largest settlement for Scotland since devolution. It will allow potential to be unlocked and public services to be invested in. It is a Budget that has ended the era of Tory austerity, puts working people back to the forefront and prioritises economic growth. It is a transformative Budget that has been a long time coming, and it is little surprise that it is a Labour Government delivering it.
I thought the Scottish Government would be pleased with the settlement they have received from the UK Labour Government. It has given them the opportunity to right the wrongs of their almost 20 years of mismanagement and incompetence and deliver a budget that works for Scotland’s working people.
Jamie Stone
Does the hon. Gentleman, who is making an excellent contribution, agree that the reason why the SNP Government did not welcome the announcement was that the Labour Government successfully shot the fox?
Kenneth Stevenson
I entirely agree, and we could go on. We could go on about the promised 800 GPs that are missing. We could go on about ferries. We could go on about everything. We could go on about selling off the seabed for well under what was required and not having any manufacturing input in Scotland for wind turbines or solar or any advanced manufacturing.
Pete Wishart (Perth and Kinross-shire) (SNP)
Will the hon. Member give way?
Kenneth Stevenson
No, I will not give way.
Only yesterday we heard from the First Minister of Scotland, who ironically warned that not supporting his budget would play into the hands of populists. All the while he leads a party that has spent almost two decades pitting working Scots against one another in the interests of the Scottish National party, rather than the interests of Scotland. People can see through the Scottish Government, just as they saw through the Conservative UK Government. Their attempts to desensitise the electorate to the horror stories that we hear on a daily basis will fall flat, because this Labour Budget ensures that they have the money and the power, and there cannot be any more excuses. They have the votes. The First Minister should end the shadow boxing and focus on using the settlement provided by the Labour Government to deliver for Scotland.
This Labour Budget is promising for the people of Airdrie and Shotts and I look forward to working with the Scotland Office and other Departments to ensure that the impacts are felt. The Airdrie and Shotts constituency was at the heart of Scotland’s old industrial heartlands and it has all the skills and ability to be at the heart of a modern industrial strategy in this new era. I am pleased that this Labour Budget will unlock the potential of my constituency and its people to do so.
Graeme Downie (Dunfermline and Dollar) (Lab)
It is a pleasure to serve under your chairmanship, Ms Vaz. For years the SNP Scottish Government were able to blame an incompetent Tory Government for their own failures. Tory austerity had huge impacts for Scotland. The Tories crashed the economy, took money out of vital reserved areas such as defence, oversaw the systematic destruction of communities and failed to properly invest in our country. But the SNP has also failed in its 17 years in power.
The Scottish Fiscal Commission, Audit Scotland, the Fraser of Allander Institute and others have all criticised the SNP’s failure to respond to the pressures on Scotland’s public finances. Just before I came to this debate, I read that the Scottish Fiscal Commission has warned the Scottish Government that their back-of-a-fag-packet commitments could mean a cut of 15% to other areas of public spending. Scottish people deserve better.
Graeme Downie
I choose not to give way because I am conscious of the time and the others who still wish to speak.
The SNP has fundamentally failed to use the powers of the Scottish Government to grow Scotland’s economy, and has instead presided over low growth and low productivity—areas that this UK Labour Government are now fixing, from which the Scottish Government should be learning lessons. Time and again, they have chosen political division over real progress. The litany of failure is embarrassing and they do not like hearing about it, but here it comes again: millions of pounds of public money wasted on ferries; failed and expensive attempts to fix health and social care; reductions in police numbers; cuts to fire and rescue; longer NHS waiting lists; and higher taxes on working Scots than on people in any other part of the UK. They even robbed Scotland’s offshore wind resources to paper over 17 years of failure. All that lies firmly at the door of the SNP Scottish Government.
Most worryingly, they have failed in fully devolved areas, such as education and skills, to give young people the opportunities and support they need and deserve to fulfil their ambitions and meet their aspirations. The long-term impact of the pandemic on young people is often forgotten, with isolation leading to missed opportunities, lost life experiences and still unknown impacts on mental health. Yet the SNP are telling health boards not to even ask for additional funding, despite the increase in the budget.
SNP excuses must now be at an end. This Labour Government have ended austerity in the UK by delivering the largest Budget settlement in the history of devolution, with an extra £4.9 billion available to spend. It delivers a pay rise for 200,000 of the lowest-paid Scots and ends the injustice of the miners’ pension scheme, giving more moneys to miners in constituencies like mine, with money that will now boost the economies in those areas.
The question for the SNP is: what will they do now that they have run out of excuses? I would hope that they would use the power and funds they have to take action, like finally making good on a promise to build a new health centre in Kincardine that was promised more than 10 years ago in my constituency, or to invest properly in NHS dental services—it is an outrage that there are currently no dentists in my constituency taking on new NHS patients—or to properly fund our police to help to tackle the antisocial behaviour we have seen recently in Dunfermline city centre.
The 2024 UK Budget has delivered for the whole country, and this UK Labour Government are getting on with the job in health, education, transport and the funding of local services, all while the SNP whinge, complain and deflect. It is time for the SNP to take responsibility or get out of the way for a Scottish Labour Government that will get Scotland heading in the right direction once again.
Valerie Vaz (in the Chair)
I can get the last two speakers in if they take a minute each.
Tracy Gilbert (Edinburgh North and Leith) (Lab)
It is a pleasure to serve under your chairship, Ms Vaz. I congratulate my hon. Friend the Member for Livingston (Gregor Poynton) on securing this important debate. Seeing as we are so short of time, I will try to cut my speech down to a minute.
An area of the Budget I welcome is the announcement over the recess from the Ministry of Housing, Communities and Local Government of the allocation of £150 million to community projects across the UK, including £1.7 million to North Edinburgh Arts, part of the new MacMillan Hub in my Edinburgh North and Leith constituency. The new hub is the first of its kind in Scotland, co-locating a community-owned venue and third sector and council services for the benefit of local residents.
The MacMillan hub will provide an accessible and high-quality creative learning, enterprise and meeting space, alongside a social enterprise café, a community garden, a public library and a dedicated skills hub, as well as an early learning and childcare centre for 185 children. The investment will be transformative for Muirhouse and the constituency, and will be a joined-up approach of the sort that I hope to see more of for our communities.
Richard Baker (Glenrothes and Mid Fife) (Lab)
It is a pleasure to serve under your chairship, Ms Vaz. In my one minute, I will talk about a real opportunity for my constituents to boost our renewable sector through the investment that has been outlined in the Budget, and also through the crucial decision made by colleagues in Government—through the hard work of the Secretary of State for Scotland and the Secretary of State for Business and Trade—to secure the future of the Methil yard in my constituency, along with the future of the Arnish yard in the constituency of my hon. Friend the Member for Na h-Eileanan an Iar (Torcuil Crichton). Together, that will save over 350 jobs and skilled apprenticeships. What a fantastic opportunity we have.
I hope there will be collaboration between the Scottish and UK Governments to look at the future of both those yards. We have so much more potential in our energy sector than we are currently realising—particularly our renewable sector—and those yards have a crucial role to play. Their potential to grow the workforce and their economic impact are massive. Through the £125 million investment in GB Energy, based in Aberdeen, the opportunity is there to build for the future.
With almost £5.8 billion allocated in the national wealth fund, we should be working together to look for bids for how those yards can work in the future to ensure economic benefit and growth for Scotland. Those are the priorities that we should look to for the future, and they are being offered because of the actions taken by the Chancellor in this Budget.
Christine Jardine (Edinburgh West) (LD)
It is a pleasure to serve under you as Chair, Ms Vaz. I congratulate the hon. Member for Livingston (Gregor Poynton) on securing this debate on the impact of the UK Budget on Scotland.
I welcome the increase in investment for the NHS and the vital cash boost for Scotland, but with all due respect to the hon. Member for Angus and Perthshire Glens (Dave Doogan), it cannot be underestimated how much we needed it, given the mess and chaos that the SNP Government have created in our public services over the past 17 years. Indeed, they have also created chaos in our ferries, as we heard today that the new Glen Sannox is being removed from service again. I agree with the comments from many Members, particularly my hon. Friend the Member for Caithness, Sutherland and Easter Ross (Jamie Stone), about the problems that we are facing.
While I welcome the money in the Budget, we have heard repeatedly from the Chancellor and other Ministers —no doubt we will hear it again today—that the Government have had to take tough decisions since coming into office. Many of my constituents in Edinburgh West are beginning to say, “Yes, every Government have to make tough decisions, but did this one have to make these decisions?”
Before Christmas I spoke to a number of businesses in Edinburgh West, and many of them were concerned about the negative impact that increases in employer national insurance contributions will have on them. Some are worried that they will have to make cuts to staff; others are trying to avoid putting up prices and passing the tax hikes on to the public. All of them are trying to find ways of making it work, and all of them are struggling. Some 40% of Scots now believe that more small and medium-sized enterprises will close in their communities as a direct result of this Government’s decisions. More than half of Scots believe that prices will have to go up. After the worst cost of living crisis in a decade, that is not what any of them needed.
GPs and many social care providers are saying that they do not know how they are going to cope with the tax changes. Private contractors or operators, who will not be eligible for employment allowance, will have to take on those extra costs directly. Within days of the Budget, several GP practices contacted me and estimated that the changes will cost them more than £10,000 extra in the next year. After 17 years of mismanagement under the SNP and 14 years of the Conservatives, our GPs need support and investment, but everywhere we look in Scotland, the impact of this Budget is not positive.
Another tax change that will have direct consequences for my city of Edinburgh is the Government’s decision to impose VAT on private school fees. It is not just because I do not support taxing education or reducing the choice of parents that I do not agree with the proposal and see it as negative, but because it will have a real impact on both the state and independent school sectors in Edinburgh. Edinburgh has the highest proportion of independently educated children in Scotland, at between 20% and 30% every year.
According to the local Labour authority, 16 schools are expected to reach capacity before the end of this decade. If the predicted percentage of children dropping out of independent education into the state sector is true, the system will be stretched to breaking point. Sadly, introducing the change halfway through the school year is causing issues for many parents. I have already had representations from parents who cannot find places in local schools for the children they have taken out of the independent sector.
I would have liked to touch on other issues, including the impact on the whisky industry—I refer Members to my entry in the Register of Members’ Financial Interests—and the farming industry, which was touched on by the hon. Member for Gordon and Buchan (Harriet Cross). However, it is sufficient to say that Scotland, which is already under pressure from mismanagement by the SNP, is now facing a far-from-positive impact from the new Westminster Government in which it put its faith.
Andrew Bowie (West Aberdeenshire and Kincardine) (Con)
It is a genuine pleasure, again, to serve under your chairship, Ms Vaz. I congratulate the hon. Member for Livingston (Gregor Poynton) on bringing forward this debate, although, rather like the hon. Member for Angus and Perthshire Glens (Dave Doogan), I was a little surprised that it was a Labour MP bringing forward a debate on the impact of the Budget on Scotland.
As much as I would like to spend my time attacking the incompetence of the Scottish Government and their record, this is a debate on the UK Budget brought forward by the UK Government, so that is what I will focus on. I am grateful that the hon. Member for Livingston has given us the opportunity to express the worry and the concern felt across Scotland as a result of the frankly disastrous Budget that the Labour party unveiled at the end of October, which has already seen business confidence plummet, inflation tick up and hard-fought-for growth stall—quite a feat.
Members do not need to take it from me, though; they can take it from Scottish business organisations. The Scottish Hospitality Group called the Budget a
“blow to businesses across the country.”
The Scotch Whisky Association called it a “hammer blow” to the industry, Offshore Energies UK called it a “difficult day” for the oil and gas sector, and the National Farmers Union of Scotland said it will cause “huge difficulties” for family farms, all while the OBR forecasts lower growth for the UK as a whole. With the biggest ever tax increases in one Budget hitting Scotland—already the highest-taxed part of the UK—even harder, Labour’s tax-raising Budget is straight out of the SNP playbook, and sadly will hammer hard-working Scots.
Let us take some of the decisions in turn. There was the decision to raise employer national insurance contributions, which, by the way, was a flagrant breach of the manifesto commitment not to do so. NICs have been raised by £25 billion, lowering the point at which contributions start. This Labour Government are hammering the worst off, those in part-time work and those starting out by hampering their ability to get or hold a job. Labour’s jobs tax will cost nearly £900 for the average Scottish job.
Tracy Gilbert
Does the hon. Member agree that, actually, 200,000 Scots—some of the lowest-paid, poorest families in our communities—will benefit from the new deal for working people?
Andrew Bowie
There are businesses across Scotland that are now seeking to lay people off, not employ new staff. In Aberdeenshire in the north-east, energy companies are seeking to lay off staff as a direct result of decisions taken by this Government. In fact, the negative impact of the Budget on growth and investment in Scotland will actually have a detrimental effect on all people in the workplace. So no, I do not agree that any of the decisions taken in the Budget will be to the benefit of hard-working Scots. In fact, I believe directly the opposite. This jobs tax—the increase in national insurance contributions —is an attack on our working people, our small businesses and our economy by this economically illiterate, as proven so far, Labour Government.
For family businesses such as Walker’s Shortbread, William Grant, Tunnock’s or GAP Group, the situation is compounded by the changes to business property relief brought in by the Government. In GAP’s case, that will mean that a company that employs 2,100 people and that already pays more than £50 million in taxes annually will have an additional tax bill of between £50 million and £100 million, simply for wanting to move the business to the next generation. As Douglas Anderson of GAP said to The Times yesterday, this is
“a state penalty on family businesses.”
It is simply unfair.
Dave Doogan
Does the hon. Member agree that money talks? Despite how we might argue here in Parliament, money talks. Is he concerned that the yield on UK Government gilts over 30 years is now 5.22%, which is even higher than when Liz Truss tanked the economy?
Andrew Bowie
I read that a couple of seconds before I stood up to speak, and of course it is extremely worrying. The trajectory of the UK economy under this Labour Government should give us all cause for concern, which is why it is right that we are having this debate today. I am just surprised that it was secured by a Labour MP.
Torcuil Crichton
If the hon. Gentleman does not wish to blame the SNP Government for the economic mismanagement of Scotland, why does he provoke SNP Members with his choice of Union Jack socks?
Andrew Bowie
These socks were a Christmas present from my mother; I promised her that I would wear them at work and that is what I am doing today. They are very good socks, so I thank the hon. Gentleman for drawing the Chamber’s attention to them.
As I was saying, that was Labour’s workers tax—their state penalty on family businesses—and its first attack on business. Let us turn to its second attack on successful Scottish industries, specifically the Scotch whisky industry. The week after Burns night, which is in a couple of weeks’ time, tax on spirits such as whisky will rise, and will continue to rise by a percentage higher than the consumer prices index. The industry is already suffering from a decision to raise duty by 10% last year, which some of us protested about from within Government at the time, and which led to a reduction by £300 million in revenue for Treasury. The move by Labour increases the tax discrimination on spirits and undermines any claim that this Government can make about supporting brand Scotland. If this is how the Government treat Scotland’s national export, we really have some big questions to ask.
This Labour Government are taxing entrepreneurship and penalising success. However, they are not content with hammering small businesses, our workers and our most successful food and drink export. They are also intent on destroying one of our most successful industries, one which is integral to the economic success of north-east Scotland and on which so many thousands of jobs and indeed our energy security depend—our oil and gas sector.
The decision to extend and increase the energy profits levy, to remove most of the investment allowances and to ban all further exploration is driving away investment and leaving us far more reliant on foreign imports. The evidence is there. Apache has already said that it is pulling out of the North sea and there were others to follow. Labour’s changes to the windfall tax will cost up to 35,000 jobs and £13 billion in economic value, and all so that it could splurge on eye-watering public sector pay rises to buy off its union paymasters, who supported Labour into Government. But I have not finished yet.
Johanna Baxter
Does the hon. Gentleman agree that that is not buying off union paymasters but delivering a pay rise for hard-working Scots?
Andrew Bowie
The hon. Lady should tell that to the hard-working Scots who are being laid off in Aberdeen in north-east Scotland as a direct result of the decisions of this Labour Government, including their decision to extend the energy profits levy, ban new investment in the North sea and preclude new exploration. She should tell that to those hard-working Scots who are worried about what the decisions by this Government will mean for them and their families, and whether they will have a job in Aberdeen in north-east Scotland in the next few years. Those hard-working Scots look with terror at what this Government are bringing down the line.
I have not even turned to farming yet. I am incredibly proud to represent some of the best farms producing the best berries, beef, lamb and crops in Scotland. The vast majority of those farms are family-owned, but due to the changes in the agriculture and business property reliefs that I outlined when I described the situation facing family businesses, their future is incredibly uncertain. Many farmers have already come into my office and claimed that it is now simply too expensive and too difficult to countenance passing their farm on to the next generation. This Labour Government are overseeing the destruction of our family farms. Even worse than that, however, is that their naivety or their incompetence, or possibly a terrifying combination of both, has seen the Labour Government announce that the agricultural funding to Scotland will no longer be ringfenced, despite the specific and pointed ask of the NFUS during the election and in the run-up to the Budget.
The impact of Budget 2024 on Scotland is, in one word, disastrous. Our small and medium-sized businesses have been hammered by additional taxes; our family firms and family farms fear for their future; our whisky industry is punished yet again for its success; our oil and gas industry, and its workers, have been sacrificed on the altar of the eco-mania, or possibly the egomania, of the Secretary of State for Energy Security and Net Zero; our agricultural sector has been ignored; and our Union, frankly, has been undermined.
Growth is falling, confidence is collapsing, uncertainty is rising and people in business are worse off. That is the impact of Budget 2024 in Scotland. I wish my friends in the Labour party well in trying to sell this Budget to the people of Scotland, who seem mightily unimpressed with the Government’s performance thus far.
The Parliamentary Under-Secretary of State for Scotland (Kirsty McNeill)
It is a pleasure to serve under your chairmanship, Ms Vaz. I begin by congratulating my hon. Friend the Member for Livingston (Gregor Poynton) on securing this debate on the impact of the autumn Budget on Scotland, and on his very dogged advocacy on behalf of those in his constituency who need the East Calder medical centre.
The UK Government were handed a challenging inheritance: £22 billion of unfunded in-year spending pressures, debt at its highest level since the 1960s, an unrealistic forecast for departmental spending, and stagnating living standards. This Budget took difficult decisions to restore economic and fiscal stability so that this Labour Government can keep the promises we made to the Scottish people. We promised to put Scotland at the beating heart of this Government; we have. We promised to end austerity; we did. We promised we would invest in Scotland’s future; we are.
It is no surprise to me that we have heard the usual carping from Opposition parties. They simply cannot face facts, because the facts are that this was a great Budget for Scotland.
Kirsty McNeill
I will make some progress. The Budget ensured the largest real-terms Budget settlement for the Scottish Government in the whole history of devolution, with an additional £1.5 billion for the Scottish Government to spend this financial year and an additional £3.4 billion next year. It means that the Scottish Government are receiving more than 20% more per person than equivalent UK Government spending in the rest of the UK. It delivered the most for those with the least, because that is what Labour Governments do.
Kirsty McNeill
At the election, Scotland was offered a choice—the politics of protest or the politics of progress. It chose the latter, and the result is a Budget that protects working people in Scotland and delivers more money than ever before for Scottish public services. That is what change looks like. The hon. Member for Edinburgh West (Christine Jardine) asked whether these were the choices that needed to be made, and to that I say an unequivocal yes, because this Government are simply not prepared to write cheques that we cannot afford to cash.
The spectacular recklessness of the last Conservative Government is something for which we await an apology, but in the meantime, it falls as ever to Labour to do the work of repair and renewal. It is our task to make whole what has been broken, and to make the long-term decisions that will ensure Scottish families can get on and not just get by.
Kirsty McNeill
I will in just one minute. The Chancellor has made it clear that, while protecting working people with measures to reduce the cost of living, difficult decisions would be required. Unlike the hon. Member for West Aberdeenshire and Kincardine (Andrew Bowie), we are not prepared to shirk them.
Seamus Logan
The Minister speaks of broken promises and Labour keeping their promises, but what about the promise not to attack the whisky industry and the promise not to raise national insurance as a tax?
Kirsty McNeill
We have made responsible tax choices entirely in line with our manifesto. That is why the rates of employers’ national insurance will increase by just 1.2 percentage points. The smallest businesses will be protected as the employment allowance will increase from £5,000 to £10,500, allowing Scottish firms to employ four national living wage employees full time without paying any employer national insurance on their wages.
Kirsty McNeill
I will make some progress. This Budget asks businesses and the wealthiest to pay their share while making taxes fairer. Those are Labour choices and they are inspired by Labour values. As my hon. Friend the Member for Glasgow North (Martin Rhodes) has made clear, this is a progressive Budget that values redistribution.
Kirsty McNeill
I will make some progress. And just as our Budget choices reflect our values, the ways in which the Opposition parties choose to oppose them represent their values, whether that is their opposition to our end to the VAT tax break on private schools or opposing, as the hon. Member for Gordon and Buchan (Harriet Cross) does, our attempts to bring agricultural property relief into balance. As she will know, the latest figures from 2021 to 2022 show that 40% of the value of APR went to just 7% of claimants; that is neither sustainable nor fair, which is why I support the Labour Government’s changes.
Harriet Cross
That means, therefore, that 60% went to everyone else—that 60% of farms in this country rely on APR to pass their farms down to the next generation. They rely on BPR as well. This is the next generation of farmers who provide our food security and who employ people in local and rural areas. Does the Minister not think that that is a really important thing to maintain?
Kirsty McNeill
As the hon. Member will be aware, each year almost three quarters of estates eligible for APR in the UK are expected to be entirely unaffected by these fair and proportionate changes. Ours was a Budget, just as this is a Government, squarely for working people. The hon. Member for Angus and Perthshire Glens (Dave Doogan) complained of the tax burden. Unlike the SNP Scottish Government, which simply want to clobber teachers and nurses with ever higher taxes, we have delivered on our pledge not to increase national insurance or VAT on working people in Scotland. That means that they will not, thanks to this Budget, see higher taxes in their payslips.
Hundreds of thousands of workers in Scotland will benefit from an increase in the national living wage and a record increase to the national minimum wage. The Chancellor made the decision to protect working people in Scotland from being dragged into higher tax brackets by confirming that the freeze on national insurance contribution thresholds will be lifted from 2028-29 onwards, rising in line with inflation, so that people can keep more of their hard-earned wages.
We have begun the difficult work of restitching our fraying safety net. Thousands of Scottish households will be £420 a year better off on average, as a result of our change to the universal credit fair repayment rate. Around 1.7 million families in Scotland will see their working-age benefits uprated in line with inflation, a £150 gain on average, in 2025-26. Maintaining the triple lock means an increase in the state pension of £470 next year, on top of £900 this year, for 1 million Scottish pensioners.
Let me pay special tribute to the campaigners and fellow trade unionists who fought for changes to the mineworkers’ pension scheme. Thanks to their efforts and the decisions of this Labour Government, nearly 7,000 retired mineworkers in Scotland will get an extra £1,500 on average in their pension. Finally, that is justice for those who powered our country.
Kirsty McNeill
I will make some progress. The hon. Member for Caithness, Sutherland and Easter Ross (Jamie Stone) and my hon. Friend the Member for Na h-Eileanan an Iar (Torcuil Crichton) shared moving testimony about the impact of changes by the Scottish Government on rural communities. My hon. Friend the Member for Paisley and Renfrewshire South (Johanna Baxter) talked about the crisis in NHS and social care. The answer to all those challenges is the same: investment in our public services. That is exactly what this Budget is designed to do.
Kirsty McNeill
I will make some progress. I have been listening very intently to the speeches and chuntering from some hon. Members; I have not been taking any notes on economic credibility. The Fraser of Allander Institute, Audit Scotland and the Institute for Fiscal Studies have all confirmed that the challenges in Scotland’s public finances are a mess of the SNP’s making. As for the party that brought us Liz Truss, the verdict of the people of South West Norfolk tells us all we need to know.
I urge everyone instead to listen to my hon. Friends the Members for Dunfermline and Dollar (Graeme Downie), for Airdrie and Shotts (Kenneth Stevenson), for Glasgow East (John Grady), for Edinburgh North and Leith (Tracy Gilbert) and for Glenrothes and Mid Fife (Richard Baker) about how to get Scotland growing. Our objective is not simply to rescue our economy from the havoc wrought by the Conservatives, but to grow it. That is why we support Great British Energy, providing £125 million next year to set up the institution at its new home in Aberdeen. That is a huge boost to the granite city, inexplicably voted against by the right hon. Member for Aberdeen South (Stephen Flynn) and his fellow SNP MPs, all sent here to deliver for their constituents but who instead sought to sabotage investment that would benefit them.
I am also pleased that we have been able to confirm our commitment to invest nearly £1.4 billion into important local projects across Scotland over the next 10 years.
Kirsty McNeill
I will make some progress. We have also confirmed that all 12 regions of Scotland will be covered by a growth deal. Our investments include nearly £890 million of direct investment into freeports and investment zones, the Argyll and Bute growth deal and other important local projects across Scotland.
Kirsty McNeill
I will make some progress. Those are all the choices of a Government resolutely focused on the future. In conclusion, the Budget does exactly what Scottish Labour was elected to do. It secured billions for Scotland; the SNP voted against it.
Dave Doogan
On that point, will the Minister give way with only seven minutes to go?
Kirsty McNeill
I am going to make progress. The Budget secured billions for Scotland; the SNP voted against it. It delivered a pay rise for 200,000 of the lowest-paid Scots; the SNP voted against it. It ended Tory austerity; the SNP voted against it. The simple fact is that they are out of road, out of excuses and out of time. This Budget helps us invest in Scotland and rebuild Britain. I am proud to tell my constituents that I voted for it and I look forward to seeing all the ways that it will change Scotland for the better.
Gregor Poynton
This has been a valuable, if not always consensual, debate. I thank the hon. Members for Angus and Perthshire Glens (Dave Doogan), for Gordon and Buchan (Harriet Cross) and for Aberdeenshire North and Moray East (Seamus Logan). I did not agree with all or much of what they had to say, but I do believe their views are genuinely and passionately held. To the hon. Member for Caithness, Sutherland and Easter Ross (Jamie Stone): I for one will not tire of hearing him continue to raise the issues he raised until we have resolution to them, and I know he will do so.
My hon. Friend the Member for Glenrothes and Mid Fife (Richard Baker) is right to raise the opportunities we have in the energy sector that are supported with this Budget; my hon. Friend the Member for Edinburgh North and Leith (Tracy Gilbert) right to raise the new deal for working people; my hon. Friend the Member for Glasgow East (John Grady) right that business confidence is growing; my hon. Friend the Member for Na h-Eileanan an Iar (Torcuil Crichton) right that in his constituency it is an NHS unfortunately in name only due to mismanagement; my hon. Friend the Member for Glasgow North (Martin Rhodes) right to talk about the choices we have had to make in this Budget; my hon. Friend the Member for Paisley and Renfrewshire South (Johanna Baxter) right to talk about the social care problems we are seeing in Renfrewshire; my hon. Friend the Member for Airdrie and Shotts (Kenneth Stevenson) is a champion for manufacturing jobs; and my hon. Friend the Member for Dunfermline and Dollar (Graeme Downie) is an expert on the mineworkers’ pension scheme.
The Chancellor’s Budget provides the Scottish Government with the largest financial settlement in the history of devolution—an additional £1.5 billion to the Scottish Government to spend in this financial year and an additional £3.4 billion to spend in the next. Let us have no more buck-passing, blaming Westminster and ducking of tough decisions. This Budget provides the SNP Scottish Government with more than adequate resources to deliver real and meaningful change in our economy and our public services. Let there be no question about it: any ongoing failures are those of the Scottish Government. They must own them and take that responsibility. They have nowhere to hide. The ball is in their court. As the Under-Secretary of State for Scotland, my hon. Friend the Member for Midlothian (Kirsty McNeill), said, I was proud to vote for this Budget.
Question put and agreed to.
Resolved,
That this House has considered the fiscal impact of the Autumn Budget 2024 on Scotland.