Balancing the Public Finances

Kirsty Blackman Excerpts

Tuesday 11th July 2017 Westminster Hall

[Kirsty Blackman (Aberdeen North) (SNP)]

It is a pleasure to be in Westminster Hall with you in the Chair, Ms Ryan. I thank the right hon. Member for Forest of Dean (Mr Harper) for bringing this debate to the House. It is an important debate to have. It highlights the fact that a huge number of Conservative Members live on a different planet from the rest of us. In particular, the speech of the hon. Member for Redditch (Rachel Maclean) did not seem to have any link with reality as I and my constituents know it.

Conservative Members are putting out economic soundbites that could easily have been lifted from the Conservative party’s manifesto, but that is not the lived experience of real people. That is not what is happening or what the just-about-managings are facing. They do not feel like their wages have gone up; they do not feel like the reduction in tax credits is at all helpful. I get that the personal allowance has been raised; that is brilliant and I am pleased that it has happened. I also get that the minimum wage has been raised, but it is not to a level that people can live on. That is the problem. It is still a minimum wage and it is not applicable to younger people in the job market. They may have families and housing costs—the same costs that those of us who are over 25 have—yet they are not worth the same wage as others. I am frustrated by the debate because I cannot believe that Members can spill this nonsense.

When the Chancellor gave the spring Budget statement, he reckoned that inflation would be 2.4% in 2017. Actually, in the 12 months to May, it was sitting at 2.9%. The forecast by the Office for Budget Responsibility for earnings growth in 2017 was 2.6%. If inflation continues to grow at 2.9% and wages continue to grow at 2.6%, there will soon be a serious problem, particularly for households that are struggling with increasing levels of household debt. The Bank of England is concerned about the increase in household debt, which is at its highest since 2008. This is a real problem for families, especially when they will see their real wages eroded.

[Jeremy Quin]

Is the hon. Lady proposing higher Government spending, higher inflation and higher interest rates?

[Kirsty Blackman]

I was literally about to come to that. There are three ways for the Government to increase spending on public services: higher taxes, higher borrowing or higher growth. Those are not my words but those of the Chancellor, yet whenever an Opposition hon. Member suggests increasing public spending or simply not reducing it, Conservative Members say, “Oh, you will have to put up taxes.” As the Chancellor said, there are three ways to increase public spending.

Some of the things that Conservative Members said are a concern. My hon. Friend the Member for Glasgow East (David Linden) said that, according to the Resolution Foundation, 2011-21 will be the worst decade for pay growth for 210 years. That is quite some statistic.

It is interesting that the Government talk about how wonderfully they are doing for young people. The Institute for Fiscal Studies said that those born in the 1980s have by their early 30s accumulated half as much wealth as those who were born in the 1970s. The right hon. Member for Forest of Dean mentioned the IFS as a respected think-tank, and it won an award last night. If we are talking about mortgaging our future and concerns for the future, the lack of wealth accumulation compared with previous generations is a real problem, including for millennials. The way the Government are dealing with it is not working.

[Royston Smith (Southampton, Itchen) (Con)]

Will the hon. Lady give way?

[Kirsty Blackman]

Not just now; I am conscious of time.

The Government are increasing spending on infrastructure. A recent report from the Institute for Government said that

“weak processes are leading to the wrong projects and contested decisions, wasting both government time and taxpayer money.”

We agree that infrastructure spending is a good thing, but we believe that the processes in place and the Government’s choices are poor and could be much better directed to infrastructure projects that will increase economic growth and create, as the Chancellor said, better spending on public services by growing the economy rather than simply cutting things or increasing taxes.

Economy and Jobs

Kirsty Blackman Excerpts

Thursday 29th June 2017 Commons Chamber

[Mr Hammond]

The hon. Gentleman is wrong. Last year, the British economy was the second-fastest growing in the G7 after Germany. In the year before that, our economy was the second-fasting growing after the United States.

[Kirsty Blackman (Aberdeen North) (SNP)]

And this year it is at the bottom.

[Mr Hammond]

Well, we are only one quarter into this year. I do not want to get techy, but the first quarter data are always subject to the largest revision, so let us wait and see. The OBR maintains its forecast for economic growth of 2% this year.

--- Later in debate ---

[Kirsty Blackman (Aberdeen North) (SNP)]

Thank you, Madam Deputy Speaker, and welcome to your seat—it is good to see you back there. I am pleased to have the opportunity to speak on behalf of the SNP, but I am disappointed that none of our amendments was selected today. We set out in them our demand for the Scottish police and fire services to be excluded from VAT payments. We would also like the Government to halt the austerity agenda—[Interruption.]

[Madam Deputy Speaker]

Order. If Members are leaving the House, they must do so with courtesy to the hon. Lady.

[Kirsty Blackman]

Thank you very much, Madam Deputy Speaker. We demand that this Government stop pursuing austerity—the electorate gave them that message and we again reiterate it. We also asked in our amendments that proper transitional arrangements be put in place for WASPI women and that the UK take the action it should take to contribute to reducing the refugee crisis across Europe. The SNP will support the amendment standing in the name of the hon. Member for Streatham (Chuka Umunna) and we will also vote in favour of the amendment standing in the name of the Leader of the Opposition, but I wish to stress that we believe the only way we can get the exact same benefits of being in the single market and the customs union is by being in them.

This is my first opportunity to speak as the SNP’s economic spokesperson, and it is a huge honour to hold this position. This is the third Queen’s Speech debate that I have seen in my time as an MP, and I want to take Members back two years, to my first Queen’s Speech debate, when the then Chancellor, George Osborne, said that

“the latest forecast is that the UK will be the fastest growing of any of the G7 economies”.—[Official Report, 4 June 2015; Vol. 596, c. 797.]

He also took the opportunity to reflect that everyone had predicted a hung Parliament, yet the Conservatives had won a comfortable majority—how things have changed. After seven years of ideological and callous cuts, in the first three months of 2017 the UK’s growth was lowest of the G7 economies, joint with Italy—so much for this “long-term economic plan”.

[Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)]

Today, the Chancellor made great play of productivity in the UK, but a London School of Economics growth commission report pointed out that the lack of a comprehensive, coherent, long-term industrial strategy from the UK Government had contributed to “poor productivity performance”, harming the nations of the UK. Is it not time that the UK Government and this Chancellor got to work on actually doing something to correct the problems they have caused for the economies of the nations of the UK?

[Kirsty Blackman]

I agree with my colleague that this is too little, too late. In the time that a British worker makes £1, a German worker makes £1.35, and not enough has been done. I understand that the industrial strategy is being consulted on, but it has not received very favourable responses compared with previous things that have been done in relation to industrial strategy. I hope to see major changes in the industrial strategy as it goes forward, so that it becomes more fit for purpose.

At this election, the Conservatives failed to bolster their majority and have had to sign a grubby deal with the DUP in order to get a majority. It was so grubby that it did not meet the tests that the Secretary of State for Scotland set out for it. It is back-door funding for Northern Ireland, and it was so grubby that the Prime Minister refused to even sign it.

The Conservatives like to portray themselves as being good with the economy and trusted with it. It is therefore distinctly irony that, after they have had seven years in government, if we ask people in the street, they will tell us that they are feeling the pain of a decade of wage stagnation; they are feeling the effects of rising inflation—rising faster than the Chancellor predicted in his spring Budget; and they are looking at how they can make ends meet in their household budgets. That is the reality for people, but the Conservatives fail repeatedly to understand this. They stand there and talk about the just about managings, the long-term economic plan and how great the economy is, but people are not feeling those things—that is not the real-life, lived experience of people in the UK.

[Jonathan Edwards]

The Tories also like to portray themselves as the party of the Union, but does the Barnett-bypass deal for the DUP not fundamentally undermine United Kingdom pooling and sharing resources?

[Kirsty Blackman]

I absolutely agree; if Northern Ireland is getting £1 billion or £1.5 billion or however much it will be tomorrow, the other nations of the UK should get similar. Our manifesto contained a commitment for extra money for the NHS in England, because we believe that the English NHS should have more money, and that would generate Barnett consequentials for the NHS—or for spend—in Northern Ireland, Wales and Scotland. That is the way we think this should have been done.

On the Conservatives’ economic record, Members should not just take my word for it. They should take the word of the Institute for Fiscal Studies, which described this situation as “dreadful”, projected that child poverty would rise to 30% by 2021-22, and laid the blame squarely on the impact of tax and benefit reforms; they should take the word of the Resolution Foundation, which reported that the Tory Government’s tax and social security policies will drive the

“biggest increase in inequality since Thatcher'”;

they should take the word of the Bank of England, which reported that consumer credit has risen at annual rates above 10%; they should take the word of StepChange Debt Charity, which reported that 22 million people in the UK are not confident that they are saving enough to cope with unexpected bills or a drop in income; and they should take the word of Money Advice Scotland, which, in a damning statement, reported:

“More and more people within the money advice sector already attest to the growing prevalence of debts that are directly related to living costs. People who are borrowing not out of recklessness, but because their level of income cannot sustain a socially acceptable standard of living”.

That is what the Tories are presiding over.

[Hannah Bardell]

I welcome my hon. Friend to her position; she is making a very powerful and convincing speech. Does she share my concern that much of this country’s growth is based on consumer debt, and that the UK has one of the highest rates of consumer debt in the EU? Is that not an economic train crash waiting to happen?

[Kirsty Blackman]

Absolutely. I think we will see increasing problems with that, and I shall come on to that later.

During the election campaign, the UK Government seemed unclear about the causes of poverty, so let me enlighten them: poverty is caused by people not having enough money.

[Victoria Atkins (Louth and Horncastle) (Con)]

If the hon. Lady is against consumer debt, which we all agree we are worried about, why is she so comfortable with public sector debt?

[Kirsty Blackman]

They are totally different things, and I am surprised that I have even been asked that question. The level of consumer debt is a massive problem for the economy, because people are going to be hit when this bubble bursts—that is what we saw happen in 2008.

[Several hon. Members rose—]

[Kirsty Blackman]

I am going to make some progress.

Nothing in the Queen’s Speech or in the fiscal or monetary policy direction will alleviate the problems people are facing. We demand that in order to stimulate growth the UK Government invest in infrastructure and public services—not just in Northern Ireland, but across the nations of the UK. This morning, the Institute of Government released a report that said that

“weak processes are leading to the wrong projects and contested decisions, wasting both government time and taxpayer money.”

The UK Government need to improve the systems in place to make infrastructure decisions so that the right ones are prioritised.

We demand that the UK Government properly secure the rights of EU nationals. Given that those who choose to live here unarguably contribute to reducing the deficit, reducing immigration will hit the public purse. The lack of access to workers will also cause issues for many industries—I know that the Chancellor is pretty onside with that argument.

[Charlie Elphicke]

My concern, and I think that of many of us on the Government Benches, is that a massive increase in public sector debt will cause interest rates to rise, which will then put pressure on families who have too much household debt. That is why it is really important that we act with fiscal prudence—to keep interest rates down.

[Kirsty Blackman]

What we are proposing is not a massive increase in public sector debt, but targeted public sector spend in order to increase economic growth.

We demand that the UK Government put in place a proper living wage—a living wage that people can actually live on, not a pretendy living wage. We also demand that the living wage is in place for those aged 18 and above, not just for those who are over 25.

[James Cartlidge (South Suffolk) (Con)]

Is the hon. Lady aware that the only international measure of the generosity of living wages is the Big Mac index? Under that index, our minimum wage is the second most generous in Europe, after Luxembourg.

[Kirsty Blackman]

The national living wage that has been put in place by the Conservatives does not provide enough to live on. It does not matter how generous it is compared with other places; what matters is whether people can live on it.

[Mr Philip Hammond]

The hon. Lady says that she wants to see a targeted increase in spending. Can she confirm that the Scottish Government will use their powers under the Scotland Act 1998 to raise taxes in Scotland to increase spending in Scotland?

[Kirsty Blackman]

We have already done so.

In this time of mass instability, we need the UK Government to support a monetary policy that encourages investment in places that will create direct growth, and quantitative easing has not achieved that since the first wave was put in place. That matter needs to be considered as a matter of urgency.

We need a UK Government who will fight for single market membership to ensure that all companies in the UK have the potential to grow, export and create skilled jobs.

[Martin Docherty-Hughes (West Dunbartonshire) (SNP)]

I am glad that, in this debate on the economy, we are mentioning the single market at last, but what about the digital single market in which we are building a future? The innovation required for small and medium-sized businesses will be thwarted if this Government withdraw us not only from the single market, but from the digital single market.

[Kirsty Blackman]

I understand that the digital single market has the potential to create massive revenues for the nations of the UK. It would be a travesty if we were not to remain a part of that.

We need a UK Government who will tackle gender inequality properly. We eagerly await the proposed legislation on this, and we will press the Government to ensure that it is incredibly robust. The Scottish National party has led the way on this: in Scotland, we have a gender-balanced Cabinet; and in Westminster, we have a gender-balanced leadership team. To overcome gender inequality, this Government must tackle the structural causes of discrimination that are so embedded in our culture.

[Hannah Bardell]

On the matter of gender equality, does my hon. Friend share my concern that when the First Minister of Scotland brought forward legislation for a 50:50 gender balance on public boards by 2020, the Conservatives in Scotland opposed it?

[Kirsty Blackman]

That does not make me feel confident about the gender equality legislation that is coming forward, but we can only hope that this Government do things differently to their colleagues in Scotland.

We have never had a female Chancellor of the Exchequer or a female shadow Chancellor of the Exchequer. Today, I proudly stand here as the first ever House of Commons female spokesperson on the economy. That demonstrates just how far we still have to travel to achieve true gender equality.

[Mr Robert Syms (Poole) (Con)]

I just point out that Margaret Thatcher was shadow Chancellor under Ted Heath.

[Kirsty Blackman]

I apologise for that oversight. I did check the facts, but obviously not well enough.

To best protect our workers, we need a UK Government who recognise the importance of trade unions and want to secure their rights, rather than systematically dismantle them. As we leave the EU, the protections for workers will be reduced, because we will lose the oversight of the European Union. We need to ensure that workers have the protection that they need and deserve.

Successive Tory-led Governments have caused untold harm to the nations of the UK: they have increased inequality; created spiralling household debt; presided over drastic reductions in people’s savings; reduced access to in-work benefits; closed jobcentres, which has reduced the opportunity for people to get back to work; and attacked the vulnerable, the sick and the disabled. Those people who are most in need in the nations of the UK have been worst served by this Government.

This Government have consistently failed to support policies that recognise the problems that millennials face. Generation Y are set to be poorer than their parents. Everybody who was born after 1955, which I understand is when the Chancellor was born, is set to be poorer than their parents’ generation. We are seeing wealth accumulation by the age of 30 decrease, and that is storing up problems for the future. There are major issues for millennials, and the Government have not moved fast enough to recognise the difference in the level of home ownership, in the age that people have children, in the social structure, and in the way that millennials are coping economically. Our economic policies have not moved towards making things better. They also have not taken into account the massive levels of student debt. As an aside, it is a pretty terrible fiscal policy to have people paying off their student debt until, eventually, it gets written off, with most of them never managing to pay it all back.

The people who live in the nations of the UK cannot cope with another unfettered Tory Government. A message was sent to the Tories at this election that said that we cannot be dragged out of the single market. An end to single market membership means the loss of 80,000 jobs in Scotland and £2,000 per person. That would be an economic travesty. Given that the Tories have already presided over a decade of wage stagnation, spiralling household debt, decreasing household debt, decreasing household savings and the drastic dismantling of the social security safety net, I do not see how the nations of the UK can cope with the drastic economic hit that will come as a result of Brexit.

[Several hon. Members rose—]