Oral Answers to Questions
Alan Brown Excerpts(1 month ago)
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Deidre Brock (Edinburgh North and Leith) (SNP)
Alan Brown (Kilmarnock and Loudoun) (SNP)
The Chief Secretary to the Treasury (Laura Trott)
As a result of decisions at the spring Budget, the Scottish Government are receiving around £295 million in additional funding in 2024-25 through the Barnett formula.
Laura Trott
Just to be absolutely clear, the Scottish Government’s total departmental expenditure limit is growing in real terms over this Parliament by over 1% a year on average.
Alan Brown
Obviously, the Minister does not understand what “real terms” means after all. Analysis by the Institution of Civil Engineers shows a multiplier effect: every £1 spent in the construction industry brings in an additional £2 of spend. That means that the real-terms cut to the Scottish Government’s block grant for capital by £1.6 billion over two years further deprives our economy of a wider £3 billion. Why do this Government think that it is okay to decimate infrastructure spend in Scotland?
Laura Trott
The Scottish Government are well funded to deliver their devolved responsibilities, and receive 25% more funding on average per person than the equivalent UK Government spending in other parts. That translates to £8.5 billion more a year on average.
Budget Resolutions
Alan Brown Excerpts(1 month, 1 week ago)
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The Chief Secretary to the Treasury (Laura Trott)
It is a privilege to open the final day of debate on the Budget—a Budget with a plan to grow the economy, a plan for better public services and a plan to make work pay. Today’s debate is focused on a theme close to my heart: improving productivity. As some Members know, back in 2010, before I became a Member of Parliament, I worked for my noble Friend Lord Maude on an efficiency and reform agenda that saved the Government £14 billion a year by 2014. It captured everything from buying printer paper collectively to managing Government projects better and digitising services. That agenda not only cut costs but improved productivity.
Ahead of the pandemic, and under this Government, productivity in the private sector increased by an average of 0.7% a year between 2010 and 2019. [Interruption.] As I am sure Opposition Members will be interested to know, that contrasts starkly with the decline in public sector productivity by an average of 0.2% per annum between 1997 and 2009. Our success was entirely due to hard work behind the scenes and a relentless focus on output.
Alan Brown (Kilmarnock and Loudoun) (SNP)
Rather than cherry-picking statistics, will the Minister tell us what she thinks about the fact—confirmed by the House of Commons Library—that the UK has the lowest investment in the G7 and is the second worst performer in the G7, post-pandemic, in terms of economic growth?
Laura Trott
I will say to the hon. Gentleman that since 2010 we have grown faster than France, Germany and Italy, and we are predicted to do the same in the next five years.
It is no coincidence that between 2010 and 2019 the number of violent crimes and burglaries halved. Our reading standards in schools, which were previously behind those of France, Germany and Sweden, raced ahead. The latest technologies, such as the NHS app and virtual wards, are now used by patients across the country.
However, this is not a “once and done” situation. The effect of the pandemic on productivity was significant. Moreover, as Lord Maude has put it, the focus on productivity must
“never end. This will always be a work in progress. There never can be a steady state… The public, for whom public services exist, deserve nothing less.”
That is why this Conservative Chancellor is willing to invest once again to drive change.
The head of the National Audit Office has said that if we can improve public sector productivity, the size of the prize is tens of billions of pounds, and the Office for Budget Responsibility estimates that raising public sector productivity by 5% would be the equivalent of about £20 billion extra in funding.
Alan Brown
The Budget bakes in post-election cuts of between £19 billion and £20 billion, and the Institute for Fiscal Studies has said that there is a conspiracy of silence from both the Conservatives and the Labour party. The Labour party has committed to sticking with the Tories’ spending plans. On the conspiracy of silence, will Labour keep the £20 billion of departmental cuts, or will it raise funds to offset that?
Darren Jones
Two short answers: first, we are not sticking to the Conservatives’ spending plans and, secondly, the OBR forecasts Conservative party failure, not the success that the Labour party will bring to this country and the economy.
I know that Conservative Ministers do not like to think about their fourth Prime Minister since 2010, who only recently crashed the economy off the back of unfunded tax cuts, sending mortgage bills rocketing, but they really do not need to look back far in history to understand the risks of a £46 billion unfunded tax cut promise. They do not even need to ask their predecessors about the consequences of such risky behaviour, because the British people are still paying the price today for their economic vandalism through higher mortgage and rent costs every single month. Conservative Ministers need to look at themselves in the mirror and ask whether they have learned anything from the last 14 years in office. I have given just a few examples of confusion, delusion, denial and risk-taking with the economy, which prove that the biggest threat to the economy is the Conservative party.
Alan Brown (Kilmarnock and Loudoun) (SNP)
May I say to the hon. Member for Wakefield (Simon Lightwood) that there is no point in Labour Members banging on about unfunded Tory tax cuts, when Labour is not going to do anything different and says it will not reverse them?
Productivity is an almost abstract word that is bandied about all the time, but the one point of consensus is that the UK’s productivity rates lag behind those of comparable countries. We keep hearing pronouncements about the need to improve productivity, but nothing changes. The last Prime Minister—the one of just 45 days—believed that tax cuts, especially for the richest, somehow boost the economy and productivity. Despite that ideology, the Government never show how the rich getting richer boosts outcomes or increases manufacturing productivity, or how tax cuts for the richest transform the productivity of those paid the least, who are doing the real work. Productivity certainly is not boosted by trying to force the long-term sick or those with disabilities into jobs they are not suited for.
The reality is that increased productivity stems from good planning and strategic investment. The Chancellor’s decision to make full expensing permanent at the autumn statement might drive forward investment but, even so, there are still questions to be asked about how the UK went into recession. Indeed, despite what the Government always tell us about global factors that affect all other countries, such as the war in Ukraine or global inflation rates, the reality is that within the G7, the UK is only outperforming Germany in GDP growth compared with pre-pandemic levels. Over a four-year period, the UK’s GDP growth—at just 1%—is a third of the eurozone, and miles behind US growth at 8.2%.
Of course, it is no coincidence that the US has its Inflation Reduction Act or that the eurozone is covered by the EU’s green deal industrial plan. It is no coincidence either that the UK has the lowest levels of investment in the G7—further proof that the Government should be providing schemes and investment to counter the EU and US measures. Instead we heard from UK Ministers at the time the blasé attitude that these other countries were simply playing catch-up with the UK. It was blinkered British exceptionalism at its worst. Indeed, the Government still do not recognise that they have fallen further behind; not only that, but they failed to listen to renewable energy developers about the strike rate for offshore wind being too low in the last contracts for difference auction, which has lost investment in renewable energy and thrown the 2030 deployment targets into doubt.
Until the failure of auction round 5 for offshore wind, the contracts for difference process was at least a success for deployment of renewable energy. However, it still represented missed opportunities for UK-based supply chain development, for investment to be targeted at UK manufacturing and for increased UK productivity. Instead, the UK Government made it a race to the bottom in terms of price, so we saw billions of pounds of investment offshored in that process. The Government hid behind EU directives but now, post Brexit, the procurement strategy still does not sufficiently incentivise local content.
On Brexit, being outside the single market and the customs union—completing additional paperwork and products undergoing additional checks—clearly affects productivity. The OBR has confirmed that the UK is still on track to see a 4% hit to GDP and a 15% reduction in EU trade as a result of Brexit. Goldman Sachs estimates that Brexit has cost the UK 5% in GDP against comparable countries, so it is undeniable that Brexit is a large contributing factor to the UK’s performance within the G7—another issue completely avoided by Labour in today’s debate.
Greater investment is required in infrastructure, but the Budget did not allocate additional capital moneys. Indeed, the Scottish Government’s capital budget is suffering a cut of close to 20% in real terms this year; yet somehow the Scottish Tories demand ever more construction—ever more deployment from the Scottish Government—while standing by as Westminster slashes our budget. That said, the Scottish Tories now see at first hand the Westminster respect agenda, as their wishes were overridden by the extension of the windfall tax. That is a further £1.5 billion of revenue from Scotland that is not being used for reinvestment. It is not propping up Scotland’s capital budget; it has been used for a tax cut. That is shameful—and yet, we are supposed to doff our cap and be grateful for £300 million of additional Barnett consequentials.
We know, though, that cuts to the Scottish Government are coming down the line, given the £19 billion of departmental cuts associated with the autumn statement and now baked into this Budget. Of course, as was pointed out earlier, Labour is effectively sticking to the Tories’ spending rules, so Labour will introduce austerity 2.0 if it comes into power. It is no wonder that the IFS says there is a “conspiracy of silence” from both Labour and the Tories on the scale of cuts coming down the line.
One cut that has been delivered is to the higher rate of capital gains for property sales. There has been enough analysis to show that charging capital gains tax at the equivalent rate of income tax would realise an additional £10 billion to £15 billion for the Treasury, yet somehow we are meant to believe that lowering the upper rate will magically bring in more money. It defies logic.
Labour likes to talk about Norway and the taxes it raises from the North sea. I like to talk about Norway, too, and the fact that it has a $1.5 trillion sovereign wealth fund, which is the biggest in the world. We look at Norway as what we might have been. It is not a change of Government that we need at Westminster—
Alan Brown
I thank the hon. Lady for giving way. I asked earlier about what the Institute for Fiscal Studies has called a conspiracy of silence from both Labour and the Conservatives. Is Labour sticking with the baked-in £20 billion of future departmental cuts that are in the Budget, and if not, how is Labour going to pay for that?
Bim Afolami
This is great fun, Mr Deputy Speaker. I say to the shadow Chief Secretary that we have been very clear about this. We have cut national insurance by a third in the last two fiscal events. It is our long-term ambition to do so and to eliminate this double taxation on work. If Labour Members do not believe that we should eliminate this double taxation, they should say so.
Bim Afolami
No, I will not give way. I wish to make some progress.
My hon. Friends the Members for St Ives (Derek Thomas), for Broxtowe (Darren Henry), and for North West Norfolk (James Wild) saw the wisdom and the importance of cutting national insurance by a third and what that means for ordinary people. From April this year, we will have taken a third off, which means £900 a year for the average worker. Some Opposition Members sniffed at that. They do not think that that is very much money. We know that, for millions of people across the country, that will make a huge difference to their lives, and we are very proud to support it.
Over and above the national insurance cuts, this Budget sets out a plan that rewards hard-working families. A lifetime of work should support the job of a lifetime: being a parent. For too long, hard-working parents have been unfairly penalised by our tax system—I am very glad that the hon. Member for Richmond Park (Sarah Olney) from the Liberal Democrats recognised that and supported our plans. That is why we are raising the child benefit threshold to £60,000 and increasing the level at which the support is completely withdrawn to £80,000. This is not done out of some ideological fancy. We are doing it because it will encourage growth in the labour market and generate an increase in work hours equivalent to around 10,000 people entering the workforce full time. So this one act on childcare that the Chancellor has put forward will save nearly half a million families an average of around £1,300 per annum in addition to the national insurance cuts.
We also want to support those who make a career out of childcare, which is why, building on our announcement at the last Budget to extend 30 hours of free childcare a week to all children aged nine months and older of working parents, my right hon. Friend the Chancellor said that the Government will guarantee the hourly rate to ensure that private childcare providers can step up to deliver this offer.
Secondly, as many Members across the House have noted, this is a Budget for long-term growth. Growth means more opportunity. Growth means greater prosperity for families and firms. And, yes, growth means higher funding for our public services.
Alan Brown
The Minister knows full well that the autumn statement had £20 billion of future cuts to public services and this Budget bakes it in. The Institute for Fiscal Studies has called it a conspiracy of silence from both Labour and the Conservatives. He talks about long-term growth and an increase in public services, but will he come clean about that £20 billion cut and what the Government will do about it?
Bim Afolami
I thank the hon. Gentleman for that point. If he looks in the Red Book, he will see that the forecast for the next spending review period is that real-terms spending on public services—the whole House should hear this, because I have heard lots of discussion from Opposition Members about cuts and slashing—will go up every year by 1% in addition to inflation. We are building on a stable foundation for that growth. Against the backdrop of economic uncertainty, business investment—one of the chronic difficulties for our economy for generations—grew last year, and will be about 11% of our GDP this year.
At the Budget, we outlined next steps on the autumn statement’s £4.5 billion funding package for strategic manufacturing, which many Members mentioned, particularly the hon. Member for Birmingham, Edgbaston (Preet Kaur Gill). That delivers the next stage of expansion for our high-growth industries.
To complement that, we are committed to ensuring the UK has the most attractive investment tax regime of any G7 or large European country. We have the lowest corporation tax rate in the G7. At the autumn statement, to complement that support for business and for growth, we announced that we would introduce permanent full expensing, which allows companies to claim, in the first year, 100% capital allowances on qualifying investments. At this Budget, the Chancellor confirmed that draft legislation on extending full expensing further to assets for leasing will be published shortly. I am very glad that my hon. Friend the Member for Harrogate and Knaresborough (Andrew Jones) and the hon. Member for Gordon (Richard Thomson) supported that investment.
The theme of today’s debate—improving productivity—was barely mentioned by Opposition Members. I echo what the Chief Secretary to the Treasury, my right hon. Friend the Member for Sevenoaks (Laura Trott), said in her opening speech: when it comes to our public services, what the public care about is whether their services improve. That means focusing on outcomes, not just inputs. Opposition Members are very, very fond of talking about inputs and how there are apparently there are all these cuts—this slashing and burning of public services—but they are not very fond of talking about our productivity plan and how we are investing to improve outcomes. I will tell you a secret, Mr Deputy Speaker: the reason they are not fond of it is that they know it would upset their union paymasters. That is why they do not want to talk about it. They do not believe in better public services, which would mean better value for money for the taxpayer, because they do not believe in better value for money. They do not believe in better support for frontline workers to actually do their jobs properly because they just want more money for their union paymasters. They do not believe in better results. They talk the talk but refuse to walk the walk, because they do not understand what it is to take any tough decisions.
I agree with something that the hon. Member for Ilford South (Sam Tarry) said. He said that we cannot cut our way to prosperity, and I agree. That is why we are investing in our productivity plan and investing comprehensively in the NHS, as my hon. Friend the Member for Watford (Dean Russell) set out compassionately and powerfully.
Oral Answers to Questions
Alan Brown Excerpts(2 months, 1 week ago)
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Jeremy Hunt
I suspect that when the hon. Gentleman tabled his question, he was not expecting that the biggest supporter of abolishing the bankers’ bonus cap was not the Chancellor but the shadow Chancellor. I hear what he says, and indeed those are some of the reasons we abolished it, because it was not working. If Labour is going to change its mind on that policy, may I ask—just to take a totally random example—when will it change its mind about the planned £28 billion of additional borrowing?
Alan Brown (Kilmarnock and Loudoun) (SNP)
The Financial Secretary to the Treasury (Nigel Huddleston)
The Government want the UK to have a fair but internationally competitive tax system, designed to bring in talented individuals and investment that contributes to the growth of the economy. Non-doms play an important role in funding our public services through their tax contributions. They pay tax on their UK source income and gains in the same way as everyone else.
Alan Brown
The Minister talks of fairness, but the fact is that during the cost of living crisis nearly a million more struggling pensioners will start paying income tax, because of the freeze in personal allowance rates, while the Government protect some of the richest members of society through non-domicile status. Scrapping that status could bring the Treasury an extra £3 billion a year. Why do the Government not do the right thing and bring in that extra money to protect pensioners and the lowest paid?
Nigel Huddleston
Non-doms contributed about £8.5 billion in taxes in 2022, and have contributed to investment to the tune of £7 billion since 2012. The hon. Gentleman will be well aware that scrapping their status would not be risk-free in a world in which people can be quite mobile, and could damage the UK’s competitiveness. As for the need for other support, that is exactly why we have been reducing national insurance rates, for example.
Autumn Statement
Alan Brown Excerpts(4 months, 4 weeks ago)
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Alan Brown (Kilmarnock and Loudoun) (SNP)
As a so-called “prudent Chancellor”, he cancelled HS2 to Manchester because of the spiralling costs of that project. Yet despite the cost of the likes of Hinkley Point C rising from £18 billion to £33 billion, and the fact that there is no successful EPR—European pressurised reactor—project in the world, he has today confirmed yet again a blank cheque for the nuclear industry. Sizewell C is likely to cost £40 billion and he has a taxpayer 20% stake in it. If it is good enough for HS2, why does he not scrap Sizewell C and save us from that nuclear financial disaster?
Jeremy Hunt
Because if we want to get to net zero, we are going to have to have more renewable energy and, unfortunately for the hon. Gentleman and for me, there are days when the sun does not shine and the wind does not blow.
Oral Answers to Questions
Alan Brown Excerpts(5 months, 1 week ago)
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Bim Afolami
My right hon. Friend tempts me to make tax policy. What I will say to her is that she will know that the Chancellor always keeps these things under review, as do the Government. Indeed, we have a fiscal event shortly.
Alan Brown (Kilmarnock and Loudoun) (SNP)
Can I ask the Minister why he said he wants particularly to support investment and growth in Sussex? [Interruption.] Is that the Tories reverting to type in terms of the blue wall?
Economic Growth
Alan Brown Excerpts(5 months, 1 week ago)
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Rachel Reeves (Leeds West) (Lab)
I beg to move an amendment, at the end of the Question to add:
“but respectfully regret that the Gracious Speech fails to include legislative proposals to prevent a repeat of the economic fallout from the September 2022 Growth Plan, by amending the Budget Responsibility and National Audit Act 2011 to give the Office for Budget Responsibility the power to produce and publish forecasts for any Government fiscal event which includes tax and spending decisions with long-term effects over a threshold to be specified in a new Charter for Budget Responsibility.”
It is fair to say that the UK is not exactly gripped with excitement at the contents of the Conservative Government’s King’s Speech. It is as if Ministers have rummaged down the back of the sofa and found legislative loose change, a broken biro, some old Bills covered in fluff and even an old Prime Minister. In this current Tory era of three-word slogans, the country is thinking not, “Five more years!” but, “Is that it?”
It is clear what the Government’s approach is in the run-up to that election. They have given up on trying to improve the country, so all they can now do is attempt to divide it. But they will fail because the Conservatives simply do not understand the priorities, hopes and values of the people of Britain today. After five Prime Ministers—one of them recycled—and seven Chancellors since 2010, the Conservatives find changing personnel rather easier than changing our country for the better.
Alan Brown (Kilmarnock and Loudoun) (SNP)
I am listening to the right hon. Lady’s speech about values. The values of my constituents are such that they are calling for an immediate ceasefire in Gaza. Does she support those values?
Rachel Reeves
We have just had an hour and a half’s worth of questions on that issue. I am going to focus on how to grow the economy and tackle the cost of living crisis.
I wish that today we were debating the Government’s significant economic reforms and new measures to get our economy back on track after 13 years of Tory economic failure—but there weren’t any. Their big tax reform is to consult on bringing in a new duty on vapes. Their big energy Bill does not even lower people’s energy bills. In fact, a third of the Bills in the King’s Speech are reheated from the previous Session. How out of touch must the Prime Minister be to peer down from 10,000 feet up in his helicopter and conclude that everything is going so well that there is no need for legislation and Government action to help unlock growth? This is the final King’s Speech before the general election, and yet this set of proposals will not quicken the pulse, get the economy roaring or lift people’s living standards. Where is the ambition? Where is the plan?
As the British Chambers of Commerce has pointed out:
“The King’s Speech opened with an aspiration to increase economic growth—but it failed to outline how that will happen.”
Jeremy Hunt
The first big infrastructure decision that I took was on nuclear, when I assigned £700 million to Sizewell C. I completely agree with the hon. Member about the potential of SMR. That is why we set up a competition, and with the previous Energy Secretary I stipulated that it should finish by the end of this calendar year so that we can proceed as quickly as possible on SMR, because it could be an important part of our net zero future.
The shadow Chancellor’s central argument is that we can get growth only by borrowing £28 billion a year more. [Interruption.] Well, I was listening to her words. She may not have mentioned this in her speech, but on 9 October she said on the “Today” programme that she wanted to take borrowing “up”—her word. We delivered all those achievements in technology, life science, creative industries and advanced manufacturing industries during a time when we were cutting borrowing, which went down by 80% between 2010 and the start of the pandemic. That is the difference. Unlike Labour, the Conservatives know that we cannot borrow our way to growth. We have to do the hard work to support entrepreneurs and innovators, including by keeping their taxes down, which Labour has never wanted to do. Because we have done just that, the International Monetary Fund says that after inflation has been brought to target from the end of 2025, this country will have faster growth than France, Germany or Italy. No shortcuts; just hard work to get one of the fastest growth rates in Europe.
Alan Brown
On investment in renewable energy, EY has confirmed today that the UK has slipped further back on the attractiveness index, so it is now behind India, China and Australia. On offshore wind, the Chancellor knows that allocation round 5 was a disaster. What will he do to rectify that? On nuclear, he talks about SMRs being the future, but they are not. There is not a successful SMR anywhere in the world, and NuScale in the United States has just been abandoned after rising to an estimated cost of $9 billion.
Jeremy Hunt
I do not accept that we are not an extremely attractive place. We have third largest renewables sector in Europe and are the largest European provider of offshore wind. Can we do more? Yes, we can, particularly by improving access to the grid. The House should expect to hear more from us on that.
We had a lot of talk from the shadow Chancellor about the cost of living crisis, but she barely mentioned that the biggest pressure on the cost of living is caused by the rise in inflation—in fact, it did not get a mention at all in her conference speech. Because we have taken difficult decisions, inflation has fallen by 40% since its peak. Core inflation is now lower than in nearly half the entire EU membership. I say gently to her that if she were to reflate the economy by ramping up borrowing by £28 billion a year, prices would go up and families would end up paying more for their petrol, their food, their electricity and their mortgages. That is why that is the wrong approach.
Oral Answers to Questions
Alan Brown Excerpts(10 months ago)
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Victoria Atkins
I have a great deal of respect for the hon. Lady, but I must point out to her gently that we have, in fact, conducted that review. In the autumn statement, we were able to announce a £13.6 billion package of help over the next five years, including a multiplier freeze for all ratepayers, large and small; a transitional relief cap funded by the Exchequer; retail, hospitality and leisure relief; and a small business support scheme, which will help to cap bill increases at £600 per year for any business losing eligibility for some or all small business rate relief or rural rate relief at the 2023 revaluation. We have done that review and are supporting businesses that need help.
Alan Brown (Kilmarnock and Loudoun) (SNP)
David Duguid (Banff and Buchan) (Con)
The Exchequer Secretary to the Treasury (Gareth Davies)
Advanced economies around the world share the challenge of high inflation from the energy shock, and the UK has been affected by those global factors. The Government have taken significant action to help households with rising energy prices and the cost of living by providing a significant support package totalling £94 billion. That includes supporting households with energy bills by extending the energy price guarantee and removing the premium paid by 4 million households using prepayment meters. Overall, the Government have paid about half of a typical household bill since October 2022.
Alan Brown
Many people in the highlands and islands of Scotland will have had their taxes used to help pay for the construction of the gas grid, despite the fact that they are off the gas grid themselves and do not get the benefits of being connected to it. Their area supplies the oil and gas, and now the cheap renewable energy, that is facilitating lower energy bills across Great Britain, yet they are more likely to be fuel poor. To rub salt in the wounds, many pay a surcharge on their electricity bills. When will the UK Government address those inequities?
Gareth Davies
I would simply point out that across the United Kingdom we have provided extensive support, as I said in my answer to the substantive question. I am very happy to write to the hon. Gentleman with details on his specific point.
Cost of Living
Alan Brown Excerpts(11 months, 1 week ago)
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The Chief Secretary to the Treasury (John Glen)
I beg to move an amendment, to leave out from “House” to the end of the Question and add:
“welcomes the Government’s action to halve inflation, grow the economy and reduce debt; further welcomes the Government’s action to take advantage of the opportunities presented by Brexit, including the passage of the Genetic Technology (Precision Breeding) Act which will boost UK food security; supports the Government’s extensive efforts to support families up and down the country with the cost of living through significant support to help with rising prices, worth an average of £3,300 per household including direct cash payments of at least £900 to the eight million most vulnerable households; and notes that the SNP and Labour would fail to grip inflation or boost economic growth with their plans for the economy, which would simply lead to unfunded spending, higher debt and uncontrolled migration.”
The world has been challenged by a series of events, including covid and the war in Ukraine, with knock-on effects to economies in every continent. In each of those, the Government have risen to the challenge. When covid hit our shores and the entire country had to isolate to save lives, we delivered groundbreaking and historic support to keep businesses afloat and families going. When our ally and friend Ukraine was invaded, we led the way to provide support internationally, and we continue to do so. The Prime Minister just yesterday announced further air defence missiles and support for our ally. Now, with economic challenges at our door, we continue to take the actions necessary to support the most vulnerable and set our country up for long-term, healthy, sustainable growth.
Already, as a consequence of the steps we are taking and decisions we have made, our country has avoided a recession. The International Monetary Fund has said that we are on the right track. Measures in the spring Budget deliver the largest permanent increase in potential GDP the Office for Budget Responsibility has ever scored in a medium-term forecast. That is as a result of Government policy. We have grown the economy faster than France, Japan and Italy since 2010, and at about the same rate as Germany since 2016. Just today, we see the unemployment rate remaining historically low. Inflation of course remains a concern, and we cannot afford to be complacent.
While I would not usually seek to give economic lessons to Members on the SNP Benches, it seems to be worth explaining in this instance that the reality is that high inflation in our country cannot be separated from global events. Other countries are experiencing similar situations to the UK. In the UK, inflation has primarily risen because of Putin’s illegal invasion of Ukraine and global supply chain pressures, which have pushed up the price of energy, goods and raw materials. Domestic inflationary pressures have also risen, as the UK labour market has remained tight, and challenges in recruitment have been reflected in strong wage growth. That has also pushed up the cost to firms of producing their goods and services, and that has been passed on into higher prices.
If we are to answer the challenge of high inflation, we must first accept that high inflation is a global challenge, which many major central banks are tackling. Nevertheless, I know that right now for many in society rising prices, including rising food prices, are causing worry and significant anxiety. People want to know when things will get back to normal and how they will be supported in the interim. Let me answer that directly. The Prime Minister pledged to halve inflation this year, and the latest Bank of England forecast published last Thursday shows that we are on track to meet that pledge. From its peak above 11% at the end of last year, inflation has begun to fall. Both the Bank of England and the OBR forecast that inflation will quickly fall later this year. We are also focused on growing the economy, reducing the burden of public debt, cutting NHS waiting times and stopping the boats. Those are all priorities of the British people, and therefore they are this Government’s priorities, too.
Alan Brown (Kilmarnock and Loudoun) (SNP)
How does stopping the boats help the cost of living crisis?
John Glen
The point I was making was that stopping the boats is a priority for the people of this country, and this Government are focused on the priorities of the people of this country. We are on track to meet these pledges to make our country and all nations, including Scotland, better off. It is also worth remembering that Scotland already has one of the most powerful devolved Parliaments anywhere in the world. The Scottish Government have substantial tax powers, including in relation to income tax, and agreed borrowing powers to further increase their spending, which I am sure the First Minister will be considering.
John Glen
I fully acknowledge the pressures of food inflation—they are in line with those of many of our friends and neighbours, but less than in Germany, for example—and I will come on in a moment to set out the interventions the Government have specifically made to deal with that.
In addition, we are investing directly in Scotland, with £349 million of funding allocated through the first two rounds of the levelling-up fund, as well as establishing two new green freeports. As the Prime Minister has already said,
“all this talk of needing any more powers is clearly not appropriate”.
The SNP and the Scottish Government do not fully use the powers they have already. While, as we have seen today, SNP Members speak about a referendum that I do not believe they have a mandate for, we are levelling up and investing directly in local communities across Scotland.
Let me address the points raised by the hon. Member for Glasgow South West (Chris Stephens).
Alan Brown
If this Union is so successful, so good for Scotland and we benefit so much, why do we need money out of a so-called levelling-up fund?
John Glen
I think the principle of levelling up across the United Kingdom recognises that we do not have symmetry across the local economies of the United Kingdom, and it is about investing to improve the productive capacity. Let me make some progress.
Let me look at the economic matters at hand. As I mentioned earlier, energy costs have contributed significantly to price rises. That is why we are paying half of people’s energy bills. At the Budget, we announced that the energy price guarantee will remain at £2,500 for the next three months, funded in part by the energy profits levy. Just under £26 billion between 2022-23 and 2027-28 is expected to be raised by the levy, on top of around £25 billion in tax receipts from the sector over the same period through the permanent tax regime. This measure is saving the average family a further £160 on top of the energy support measures already announced. That includes this Government’s help for all domestic electricity customers with £400 off their energy bills through the energy bills support scheme, and in providing a £200 payment for households that use alternative fuels such as heating oil through the alternative fuels payment scheme.
Alongside holding down energy bills, increasing benefit payments, increasing pension payments, a council tax rebate, the multibillion-pound household support fund—attracting Barnett consequentials—and freezing fuel duty, we are giving up to £900 in cost of living payments to households on means-tested benefits. That means that more than 7 million households across the UK have been paid a £301 cost of living payment by Wednesday 3 May as the first of three payments. This will be accompanied by a £150 payment for people on eligible disability benefits this summer, and a £300 payment on top of winter fuel payments for pensioners at the end of 2023. The latest payment follows on from up to £650 in cost of living payments delivered to households on means-tested benefits by the Government in 2022, with an additional £150 for individuals on disability benefits and £300 for pensioner households. Altogether, support to households to help with higher bills is worth £94 billion, or £3,300 per household on average across 2022-23 and 2023-24. Aside from helping the most vulnerable, the OBR’s analysis shows that, taken together, the freezing of fuel duty, changes to alcohol duty and the extension of the energy price guarantee will further lower consumer prices index inflation by 0.7 percentage points this year.
Ian Murray (Edinburgh South) (Lab)
I am very pleased to be able to speak in today’s SNP Opposition day debate on the cost of living crisis, because for thousands of my own constituents—just as this is true for Members right across this House—this is the most pressing issue facing all households. After coming through the pandemic, millions of people have found the biggest health crisis in our lifetime being replaced by the biggest financial crisis in our lifetime, most of it compounded by this Government’s own decisions.
Bills are continuing to rise, and that is against a backdrop of wages failing to grow. The average Scottish worker’s wage is now £800 lower in real terms than it was when Labour was last in government. In my own constituency, it is almost £3,000 lower. At the same time, the price of everyday essentials has risen by an average of £3,500 since 2019. The cost of a typical food shop is up by £700 a year, and food inflation is far outstripping actual inflation, as we have heard. Transport costs are up by £800 and everyday fuel bills are up by almost £1,500. So it is little wonder that so many people are struggling to make ends meet. It is the No. 1 issue my constituents contact me about, and I am sure that is the same for every MP in this House.
The crisis shows no signs of abating; in fact, it is getting worse as the Government’s sticking plaster attitude to politics begins to run out. We used to say that too many are having to choose between heating and eating—we have used that phrase in this House a number of times—but it is becoming much more apparent that some are unable to choose as they cannot do either. Under Labour, we used to celebrate the fact that millions had been lifted out of poverty. Scotland’s two Governments are doing a very good job of thrusting them all back in—and more.
Despite what we have heard from the Conservatives—we will continue to hear this today, no doubt—about the miserly attempts by this Government to resolve the crisis, let us not forget that this crisis was made in Downing Street. They will blame and they have blamed covid and Ukraine, but we have had 13 failed years of this Government. Covid and Ukraine have merely hastened the chickens coming home to roost. Just nine short months ago, the former Prime Minister and the former Chancellor crashed the British economy with a reckless plan to give unfunded tax breaks to the very richest. The Conservative party crashed the economy, but there is no contrition and no acknowledgment of that.
The shortest-serving Prime Minister in history has left a long-lasting legacy of economic misery that ordinary working people up and down this country will be paying for for many years, and every Conservative MP who supported that reckless Budget was complicit and continues to be complicit. They are complicit in the Tory premium on everyone’s mortgages; they are complicit in the Tory premium on everyone’s food shop; they are complicit in the Tory premium on everyone’s energy bills; they are complicit in the Tory premium on everyone’s cost of living. And while being complicit in the premium, they are complicit in the discount on everyone’s pay.
Because while the former Prime Minister blew the doors off, this is a crisis that has been bubbling away for a long time. Growth in our economy has stagnated for more than a decade. In fact, had the economy continued to grow at the rate it did under the last Labour Government, we would have about £40 billion more to spend our public services and tackling the cost of living, without raising a single tax. That is the elephant in the room for the Conservatives. [Interruption.] They chunter from the Government Benches without any contrition for the fact that they crashed the economy and everyone is paying the price.
Since 2019 alone, there have been no less than 24 separate tax rises, all implemented by the current Prime Minister as Prime Minister or by the current Prime Minister when he was Chancellor. The tax and no spend Chancellor is now the tax and no spend Prime Minister, taking even more from the pockets of those that can least afford it at a time when they need every penny they can get.
Let me mention the story of constituent who came to see me worried about losing their family home because of higher mortgage rates. Those interest rate rises are a direct result of the Tories’ inflation crisis and the crashing of the economy. He said to me that he may lose his family home to pay for this Government being out of touch and their economic incompetence. Just think about that for a minute: a family losing their home as they can no longer afford their mortgage because of decisions made by this Government.
After 13 years, Britain is forecast to have the worst growth in the G7. In fact, if our economy continues along this growth path, by 2030 Britain will be less well off than Poland. The Government just do not get it, and they do not get the cost of living crisis. It is affecting everyone, with a disproportionate impact on the young, the old, the disabled, students and of course, as always, the poorest. The Government are out of touch beyond comprehension and should be out of time.
It is interesting, however, that in the motion and the amendment both the SNP and the Conservatives attack the Labour party. The SNP’s motion rightly talks about the damage caused by the Conservatives’ Brexit. Putting to one side the fact that this is partly an attempt to hide the SNP’s own complicity in the cost of living crisis, the mess the Tories have made of Brexit has undermined our country: we believe that and agree with the SNP on that. The Conservatives failed to negotiate a good deal with the European Union despite their “oven-ready” promises, and instead have left the country with a deal so thin and deficient that it has had lasting repercussions. Their entire Brexit project was driven by their own party interest rather than the national interest. Ever since, the Government have continued to weaken the relationships with our European neighbours and friends, with disastrous consequences for jobs, businesses and Britain’s place in the world. They are viewed by our European and international colleagues as untrustworthy law breakers.
But the SNP motion is completely wrong: Labour does not support a damaging Tory Brexit. The SNP playbook reeks of desperation and SNP Members absolutely know it. [Interruption.] They chunter, and they use that same line again and again, but I remind the House of their track record on Brexit: they would have taken Scotland out of the EU had they won the independence referendum in 2014; they spent less on campaigning to stay in the EU than they did on chasing 3,500 votes in the Shetland Scottish parliamentary by-election; they abstained on a vote in this House that would have delivered a customs union; they pressed for a general election in 2019 for their own party interest rather than continuing to try to fight the Government’s warped Brexit strategy; and we must remember that when the Division bell rang in this House to either back the thin trade and co-operation agreement or plunge the country into no deal, the SNP chose no deal. This Government have fundamentally failed to improve anything and the Brexit situation in the UK has been bad, but no deal would have been immeasurably inferior. Worse still, the SNP has a proposition for a separate Scotland that is incompatible with EU treaties for a new state wishing to join.
Alan Brown
Is it not the case that the reason we are not in the customs union is that some Labour MPs backed the Tories, and is it not the case that there are now two Baronesses in the House of Lords who were Labour MPs and have been rewarded for their work in helping deliver a hard Brexit—Baroness Gisela Stuart and Baroness Kate Hoey? That is where Labour were back then.
Ian Murray
Those two Baronesses were put into the House of Lords by the Conservative party, not the Labour party, and the reason they are in there and not in here is that they were on the wrong side of history. I draw the hon. Gentleman’s attention to what actually happened in this House in the two major votes when we had the indicative vote process in this House: I do not remember exactly now, but I think there were 42 SNP MPs, and they abstained on the customs union and the vote was lost by six—and that apparently was our fault. Let me emphasise again that on 12 or maybe 19 December, the Division bell rang in this House to either back the deal, which was not ideal—in fact it was a pretty disastrous deal—or back what was even worse, no deal, and the SNP chose no deal. That is what happened and that is what the Whip record in this place shows. The SNP’s Brexit and EU positions are as dishonest as they are broken.
The next Labour Government will build a closer relationship with the EU so that our businesses have the opportunity to grow and to create wealth and high-quality jobs across Britain. We see the trade and co-operation agreement as the floor of our national interest and not the ceiling, as the current Government do, and it will be up to the next Labour Government after the next election to renegotiate the TACA in 2025, as stated in the agreement. We will tear down trade barriers to help our businesses, we will support our world-leading scientists and service sectors, we will strengthen our security co-operation to keep us all safe and we will turn the UK into a green superpower, working with our EU neighbours and international partners. All of that will be done while repairing our tattered relationship and regaining the trust of others.
There is a reality that the SNP never acknowledges: the UK did leave the EU, and we cannot just wish that away. I know SNP Members like to promise the undeliverable because they know they will never have to deliver it, but anything other than saying that to the public is completely and utterly dishonest. It is only through sustainable economic growth that we can resolve the cost of living crisis, and that is exactly what Labour will deliver after the next general election.
Unsurprisingly, the SNP’s motion fails to mention that the SNP has been in charge of the Scottish economy for the last 16 years. A Scot who was finishing school when the SNP came to power is now in their mid-30s, perhaps with a family of their own, and they have seen that, much like with the UK Government, economic growth has been an afterthought, with Scottish businesses dismissed and jobs shipped overseas—although the SNP has done wonders for the UK motorhome industry, of course.
Huge promises have been made off the back of the renewable energy potential in Scotland, but little has been delivered. The truth is that the SNP Government—I give them credit for this—have created tens of thousands of highly skilled, high paid jobs in the renewables sector; it is just that none of them are in Scotland, but are instead in Denmark, Indonesia and everywhere else where that they have shipped off the contracts to foreign shores. So the renewables potential, which could create highly paid jobs and lower energy bills for everyone in Scotland, is being used to lower bills in Scandinavia, while we pay the highest bills in Europe. That is the work of the Scottish Government—nobody else.
When it comes to child poverty, after 16 years of SNP Government a quarter of Scottish kids are growing up in poverty. All the progress made by the previous Labour Government in lifting millions of people out of poverty has been reversed. Even the Children and Young People’s Commissioner for Scotland said the SNP had “absolutely failed” children and young people. SNP Members may enjoy their rhetoric, but their record of delivery is lamentable.
Their record on public services after 16 years of SNP rule is appalling. Their proposition for an independent Scotland is as economically illiterate as the Conservatives who crashed the economy; it is a proposition that will make the current cost of living crisis look like a tea party in comparison. Despite the SNP’s recent statements—including by their Westminster deputy leader, the hon. Member for Paisley and Renfrewshire South (Mhairi Black), who opened this debate—that they do not want to rid us of this Tory Government, I can assure them and the people of Scotland that a Labour Government will transform the country for every part of our country, because we have credible, fully costed solutions to the cost of living crisis.
The first thing we would do is introduce a proper windfall tax on the oil and gas giants, something repeatedly opposed by the leader of the SNP at Westminster until the polls showed it was popular. [Interruption.] SNP Members chunter again, but the record shows that when we brought to the House our proposition to introduce a windfall tax on the oil and gas sector, the SNP did not support it. Over the last year, the Conservatives have left more than £10 billion on the table which could have been realised by backdating the tax to January 2022, as Labour has been calling for, closing the tax loopholes the Prime Minister helpfully put into his windfall tax and taxing at the same rate as Norway. It is simply not right that oil giants are raking in unexpected billions of pounds off the back of British families. The next Labour Government will put an end to that injustice while the SNP sit on their hands, merely carping from the Opposition Benches.
The money raised from that would help Labour alleviate the pressure on families across Britain and would pay for our plan to help energy-intensive industries such as food manufacturers and processors with the cost of energy, helping to keep down prices in the supermarket. That point was also made by the Minister, although his means of doing that was not the same. We would cut business rates for small businesses, paid for by taxing the online giants, who have raked in huge profits in recent years while our high streets have suffered, and we would reverse the Conservatives’ decision to hand the top 1% of savers a tax break, while introducing specific measures to keep doctors in work. We would close the non-dom tax loophole—much to the frustration of the Prime Minister—and break the Tories’ high-tax, low-growth trap that is breaking our economy.
Listening to the hon. Member for Paisley and Renfrewshire South, it would seem that none of that matters and that we would be just as well off to keep the Tories. I do not agree, I am not sure that her constituents agree, and I am sure that the people of Scotland definitely do not agree. If the new First Minister and the SNP really thought that the people of Scotland were on their side, they would put their game playing to one side and call an election in Scotland so that the people of Scotland could choose their next First Minister. While we are on elections, perhaps the best way to resolve the cost of living crisis would be for the UK Government also to call an election so that we can kick this out-of-touch and out-of-time Government to one side.
Douglas Ross
Thank you, Madam Deputy Speaker. I will not do it again so that you do not have to interrupt with a sweetie in your mouth.
There are opportunities for SNP MPs to speak throughout the debate, and they have not turned up. Three quarters of them are not here for the debate; they have refused to be here. This is an important debate, and there are lots of issues that we need to discuss, but many other topics could have been chosen by the SNP. When I was waiting for the motions to come in last night, I thought that we might have a debate about what our two Governments can do together to improve the lives of young people in Scotland, because that is a crucial issue. Just this week, we heard that the former Children and Young People’s Commissioner for Scotland, Bruce Adamson, said that the previous SNP leader at Holyrood had “absolutely” failed young people.
I thought that was the most extraordinary thing that we had heard on the subject—and it was until, in response to the intervention by my hon. Friend the Member for Bosworth (Dr Evans), who quoted those comments, the hon. Member for Kilmarnock and Loudoun (Alan Brown) said, “Woo hoo—the big dog.” Is that the official SNP position on the previous Children and Young People’s Commissioner for Scotland rightly being critical of the abject failure of the hon. Member’s party in government for young people in Scotland?
Alan Brown
I know that a lot of people down here pretend that they cannot understand what I say because of my accent. It is quite embarrassing if the hon. Member does not understand what I said. I did not say words remotely close to that, so he can withdraw the remarks.
Douglas Ross
I am happy to give way again to the hon. Member if he will tell us what he was saying about the former Children and Young People’s Commissioner for Scotland. If I have got it wrong, please tell the House what you said.
Dave Doogan
In a minute.
It is not just the fishers, because Angus is the garden of Scotland and its farmers are subject to the real constraints of Brexit. People talk about farmers as though they are just a guy with a tractor, but modern agricultural enterprise is a vast undertaking involving plant and seed suppliers, as well as any amount of different subcontractors and small businesses, so when I talk about agriculture I am talking about hundreds of small businesses across Scotland, and thousands across the United Kingdom.
My farmers in Scotland are subject to the UK Internal Market Act 2020, for which my colleagues in the Scottish Government would not give legislative consent, because it is so damaging to Scottish agriculture, even before the introduction of the Australia trade deal on top of it, which undercuts with lower standards. That has created a market in which we cannot possibly compete, where they do volume and we do quality. Scottish agriculture is different to English agriculture, which is much bigger. We do not do bulk in Scotland, which gets to the heart of how broken the Union is. Did the UK Government try to construct that system to promote enterprise, jobs and prosperity in agriculture in Scotland? No, they did not. They did it on the basis of their ideology.
Turning back to business investment, where there is a thriving business community, there are jobs and upward pressure on wages. That is what we need to get people out of poverty—
Alan Brown
Will my hon. Friend give way to the hon. Member for Edinburgh West (Christine Jardine)?
The Minister for Employment (Guy Opperman)
As parliamentarians, we must be democrats first and foremost. We must accept the democratic decision of the British people in the EU referendum, and we must accept the decision of the Scottish people in the independence referendum; I wish the Scottish National party accepted that. As the Member of Parliament for Hexham, which goes to Carter Bar and the border, I was proud to campaign from Aberdeen to Annan, from the Borders to Edinburgh, to make the case for the Union. I believe we should continue to do so in this place.
It is unquestionably the case that the Government fully appreciate, and are assessing and assisting with, the pressures that households face across the United Kingdom. It is quite clear that these derive from the challenge of high inflation, the impact of covid and the impact of global issues, most particularly Putin’s invasion of Ukraine. That is why we continue to take extensive action to help households. In 2023-24, we have increased benefit rates and state pensions by 10.1% and we will spend around £276 billion through welfare support in Great Britain. We have never spent more in this country on low-income families, the disabled or pensioners.
In respect of the cost of living, the steps we have taken over the last year show that this is a Government that will always protect the most vulnerable. The total support package we have provided to help with rising bills is worth over £94 billion across 2022-23 and 2023-24—that is more than £3,300 per UK household on average. Included in that are the cost of living payments made to over 8 million low-income households, around 6 million disabled people and over 8 million pensioner households last year. There has been a 170% increase in applications for pension credit.
The Government paid out £37 billion in the summer of 2022 and billions in the autumn of 2022, and the Department for Work and Pensions has made cost of living payments worth £2.2 billion so far this year. This year, more than 8 million households will get additional payments of up to £900. Over 99% of eligible households on a DWP means-tested benefit have now received their first cost of living payment during 2023-24 of £301. Over 6 million people across the UK on eligible disability benefits will receive a further £150 disability cost of living payment this summer to help with additional costs. More than 8 million pensioner households across the UK will receive an additional £300 cost of living payment this winter. We have also provided ongoing support with the cost of living through the energy price guarantee, which continues for the summer.
We believe strongly that work is the best way out of poverty, and we have the opportunity through our jobcentres up and down the country to assist people and provide support for them. Whether that is youth hubs for young people, the 50Plus offer, the in-work progression or the massive increase in disability employment, we are progressing and supporting those people who are in work to get better jobs and a better opportunity for the way ahead. That is why we are extending the support our jobcentres offer to low-paid workers so that they can increase their hours and move into better paid, higher-quality jobs.
For those on universal credit, we are increasing the childcare cap to £951 for one child and £1,630 for two or more children. We are paying childcare costs up front when parents move into paid work or increase their hours. We are further supporting working people with the largest ever increase to the national living wage—an increase of 9.7% to £10.42 an hour from this April. That represents an increase of over £1,600 to the annual earnings of a full-time worker.
There has been much criticism of the UK economy, but we have to bear it in mind that the UK has the fourth highest employment rate in the G7—higher than the US, France and Italy. Our unemployment rate remains low at 3.9%. We have more people in payroll employment than before the pandemic, at 30 million. A substantial package of labour market interventions, part of which I have outlined, was announced at the spring Budget. That was a huge boost to our efforts. We see youth unemployment—
Guy Opperman
As the hon. Gentleman’s colleague said, probably not.
Our record on youth employment is the second best in the G7, our economic inactivity is back at 2018 levels and the number of vacancies has dropped for 10 quarters in a row. We heard much from the SNP during the debate, but there was no talk whatsoever about luxury camper vans worth £100,000, missing auditors or ferries to the Western Isles that do not exist. Presumably those ferries have both the auditors and the camper vans on them. There was no talk of the comment from the Children and Young People’s Commissioner for Scotland that the SNP Government had failed their people; no talk of the 16 years of failure on police, education and health; and no talk of their total abandonment of the oil and gas sector.
We are discussing the cost of living, but the SNP would rather import oil and gas from overseas than support more than 100,000 jobs in the north-east of Scotland and support the businesses that we have there. The truth is that it is in partnership with the Greens, who are closely related to Extinction Rebellion and have stated explicitly that they are anti-economic growth. Why would we import oil and gas when we can address the cost of living with something that is home-grown and supports more than 100,000 in the north-east of Scotland? That is what this Government are doing and what my hon. Friend the Member for Moray (Douglas Ross) is doing, and we should support him wholeheartedly.
We have just passed the 400th anniversary of the publication of Shakespeare’s “Macbeth”—a tale, interestingly, of a husband and wife in Scotland whose misdemeanours finally catch up with them. I am absolutely sure that that has no relevance whatsoever to the present day. I am absolutely sure that the discussion of independence is always
“Tomorrow, and tomorrow, and tomorrow”.
I am absolutely sure that no one in the Chamber today is
“full of sound and fury,
Signifying nothing.”
However, I am absolutely certain that this Government are assisting on an ongoing basis, and I strongly commend the Prime Minister’s amendment to the House.
Question put (Standing Order No. 31(2)), That the original words stand part of the Question.
Energy Trilemma
Alan Brown Excerpts(1 year ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Alan Brown (Kilmarnock and Loudoun) (SNP)
I, too, congratulate the right hon. Member for South Northamptonshire (Dame Andrea Leadsom) on securing the debate. I must admit that I did not realise when she secured the debate that I would effectively be responding to a Tory Back-Bench 1922 committee report. It comes as an even greater surprise to me that I agree with the recommendations she has raised. She did say that there were 30-odd recommendations, though. She did not go through them all—I thank her for that—but I suspect that I would find some among them that I disagree with.
As I say, I agree with the right hon. Lady on the points that she brought forward. We really do have to unlock renewables, and I agree about the need to reduce demand. One way to do that is to increase energy efficiency installations; the Government must really ramp up action on that. One thing I would say to the Minister is that I am now getting feedback that the roll-out through ECO4 is not going as quickly as suppliers would like it to go; they are already behind on progress this year, so maybe we need to look at ways to target the right homes for energy efficiency upgrading.
The right hon. Member for South Northamptonshire obviously took credit for the creation of the new stand-alone Department for Energy Security and Net Zero. I welcome that new Department; to be honest, it was long overdue, but at least it now seems to have the right priority within Government. I also completely agree about the number of grid upgrades that will be required. We need much better forward planning, and it was certainly an eye-opener when she said that we had seven times the amount of infrastructure still to be built. There is no doubt that Ofgem has failed on that. National Grid ESO confirmed two weeks ago to the Business, Energy and Industrial Strategy Committee that it paid £4 billion in constraint payments last year. That is effectively £4 billion wasted that could have gone towards grid upgrades, storage or other mechanisms, and it shows how Ofgem needs to get a grip on the issue and allow anticipatory investment.
We need to imagine what the grid will be required to look like in 2050 and start planning for that now. I am concerned at the piecemeal approach that has been taken; even when the grid has been upgraded, we are building in future constraints already instead of putting in the right capacity. That will cost more money in the long run and block renewables from coming online.
I must say I also welcome the right hon. Lady’s conversion to referendums. She will find that on the SNP side we completely agree with the need for referendums, and I look forward to her support on that matter. I was also glad to hear her compliment the independent advice body Home Energy Scotland, and it would be good to see a completely independent body set up in England to give free and impartial advice and help people to get the measures required.
It is no surprise that I agree with the points my right hon. Friend the Member for Ross, Skye and Lochaber (Ian Blackford) made. He is right that the IPCC report highlights the urgency to take action now, before it is too late. He also highlighted the fact that investment is relocating to the United States where there is momentum because of the Inflation Reduction Act. Meanwhile, here we have the electricity generator levy, but no renewables investment allowance. We really need to look at some form of that. My right hon. Friend obviously mentioned the Skilling report, the opportunity potentially to scale up to 80 GW of green electricity generation in Scotland and how important that could be in a just transition, creating 300,000-plus new jobs.
I also agree with my right hon. Friend on tidal stream. I have been trying to highlight the issues with the funding pot announced for AR5—it is definitely not enough money, especially with inflationary pressures. MeyGen in the Pentland Firth is the biggest tidal stream site in the world, but it has confirmed that it now faces inflation pressures of +50% on the AR4 strike rate that it bid against. The only way that that project can grow is if it gets to scale up through a bigger proportion agreed in AR5, and for that there needs to be a much bigger budget. I am pleased to say that the Exchequer Secretary to the Treasury has agreed to meet me next week, and I will certainly make the case for at least £40 million, which is what I have been asking for.
In a real twist, I agreed with the points made by the hon. Member for Banff and Buchan (David Duguid). There is no doubt that we will still be using oil and gas in 2050 and will still need to utilise them as an asset. As he rightly said, Scotland is a net exporter of oil and gas. In fact, it supplied almost 50% of the UK’s gas consumption last year and 75% of the oil.
When we talk about energy security, though, we must be realistic and accept that, while even a lower percentage increase in production for the North sea increases energy security, that oil and gas can be traded on the international market and does not necessarily come directly into the UK market. There has been a 30% reduction in oil refinery capacity in the UK since 2010, so even a lot of the oil for use in end products here has to go abroad to be refined and then come back. The security issue is not quite straightforward, but I agree that that is an asset we must continue to utilise.
Mr Carmichael
What view does the hon. Gentleman take, then, of the Scottish Government’s current consultation on presumption against future development?
Alan Brown
There is no harm in consulting. We need to look at that and have proper climate compatibility checks—I think that is the right way to go about it.
I agree with the hon. Member for Banff and Buchan about direct air capture, which could, of course, play a role as part of the wider Acorn cluster, but I repeat that, with £20 billion announced for carbon capture and storage, it is disappointing that we are still waiting to hear any firm commitments on Acorn. The Budget mentioned a possible track 1 expansion, so can the Minister advise me on whether Acorn might be included in that this year, or will it rely on track 2? If so, when will we hear an announcement about the track 2 process?
The right hon. Member for Orkney and Shetland (Mr Carmichael) rightly mentioned the fantastic EMEC facility. I urge the Government to come forward with funding to replace EU funding and keep EMEC going. He said that he was not too sure about nuclear. My views on nuclear are well known, but I repeat that I am completely against it. Hinkley is costing £33 billion; Sizewell C will cost something like £35 billion. Think what we could do with that money in energy storage, energy efficiency and even grid upgrades. That £35 billion is just a waste of money. Sizewell C will not be constructed for 12 to 15 years, and there is not even one successful EPR project in the world. SMRs are being promoted, but there is not even an approved SMR design in the UK. Rolls-Royce tells us that it will somehow get them up and running by 2029, but that is a fallacy when the regulator has not even approved the design yet. At £2 billion a time, SMRs are not exactly cheap, and that money could be better spent elsewhere.
The hon. Member for Crewe and Nantwich (Dr Mullan) made a good point about the potential for geothermal, and I agree with him. We have a lot of former mineworking areas in Scotland and other areas of the UK, and they could be a place to start on the potential for geothermal. It would be good to see Government support for that.
The hon. Member for North Devon (Selaine Saxby) mentioned community energy, an effective Local Electricity Bill, and amendments to the Energy Bill. Certainly, I have been a supporter of the Local Electricity Bill. I would be happy to consider that on a cross-party basis when the Energy Bill comes to the House of Commons.
The hon. Member for Stoke-on-Trent Central (Jo Gideon) mentioned intermittency issues. Yes, we need to deal with them, but that can be done with pumped-storage hydro, which my right hon. Friend the Member for Ross, Skye and Lochaber mentioned. All that is required to get Coire Glas over the finishing line for final investment and approval is a green cap and floor mechanism for revenue stabilisation. Some £1.5 billion will be fully funded by SSE Renewables—no subsidy or Government guarantees have been asked for; just the revenue stabilisation mechanism.
The right hon. Member for South Northamptonshire made a good analogy, which everyone picked up on, and I agree with her, but although we are calling it the energy trilemma, we also need to look at it as an opportunity —the opportunity that comes with decarbonisation, green energy, new jobs, just transition and by bringing bills down in the long run. We have to grasp that opportunity to have a truly green renewable energy grid supplying homes across the UK.
The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Amanda Solloway)
I am going to go through my speech as fast as I can, because this has been an incredible debate. I would so much have liked to have had more time, but I want to allow my right hon. Friend the Member for South Northamptonshire (Dame Andrea Leadsom) to come back in at the end.
I welcome the opportunity to debate this important issue, and I thank all hon. and right hon. Members for their contributions. We have had an informed and interesting discussion. I particularly thank my right hon. Friend the Member for South Northamptonshire for bringing this important topic to the House. I also pay tribute to her for the important work she did in advancing the nation’s energy and climate security as Secretary of State with responsibility for those matters, as well as in her role as Energy Minister prior to that. I welcome the work that she and other Members have been doing more recently to contribute to this policy debate.
I agree with my right hon. Friend about the creation of the new Department for Energy Security and Net Zero, which I am sure that the whole House will welcome. It will deliver policies at the heart of the Government’s agenda and tackle the energy trilemma. Indeed, the Secretary of State was mindful of the trilemma as he laid out his priorities, which are:
“To set Britain on a path to energy independence, in other words, delivering energy security.
To bring bills down as soon as possible, and keep them down, so wholesale electricity prices are among the cheapest in Europe, delivering consumer security.
To decarbonise energy as part of our commitment to net zero, delivering climate security.”
As the Minister with responsibility for energy consumers and affordability, I will be working hard with the Secretary of State to bring down energy bills for households and businesses and to tackle fuel poverty.
The Government have a clear plan to deliver our priorities, set out in our Energy White Paper, published in 2020, and in our “Net Zero Strategy”, published in 2021. The British energy security strategy, published in April last year, charted a pathway to reducing our dependence on imported oil and gas and achieving net zero greenhouse emissions by 2050.
In the 2022 edition of the index, the UK was ranked fourth overall, as the hon. Member for Southampton, Test (Dr Whitehead) mentioned, ahead of G20 competitors including France, Germany and the United States. We are clearly doing something right. We should not consider the three aims of having secure, affordable and clean energy as being in competition with each other. In fact, enhancing security means decarbonising electricity, and both mean keeping energy bills affordable. To illustrate that point, I highlight the role that wind and solar play in our energy mix. They are not only the cleanest sources of power that we have, but the cheapest, and they contribute to our energy security by reducing our reliance on imported fuels.
I want to mention the contributions from a couple of other Members. My hon. Friend the Member for Banff and Buchan (David Duguid) has a great depth of knowledge and brings real experience to the subject. He has a genuine commitment to the subject, and he mentioned carbon capture, usage and storage. That is a priority for the Government, and we are progressing as quickly as we can. The funding package announced at the Budget is unprecedented and demonstrates His Majesty’s Government’s strong commitment to delivering CCUS in the UK.
Amanda Solloway
I am so sorry, but I just do not have time.
I would particularly like to mention my hon. Friend the Member for Crewe and Nantwich (Dr Mullan), who is a strong and consistent advocate for energy security and net zero. The UK currently does not have access to large naturally occurring geothermal resources that countries such as Iceland have, but I welcome the review he is doing and look forward to reading it.
To meet our ambitions on renewables, I agree with my right hon. Friend the Member for South Northamptonshire that we should accelerate the planning processes and networks infrastructure vital to bringing these projects to fruition. That is why the Government have committed to dramatically reducing timelines for delivering strategic onshore transmission network infrastructure by around three years, with an ambition to halve the end-to-end process by the mid-2020s. We look forward to the report from the Electricity Networks Commissioner, Nick Winser, this summer, and will take action in response to his recommendations.
We are committed to ensuring that projects benefit not only the nation as a whole, but the communities in which they are built. Members rightly call for an electricity system that is smart and flexible, and by the end of 2022 there were 31.3 million smart and advanced meters across Great Britain. The flexibility of the system is underpinned by a growing pipeline of electricity storage projects, with nearly 23 GW of storage already online.
Members have rightly pointed out the crucial role in energy security of reducing consumption through targeted energy efficiency measures, and we are already off to a good start. In 2010, only 14% of homes were in energy performance band C or better, but thanks to Government and industry action, 46% of homes now meet this benchmark.
The Government are bringing all this work together through the Energy Bill, which is the vehicle for delivering our strategy. It will modernise the way that we heat people’s homes, it will turbocharge British technology and it will liberate private investment, scaling-up jobs and growth.
To sum up, the UK is firing on all cylinders to deliver a green, resilient and independent energy system, with these three elements going hand in hand. As my right hon. Friend will know, the UK is a global leader not just in clean energy, but, as the energy trilemma index confirms, in cheap and secure energy. So it is only right that our ambition is to completely decarbonise our power system by 2035, subject to ensuring security of supply. This will provide the cheap, clean and British energy we need for decades to come.
Oral Answers to Questions
Alan Brown Excerpts(1 year, 1 month ago)
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Jeremy Hunt
I do, but I also point out to the hon. Lady that we took a range of other measures in the Budget that will help such people, including increasing the help that we give them to find appropriate work, and helping those who have a long-term sickness or disability to get the support they need to get back into work. Doing all those things will make a big difference.
Alan Brown (Kilmarnock and Loudoun) (SNP)
The Chancellor of the Exchequer (Jeremy Hunt)
This Conservative Government believe in the virtue of work, and that is why last week’s Budget set out to remove barriers for long-term sick and disabled, for jobseekers, for older people with our pension tax reforms, and for parents with the biggest expansion of childcare in memory.
Alan Brown
With Orbital O2 in Orkney and MeyGen—the largest tidal stream site in the world—Scotland leads the way in tidal stream generation. That industry is at a stage where it needs to expand and scale up, but to do so, it needs a bigger ringfenced budget. In the renewables auction announced last week, the Government propose to halve the budget for tidal stream instead of increasing it. Will the Chancellor meet me to discuss the impact and the opportunities for business?
Jeremy Hunt
We are interested in giving support to all forms of renewable energy, and the Exchequer Secretary to the Treasury is very happy to meet the hon. Gentleman to discuss those issues further.