Financial Statement

Alison Thewliss Excerpts

Wednesday 23rd March 2022 Commons Chamber

[Rishi Sunak]

I thank my hon. Friend for his support and he is right to highlight some of the independent commentators who have supported the policies announced today. I will touch on one of the things he said, which was about education spending. I agree that it is vital for our country’s future that we support our teachers and children. That is why the Prime Minister announced, in total, £5 billion of catch-up funding to help children to recover the learning they lost during the pandemic, why we are raising per pupil cash amounts by £1,500 over the Parliament, and why we are raising teachers’ starting salaries to £30,000, as our manifesto committed to doing.

[Alison Thewliss (Glasgow Central) (SNP)]

This tax plan that the Chancellor has announced is very thin. It is lightweight and it is superficial. It is exactly what we have come to expect from this Chancellor. What we heard today from the Chancellor was not enough. It was utterly detached from the needs of our constituents up and down these islands.

This cost of living crisis has been a decade in the making, layer upon layer: austerity, which stripped back public services and punished people through brutal social security cuts; Brexit, which has driven away skilled workers and increased costs for businesses and individuals; covid, where we saw public money splurged in its billions on crony contracts while some people were entirely excluded from support, and now those who got support under the self-employment income support scheme are expected to pay tax on it, just to add insult to injury; and now home energy costs, which were already soaring before the increase in hostilities in Ukraine, are forcing households to the brink. Inflation running at 6.2%, its highest rate in 30 years, is hitting the poorest the hardest. Food prices are rising, especially for the basics, and foodbanks are seeing record numbers of people coming through their doors. The Chancellor says he is going to increase the household support fund, but is that it? Is that it? People are desperate and they need a good deal more help than that.

We know that sanctioning Russia is not cost-free, but the Tories cannot use that as a sleight of hand to distract from the layers of pain that lie beneath the current crisis. Each of those layers has seen political choices and opportunities for change squandered by this UK Tory Government and their predecessors. We see it again today. This Chancellor has increased taxes more in two years than Gordon Brown did in 10, while people are struggling. The Treasury Committee issued a report this morning, which states that the UK Government

“must take further action to support UK households, in particular those on lower incomes to manage the subsequent rise in energy and other costs.”

The Chancellor’s announcement on national insurance contributions is welcome. We have been calling for it for years. It is not something that the Chancellor should have brought today; it is something he should have brought to the House a long time ago. Hiking national insurance is a tax on individuals, but it is also a tax on jobs. Employers are already facing increased costs in energy and materials, and many businesses will not be able to bear such pressure. Small and medium-sized enterprises in particular need more support. Hospitality and tourism have struggled through the pandemic and now the Chancellor is moving VAT from 12.5% back to 20% at a time when consumers have much less money in their pockets. We on the SNP Benches called for the cut before the Chancellor brought it in, and we support UKHospitality’s “VAT’s enough” campaign.

Universal credit has been cut by £20 a week at a time when people need it the most. Carly, a single mum, spoke at the Gingerbread reception on Monday and told us all how important it was that that money was there, because things are tighter than they have ever been. There is no further support for people on legacy benefits and disabled people who often face higher energy costs and have no option on those costs. A taper has been put in place that helps only people who are in work. Benefits are just not going far enough, as they do not keep pace with inflation, and the welfare cap punishes people for their circumstances. There has been an end to the triple lock on pensions and there is nothing for the WASPI women, who are campaigning outside today, who are still losing out on what should have rightfully been theirs.

The Scottish Government, by contrast, are doing what they can within their limited budget, to support people: uprating the eight Scottish social security benefits we control by 6% and increasing the Scottish child payment to £20 a week—a lifeline to families. This UK Government should be doing the same. Taking 5p off fuel is something, but it does not help those who are paying for trains and buses. The Chancellor cut air passenger duty during COP26 but he still offers nothing for the millions of commuters who use public transport every day.

I do not know if the Chancellor has ever had a prepayment meter—I do not think they fit them for swimming pools. However, 4.5 million people—[Interruption.] Hon. Members say it is “pathetic”, but 4.5 million people across these islands experience the stress and despair of watching the money on their prepayment meters run out. Prepayment customers already pay higher bills than those on direct debit and they may struggle even to access the Chancellor’s “heat now, pay later” loan—if it does not automatically go to pay back the debts on that meter. The Fuel Bank Foundation, which provides top-ups to those on prepayment meters who are struggling, has seen a 75% increase in demand already. That was before the prices that we are seeing now.

There was nothing either from the Chancellor for customers using heating oil or LPG, who must fill up by the tank. Those on heating oil have seen their tank costs—for 500 litres in a tank—go from £250 to between £600 and £900. They have no choice about how to get that energy. Where are they in the Chancellor’s priorities today?

Nuclear energy—which the Government touted an awful lot before today and which, interestingly, was missing from the Chancellor’s statement—is not the answer to reducing people’s bills. It is slow and eye-wateringly expensive. We know from the Nuclear Energy (Financing) Bill that the Government’s proposals will add £63 billion to people’s energy bills. They should instead fix the long-standing inequality of grid charging, invest more in onshore and offshore wind, tidal and solar, and bring carbon capture and storage in the north-east of Scotland off their reserve bench. They should make it a real net zero transition worthy of the name.

The Government could invest in a national programme of heat pumps, retrofitting and insulating. I was glad to see the Chancellor’s announcement on home energy efficiency and repairs, because we have called for that for a long time. However, this paltry announcement does not go nearly far enough and does not even meet the significant home energy interventions that Scotland is making.

The Chancellor has choices. He could have looked at a windfall tax on profits. The shadow Chancellor, the hon. Member for Leeds West (Rachel Reeves), was right about oil and gas, but why should Amazon, Serco and Netflix not have to pay up for their mega-profits during the pandemic?

The Chancellor has had a windfall of his own. Tax revenues are higher than expected and the deficit is £30 billion lower than planned. If we look at the OBR report that came out today, we see that VAT has gone up by £21.7 billion—that is £21.7 billion extra in the Chancellor’s coffers—and that the amount from self-assessment is up by £5.2 billion more than was forecast late last year. That could have been used to cushion the cost of living crisis and to invest in renewables and wean us off fossil fuel.

MoneySavingExpert’s Martin Lewis was stark in his warning on Sunday morning:

“As the ‘Money Saving Expert’ who has been known for this, I am virtually out of tools to help people now.”

He said, while watching this statement, that his “head …sunk”. There is no help for people on energy.

In conclusion, people face a crisis that the Chancellor could have done more to avert. In so many ways, he has made the choice not to act. There is nothing for Scotland in his announcement today. We on the Scottish National party Benches look forward to the day when Scotland has a Government with the full fiscal powers to make sure that all our people can have a decent standard of living, and that no child goes to bed with an empty tummy in a cold home.

[Rishi Sunak]

The hon. Lady said that there is nothing for Scotland in this statement, but maybe she missed the part about the UK-wide fuel duty cut, which, together with the freeze, will save a typical driver £100 and a typical van driver £200 this year. Perhaps she missed the part about the largest increase to personal tax thresholds ever. That £6 billion tax cut will help 2.4 million people in Scotland, starting in just a few months’ time. Indeed, 75,000 businesses will benefit from the employment allowance—again, that £1,000 tax cut for Scottish businesses will come in very shortly.

The hon. Lady mentioned that Scotland, as ever, wants more fiscal autonomy. Scotland already has a considerable degree of fiscal autonomy, and I did not hear whether the SNP will deliver the same income tax cut for Scottish taxpayers that the UK Government will deliver—as paid for in these numbers—in 2024. I look forward to hearing from her that the Scottish Government will cut taxes for their taxpayers with the powers and funding that they will get.

I always want to make sure that we look after the most vulnerable in our society. The hon. Lady mentioned a single mother she knew. I am pleased with and proud, in fact, of this Government’s actions, because by increasing the national living wage in April by 6.6%, by cutting the UC taper rate and through the increase in personal thresholds today, we have ensured—if we take all tax and welfare changes together—that a single mother of two children working full time on the national living wage will now be £1,600 better off.

The hon. Lady made a point about businesses. We are providing a business rate discount for business, and Scotland has received a Barnett share of that money. A business rate discount will come in here for retail, hospitality and leisure businesses in just a few weeks, and I know that the Scottish Government will have the resources to do the same thing.

Lastly, the hon. Lady made a comment about prepayment meters. I am acutely aware that millions of families rely on prepayment meters. That is why, when we designed the energy support package that we announced in February, we had particular care for those people to ensure that they would receive the same benefit. Indeed, we made sure that 40% of them will automatically get the £200 rebate in October. For the remainder, we are working with BEIS and the industry to ensure that all those people get the same benefit as well. They will receive a voucher, a cheque in the post or something called a “special access message” on their phone, by SMS, so that when they go to one of the retailers that they use to top up their meter, they will also benefit from our actions, because this Conservative Government is on the side of everyone.

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[Madam Deputy Speaker (Dame Rosie Winterton)]

I thank the Chancellor for his statement.

[Alison Thewliss (Glasgow Central) (SNP)]

On a point of order, Madam Deputy Speaker. I want to use this opportunity to allow the Chancellor to hear a clarification. He suggested that the Scottish Government might want to follow the UK Government in eventually introducing a 19% rate of income tax. Would it be possible to get the Chancellor to correct the record? There is already a 19% rate of income tax for the lowest earners in Scotland, so in fact it is the UK Government who have to play catch-up with the Scottish Government.

[Madam Deputy Speaker]

As the hon. Lady knows, the Chair is not responsible for the speeches of Ministers. I am sure that, if any incorrect information has been given, the record will be corrected. Obviously, the Ministers on the Front Bench have heard her point.