Constitutional Law

Angus Brendan MacNeil Excerpts

Tuesday 21st May 2024 Commons Chamber

[The Parliamentary Under-Secretary of State for Scotland (John Lamont)]

I beg to move,

That the draft Scotland Act 1998 (Increase of Borrowing Limits) Order 2024, which was laid before this House on 17 April, be approved.

I am grateful for the opportunity to debate this order, which is the result of collaborative working between the two Governments in Scotland and upholds the 2023 fiscal framework agreement. This order will increase the Scottish Government’s cumulative capital and resource borrowing limits to reflect inflation. The order is made under sections 67 and 67A of the Scotland Act 1998, which set out the amounts that can be borrowed under section 66. We are making this order with the Treasury’s consent, as required in those sections.

Scotland Act orders are a demonstration of devolution in action, and I am pleased to say that the Scotland Office has taken through more than 250 orders since devolution began. The 2023 agreement set out that the annual limits for capital and resource borrowing will increase in line with the Office for Budget Responsibility’s GDP deflator forecast at the time of the Scottish Government’s draft budget. The United Kingdom Government agreed, in the 2023 agreement, to amend the Scotland Act to increase these limits as necessary.

[Angus Brendan MacNeil (Na h-Eileanan an Iar) (Ind)]

What are the spending limits on the UK Government? Is it not the case that the UK Government have balanced their books in only 11 years since 1945, and have paid back only about 1.7% to 2% of the debt accrued, if that? It is entirely erroneous to try to put shackles on the Scottish Government and what the Minister often calls the most powerful devolved Parliament in the world. Scotland should be going in the same direction as any normal country, and towards independence.

[John Lamont]

This Conservative Government have prudently managed this country’s finances, unlike the Scottish Government, who continue to slash frontline public services across Scotland, despite a record-breaking block grant from the UK Government. Those spending choices were, of course, made by the SNP, rather than the UK Government. This order will increase the resource-borrowing limit by £29 million, from £1.75 billion to £1.78 billion, and the capital-borrowing limit by £50 million, from £3 billion to £3.05 billion. The exact figures are set out in the order we are considering. The timing of this order gives the Scottish Government certainty over the cumulative borrowing limits for the 2024-25 financial year. It is important to note, however, that the Scottish Government still remain accountable to the Scottish Parliament and the people of Scotland in how they choose to use these increased borrowing powers.

[Angus Brendan MacNeil]

Is it not a fact that had the recent blood scandal happened only in Scotland, the Scottish Government would not have had the means to do anything that might be asked of them, because of all these spending restrictions and the handcuffs put on them by Westminster? Are these real-world events not another reason that the Scottish Government should not be a hostage of the UK Government, as they or any Scottish Government are under the devolved set-up?

[John Lamont]

The hon. Member and his hon. Friends on the nationalist Benches continue to obsess about independence, but he seems to forget that the people of Scotland had their say back in 2014 and voted in record numbers to remain part of a strong United Kingdom. I suggest that SNP Members focus on delivering for frontline services in Scotland by supporting our NHS, schools and transport networks and get on with the day job of governing Scotland, rather than talking perpetually about referendums and independence.

In summary, the order amends UK legislation to increase the cumulative borrowing limits of the Scottish Government ahead of the next financial year. In doing so, the UK Government uphold their commitment to the 2023 agreement and deliver for the people of Scotland. It is positive to see both Governments working together. On that note, I commend the order to the House.

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[Ian Murray]

I could not agree more. If the Prime Minister wishes to go and see His Majesty the King at some point soon, we might get at least one half of those two Governments working together after the general election.

[Angus Brendan MacNeil]

What do he and the hon. Member for Edinburgh West (Christine Jardine) have against the Republic of Ireland? It has one Government, which is doing very well and has a budget surplus, unlike the UK that has the mishmash and a mess, with a Scotland underperforming in the UK and looking at an Ireland that is overperforming having left the UK. There are lessons to be learned for himself and other colleagues.

[Ian Murray]

There are certainly lessons to be learned for the UK: not to have a Tory Government. If we had a Labour Government, things would be in a much better position. I am sure the hon. Gentleman will be encouraging all his constituents to vote Labour at the general election in order to make that change.

My fourth question to the Minister is that the fiscal framework of August 2023 suggests that these figures will be increased by inflation from 2024-25 onwards. Will the Minister confirm that is correct? What inflationary measure will be used to do that? Every household in Scotland, and up and down the UK, knows the impact the current Government have had on borrowing overall. Crashing the economy and trebling the national debt has had consequences for everyone. The interest payments on Government debt alone as a share of the economy are now the highest since in early 1950s.

Thanks to the former Prime Minister’s disastrous premiership, interest rates that homeowners are now paying have gone through the roof, taking away home ownership for many in this country. We are in the midst of a cost of living crisis that was made in Downing Street but is being paid for by working people all over the country. If it is possible to sum up this dreadful Government in one individual’s actions and behaviours, it is the crashing of the economy, accompanied by the highest tax burden on working people in 70 years, and the largest fall in living standards since records began in the 1950s. They are reckless, incompetent and unapologetic for the chaos they have wrought across the country.

But the Government seem to want to go further. They have looked at the former Prime Minister’s chaos inflicted on the country by the £45 billion unfunded tax cuts for the richest, and decided to trump that with a £46 billion unfunded tax cut to scrap national insurance, but will not tell us how they will pay for it. [Interruption.] There is chuntering from the Treasury Bench. Instead of chuntering, perhaps they will tell us how they will pay for that £46 billion unfunded commitment. When the Minister responds, will he take the opportunity of this rare occasion of a Scottish statutory instrument being discussed on the Floor of the House to answer my fifth question, about where the money for the £46 billion unfunded commitment will come from?

We have had three failed Prime Ministers in the UK over as many years, an embarrassing statistic the SNP could not help but match, with three First Ministers in Scotland in as many years. They have brought back former leaders to take charge, although the party in government in this Parliament have not done that for the top job, or certainly not for now anyway. Scotland is governed by a man who is responsible for many of the problems we face in the first place—he will have to take charge of these borrowing requirements—the Education Secretary who wrecked our education system, the Finance Secretary who decimated local government finance and the leader who led them to their worst ever election result.

[Ian Murray]

Yes, we will be supporting the statutory instrument, but it is worth putting it into the context of where these borrowing powers will have to be spent and the requirements of that. I know the hon. Gentleman would hardly wish to defend the Scottish Government’s record on spending; Members on the Opposition Benches certainly will not do that. What is happening in Scotland because of having two bad Governments needs to be completely exposed—[Interruption.] Oh, SNP Members are awake.

[Angus Brendan MacNeil]

We are awake all right.

[Alison Thewliss (Glasgow Central) (SNP)]

The hon. Gentleman was making us nod off.

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[Ian Murray]

The conclusion is that all roads must lead to a Labour Government to resolve the issue. That is where we end up.

The only response to this crisis from either Government has been to increase taxes. [Interruption.] Those on the Treasury Bench are still chuntering. I wonder whether they can still chunter about where the £46 billion unfunded spending commitments are going to come from. Those on the Treasury Bench have presided over the highest tax burden on working people in 70 years, and the SNP went even further, with any Scot earning over £28,500 a year paying more tax than anywhere else in the UK—that is nurses, teachers, police officers, firefighters and council workers all paying for their Government’s incompetence.

[Angus Brendan MacNeil]

Will the hon. Member give way?

[Ian Murray]

I am happy to give way one last time.

[Angus Brendan MacNeil]

The hon. Gentleman earlier mentioned the previous Prime Minister and the high interest rates in the sterling zone. Will he apologise for buddying up with the Tories in 2014, wearing his Union Jack jacket, saying that Scotland should stick with the Tory Government, stick with the risk of a Prime Minister doing what she did, and stick with the risk of a currency zone that has hammered people’s mortgages and hammered people’s standards of living. He can apologise from the Dispatch Box if he wants.

[Ian Murray]

Mr Deputy Speaker, I am so looking forward to the hon. Gentleman bringing forward yet another financial perspective to what independence would look like, but it would absolutely trash our economy and make what is currently going on look like a picnic in the park. He cannot answer any of the basic questions about how that would work.

At the same time as hammering working people in Scotland with tax increases, the SNP has U-turned on its U-turn and, again, will not take any more money from the oil and gas giants’ excess profits, but will, instead, take more money from our nurses in income tax. Working people are paying the price and getting less. The truth is that this motion today is not what the people of Scotland and the UK are calling out for; they are speaking with clarity that they want change—change from a cruel and failing Conservative Government and change from a tired and failing SNP Administration. They want change. Let us get this general election and deliver that change.

[Tommy Sheppard (Edinburgh East) (SNP)]

I must start by reflecting how glad I am to see that this topic has captivated the imagination of the House with the participation here today.

Let me start by agreeing with the shadow Secretary of State on one point: if anything reflects the zombie nature of this Parliament, it is the fact that we are spending 90 minutes on the Floor of the House discussing something that usually would be decided by 12 people in the attic and, at best, go to a deferred Division.

Clearly, the Government are very thin when it comes to stuff to put before the House, but given that this measure is here, I am happy to debate it. Let me also say that there has been suggestion that there is nothing to see here—that all that is happening is a statutory instrument to give effect to an agreement that has been reached between the Scottish and UK Governments. That is not quite the case, though, is it? Of course, officials in both Governments have worked out agreements on how things should be calculated—how inflation and various other factors should be determined—and it is good to see that officials in both Governments are singing from a common hymn sheet when it gets to analysing the situation before them. But that is not to pretend that the quantum of money involved is the subject of consensus or agreement.

I would have thought that even Scottish Ministers would be a little concerned to suggest that this is an inflation-related increase in borrowing limits. The increase is 1.6% over seven years, for money that mainly goes to the construction industry where we have been looking at 40% or 50% inflation over the same period. I do not even know how they can keep a straight face in describing this as an inflation-rated increase.

The truth is that these borrowing limits are not a matter of negotiation between the Scottish and UK Governments. They are not subject to a legislative consent motion; they are something that is determined by the UK Treasury, and that is the statutory position. This UK Treasury has determined what the figures are, and, to be frank, it has the Scottish Government over a barrel because the only option is to agree to this proposed increase, or to get no increase at all. The Government have us over the same barrel, because we either agree to this 1.6% increase, or the status quo ante will prevail and there will be no increase at all.

[Angus Brendan MacNeil]

Further to the point made by the hon. Member for Glasgow North (Patrick Grady) about the shadow Health Secretary pointing out that all roads lead to Westminster, and that the spending constraints and austerity that have been chosen were foisted upon everybody, it is a ridiculous situation, surely, when Scotland’s hands are tied like no other country in Europe. Spain does not decide its priorities for health spending based on what France is spending, so why should Scotland or Wales do similarly? Why also do the Barnett consequentials stem from only one of the nations of the UK? Wales probably has the greatest health needs, but we do not see money for England as a consequence of Welsh needs or Scottish needs. Why does it all stem from the one part? That is something those of the Tory-Labour “Better Together” agenda have never addressed: the imbalance of the UK, with one partner in the lead and the rest having to follow with the choices they make for us.

[Mr Deputy Speaker (Mr Nigel Evans)]

That intervention was longer than many speeches I have given here.

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[Tommy Sheppard]

I agree with that. I was just coming on to talk about the impact of these cuts and the fact that, even with increased borrowing by the Scottish Government, we are still talking in overall terms about a 9% reduction in the capital budget in Scotland. A 9% reduction means that some big projects are going to be delayed and some are going to be shelved. People who are looking for a new building or a new piece of infrastructure in their constituency should understand, when they are told delays are going to take place, that those are a consequence of what we are deciding here.

Of course, not all capital spending is to do with big, grandiose projects; a lot of capital spending is focused on improving the day-to-day operational delivery of public services, and therefore the consequences of cuts and delays will have an impact on revenue budgets as well. If we cannot improve the energy efficiency of a particular building through capital improvements, it will cost more to run that building. If we have to provide temporary facilities, that will cost more.

There is a double whammy. Not only is the capital budget having to be funded in part by a charge on the revenue budget to Scottish taxpayers, because of the borrowing the Scottish Government undertake, but the revenue consequences elsewhere in operational budgets will put them under considerable additional strain.

[Angus Brendan MacNeil]

Will the hon. Gentleman give way again?

[Tommy Sheppard]

I will not, if the hon. Gentleman does not mind, because I am just about to—

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[Angus Brendan MacNeil]

I will be brief!

[Tommy Sheppard]

Really? All right.

[Angus Brendan MacNeil]

The hon. Gentleman is making a good point on capital spending. The Scottish Government and a small Scottish island cannot build a replacement hospital at the moment because of those capital constraints. Meanwhile, independent Ireland has so much money from its surplus that it is funding nurses and Erasmus students not just in its own territory, but in Northern Ireland, which is currently part of the UK.

[Tommy Sheppard]

Indeed.

This is the final point that I want to make. Let us remember that when we talk about Scottish Government borrowing—the entire thing that we are talking about here—it is borrowing with the permission of, and guaranteed by, the UK Treasury. It is not possible for the Scottish Government to do a deal with a private sector house builder and get some private finance to build more social housing as an additional project in Scotland. That is not possible unless it is agreed to by the UK Treasury and comes within these limits, so the Scottish Government, who are heralded as the most powerful devolved regional Government in the world, do not have the financial capital powers that even a medium-sized business has to manage its own affairs.

That is why, in the end, the argument should really be for a Government in Scotland who have the capacity to make decisions about capital spending and other aspects of our finances based upon the needs and requirements of the people of Scotland, rather than the needs and requirements of mandarins in the Treasury in Whitehall. That is why we should have independence for Scotland.