Budget Resolutions

Alison Thewliss Excerpts

Thursday 23rd November 2017 Commons Chamber

[Alison Thewliss (Glasgow Central) (SNP)]

I am delighted to be able to speak in this Budget debate on the issues of public services and housing, both of which are intertwined in defining quality of life. They are key aspects of what should have been a Budget for people and prosperity. Unfortunately, this chaotic Tory Government just limp on in crisis and have failed to deliver on either.

One way to inject further funds into public services in Scotland would be to pay Police Scotland and the Scottish Fire and Rescue Service in full the £140 million they are due in backdated VAT. I welcome, of course, the announcement that the Chancellor made yesterday, but if the logic of the argument is true today and yesterday, it must have been true in 2015, when we submitted it as an amendment to that Finance Bill, and it must have been true when the Scottish Government made numerous and lengthy representations to the UK Government on this matter prior to, during, after and since the implementation of the single services. I have read those representations, and it is absolutely clear that discretion has always rested with those who make the rules: the UK Treasury. We see that in the announcement yesterday. The Government could have saved not only money, but a good deal of civil service time and effort if they had conceded this point six years ago. The Tories and Labour in Scotland have supported the establishment of Police Scotland and the Scottish Fire and Rescue Service in their manifestos. Support for the principle of single services is not in dispute.

In October, Chancellor stated:

“We discussed this with the Scottish Government before they made the decision to unify the police, we warned them that under EU law they would not be able to recover VAT if they made this move, the Scottish Government told us that they had calculated that the savings they would make would be sufficiently great that even with the loss of the VAT recovery ability it was still a sensible thing to do—that’s their decision, a decision which they made, and we are now constrained by the VAT rules that are in place.”

Was the Chancellor misleading the public when he stated that to drop the VAT would break EU law?

Moreover, Murdo Fraser MSP, who was clamped gloriously today by Nicola Sturgeon, stated that

“because both Police Scotland and the Scottish Fire and Rescue Service are not part funded through local taxation, there is no justification for a VAT refund.”—[Scottish Parliament Official Report, 31 October 2017; c. 77.]

It seems entirely unclear as to why the Scottish Conservatives believed that there was no justification to scrap the VAT then, even a few weeks ago, yet now advocate it and actively celebrate it.

I also noticed, buried away on page 39 of the Budget Red Book—it is getting shorter, because the Government used to hide things on page 88 back in 2015—that there is a change relating to VAT for combined authorities and fire services in England and Wales. This is very interesting. At the top of page 39, under the heading “combined authorities” it states:

“Through Finance Bill 2017-18, legislation will be amended to ensure UK Combined Authorities and certain fire services in England and Wales will be eligible for VAT refunds.”

How curious! Could it be that the Chancellor realised that he could not possibly make these changes for English bodies without accepting the logic for changes in Scotland? If so, claims of influence from the baker’s dozen on the Benches across from me have less substance than a cream puff. This UK Government, having accepted the logic as they did for Highways England, the Police Service of Northern Ireland and academy schools, must now make good their mistake and backdate the VAT.

There is a gaping hole in this Budget where there ought to be a commitment from the Chancellor to scrapping the public sector pay cap. Public services workers have, for years, been asked to deliver more for less, all the while seeing the cost of living increase. The Scottish Government are the only Government on these islands committed to scrapping the cap. I had hoped that, given the demonstrations, the pressure, the commitment and the U-turns, the Chancellor would have been bold and put a figure on this, rather than giving us what was in his mealy-mouthed speech yesterday.

[Chris Stephens]

Is my hon. Friend as concerned as I am that the UK Government’s approach to public sector pay is such that those in male-dominated workplaces will get a pay rise but those in female-dominated workplaces will not?

[Alison Thewliss]

As on so many related issues, my hon. Friend is absolutely correct. The UK Government should commit, as the Scottish Government have, to paying the real living wage—not the pretendy living wage, not the living wage that does not apply to those under 25, not the in-built age discrimination that they continue to perpetuate, but the real living wage as defined by the Living Wage Foundation.

We cannot hide from the fact that workers need a pay increase, because prices are up in a range of areas. The price of basics like bread and butter have increased—bread by 5% and butter by 12%—since the Brexit vote. This is just another example of the Government forcing people to spread too thinly—literally—to get by. The London School of Economics estimated this week that the average household has lost £7.74 per week because of the higher prices in shopping baskets. Ask anyone at the supermarket and they will tell you the same, and it feels like an awful lot more to many people.

I note from the Red Book that the full basic state pension will rise by only £3.65 per week and the full new state pension by only £4.80 per week. That hardly seems enough to meet the increase in the cost of living caused by the Government’s chaotic Brexit obsession. Contrast that with the £82.2 million in sovereign grant funding going to two pensioners and their hingers-oan who live along the road from this building, and it is clear that unfairness is rife in this country. The impact of a no-deal Brexit and the lack of single-market membership will only make things worse.

We cannot deliver the public services on which we all rely without well-paid and well-motivated public sector workers. We must end the pay cap and deliver pay certainty for public sector workers right across the board, not just for those in the NHS, because as hard as they work, there are many others who work just as hard.

We must see appropriate consequentials. I mentioned the money the Chancellor trumpeted for the NHS—some £300 million. If the Government were being fair, Scotland should have had £30 million, but we are getting only £8 million. That is jiggery-pokery of the highest order. We have also lost £600 million for our trains in the Tories’ great train robbery. I ask for that to be put right as soon as possible.