Nuclear Energy (Financing) Bill (First sitting)
Alan Brown ExcerptsTuesday 16th November 2021
(3 years ago)
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Alan Brown (Kilmarnock and Loudoun) (SNP)
Q
Ideally, the Bill is supposed to facilitate Sizewell C going ahead. Julia, you said that you view Sizewell C as units 3 and 4 of Hinkley Point C. Given that we are consistently told that the learning from the design of Hinkley Point C went on to Sizewell, why has the taxpayer committed £1.7 billion in the Budget to take Sizewell C to a final investment decision?
Julia Pyke: The £1.7 billion and its use is not published and not available to us. I think there is an assumption that it is for a Government investment in Sizewell C. Whether or not that money is for spending before you reach a final investment decision, or is a Government investment, is the type of investment decision for the Government and not for us.
Alan Brown
Q
Julia Pyke: There has been no express discussion about the use of the £1.7 billion in the Budget as pre-development funding for Sizewell C, no. The Government do discuss how it is that we may get from where we are now to a final investment decision, but there is no explicit linking of the £1.7 billion and that discussion.
Alan Brown
Q
Julia Pyke: We believe that the regulated asset base model—David and Michael will want to comment—is designed to come into place at financial close. The question of how nuclear projects get from where they are now—in the case of Sizewell the project is very mature, with a design and a team, and we have applied for consents; projects that are further behind obviously have a lot further to go and need a lot more money—is its own question. The regulated asset base model is designed to give the private investment community sufficient confidence in investing in nuclear that nuclear can go ahead and take its place in the electricity mix, which benefits consumers. The model is not necessarily designed to be a solution to the period from conception to financial close.
Alan Brown
Q
Julia Pyke: If you look at the roughly £200 billion of regulated assets in the UK across the national grid transmission lines, distribution lines, water companies and airports, the regulated asset base model will track the lifetime of the asset. In the case of a UK European pressurised reactor, the operational lifetime is around 60 years.
Alan Brown
Q
Julia Pyke: I think nuclear is unique among electricity-generating technologies in pricing in the cost of decommissioning and waste disposal up front. In the gas price, you do not see the cost of dealing with climate change. In the price for other forms of electricity generation, you do not see waste disposal priced in, but in the case of nuclear, the cost of decommissioning and waste management and disposal is priced in to the electricity price.
Alan Brown
Q
Julia Pyke: It is priced into the CfD for Hinkley, and it will be priced into the contractual arrangements for Sizewell.
Alan Brown
Q
Julia Pyke: A regulated asset base model will tend to pay for the asset to be available. We expect the electricity to be sold at market price and for the regulated asset base model to either provide a top-up, in the way the CfD does, if the costs under the RAB are above the then electricity price, or to pay back in if we see spiking electricity prices, in the way we have done recently, during low wind speeds and the gas price spike. It is two-way.
Alan Brown
Q
Julia Pyke: You would expect the regulated asset base to work in the way the existing £200 billion of regulated assets work, which is essentially to pay for availability.
Alan Brown
Q
Julia Pyke: I believe that the Government have done its calculations very carefully and cautiously, so I believe they are very realistic. They are comparing the cost of money under a contract for difference with the cost of money under a regulated asset base model. It is important to remember that the cost of money is by far the dominant cost to consumers. We need nuclear, and we need to get the cost of nuclear down. The dominant cost of nuclear to consumers is the cost of money, so it is entirely plausible that the Government’s figures have been carefully calculated and are right.
Alan Brown
Q
Julia Pyke: We have, of course, looked at the savings. The most important saving to consumers is that, in building nuclear, consumer bills will go down. Models without nuclear are more expensive—I think the Secretary of State himself has said that in Parliament. That is a major reason to go ahead with nuclear, and it is a major reason to introduce the most cost-effective way of financing nuclear, which the Government has concluded is the RAB.
David Powell: If I can help with that question, from the perspective of GE Hitachi, we are focused on small modular reactors in the UK. While the cost of those is considerably less than the cost of the Hinkley plants, the output is of course a lot less, at 300 MW or so. If you are going to build a fleet of those, which is where we would like to go in the UK—using that repeatability model and a standard licence design, so that once it is designed and licensed it can go through being built repeatedly, which is very much a factory output-type of approach—you very quickly get to the capital cost of something similar to a Thames Tideway project, which was £4 billion. I know that the RAB model is focused around large-scale nuclear projects, but we would also like to see that applied to small reactors or at least be considered. As yet, we have not done any analysis—all our focus has been on looking at costs, and the models have been on the contract for difference approach—but we would like to look at how that RAB model would apply, from the Government’s perspective as well.
Julia Pyke: If you look at the Tideway savings, when Tideway was first conceived of, before it was decided to do a RAB, I believe it was estimated that consumers would have to pay around £80 a year on their bills, and the RAB reduced that to around £25.
Alan Brown
Q
Julia Pyke: I cannot recall the length of the Tideway contract, but it is quite long.
Alan Brown
Q
You are hoping that RAB will facilitate the small modular reactors as well. Would that be a 60-year operational contract you would be looking for?
David Powell: That is a matter for discussion with the Government and BEIS, but our plant design life will be 60 years, in a similar way to the Hinkley and Sizewell reactors. So, yes, potentially. That really depends on what the developers and investors would like to see.
Alan Brown
Q
Julia Pyke: I do not know what plans the Government has to explain the arrangements, but I imagine it will be in line with the principles of transparency. There is a lot information available about Hinkley. Michael made the great point earlier that value for money is around many things; it is the electricity price including the price of decommissioning, but it is also around UK content and around jobs. We will have 70% UK content; we will give rise to around 70,000 jobs. We give work to over 3,000 British businesses. So value for money is a wider metric than just the cost. There is a lot of information available on our supply chain plans and UK content, and I think there will be a lot of information available around the calculation of the RAB price.
Alan Brown
Q
Julia Pyke: Jobs in construction, using the National Audit Office metric, are around 70,000. Permanent jobs to operate the plant would probably be around 900 in ordinary state, plus several thousand more when there are maintenance outages, which are approximately every 18 months.
Virginia Crosbie (Ynys Môn) (Con)
Q
Michael Waite: In the Bill, there is not currently a clear apportionment of risk between the constructor, the developer, the investors and the consumers. It is clear that if we are developing and constructing a project, there are two approaches to ensuring there are no overruns and minimising the chances of cost and schedule difficulties. You can either take a carrot or a stick approach. If the stick is applied to the developer and the constructor, there is necessarily a larger contingency applied from day one. If I remember correctly, in the Hinkley point original negotiations there was a £2 billion contingency for potential problems and cost overruns for a first-of-a-kind project in the UK. That sort of contingency allocation can be minimised by taking more of a carrot approach, where fees and profits can be at risk but a developer and constructor is not risking losing money on the job. There are many mechanisms in place that can incentivise on-time and on-budget operation without apportioning too much risk to the construction community.
Alan Brown
Q
Julia Pyke: The construction period is about 10 years, so it will take about 10 years.
The Chair
Thank you very much. I thank all three of our witnesses, who have had a gruelling session. It has been very useful; a lot of information has been gleaned from your evidence and we are most grateful to you for taking the time to come and speak to us. Thank you very much indeed. Would you mind vacating the hot seat? You will be replaced by only one person in the room. Incidentally, you are more than welcome to stay and listen to the subsequent session. I invite the next panel to join us.
Examination of witnesses
Sue Ferns, Charlotte Childs and Simon Coop gave evidence.
Dr Whitehead
Q
Simon Coop: The UK workforce are absolutely flexible and they are highly skilled. In construction, the same key workers with the key skills have moved to projects. I do not see that being a major problem in future construction projects. As a result of talking to the company, there are already plans to transfer the operational skills at Hinkley Point B to Hinkley Point C. Those operational skills are currently transferring and people are keen to move on and use those skills at the Hinkley Point C project. There should be no difference in terms of transfer to future construction projects.
Alan Brown
Q
Charlotte Childs: We are a member of that organisation, so the letter you received and the policy that we have set is based on a wide-ranging discussion with our members. In response to your suggestion about investment in manufacturing, it is not a this or that situation, is it? Scotland in particular has benefited greatly from the current nuclear civil generation, and the zero carbon generated by Torness and Hunterston B have contributed to southern Scotland consistently hitting the 2030 target, working alongside other renewables like wind to provide green energy. Without heavy investment in new nuclear projects we will not reach our net zero targets, and Scotland has set itself an even more ambitious target of 2045 to reach net zero. That simply will not be possible without having a consistent and reliable baseload that is net zero in its production of energy.
Alan Brown
Q
Charlotte Childs: Those alternates do not exist yet and will not do so for a long time. The technology is not there in the short term to reach the targets that have been set in the near future. It is also about investing in UK skills and jobs, and the existing nuclear supply chain—Sue spoke of Springfields and the nuclear supply chain in place to deliver Hinkley Point C. As Simon and I have said, we need to ensure that the decisions are taken decisively and quickly to protect those supply chain jobs. The supply chain for wind, for example, which you have suggested in the past is a viable alternative to nuclear, is not within the UK. We have the skills and the capability, but we are currently importing turbine parts and steel from China to create the wind turbine fields that are currently being constructed. The £20 billion is a lot of money, but it will create an inordinate number of skills, prospects and social changes for the local area around Sizewell, as well as for the wider UK workforce and supply chain.
Alan Brown
Q
Sue Ferns: If you do not mind, I just want to add to what Charlotte has said. Our analysis shows that investment in nuclear is more jobs-rich than investment in other low-carbon technologies. We have done some work, based on Office for National Statistics data, that shows that each installed megawatt of nuclear capacity supports roughly 4.7 direct and indirect jobs, compared with 1.5 in offshore wind and 1.1 in solar. I would be happy to share that analysis with you if it is of interest.
Alan Brown
I have seen that—I know some of it is up for debate. It is also about operational jobs. I will happily discuss that further.
The Chair
Great. Unless there are any further questions from Members or our witnesses have anything particular to say that they have not said—I see no indication that that is the case—I thank our three witnesses very much indeed for their time before the Committee. Their evidence will be useful in our deliberations over the next couple of weeks, when we will consider the detail of the Bill. I call the Whip to move the motion to adjourn.
Oral Answers to Questions
Alan Brown Excerpts(3 years ago)
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Mr Clarke
The hon. Gentleman is right to champion the university sector. We in this country are fortunate in having such a fantastic set of universities, and it is important for young people to have the opportunity to enrol on courses that will meaningfully improve their life chances and career prospects. However, it is also important to balance a strong offer for the university sector with an equally strong vocational offer, and we are keen to strike that balance through the new T-levels and our investment in skills—which was a defining theme of this Budget and spending review—so that whatever young people decide to do, they have a strong and credible route to employment and success.
Alan Brown (Kilmarnock and Loudoun) (SNP)
Scotland leads the world in the development of wave and tidal technologies. The expansion of that sector could create fantastic chances for more young people to secure more highly skilled jobs, and could set them up for possible worldwide opportunities. However, if the sector is to expand, it will need a ring-fenced pot of money in the forthcoming contracts for difference auction. It is believed that the Treasury blocked that concept. Will the Chief Secretary meet me to discuss how changes could be made that would allow the sector to bid and be successful in scaling itself up?
Mr Clarke
The hon. Gentleman has referred to the contracts for difference mechanism, which has been hugely successful in helping to drive the improved economics of technologies including offshore wind. I think that we as a country should be very proud of that, especially in the week of COP.
There is no doubt that there are exciting opportunities for young people. I think that the Department with which the hon. Gentleman would do best to engage on that is the Department for Business, Energy and Industrial Strategy, but I am always happy to have any conversations that would be useful in this regard.
Carbon Emission Charges
Alan Brown Excerpts(3 years ago)
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Alan Brown (Kilmarnock and Loudoun) (SNP)
It is a pleasure to serve under your chairmanship, Mr Robertson. I congratulate the petitioners on bringing forward the petition and the hon. Member for Newcastle upon Tyne North (Catherine McKinnell) on presenting the debate and making some key points. It is a worthwhile time to debate this subject, given that COP26 is taking place in Glasgow as we speak, and how we achieve net zero in the fairest way is something that needs serious discussion. It is a slight disappointment that there were not more Back-Bench contributions, but so be it.
I completely agree with the three key points made by the hon. Lady. Obviously, we need to generate the shift to low-carbon technologies, but it is critical that we protect the most vulnerable and stop carbon leakage. The hon. Member for Broadland (Jerome Mayhew) also made that point. He made an interesting contribution, and I will try to summarise it. I think he said that although he is a proud free marketeer, he is not really a free marketeer because interventions need to be taken. That is quite an interesting dynamic. He also seems very much to be a protectionist when it comes to imported goods—but again for the right reasons, because we are talking about carbon border adjustments.
Jerome Mayhew
I want to make it absolutely clear that I am not a protectionist. If a CBAM is to be successful, it is important that we ban the P-word. The tariff has to be applied at exactly the same level as that used in the domestic economy.
Alan Brown
It is possible that I was being slightly flippant when I used the word “protectionist”. I take his point that if we are going to do this correctly, it will have to be in collaboration with other countries. I agree with that.
If we believe in the basic principle that the polluter pays, a carbon tax makes sense. If we are serious about achieving net zero, we need to give serious consideration to carbon taxes. However, as has already been said, any such taxation needs to be fair. It cannot be structured in such a way that companies feel obliged or rewarded for relocating to other countries, therefore defeating the purpose. Critically, it must also not lead to the poorer in society paying a bigger burden, especially if a tax is levied on gas bills. The reality is that the more affluent will be able to switch to heat pumps, but those struggling to pay their energy bills will have no chance of doing so. We cannot leave the most vulnerable to pick up the carbon tab for others as the energy sector transitions to net zero.
The recent Government policy of £5,000 grants for heat pumps is still insufficient for most people to be able to afford the installation of a heat pump. The unit cost of a heat pump is still in the price range of £6,000 to £10,000. A £5,000 grant goes only part of the way, but it does not make up for all the additional work that is also required. We need to have proper energy efficiency measures, which are welcome but cost money, such as a new water tank, possibly new radiators, decommissioning boilers, and then there is decoration works that need to be done to a property once all that work is completed. That £5,000 grant is clearly not the pathway to increasing the number of heat pump installations from current figures of 30,000 per year to the Government target of 600,000 a year. Going forward, we need to look at that in the mix. Before a carbon tax is introduced, we need to ensure that it does not create more people who are fuel poor, and also look at how we use the revenues from the carbon tax to help get heat pumps and energy efficiency measures for those who need them most.
At the moment, decarbonisation of the power sector is being paid for by levies from our electricity bills. The UK Government have acknowledged that that is unsustainable, because roughly a quarter of electricity bills are made up of those levies. That needs to change; there needs to be a fairer system. That is where carbon taxes could be looked at, but—I am repeating myself—it is important that the most vulnerable are protected.
In wider industry, cost-effective decarbonisation solutions need to be available to industry when a carbon tax is introduced, and taxation must be structured so that it is fair and equitable across the UK. Recently, the UK Government opted to fast-track two carbon capture and storage clusters in the north of England but, disgracefully, they have made the Scottish cluster a reserve cluster. That means that, despite the Scottish cluster being the most advanced in project development and deliverability, it is estimated that the two other clusters will proceed at a faster rate.
It would be inherently unfair for the Government to support, either via direct taxation or consumer levies, some industries in some areas of the country while potentially slapping a carbon tax on another area just because they have not been progressed at the same rate. These things have to be looked at in the round. The Scottish cluster takes in the two biggest carbon dioxide emitters in Scotland—Peterhead gas station and the INEOS facilities at Grangemouth. As the biggest polluters, they have to pay to remedy that—that is where we are right—but will they make that investment? They need that assistance, and they must not be disadvantaged when others are getting support.
Revenues from a carbon tax must be reinvested in green initiatives targeted at the most vulnerable and the hardest sectors to decarbonise. They must also be completely transparent. We have had a carbon tax in the airline industry for years: air passenger duty, which is supposed to follow that basic principle of polluter pays, in relation to aircraft emissions. The actual reality is that, over the years, APD has become nothing more than a Government revenue stream. It is not ring-fenced or reinvested; it becomes part of the “money in” column and is added to the mix of Government expenditure.
It is outrageous that over the years, so-called environmental taxes have been levied and never ring-fenced and reinvested in the way they should have been to reduce emissions. Last week, the Chancellor made the crazy announcement of lowering APD on domestic legs of return journeys. We need a serious debate about support for the airline industry and the wider travel industry, but a reduction in air passenger duty should apply only to airlines that use sustainable aviation fuel, which costs more money. At least companies would be incentivised to lower their emissions, with the offset reward of reduced APD. It makes no sense in the current climate to do a blanket APD cut.
In the aviation industry as a whole, for years consecutive Governments of different colours have maintained a policy that aviation fuel is duty free. We pay our petrol duties at the petrol pump for domestic use in our cars, but all these years, aviation fuel has been duty free. That makes no sense. It needs to be looked at in the round. I do not want to kick the airline industry when they are down and make it harder for them, but we need a system that is fair for everyone on carbon taxes, emissions and incentivising behaviour to drive change. The Government need to look at that.
In the oil and gas sector, £350 billion of revenue has come from Scotland over the years. Those were carbon taxes, but that money has never been ring-fenced or reinvested. A sovereign wealth fund has never been created. Most countries across the world have created sovereign wealth funds, which they are using now, in these tough times, either to help their economy, stimulate their economy, or do green initiatives on the path to net zero. But the UK Government have never done that. It is to their shame that we do not have that money, as a legacy, to go forward.
Today, I actually managed to attend a COP26 panel event before I got on the train to come down to Westminster. There was a representative at the event from Louisiana; he was explaining how for years it has used its offshore revenues to pay for climate adaptation measures along its coastline. Obviously, Louisiana is one of the areas most affected by coastal erosion. That shows us what can be done with long-term thinking, but it needs the initiative to look at revenues that are coming in and how to use them wisely. That is what I am calling for. If there is carbon taxation coming in, it must be transparent and it must be available to be reused to fight climate change.
In a similar vein, I represent a former coalfield area. Carbon taxes had been applied to the extraction of coal over the years, but a few years ago, when the open-cast coal industry collapsed in my constituency, it left massive craters that needed reinstatement work at a cost of millions of pounds. Carbon taxes came from my constituency to the Treasury, but they just went into the black hole. When we asked for assistance for restoration work on those abandoned coalmines, the answer that came was, “No. Too bad. That money came in and it has been used. There is no money coming back to your constituency. It doesn’t work that way.” That shows the folly of not ring-fencing a tax for the purpose that it should be ring-fenced for. Again, transparency is utterly critical if we are to go forward.
I would also say on transparency that the Treasury will have to develop these taxes following open consultation with industry, non-governmental organisations and charities. I also suggest that it would be worth the UK Government’s following the lead of the Scottish Government and having a just transition commission that is able to advise the Government on fairness, look at policies across the board and advise the Government accordingly. Equally, the Treasury cannot be left with the power to introduce exemptions from carbon taxes without robust and transparent procedures, or else it is a lobbying exercise and it becomes open season for donors and cronies to lobby the Government and possibly get exemptions. Again, anything that comes forward needs to be transparent.
I have just one further warning about the money not becoming a Treasury income, because that nearly happened post Brexit. The Department for Business, Energy and Industrial Strategy had devised an emissions trading scheme, which was agreed with all the devolved nations, but at the eleventh hour the Treasury wanted to throw away all that work and replace it with the introduction of a carbon tax. That was clearly just because the Treasury saw it as an income stream. That cannot be allowed to happen; the Treasury cannot have carte blanche to do what it wants. It also shows us that carbon taxes have to be developed in conjunction and consultation with the devolved nations.
In Scotland, we have our own net zero by 2045 target. We have, as I said, the Just Transition Commission. We are working with our own policies, so it is only right that carbon taxes be introduced in such a way that they do not adversely impact our direction of travel.
I am getting near my conclusion, Mr Robertson. I have some concerns about a carbon tax, but largely I do favour the concept. I pay tribute to the work done by the Zero Carbon campaign, which has illustrated and highlighted the fact that surveys prove that such a tax is generally popular with the wider public. They understand the need for net zero; they understand the benefits of a carbon tax being introduced, but again, the critical question is whether that is being done fairly. Scotland’s Climate Assembly has had similar findings with the delegates who have participated in the assembly.
Things can be done to resolve the concerns. Again, that is about transparency. It is about targeted reinvestment. Ireland is already doing that: it targets top-up social welfare payments. That is something that this Government could look at, especially with the cost of living and the fuel and energy cost crisis at the moment. They could put more money into supporting electric vehicles as we try to transfer away from the internal combustion engine.
Something that the Scottish Government are doing is interest-free loans. They have extended interest-free loans to the second-hand market to try to extend affordability, but the UK Government are cutting the grants available. If we are going to have carbon taxes, we need to further stimulate the electric vehicle market and ensure that some people are not left behind.
The decarbonisation of our heating systems is absolutely critical. It would be good to step up energy efficiency installations, treat energy efficiency as a capital infrastructure programme and speed up the upgrading of all properties to EPC––energy performance certificate––band C. That would reduce emissions and fuel costs. What could be a fairer way of using the carbon taxes that are levied?
I agree with the two contributions so far about introducing a broader carbon adjustment to minimise leakage or offshoring. We know that carbon taxes can be successful in changing behaviour. We know that they seem to have wider support if they are introduced fairly and transparently, so let us continue with this serious discussion. Let us find a way to introduce them but ensure that it is done in a way that helps us get to net zero and is part of a just transition.
Lucy Frazer
I will make a little bit of progress, because I am about to address a point that the hon. Member himself mentioned, which was about aviation duty. The point about a domestic increase in air passenger duty has been made over the past few days, but I would like to highlight some other work that is being done in this industry to try to ensure that it is compliant with our net zero targets and ambitions. We have the Jet Zero Council, which is looking at how we revolutionise this industry and make it more carbon neutral.
Alan Brown
I know about the work of the Jet Zero Council, but what measures were in the Budget to help the airline industry decarbonise?
Lucy Frazer
The Budget set out a number of measures to ensure decarbonisation. There was a significant amount of spending in relation to decarbonisation in various transport areas, including the electrification of cars. We have already talked about heat pumps, and in relation to the airline industry, the hon. Member will remember that as well as reducing the tax on domestic airlines, we increased the tax on long-haul flights, recognising that it is not particularly carbon friendly for people to travel further.
I would like to address two important points that were not really raised in the debate but which were in the petition. The petition makes the link between air quality and subsidies to fossil fuel companies. I want to highlight that the UK has been a long-standing supporter of the multilateral efforts to promote fossil fuel subsidy reform since they were first proposed in 2009, including through the G7 and the G20. In December 2020, the UK announced its support for the statement on global fossil fuel subsidy reform. Inefficient fossil fuel subsidies encourage wasteful consumption, reduce our energy security, impede investment in clean energy resources and undermine efforts to deal with the threat of climate change. In March of this year, the Government went further, confirming that the UK
“will no longer provide any new direct financial or promotional support for the fossil fuel energy sector overseas”
other than in tightly defined and limited circumstances, such as technical or regulatory assistance that supports health and safety or to support decommissioning.
The other important matter raised in the petition was air quality. I want to underline that the Government are taking significant steps to improve air quality in the UK. It is not just tax measures, but non-tax measures, that achieve our aims, which is why we have a strong and proportionate regulatory framework that requires industry to reduce emissions, including of carbon dioxide, nitrogen oxide and particulate matter. The industry has responded with investment and innovation to meet those standards.
I would like to conclude by saying that it is a pleasure for the Government to answer on this extremely important topic. The petitioners’ success in securing this debate should not come as a surprise to any of us—it is simply evidence of the widespread recognition of the challenge we face, the importance of the issue and the cross-party support for tackling climate change. As the Prime Minister said yesterday,
“The UK has proved it can be done—we have lowered our greenhouse gas emissions by 44%... And we’re cutting our contribution to climate change more and more every day.”
I reassure hon. Members and the thousands of petitioners that the Government take the issue extremely seriously. We will continue to act on many fronts, both nationally and internationally.
Working People’s Finances: Government Policy
Alan Brown Excerpts(3 years, 2 months ago)
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Mr Clarke
I absolutely agree: it is very important that we invest in skills. The plan for jobs is not just about getting people into work or keeping them in work; it is about making sure they grow their skills during their working lives, which is why we have a focus on more skills for school leavers and generous apprenticeship hiring incentives. We are also tripling the number of traineeships for 16 to 24-year-olds, and we have the pioneering lifetime skills guarantee. These are all the sorts of things that will make a difference in Staffordshire as they will across the rest of the UK, and we should be incredibly proud of that.
Alan Brown (Kilmarnock and Loudoun) (SNP)
On the previous intervention about there being a limited amount of money that can only go so far, did the £1.6 billion allocated for a nil rate stamp duty on houses worth up to £500,000 help the poorest, the richest, or a combination of the richest and the housebuilders’ profits?
Mr Clarke
The hon. Gentleman asks us to apologise for keeping the housing market moving in the teeth of the pandemic and I make absolutely no apology for that; it was absolutely the right thing to do to make sure we did not see a collapse of that market.
It is important to recognise that supplying, protecting and creating employment opportunities is the right way forward both economically and politically for our country. That is why we have made a deliberate choice to invest in our plan for jobs, which we launched over a year ago to create work opportunities and assist workers to develop the right skills for the future.
Our plan is helping young people—a group disproportionately affected by the pandemic—through the £2 billion kickstart scheme. At lunch, I was talking to the Under-Secretary of State for Work and Pensions, my hon. Friend the Member for Mid Sussex (Mims Davies), about the impact of these programmes on young people, creating and fully funding hundreds of thousands of jobs for those at risk of long-term unemployment. I am proud that so far over 63,000 young people have had the chance to begin a kickstart job, with the numbers growing by more than 2,000 every week. Our plan will support more than 1 million unemployed people, many of whom are aged over 50, helping them find work through our three-year-long £2.9 billion restart programme, and providing jobseekers with the personalised, intensive support that will make a real difference to their prospects.
Alison Thewliss
The hon. Member is perfectly right to point that out and to refer to the words of Torsten Bell. He came to the Treasury Committee to give evidence about some of the things that we are facing in the months ahead. Many constituents will just not be able to cope with this. They will become more indebted, they will struggle to get by, and they will find it difficult to get back out of that debt, get on with their lives and be productive members of society. This is a significant crisis, which this Government are ignoring and making worse by their inaction.
This Tory Government have already created the perfect storm: a cost-of-living crisis atop an already weak and stagnant economy. Citizens Advice Scotland found that more than 1.4 million people in Scotland ran out of money before payday at least once in the last year. Sarah Arnold, senior economist at the New Economics Foundation, found that 2.5 million working families on low incomes will lose £1,290 a year because of the double whammy of the cut to universal credit and the increase in national insurance contributions. That is utterly unjustifiable.
It may not mean much to those on the Government Benches, but that is an enormous amount of money to many people across this country, which cannot be made up through a few hours’ work, as the Work and Pensions Secretary appears to believe. It is the difference between just getting by and not coping at all, between being able to put food on the table or relying on the food bank, between keeping the lights and the heating on or disconnecting from the power supply.
I am an honorary vice-president of Energy Action Scotland—I refer Members to my entry in the Register of Members’ Financial Interests—which has found that one in five households with a prepayment meter regularly self-disconnects because they simply cannot afford to top it up. Of those households, 88% contain a child or someone with health issues. Those on prepayment meters will struggle the very most in the months ahead—they always do—and this UK Government do absolutely nothing to support them. The stress of watching the meter eat what little money has been put in it is an experience that I am sure few on the Government Benches will understand, but I have had constituents shivering, living in one room under blankets and duvets, because no matter how much money they put in that meter, they cannot keep their home warm.
There is a significant impact on older people, carers and people with disabilities, whom this UK Tory Government have often completely ignored. That is a group whose energy bills are higher. My constituent Rob McDowall is among many already worrying about how to keep warm this winter. Like Citizens Advice Scotland, he is advising people to seek assistance and advice right now. While I fully support attempts to seek advice, this UK Tory Government should take their responsibilities seriously too.
Energy costs will increase more in Scotland due to our geography. This is a life and death issue. Living in a cold home causes illness, and Energy Action Scotland has found that there are around 2,000 excess deaths in Scotland each winter as a result. That is a scandal in energy-rich Scotland, but it is a reflection of how broken the energy system is—a system entirely reserved to Westminster. Around 25% of energy bills is the cost of UK Government levies and policy choices, as well as VAT. That disproportionately hits those on low and middle incomes. The Treasury must do something now to alleviate that burden. That is in its hands.
Alan Brown
Is it not the case that even the schemes that are meant to help the poorest, such as the warm home discount, the eco scheme that helps with some energy-efficiency measures, are paid for by other energy users, so they are actually regressive? Those who can least afford their energy bills are paying to try to support other people, so it is a circular argument that goes nowhere. Is it not also outrageous that in the highlands of Scotland, people pay up to £400 more a year as a levy on their electricity while exporting energy to the rest of the UK?
Alison Thewliss
My hon. Friend is absolutely right to point that out. That is an unfairness in the system that the Government have shown no compulsion to tackle at all. We must look at that unfairness, particularly for those in the most rural parts of Scotland who find it hardest to afford their energy bills.
I seek an assurance from the Government that those who have money sitting in their energy accounts just now will see that swiftly transferred over to any new company, as people tend to pay in more over the summer to meet their bills in the winter. In his statement yesterday, the Secretary of State for Business, Energy and Industrial Strategy could not guarantee that the warm home discount would be paid to customers transferring. I also want to know what assistance will be possible for those transferred customers who are living with existing arrears. It is an uncertain and very worrying time for them all.
As an aside, my hon. Friends the Members for Kilmarnock and Loudoun (Alan Brown) and for Aberdeen South (Stephen Flynn) have been pursuing the ridiculous transmission charging regime, which makes it more expensive for us to connect the clean, green energy produced on our doorstep in Scotland to the national grid. It feels as if Ministers could not be less interested in fixing that disproportionate scandal.
We all know households that already struggle to pay their energy bills. Households relying on electricity for their energy needs pay £600 more on average than households with both gas and electricity. In the areas that are off the gas grid completely, particularly those relying on liquefied petroleum gas, those costs can be even higher.
In addition to food banks, fuel banks are springing up around the country to meet this need, but given the soaring fuel prices we face, it will just not be enough. The price of food in the shops is also going up. Inflation stood at 3.2% in August, which I understand is the highest month-on-month increase since records began in 1997. Some have predicted that it might reach 4.5% by November. The Bank of England target is 2%. That means that goods in the shops will get ever more expensive. There is the prospect, too, of the national insurance hike being passed on to consumers. The Institute of Chartered Accountants in England and Wales has suggested that companies may try to cover the increase on employers’ costs by passing it on to consumers, so as well as being a tax on jobs, this is a tax at the till.
In addition to having an impact on people’s food bills and their ability to feed themselves, this cost increase is having an impact on charities that are already trying their best to support those in need. Audrey Flannagan at the Glasgow South East food bank in my constituency tells me that food donations to it are down 30%, at a time when she is planning for an influx of people due to the cuts to universal credit. I say “cuts” because, for many who claimed benefits for the first time during the pandemic, they have known nothing else. Audrey tells me that people she has spoken to have been horrified to receive a letter from the Department for Work and Pensions informing them that their money is getting cut, because for them it is not an uplift; it is quite simply what they have been managing on for months now.
The Minister talked about living wages, but his living wage is not a real living wage, as set by the Living Wage Foundation; it is a pretendy living wage. It is not enough for people to live on, and it is not available to everyone. As he knows well, age discrimination is baked into the living wage. Younger people, who face the same bills at the checkout and on their energy and rent, are getting short changed by this Government through their pretendy living wage.
The impact on families of this cut has been well repeated, but I would like to mention the impact on single people. Twenty pounds is around a third of a single person’s income on universal credit. Glasgow South East food bank has seen a significant drop in single people coming for emergency food assistance in this past year, from 601 people in January to March 2020, to just 151 people in the same period this year. Audrey Flannagan believes that the additional £86 per month—UC is paid monthly—was enough to make a difference to those people. It pays for the gas and electric, it puts food on the table, and without that £86 a month, many will return to her service in just a few weeks’ time.
Many people have been in touch with me, as they have with my colleagues, to protest the cut to universal credit, but I want to read this email from John, because he puts it so well. He says:
“I wanted to write you a short note to tell you that cutting back on the U.C. uplift is going to have a very hard consequence on me. I was laid off at the start of the pandemic when the company I was working for closed down. With the uplift I’m receiving about £300 to last me nearly 5 weeks! The government talks like this was a favour done us! Firstly, I and all those on Universal Credit are not responsible for a pandemic! Secondly, the pandemic is not over yet! There could be further strains and further lockdowns! What then for people like me! Also benefits did not go up before the uplift for years and years, while prices and the cost of living have. This therefore is actually a benefit cut! It will be the difference for me between just getting by and crushing poverty!”
That choice will be faced by people up and down this country. Every single person in this House has a responsibility to think of each and every one of them when we vote on this issue, because it is the difference between just getting by and crushing poverty, as my constituent John pointed out.
There are global issues, of course, driving the cost-of-living crisis, but the political choices being made by this UK Tory Government are making it worse. Yet again, they have chosen to balance the books on the backs of the poor—to repeat the mistakes of the previous crash by choosing austerity over stimulus. My constituents did not choose this. The people of Scotland did not choose this. Even many Tory voters did not choose this, as those on the Government Benches break promise after promise to their own supporters. The first duty of Government is to protect its people, and this UK Tory Government have failed repeatedly on all counts. There is no Union dividend, only a Union dead end. Scotland needs the full powers of a normal independent country, to look after all of our people and seek a fairer, just and more prosperous recovery for everyone.
Oral Answers to Questions
Alan Brown Excerpts(3 years, 2 months ago)
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Owen Thompson (Midlothian) (SNP)
Alan Brown (Kilmarnock and Loudoun) (SNP)
Patricia Gibson (North Ayrshire and Arran) (SNP)
Alan Brown
In 2016, the Tories promised that fuel bills would be lower for everyone on leaving the EU. The reality is that fuel bills are increasing while they make the heartless cut to universal credit. In order to tackle fuel poverty, will the Minister use the net zero review to cut VAT on energy efficiency products, keep new nuclear off electricity bills, provide direct funding for heat decarbonisation and sort out the unfair grid charges on Scottish renewables?
Steve Barclay
Well, I think we should look at what my right hon. Friend the Chancellor has done. I touched a moment ago on how the covid measures have protected the poorest working households the most. Alongside that, the Budget measures on tax, welfare and spending decisions made since 2019 have, on average, benefited all households this year, with the poorest gaining the most as a percentage of net income. That is the approach that my right hon. Friend the Chancellor has taken and it is one that the Scottish Government should follow.
Economy Update
Alan Brown Excerpts(3 years, 5 months ago)
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Steve Barclay
I strongly welcome my hon. Friend’s question. She is absolutely right to focus on that. That is why, at the Budget, my right hon. Friend the Chancellor announced key measures such as maintaining the level of personal tax thresholds until 2025-26 and increasing the main rate of corporation tax. It is important that we take measures to protect the public finances and get them back on to a sustainable path in the medium term. She is absolutely right to highlight that important issue.
Alan Brown (Kilmarnock and Loudoun) (SNP)
In December, the UK Government provided a quarantine exemption to people flying business class, as if somehow the richest were immune to covid. Despite the bluster, we know that India was not added to the red list quickly enough. In terms of learning lessons, does the right hon. Gentleman agree that financial analysis needs to be undertaken on the cost of protecting borders with full quarantine and supporting the travel and tourism industries, versus the damage in financial impact of the longer imposition of restrictions?
Steve Barclay
Where there is a balance between protecting the unlocking of the wider UK economy versus a tougher approach at the border, the bigger prize economically is the UK’s ability to unlock our economy. As the Prime Minister set out in Prime Minister’s questions, we should not judge that with the benefit of hindsight when information on variants of concern which were not known at the time subsequently come to light, not least because of the UK’s capacity to undertake 47% of current global genome testing. Again, that is a further illustration of the UK-wide capacity that allows us to be more effective in our response.
Levelling-up Agenda
Alan Brown Excerpts(3 years, 5 months ago)
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Each debate is chaired by an MP from the Panel of Chairs, rather than the Speaker or Deputy Speaker. A Government Minister will give the final speech, and no votes may be called on the debate topic.
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Alan Brown (Kilmarnock and Loudoun) (SNP)
It is a pleasure to serve under your chairmanship, Sir Edward.
Clearly, this debate is about a con trick—a gimmick. It is actually the Tories admitting that they have continually let down communities, regions and nations for decades. However, they are now saying, “We’ll give some money back and everything will be better.”
Clearly, additional strategic investment is always welcome, but this investment is not strategic and it also bypasses the devolution settlement. We have heard from other contributors that this investment is far too piecemeal.
When we consider Westminster failures, this levelling-up fund does not even come close to making amends. If we go back to Maggie Thatcher’s flagship policy of right to buy council houses, the fact that initially all receipts went into Westminster coffers meant the erosion of council and social housing stock, with no funds available for new builds. In Scotland, it has taken the Scottish National party Government to try to turn this situation round, with record numbers of new build houses for rent. Unfortunately, England still has an incoherent housing policy that will cause further inequality.
Oil and gas produced £350 billion worth of revenue for the Exchequer and yet there was no consideration about setting up an oil fund to allow legacy considerations rather than the squandering of those revenues in tax cuts. Yet now we are supposed to be grateful for money coming back.
Look at the devastation of coalmining communities. Where is the coherent strategy for levelling them up? When opencast coalmining companies in my constituency went into liquidation in 2013, they left millions of pounds worth of outstanding restoration works and again the UK Government were nowhere to be seen. They did not contribute a penny and even refused to support a coal tax scheme that would have funded that restoration work.
We know that the levelling-up fund is labelled as money that might otherwise have gone to the EU, but the reality is that the likes of Scotland had to make use of EU structural funds to offset Westminster letting us down. Indeed, the fact that the highlands became an EU objective 1 category area under Westminster rule says everything. However, that did allow the highlands to access funding for roads and bridges, including the upgrading of the last remaining single-track trunk road in the UK. That money funded harbour upgrades as well, which was real, strategic levelling up.
Now, conversely, we have Scottish Tories demanding road upgrades for schemes that Westminster failed to deliver on, and we know that it was the Tories who labelled Scottish fishermen as “expendable”. It is those same fishermen who have now been given a poor Brexit deal, and we know that our farmers will be the next to suffer because of the trade deals that have been negotiated by Westminster.
Even when we consider the electricity grid charging scheme, we see that Scotland faces the highest grid charges in Europe, so the system prejudices development in Scotland in areas that would actually benefit from levelling up. Real levelling up would also have seen the contract for difference procurement process amended to include local content.
To be clear, I will support bids by my local authority if they bring additional strategic investment, and I will also support community groups to try to access funding. But the process is a farce. Like the stronger towns fund, it is likely to be politically managed rather than having a proper needs-based assessment. The fact that the first bids have to be submitted by 18 June and be shovel-ready to be delivered in a year confirms a lack of strategic thinking and oversight. There is a real risk that hurried bids will be accepted, leading to cost and programme overruns later on.
Pitting MPs and local authorities against each other is not the way to tackle structural inequalities. My constituency needs additional support, but this is not the way that it should be managed.
Oral Answers to Questions
Alan Brown Excerpts(3 years, 7 months ago)
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Steve Barclay
I share the hon. Gentleman’s desire to boost infrastructure in south Wales, and he is quite right to focus on young people getting to work, given how impacted they have been by the pandemic. He knows that his area in particular has received additional funding for capacity, and this will enable it to bid for the levelling-up fund to address the issues that he highlights.
Alan Brown (Kilmarnock and Loudoun) (SNP)
The Chief Secretary to the Treasury (Steve Barclay)
The existing fiscal framework sets out the arrangements for a review following the Scottish elections. This will allow a settlement in the light of a Parliament’s-worth of experience, which is consistent with the Smith commission’s expectations that there will be effective operation of the fiscal framework and that it should not require frequent ongoing negotiation.
Alan Brown
The reality is that the powers of the Scottish Government are not adequate to deal with the pandemic. There are too many constraints on borrowing powers for the Scottish Government; the reality is that councils can borrow more easily under the prudential borrowing code. Does the Minister not agree that it is time the Scottish Government had more flexible borrowing powers?
Steve Barclay
The Smith commission set out the conditions, and they already give substantial borrowing powers. That is why there is up to £450 million of annual capital borrowing, £700 million in the Scotland reserve and up to £600 million for resource borrowing in relation to forecast error, and of course that comes on top of the share of UK Government borrowing provided through the Barnett formula.
Commission on Race and Ethnic Disparities
Alan Brown Excerpts(3 years, 7 months ago)
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Kemi Badenoch
My hon. Friend makes an interesting point. I believe in freedom of expression. It is important that authors, playwrights and other artists feel free to write about and represent a broad range of people, regardless of their race or ethnicity. That is what we would see in a truly diverse society with a shared culture, rather than a “stay in your lane” approach that assumes our society consists of mutually antagonistic identity groups.
Alan Brown (Kilmarnock and Loudoun) (SNP)
The commission’s report used the phrase “Caribbean experience” as a euphemism for the slave trade. In Scotland, if the SNP is re-elected, it will fund the development of an online programme in Scotland and the UK on colonial history throughout the world. It will be able to be used in schools as an educational tool. Does the Minister agree that countries still have to face their colonial history for what it was and to have a mature discussion about its consequences and impacts?
Kemi Badenoch
I agree that we need to have a mature discussion, but I should let the hon. Gentleman know that the commission and its chair have been misrepresented on the comments about slavery. They have stated that any suggestion that they downplayed the history of slavery is “absurd” and deeply “offensive”:
“The report merely says that, in the face of the inhumanity of slavery, African people preserved their humanity and culture.”
The hon. Gentleman might be interested in the commission recommendation on new curriculum resources better to teach this complex history of the people of Britain.
Leaving the EU: Impact on the UK
Alan Brown Excerpts(3 years, 8 months ago)
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Alison Thewliss
The hon. Gentleman does not even want us to get to that point, so I am not even going to engage with his arguments. [Interruption.] He is not interested because he is not interested in independence. I would rather talk right now about immigration policy, and the damage that his policies are causing to people in my constituency.
We have the worst possible immigration policy. We have arbitrary targets, a hostile environment and cruelty built into every stage of the system. People who come to live and work in Scotland tend to be highly skilled and are net contributors in both productivity and Government revenue. I have seen how non-EU nationals have been treated, causing misery and hardship, unthinkable poverty and deprivation—all of that serving absolutely no economic purpose. It costs more to treat people so abysmally, and the UK Government do it anyway.
Alan Brown (Kilmarnock and Loudoun) (SNP)
My hon. Friend is absolutely right about immigration policy. Does she agree that it is ironic that earlier the Tories were trying to complain about the projected figures and the shortage of doctors, when they are the ones who are imposing this horrific immigration policy on Scotland?
Alison Thewliss
Indeed. There are very many aspects of immigration policy that cause significant damage, including loss of skills and the general hostility, which causes people to feel that they are not welcome in their own homes. It touches me every time that someone at my surgery asks me, “Why would they do this to me? Why would they make me so unwelcome? Can I go back to my country, to the war-torn conflict that I have come from? I would feel better there than I do here, under this Government.” Every time that I can, I say to somebody, “This is your home. Glasgow can be your home and you are welcome here.” I do not hear that nearly enough from the Tory Benches. This Tory Government now seek to extend the hostile environment to EU nationals. They do not do so in our name—ever.
The Expert Advisory Group on Migration and Population has estimated that the impact of post-Brexit immigration policy will be a 50% to 80% reduction in net EU migration to Scotland after 2020, and an overall reduction in overseas net migration of 30% to 50%. It has found that very few jobs in key sectors in Scotland will meet the arbitrary salary threshold this Government have imposed. The Home Secretary is aware of these issues and has done absolutely nothing to address them. There are currently no plans to include a route to jobs below the skills threshold, and the UK Government have rejected the possibility of any regional variation in the salary threshold. There has been no clarity on whether the Scottish shortage occupation list will continue to operate. This is a disaster for our remote communities, who depend on migration to counter depopulation. It is a disaster for businesses, who rely on that pool of talent to gain a competitive advantage in an increasingly global market. It is a disaster for our universities, who face a reduction in international staff and students and the experience and richness they bring. And it is a disaster for Scotland’s cities, whose wonderful cultural offerings are ever-enhanced by our migrant communities.
There are few starker examples than Brexit of how a Westminster Government are willing to sideline Scotland’s interests for their own cheap political gain. A differentiated approach to migration works well in Canada and Australia, and there is no sound economic reasoning not to do it, but the UK Government would rather put Scotland’s future at risk to appease the worst excesses of the Tory party.
Many people are beginning to realise that Brexit was a pig in a poke and the much-vaunted schemes that have followed it are merely a mirage. I spoke recently about the shared prosperity fund, the UK Government’s replacement for EU structural funds. It is almost unbelievable that we are now five years since the Brexit vote and still awaiting detail on how this scheme will operate. What we are certain of, however, is that this scheme will, due to the United Kingdom Internal Market Act 2020 and the power grab, bypass Holyrood entirely. This UK Government have made sure that decisions are taken out of the hands of the people of Scotland and restored to the backrooms and corridors of Whitehall.
When we have the choice in Scotland, we invest in projects that meet the needs of our population. The Scottish Government built the stunning Queensferry crossing—toll-free and clearly adored by the hon. Member for Moray (Douglas Ross) as he delivered his keynote speech to the Tory party conference in front of it.
The Paymaster General (Penny Mordaunt)
I beg to move an amendment, to leave out from “House” to end and add
“welcomes the UK-EU Trade and Cooperation Agreement, and recognises the enormous opportunities for Scotland’s economy.”.
Forty-eight years ago, the UK joined the European Economic Community, a concept built by giants. Its founding vision was based on peace and economic prosperity and much good came of it—economic, social and political—but over the years it evolved into something altogether different. Those who campaigned for Brexit did not do so because they objected to the benefits of being in the EU—the free flow of goods, shared security co-operation, ease of travel or reciprocal benefits. What they objected to was the price of those things.
Some objected that the situation prevented developing deeper co-operation with other nations, or that it supported protectionism that held developing nations back, or that it facilitated misery and suffering for refugees and economics, or that it undermined NATO, or frustrated our service economy. Some resented our inability to control our own laws, our own immigration policies or further border controls. Some were concerned about being tied to the eurozone in any way or to the European Court, others about the immense costs of membership and the lack of accountability, political and fiscal. Some wanted us to have our own fishing, agriculture and environment policy, and to realise our ambitions to promote trade for a prosperous and peaceful world.
The negotiations that preceded us leaving the EU and in the run-up to the transition period ending were complex, but our aims can be summarised in three sentences. We wanted to keep the good bits. We wanted to lose the bad bits. We wanted to maximise the possible opportunities for every part of the UK. The post-negotiation scorecard shows that we did well. Under the deal reached with the EU, people in Scotland, as well as all UK nationals, will be able to benefit from a wide range of social security rights when travelling, working and living in the EU, including access to an uprated state pension and to reciprocal healthcare arrangements.
Alan Brown
Has the right hon. Lady asked the fishermen and the seafood industry how they would mark the scorecard? Also, does she think it is acceptable that the Fisheries Minister, the Under-Secretary of State for Environment, Food and Rural Affairs, the hon. Member for Banbury (Victoria Prentis), said she did not read the details of the deal because she was involved in a nativity play at her local school? Surely as Fisheries Minister she should have known exactly what was in that deal?
Penny Mordaunt
If we are talking about scorecards, a policy of handing back coastal waters to Scottish fishermen will win every time over handing back their new quotas to the EU. I am very happy to be judged on that basis.
The trade and co-operation agreement allows the UK to take full advantage of the opportunities available to us as an independent trading nation and strike trade deals with other partners around the world. We have started to use those new-found freedoms. We now have a points-based immigration system, which is open to the whole world and the talent that is out there, and can be tailored to our needs. Following the comments from the hon. Member for Glasgow Central (Alison Thewliss), I hope she will be supporting the Home Secretary’s initiative to establish safe routes for refugees fleeing conflict areas, rather than them having to rely on people traffickers.
The Agriculture Act 2020, which replaces the EU’s bureaucratic common agricultural policy, transforms how we support farmers. The Fisheries Act 2020 enables us to control who fishes in our waters. We have launched our new global human rights sanctions regime. There is the UK-Japan comprehensive economic partnership agreement, and we are replacing overly bureaucratic EU structural funds with the new UK shared prosperity fund.
Brexit was an event, but now there is a process. From outside the EU, we can develop, refine and build our relationship with the EU and its member states for the benefit of all our citizens. The noble Lord Frost and I, and all members of the Government, will be working day and night to address the remaining and future issues for businesses, and to listen to their needs and ambitions. We take those issues incredibly seriously. We will resolve the problems, some of which the hon. Lady touched on.
Ian Murray
That was a boring and predictable intervention. The hon. Gentleman knows that we voted for the deal to avoid the very no-deal that his Government were threatening. He also knows—he is just about to rejoin the Scottish Parliament, assuming he wins his seat, and I hope he gets the rules in train before he does so—that that is not what the debate was about in the Scottish Parliament. It was about something completely different, not whether Members there accepted or did not accept the deal. The hon. Gentleman knows that not to be the case. [Interruption.] Rather than chuntering, it would be much better for the hon. Gentleman to give some reassurance to the fishing industry and the Scottish farming industry. This is what they are saying to us. It is what they are putting on the record. I am not making this up. It might be a good starting point to give them some reassurance and to work together to resolve some of the problems.
The trade deal leaves a huge amount of uncertainty and falls short of what is needed and what was promised. Scottish farmers are clear that they will not stand by and see a weakening of import standards for food and allow Scottish and British produce to be undercut by others. We need concrete guarantees that food and farming standards will remain at least as high as they are now.
What about services? The financial services sector in Scotland maintains 162,000 jobs and accounts for nearly 10% of GDP. Across the UK, the financial services sector contributed £75.6 billion to the Treasury in the year before covid. There is nothing in the agreement for the 80% of our economy that supports millions of jobs and livelihoods. I hope the Minister can tell us that the EU-UK memorandum of understanding with the financial services sector that is due to be signed by the end of March will give the sector what it was promised. The Government need to secure long-term agreement with the EU on financial services equivalence and to improve access to EU markets for the wider professional services industry, so that the UK and Scotland can remain global hubs for financial services.
I have mentioned just three sectors—the hon. Member for Glasgow Central mentioned others—that have been disadvantaged by this deal, but we could have talked about so many others, including chemicals, petrochemicals and energy. The list is endless. No wonder there is frustration, as it transpires that deals could have been done that would have made things easier for people. We could have stayed in the Erasmus programme. While I welcome aspects of the new Turing scheme, the Government could have done both. That would have been a truly global Britain—stay in Erasmus+ and do the Turing scheme for non-EU countries.
We could have had a deal for our performers and production tours—it was on offer, but it was turned down. Why? Government policy seems to be to cut off our nose to spite our face. I hope that a solution can be found, or it will be more damage to another jewel in the UK’s crown—our creative industries. Those issues do not need Government platitudes. We want not more promises to be broken, but action and resolution now. The Brexit reality includes everything from shellfish rotting on a motorway to stopping our musicians touring Europe. The sunny uplands that we were promised mean a 4% hit to GDP—the equivalent of £3,600 for every household in the UK, according to the House of Commons Library. It is a shame that we do not have time to deal with the Northern Ireland protocol and the effects on the Good Friday agreement.
It is worth coming on to the SNP’s approach to the EU, as the party has initiated this debate in the Chamber. We have heard time and again, in the Chamber and elsewhere, that the UK has left the EU so Scotland needs to leave the UK. The former Labour MP and Europe Minister, Douglas Alexander, said this week in an article in The New European:
“Independence for Scotland would represent a reckless ‘hold my beer’ response to Brexit”.
All of us who campaigned to stay in the EU and strained every sinew to ensure that the case was made are disappointed. Of course we are angry. Many are still grieving after leaving the EU, but if the response is ripping Scotland out of the UK that would add catastrophically to that position.
The UK has left its largest trading partner, the EU. Of course that is bad, and we will hear that throughout the debate. Scotland leaving its largest trading partner, the UK, would be immeasurably worse. We need a remedy for Brexit, not a hugely damaging “I told you so” moment from Scotland. I did not vote remain for my vote to be misappropriated—
Alan Brown
We hear a lot about the fact that England is our biggest trading partner—that is true—but does the hon. Gentleman accept that 62% of goods manufactured in Scotland go to the EU, so it is our biggest trader in manufactured goods?
Ian Murray
The London School of Economics report—the LSE used to be lauded by the First Minister—said that Scottish independence would be three times worse than Brexit. Everything that the hon. Member for Glasgow Central said has to be multiplied by at least three. Then we can see the impact of what would happen—[Interruption.] Here we go again. I am trying to shine light on the facts of what would happen. I am trying to shine light from the LSE, an organisation that used to be lauded and cited in the Chamber every single day by Scottish National party Members, and all we get is, “Are we better together?” We need answers to those questions. That is what people are crying out for—they want people to be honest and answer those questions.
I did not vote in the EU referendum for my vote to be misappropriated by the nationalists to break up the UK. It is not their vote to do that with. I wonder whether the no-deal SNP regrets spending less on the EU referendum than it did chasing a few thousand votes in its failed bid to win the Scottish parliamentary by-election for Shetland.
The most extraordinary aspect of the debate in Scotland is the SNP’s promising a seamless transition back into the EU if the public vote for a separated Scotland. That is another in a long line of assertions that are not based on fact and not backed by any satisfactory answers. Indeed, we heard the hon. Member for Moray (Douglas Ross) ask the SNP’s finance spokesperson what the currency would be. There was no answer. Can the House imagine the shadow Chancellor or the Chancellor standing at the Dispatch Box unable to tell the country what its currency would be? They would be laughed out of the Chamber. They would have to resign before they reached the Speaker’s Chair.
One thing is for sure: Brexit shows us that breaking up is incredibly hard to do, and I am disappointed again that the SNP has introduced a debate on the EU but not taken any time at all to set out how, why or whether it can get a hypothetically independent Scotland back into the EU. Perhaps it will answer some key questions, as its separation strategy seems to be very similar to the strategy of Nigel Farage and the Brexiteers. It wants to cherry-pick the best bits of the EU, but not take the bits that it knows the public would find unpalatable.
The SNP’s proposition is that Scotland would seamlessly rejoin the EU as an independent nation, but not take the euro, or sign up to Schengen, or meet the deficit and debt requirements, or have its own currency, or meet the exchange rate mechanism rules, or re-enter the common fisheries policy. The sterlingisation plan excludes it from entering the exchange rate mechanism.
Most astonishingly, the Scottish Health Secretary said on “Question Time” last month that Scotland would not need to sign up to the very trade and co-operation agreement that we are debating today between the EU and the UK, which I and the SNP are rallying against in this debate. How is that even possible? Scotland would become an independent nation and would seamlessly go back into the European Union, and then would not even have to implement at the border at Berwick the trade and co-operation agreement that was signed between the UK and the EU? That is just implausible.
We know that the relationship between Scotland and the rest of the UK, in the hypothetical event that Scotland was ripped out of the UK, would be determined by the very trade and co-operation agreement that was signed on Christmas eve by the Prime Minister. All the problems that are being faced by Scottish industries such as fishing, manufacturing, agriculture, exports and financial services that we might hear about this evening would increase fivefold or more, as the rest of the UK is far and away the largest market for Scottish goods and services. This just does not make sense, and it is about time the SNP faced up to those key questions and was straight with the Scottish public. That is all I ask: be straight with the Scottish public and answer the questions.
Scotland has two Governments making promises to the Scottish people that they cannot deliver, and making promises to the people and businesses of Scotland that they have no intention of delivering. The problem is that the UK Government see the relationship achieved with the limited last-minute deal between the UK and the EU as the ceiling of their ambition—we heard that tonight from the Minister—but we do not. We see it as being the floor from which to build. We need to work hand in hand with industry, business, our trade unions and our European partners and friends to achieve practical solutions so that we can face the challenges thrown up by this deal with the EU and grab those future opportunities.
This deal must be built on; it must be the start, not the end. We have to live in the reality, and while we would not have taken us to this position, that is where we are. The deal has to be about a deeper, mutually beneficial relationship that means businesses can thrive. That means repairing the tattered relationship with our EU partners. It means putting aside the ideological nationalist agenda from both Governments and working in the national interest. Now more than ever, we need what the Scottish public are crying out for, which is both Governments, Scottish and UK, working together to mitigate aspects and disadvantages of covid and Brexit, but I fear that I should not hold my breath.
Alan Brown (Kilmarnock and Loudoun) (SNP)
My constituency has higher unemployment than we would like, and for that reason we certainly welcomed European funding. It helped to support the construction of a new industrial estate in Kilmarnock, which helped create much-needed jobs. What is the replacement for European funding going to look like? Most Ministers here do not know how to pronounce Loudoun, let alone find their way to my constituency, and it is a disgrace that the UK’s so-called shared prosperity fund is managed by the Secretary of State responsible for English local government.
I have constituents who are worried about achieving settled status before the June deadline. That is really galling when we consider that the Chancellor of the Duchy of Lancaster and Minister for the Cabinet Office, when he was chair of Vote Leave, was telling us that Scotland could have control over immigration. Instead, we are wedded to an insular system, and there is a pig-headedness over immigration that saw the UK rule out proposals for visa-free travel for musicians. This is directly affecting the livelihoods of my constituents Hayley Orr and Alan Scobie. Alan plays in the band Skerryvore, one of the top traditional-type bands in Scotland. Their tours to the EU are important as they promote Scotland culturally and generate visits to Scotland as a consequence, so there is a double whammy here if they cannot freely access the European tour circuit.
FMX Event Services of Fenwick provides logistical support and equipment for touring bands. It is lined up for the likes of Nick Cave for a six-month tour in the EU, but now, due to cabotage arrangements agreed with the UK Government, onward journeys within the EU are impossible, ruling out that type of work at present. A business in the constituency that exported deer antlers could not get export licences, so it has relocated to France. John Gall, who owns Brownings the Bakers, makers of the Kilmarnock pie, confirmed to me that packaging supplies, such as cardboard and polythene, are more limited in quantity at the moment and have increased in cost, as has wheat.
The supply of machinery parts for repairs and maintenance is a possible serious issue for all manufacturers. From my constituency, Worksmart Contracts carries out refurbishment and fit-out work across the UK. It has confirmed that the availability of timber is an issue, and that some prices are up 30% on last year. There is price volatility, too, in metals and fixings, which means that there are risks when it comes to pricing tenders, as a successful contract award down the line might mean a company taking a hit if prices continue to rise after it has compiled the tender.
McLaren’s Nurseries in my constituency is the first in Scotland to have a plant passport, but it feels that it is acting as a guinea pig and has found that a costly and exhausting exercise. It is losing out just now on what it can import, and it also faces cost increases. It is looking at having to unpack 10% of its exports—up to 20,000 plants—to be checked by inspectors, which is a massive risk with regard to damage and delay to what are perishable goods. All this goes way beyond teething problems and it is a direct consequence of leaving the EU. It might not be headline news, but this is the real impact on people in my constituency.
The Parliamentary Secretary, Cabinet Office (Julia Lopez)
I thank all hon. and right hon. Members who have taken part in this afternoon’s debate. The contributions from most have been passionate, insightful and optimistic about our nation’s new path outside the European Union, while recognising that our ambitious and wide-reaching trade and co-operation agreement with the EU will take time to embed. Most also set out a belief in the UK.
The British people’s choice to leave the European Union has often been mis-characterised as a nostalgic, inward-looking reflex, and today we have heard from the SNP that it is “post-imperial stress” syndrome. The hon. Member for Glasgow Central (Alison Thewliss) derided the UK as “insular little Britain”, while Labour MPs suggested it is toxic nationalism and a disaster. The future is bleak, said the hon. Member for Lewisham East (Janet Daby). Sometimes it feels as though we are still in the last Parliament. If only they did talk of sunshine, lollipops and rainbows.
Instead, I believe the vote to leave was a recognition, first, that the world of tomorrow demands agility, speed and nimbleness in resolving the challenges we shall face, with greater democratic accountability, not federalism, in decision making. The vaccine roll-out is a case in point. International co-operation and partnership will always be vital for the UK, but that need not be channelled via a costly bureaucracy.
Secondly, the vote was as much about ourselves and how we govern ourselves as it was about the EU, and my hon. Friend the Member for Redcar (Jacob Young) had that spot-on. It was a request by the British people for us to be more accountable—not to seek scapegoats, but to deliver to communities solutions that fit them. Those in the SNP, in their relentless, sneering negativity, have made it quite clear that they see themselves as unwilling passengers on that journey, but we recognise that Scotland is not the SNP and that the Scottish people are integral to our collective success as active and much valued builders of the UK’s future.
This is why we are not just focused on the opportunities for Scotland that stem from our leaving the EU, but intent on making the levelling-up agenda mean something for each of the four nations in the UK. Ironically, given their appetite for such polls, SNP Members like to frame the choice of voters at referendums as mistakes, and today is no different as they seek to tell the British people once again why they were wrong to leave the EU.
SNP Members talk about the Erasmus scheme without highlighting the tremendous new opportunities for Scottish students from the Turing scheme, which will open up study placements across the world, not just the EU, from September, with grants provided and tuition fees waived. My hon. Friend the Member for Birmingham, Northfield (Gary Sambrook) highlighted the opportunities open to working-class constituents in his city.
SNP Members talk about the challenges to the fishing industry without setting out the investment that we are making to grow the Scottish fishing fleet, the collaboration with industry and European partners to tackle border frictions head-on, or the fact that under the agreement we have reached, Scottish fishermen will benefit from being outside the strictures of the common fisheries policy. They talk about the loss of EU regional funding without explaining that we will be at least matching it.
Alan Brown
Will the Minister address the point made by my hon. Friend the Member for Central Ayrshire (Dr Whitford) about the fact that Scottish fishermen cannot swap quotas, and therefore cannot actually access more of the cod and haddock that they rely on as their key income?
Julia Lopez
The Under-Secretary of State for Scotland, my hon. Friend the Member for Banff and Buchan (David Duguid), is running the Scottish fisheries taskforce, which is going through some of the issues that the hon. Gentleman highlighted.
SNP Members talk about the loss of EU regional funding, as I mentioned, without explaining that, through the new UK shared prosperity fund, we will at least be matching the funds that have already been distributed to the benefit of communities across our four nations. They talk about the positive role of immigration to the UK without understanding that the desire for greater control of our borders does not undermine the warmth of our welcome to talented, hard-working people from around the world, as our new points-based system attests. They talk of their concern for small business without explaining how our moving away from the EU’s complex procurement regime, rather than clinging closely to it, as they so desire, could open up many more opportunities for SMEs to bid for Government contracts. My right hon. Friend the Member for Wokingham (John Redwood) rightly challenged us to be even more ambitious in this area.
I have heard concerns today about Scottish exports without recognition that geographical indications for valued Scottish products remain in the trade and co-operation agreement, and that those products can now also find new markets as we secure ambitious new trade deals with nations such as America and Australia, and we can benefit from those already agreed with Singapore, Japan and Canada. SNP Members portray the UK as a spent force without celebrating the fact that Glasgow will be hosting the COP26 conference, showing global leadership on the issue of climate change, as well as British ingenuity in green tech.
We do not define the relationships between our nations by our 40-odd years of membership of the EU. No—we are bound by the cultural, familial and economic ties of centuries, which SNP Members want to dismantle as they seek so desperately to bind Scotland back into EU bureaucracy. We also have the humility to recognise that our Whitehall-centric model of Government can be improved. It does not do a good enough job of utilising the talents and hearing the voices of everyone in the UK. That is why, this week, the Cabinet Office announced our second headquarters in Glasgow, where at least 500 civil servants will be based as we relocate at least 1,000 roles to Scotland, including from the Foreign, Commonwealth and Development Office. Brexit was not just about the EU; it is a creative catalyst for us to govern better, which is not a challenge that the SNP seems up for—not when shortcomings can be obscured by finger-pointing. This move brings key decision makers closer to the communities they serve so that we understand the perspective of people in East Kilbride as much as south-west London.
The integrated review published this week on national security, defence and foreign policy sets out the Prime Minister’s vision for the UK in 2030: a stronger, more secure, prosperous and resilient Union that will draw on tremendous Scottish capabilities in space, cyber and maritime industries.
I am grateful for the valuable points that have been raised by right hon. and hon. Members throughout this debate, and I regret that time does not allow me to cover all of them. I have great affection for the Chair of the International Trade Committee, the hon. Member for Na h-Eileanan an Iar (Angus Brendan MacNeil), from our time together on that body. He will know that the demand for Scottish goods comes from nations beyond the EU and that with tariff-free trade secured in the TCA, we now have scope quickly to dismantle tariffs to new markets. Scotland already exports £7,600 worth of goods to the US every minute, but a new FTA could unlock even more opportunity with the US.
Right hon. and hon. Members highlighted genuine constituency concerns this afternoon that I do not seek to brush over. We recognise that there has been friction for seafood exporters and we have set up the seafood distribution support scheme and the Scottish seafood exports taskforce to work through these issues constructively. I received an email just yesterday from a French counterpart in the Hauts-de-France region who is actively engaged with the taskforce and wished to offer assurances that our continental friends are every bit as eager as we are to deal with issues of paperwork, given the exceptional quality of Scottish seafood and its importance to their regional market, which contains Europe’s largest processing seafood processing centre.
On the issue of touring musicians, we are alive to the concerns that have been raised. We have sought a more ambitious deal with the EU. Unfortunately, that request was rebuffed and we are now actively working with the industry to see how Government can facilitate their ambitions.
The Government remain committed to ensuring that every success is made of our status as an independent, outward-looking nation. We believe that this is an exciting new chapter in our national story, to which the contributions of the Scottish people will be fundamental. Indeed, we have ambitious plans for every part of the UK. Unfortunately, today the SNP has rather limply and sourly exposed that it would rather keep up its habit of blaming others than lay out its own ideas for improving the lives of Scottish people.
Question put (Standing Order No. 31(2)), That the original words stand part of the Question.