Cost of Living and Brexit
Stewart Hosie Excerpts(1 year, 6 months ago)
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Dr Whitford
No, I am sorry. I have just given way to the hon. Lady.
The Institute for Fiscal Studies’ analysis of the Scottish tax and benefit system showed that it was more progressive, with almost 30% of low-income families £2,000 a year better off in Scotland, but Scotland aspires to something more radical than just mitigating Westminster austerity such as the two-child limit or the six-year benefit freeze. Our vision is to be a fairer, greener nation. The Scottish Government founded the Wellbeing Economy Governments Group in 2018 with Iceland and New Zealand, and Finland and Wales joined later. A wellbeing economy does not just focus on GDP, which includes the profits of damaging sectors such as the tobacco industry, but invests in the physical and mental health and social, economic and environmental wellbeing of every citizen. It is a holistic approach that recognises that our society and economy depend on the success of every individual, every family and every community.
Therefore, in addition to the targeted anti-poverty measures, the Scottish Government invest in the wellbeing of all those living in Scotland, from the baby box that welcomes the birth of a child and university tuition that allows our young people to reach their full potential to the free personal care that allows older people to stay in their own home for as long as possible. However, with the tightening limitations of devolution, the Scottish Government do not have the power over their own economy or the control of taxation and social security that are required to deliver the wellbeing economy we aspire to. We all know that we need a different type of economy by the end of this decade, or we will leave our grandchildren to face climate collapse. The pandemic brought everything to a standstill, which gave us a unique opportunity to decide what kind of economy and society we wanted to rebuild.
Stewart Hosie (Dundee East) (SNP)
Before my hon. Friend goes on to talk about the kind of economy we want to see, will she make the observation that in an important debate on the cost of living and its evil twin Brexit, on the day after an urgent question on the Tories’ mortgage crisis, we have one Tory Back Bencher and two Labour Back Benchers in the Chamber? Does that not tell the Scottish people everything they need to know about how little Unionism really cares for ordinary people?
Dr Whitford
The proposal for this economy, as I said at the beginning of my speech, is not just for the people of Scotland: it is for the people of the four nations of the UK. The review of the TCA will come up in 2026, and while it is not possible to make Brexit work, it is possible to mitigate some of its worst effects. For that, though, we need to understand what Brexit is doing to the UK’s society and economy and have proposals that we can bring to the EU to ask for change.
Unfortunately, the opportunity to change to a different economy and society has not been taken. We already see poverty and inequality rising, and the climate emergency being pushed off the action list—including by Labour, which has just U-turned on its pledge to invest £28 billion in the transition to a green economy. Unfortunately, the climate crisis cannot wait. Scotland is blessed with extensive green energy potential, from wind and tidal power to green hydrogen and pump storage hydro. The current Government have failed to support Scotland’s green energy potential, and sadly there is now little reason to expect much change under Labour, either.
Budget Resolutions and Economic Situation
Stewart Hosie Excerpts(1 year, 9 months ago)
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Stewart Hosie (Dundee East) (SNP)
I thought the Chair of the Treasury Committee, the hon. Member for West Worcestershire (Harriett Baldwin), was about to launch a ship with her peroration.
If I may, I will make a couple of small observations before I start. The Chancellor mentioned Nigel Lawson and his deregulatory Budgets and spoke about the resolution for Silicon Valley Bank. I hope the Government learned the right lessons from those episodes and indeed from the 2008-09 crash: do not weaken regulation, do not weaken tier 1 capital and do not return the banking system to risk.
I was intrigued by many of the things the Chancellor said about reducing economic inactivity. Some of the measures may well work. To add more brutal sanctions on to universal credit claimants was probably rather unconscionable, given everything else that is happening.
The Chancellor gave the impression of broad, sunlit uplands, and there was lots of cheering and waving of Order Papers at the end. What he actually described, though, was a UK economy that has gone from being the most robust in the G7 to one of the weakest; a UK economy in which Brexit slammed the brakes on UK investment; a UK whose performance deteriorated after the Brexit referendum, in both absolute and relative terms; a country that unilaterally imposed trade barriers with its nearest neighbours; and the only country in the G7 whose economy has not returned to its pre-pandemic level.
One could make a case that this was not all the Government’s fault, but many of the difficulties were, and many were caused by the disastrous fiscal loosening of the Chancellor’s predecessor, the right hon. Member for Spelthorne (Kwasi Kwarteng). We can see the problem the economy faces through the prism of debt interest. The Chancellor is right about the comparison with last November, four months ago, but year on year, debt interest payments are £30 billion, £40 billion, £50 billion, £60 billion higher than they were a year ago. For ordinary working people, the OBR confirmed in November that real household disposable income remains below the 2019-20 level and will do so for the next four or five years, and I have seen nothing in the Red Book or the OBR forecast in the past few minutes to change my mind about November’s assessment.
We had every right to expect that today’s Budget would begin to address more of the long-term issues the economy faces and would contain action to tackle some of the cost burdens on ordinary people. Those long-term issues were addressed by both the CBI and the TUC in their Budget submissions. On growth, the CBI said:
“The UK economy continues to face global and domestic headwinds, with the prospect of several more years of low growth.”
The TUC said that
“the government is arguing once more that the state of the public finances is a reason to restrict economic growth, flying in the face of evidence to the contrary.”
On productivity, the CBI noted:
“Britain has experienced 15 years of low growth and flatlining productivity”.
The TUC called on the Budget to get
“productivity rising by rebooting our skills system.”
On exports and trade, they both said broadly the same thing. The CBI said the Government should
“work with businesses across the UK’s nations and regions to kickstart an exporting boom”.
On the supply of labour, the TUC said that
“acute labour and skills shortages are an albatross hampering UK growth.”
The TUC said
“there is a recruitment and retention crisis in public services”.
On the green economy, the CBI said:
“Going green is essential both for our international competitiveness and our energy resilience.”
The TUC demanded that the Government
“institute the Green Jobs Taskforce with a long-term remit and regulatory capacity to co-ordinate planning for decarbonising our economy.”
Some measures in the Budget are to be welcomed; there always are some. The changes on prepayment meters will help, more support for local charities will help and the replacement for the corporation tax super-deduction is absolutely essential—it could not be allowed simply to fall off the table. The problem is that even a cursory glance at the Red Book and the OBR forecast shows there is little to indicate that the Government have really understood, or are taking seriously, the issues raised.
On growth, the OBR forecast makes clear the impact of Government investment. It is negative in 2025, 2026 and 2027, and it will be a drag on growth for most of the forecast period. Productivity growth, even on the Government’s favoured productivity per hour metric, does not reach 1.5% in any year of the forecast period—it is below the 2% historical rate.
The much vaunted £20 billion of R&D spend by 2024-25 has been announced three or four times, but it was not mentioned today. I assume it is still on the table, alongside the £1 million a year permanent annual investment allowance. I welcome these things, but the problem is that, with the inflation we have had and the inflation that is forecast, the money will not buy the £1 million a year or the £20 billion of R&D spend that was originally anticipated.
On exports, trade and the balance of payments, the current account balance remains negative for the entire forecast period. Being outside the EU single market remains a drag on the ability of firms to trade easily with our nearest neighbours.
To be fair, the Chancellor spoke a lot about the supply of labour. Employment is forecast to rise, but it will barely dent the labour and skills shortages throughout the economy. My view, and my party’s view, is that only reversing Brexit and ensuring the free movement of people will do that. Even the current framework is instructive, is it not? With a 16-plus unemployment rate of 3.1%, an employment rate of 76.5% and an economic inactivity rate down to 21%, Scotland has the best employment, best unemployment and best economic inactivity rate of any UK nation. That demonstrates clearly that a competent and compassionate SNP Government can deliver on employment where the UK Tory Government are failing.
The Chancellor made great merit of going green. Some interesting things were said. The £1 billion a year or so investment in carbon capture and storage is to be welcomed, but we will look very carefully to see where it is spent. There was no mention, for example, of the Acorn project in Peterhead, which of course had £1 billion of funding pulled almost a decade ago. But the Chancellor did mention small modular reactors and nuclear power, which is at the heart of the Government’s energy policy. Given that that is now back on the agenda, it is useful to look at the economics of it. On SMR, remember: this is pipedream stuff. There is not a single small modular reactor design that has even been licensed for use.
The primary mechanism to drive investment in nuclear is either the regulated asset base model or a guaranteed price for electricity with a strike price at almost double that of real renewable energy, linked to CPI for 35 years. There are loan guarantees to transfer project risk, including that of cost overruns, to the Government and then the taxpayer. There is a waste disposal service for spent fuel and other waste. The price of those contracts is set according to the Government’s methodology, but if the prices go above a cap, they too will be passed on to the Government and the taxpayer.
Then there is the commitment by Government to manage decommissioning cost overruns, even though it is impossible to know what they will be, because they do not become apparent until the decommissioning takes place—massive costs to the consumer and a near unlimited contingent risk placed on the taxpayer. But here is the rub when the Government call it “green” or “renewable”: allowing one or two generations to buy expensive, overpriced nuclear energy, nuclear electricity, and then forcing the next 50 generations to decommission, store and guard toxic nuclear waste is not green.
You will recall, Madam Deputy Speaker, that the Government introduced their new fiscal charter last year: net debt to fall as a share of GDP in the fifth year of a rolling programme and public sector net borrowing not to exceed 3% of GDP in the same year. When the OBR reported in the autumn, those targets were due to be met in 2027-28, with the figures being, if memory serves, 0.3%, 0.6%, £9.5 billion and £18.6 billion. They are forecast today still to be met but, interestingly, the net debt measure is now showing a margin of only 0.2%. That tells us, because the debt figure is different, that there is probably a little more headroom than was anticipated only four months ago.
Therefore, the expectation should have been that the Treasury did more to tackle domestic and business energy costs, particularly for small and medium-sized enterprises; that it continued to act to squeeze inflation down, where it had the power to do so; and that it ensured things within its control, such as public sector pay, the minimum wage, the state pension and social security rises—it did this in November—did not leave people any worse off. If it does not do that, energy price hikes, inflation and weak pay rises will continue to erode people’s standard of living.
We know from the November OBR forecast that inflation was set to peak at a 40-year high and that wages and living standards were still set to be squeezed by about 7%, wiping out all the growth from the past eight years. What do we know today that we did not know then? We know that telecoms prices are due to rise; BT is putting its costs up by 15% at the end of this month. Grocery prices continue to rise —if you can get fresh produce at all. Grocery inflation rose in February to a record high of 17.1%. That will add the best part of £1,000 to the average family shopping basket throughout the year and we know that families are really beginning to feel the pain of increased mortgage costs.
So it is obvious that the Government had three urgent tasks today, all of which ought to have been designed to deal with the things that matter to the public. The first was to continue to support businesses that are struggling with high energy costs—not simply to freeze the “cap”, although it is not a cap at all, but to reduce it. They needed to recognise that this “cap” is an average and to pay attention to the fact that a UK average energy bill of £2,500 will mean one of £3,000 or £3,500 in Scotland. The Government should have supported the reduction to £2,000 and maintained the £400 energy bill support scheme.
Secondly, the Government ought to have continued to bear down on inflation. Forcing down energy prices would have helped with that, as it did last year—3.5% was the impact last year, and we would be talking about another 2% this year at the current rates. The Government could have gone further by mandating the regulators to stop the blatant price gouging and profiteering by energy and telecoms companies.
Thirdly, as I have said, the Government needed to ensure today, or even to signal their intention, that when it comes to the things under their control—the next round of public sector pay, benefits, the minimum wage and pensions settlements—nobody falls behind. They could have gone further to introduce real fairness and raise more cash to really support the economy and boost trade. They could have ended non-dom status, but that was not mentioned today. They could have taxed share buy-backs, but that was not mentioned today. Instead of doing costly vanity nuclear power projects, they could have been scrapping them and investing in real, green renewables. And fundamentally, they could have been rejoining the EU single market, to give our exporters and our economy a fighting chance to recover.
Several hon. Members rose—
Scotland Act 1998: Section 35 Power
Stewart Hosie Excerpts(1 year, 11 months ago)
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Mr Jack
It is not the last resort. What I said to the shadow Secretary of State was that we have 28 days in which to take legal advice and act. Failing that, the Bill goes for Royal Assent. That is the timeframe we operate in. There is then the opportunity for further discussions with the Scottish Government to see if we can get the legislation in scope. We made the same offer with the UNCRC (Incorporation) (Scotland) Bill, which we took to a section 33 order, and that offer still stands. We are happy to discuss with the Scottish Government what amendments could be made to the Bill to get it in scope so that it does not have adverse effects on UK-wide legislation. There is never quite a last resort when you can go on talking, discussing and trying to resolve your differences.
Stewart Hosie (Dundee East) (SNP)
It is true that under section 35, UK Ministers have the right to interfere in Scottish legislation on the grounds of defence, national security or international obligations, or if the Scottish legislation modifies or has an adverse effect on UK reserved law—that much is clear. But given that the Tory Chair of the Women and Equalities Committee, the right hon. Member for Romsey and Southampton North (Caroline Nokes) said that the GRR legislation
“doesn’t change the Equality Act”,
and that the Scottish Secretary has been signally incapable of giving a single example of where it might do so, this is not a debate about process; it is a debate about principle. Would it not be better, instead of interfering and engaging in a rather crass culture war, if the Scottish Secretary apologised to trans people, apologised for trampling over Scottish democracy, folded up his little red folder, and removed the threat to interfere?
Mr Jack
I say again: let us take the heat out of this debate. This is about the Equality Act 2010, which is a GB-wide piece of legislation. The legal advice we have is that there are adverse effects to that law—that is entirely what it is—and it will be published this afternoon in the statement of reasons.
Scottish Independence and the Scottish Economy
Stewart Hosie Excerpts(2 years, 1 month ago)
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Mr Perkins
A number of people want to intervene. I will accept interventions, but I will not accept one from the hon. Member for East Renfrewshire (Kirsten Oswald), because she misrepresented me previously. She said that I had said that I had apologised for the Government’s record. I have not; I have done the opposite. [Interruption.] I will check the record very carefully. She misrepresented me and if she wants to correct the record I will let her, but if she does not want to correct the record I will hear from the right hon. Member for Dundee East (Stewart Hosie).
Stewart Hosie (Dundee East) (SNP)
The hon. Gentleman is perfectly entitled to make the case he is making, but given that in Scotland we voted to stay in the European Union and given that in his constituency 34,000 voted to leave and only 22,900 voted to remain, would it not have been better, instead of wasting his time in Scotland, if he had done his job in Chesterfield, instead of having that act of economic self-harm that is Brexit?
Several hon. Members rose—
Stewart Hosie (Dundee East) (SNP)
Several very interesting things have been said today. I have never taken a single vote for the SNP in Dundee East for granted. However, I heard the hon. Member for Edinburgh West (Christine Jardine)—she is no longer in her place—talk about Orkney and Shetland, and if I lived on one of those island groups, I would be very cross indeed that the Liberal Democrats took them so much for granted and considered them so much of a personal fiefdom.
We had the Secretary of State for Scotland talk about funding delivered by the UK Government. Indeed, the hon. Member for Banff and Buchan (David Duguid) spoke about several other UK policy decisions and read out their cost. I thought that was interesting because it was almost like it was discretionary largesse from Whitehall, almost ignoring the fact that Scottish individuals and businesses pay tax. It is almost as if they do not realise that almost every penny is borrowed and that Scottish taxpayers contribute their full fair share to the debt repayment costs. I find that extraordinary.
We have heard other talk during the day about the debt Scotland might have. The Scottish Government cannot borrow. They have no debt. All the debt comes from the UK. The UK borrows all the money, no matter where it is spent. When there is a £500 million overspend on a single tube station, we pay our share of that debt. There is no Union dividend.
We then heard the Secretary of State make some extraordinarily disparaging remarks about education. Scotland has the highest proportion of people with a tertiary education—the best educated country in Europe. Instead of talking it down, why do we not celebrate the pupils and the students, the teachers and the lecturers, and the schools, colleges and universities? He then went on—he must have been having a really bad day—to talk about crime. We have the lowest crime—[Interruption.] Ah, he has come in. Welcome, Governor-General; take your seat. Scotland has the lowest crime rate since 1974. It was reported in the last week that barely 5% of reported crimes in England even have somebody charged. To talk down the criminal justice system in Scotland while allowing the utter failure of the criminal justice system in England to go by the book is absolutely disgraceful.
We then had the bizarre sight of the Better Together parties—the Tory-Labour coalition party—pretending to dislike each other, but when I see Labour’s immigration mugs and the “Make Brexit Work” slogan, all I see is a red Tory. Whether they are red Tories or blue Tories, it does not matter. They are exactly the same.
We then had—I might not even get to my speech proper, Madam Deputy Speaker—some straw men thrown up about how much Scotland’s foreign currency reserve would have to be when we become independent. I checked and the UK’s foreign currency reserve is 6.4% of GDP, Ireland’s is 2.7% and Finland’s is 7%. To be fair, Denmark’s is higher at about 20%, but how can it be that a modern advanced economy with huge natural resources and a balance of trade surplus, such as Scotland, would somehow uniquely be expected to hold 50%, 60%, 70% or 80% of GDP in foreign currencies?
Stewart Hosie
I think my right hon. Friend spoke enough earlier on, but of course I will give way.
Ian Blackford
I am very grateful to my right hon. Friend—I will see him later. He is making a powerful speech. It is worth pointing out to the House that the UK has a current account deficit of more than 8% of GDP. If there is a country that cannot pay its way, it is the UK.
Stewart Hosie
That is absolutely true. There will come a time, when we have the referendum next year, to enter into proper, calmer and sensible debates about the minutiae and the technical detail regarding all that—long may that continue.
Basically, what we saw today was a rerun of Project Fear: Project Fear 2. I was struck by the comments of the hon. Member for Chesterfield (Mr Perkins), who is also no longer in his place. At one point, he genuinely seemed to suggest that the determination as to whether Scotland should have a referendum should be based on opinion polls rather than real votes. I will take seven, eight, nine or 10 mandates in a row over an opinion poll any day of the week.
Project Fear 2 took me back to the 2014 independence referendum. The yes campaign was characterised by one thing: the absolute determination to answer every question and provide as much information as possible to the people of Scotland. We did that in the face of the constant refrain from Unionism that there was not enough information. Even when detailed answers to every question were tripping off people’s lips, we were still asked for more.
We tried to ensure that the answers we gave about the future shape of the Scottish state and policy for an independent Scotland were, to the best of our ability, in the best interests of the people of Scotland and those in the rest of the UK. Nowhere was that clearer than in our proposals for what was then a formal shared currency and our determination to service a negotiated share of the UK’s national debt. Both those plans were designed to protect sterling and stop the rest of the UK falling victim to a technical default on its debt obligations. To provide that certainty, clarity and detail, we drew, if not exclusively, certainly heavily, on the 670-page “Scotland’s Future” White Paper.
We need to recognise the way in which Unionism behaved and campaign differently and smarter this time. The first thing to recognise is that no matter how detailed and precise our answers were, Unionism continued and will continue to ask the same questions over and over again to give the impression that there are no answers. It was false then and it is false now.
Secondly, we need to recognise that Unionism acted and continues to act irrationally. Next time, next year, whatever policy decisions are finally determined to be best for Scotland, they must be not only technically robust, but politically bomb-proof, so that no indyref2 policy area can ever be held hostage by a Westminster veto.
Thirdly, while we must of course answer every single question that the public put to us, we should make our fundamental case on principle, not detail. That is why the first three papers published by the Scottish Government are first class. A mix of democratic principle and a vivid picture of what Scotland could be is hopeful, upbeat and takes yes campaigners away from the miserable drudge of Unionist whataboutery—we have seen it in spades today—that so characterised the 2014 referendum campaign.
I have one final thought at this point. We know how successful Scotland can be. Is it not time that Unionism was finally challenged? Beyond Brexit, is this really as good as it gets? The first thing we have to do is deliver Scottish independence, and the second, and in many ways more important, is to describe the kind of Scotland we seek. We have laid out the mechanism by which we will deliver it, we have gone to the Supreme Court to test the legality of the referendum and we have the wonderful fall-back position that the next Westminster election will be a de facto referendum, meaning that the Scottish people’s voice will be heard one way or another.
The answer to the second question—what sort of Scotland will we deliver?—is implicit in the motion. Our critique of the botched experimental, Tufton Street economics that crashed the economy in the mini-Budget is stark, and our demands for action to help those most in need are clear, but let me end by answering the question of what sort of Scotland we seek in a slightly more succinct way. The Scotland we will deliver will be the one that the people of Scotland want and choose, because it is with independence and only with independence that Scotland will always get the Government and the policies it votes for.
Oral Answers to Questions
Stewart Hosie Excerpts(4 years, 3 months ago)
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Angela Crawley (Lanark and Hamilton East) (SNP)
Stewart Hosie (Dundee East) (SNP)
Ruth Jones (Newport West) (Lab)
Mr Jack
The hon. Lady points towards frameworks, which is exactly what we are doing. For standards, frameworks will be by consent across the United Kingdom. There is the opportunity for parties to opt out. As a safety net for business, we are introducing mutual recognition, which underpins the European single market, and we are introducing non-discrimination.
Stewart Hosie
The gravity analysis published in the internal market Command Paper suggests that a border effected between Scotland and the rest of the UK would have an impact of about 1.1% of Scottish GDP. Brexit will have an impact seven times greater—a loss of GDP growth in Scotland of about 8%. When the Secretary of State has discussions with the Scottish Government, will he commit to bring forward another Command Paper insisting that Scotland remains part of the European Union single market?
Mr Jack
We are leaving the EU—I do not know if that point has been wasted on the hon. Gentleman. When we were on the Treasury Committee, we saw many projections about what would happen if the UK voted for Brexit, and all those projections had one thing in common: they were wrong. I do not recognise his figures. I believe that with good trade deals and this UK legislation, we will strengthen the Scottish economy.