Budget Resolutions

Callum McCaig Excerpts

1st reading: House of Commons
Tuesday 14th March 2017 Commons Chamber

[Graham Evans]

My hon. Friend is absolutely right. In the previous Parliament, the Opposition opposed every single reform made by the then Government, and they have also opposed all the reforms of the current Government. They call our approach austerity; I call it living within one’s means. We have to take the difficult decisions. Judging by the £30 billion black hole in the Opposition’s counter-proposals, however, they have forgotten the mistakes of the past.

[Callum McCaig (Aberdeen South) (SNP)]

While talking about the need to balance the books, the hon. Gentleman made a bizarre analogy comparing the country with a family. When he is sitting at the dinner table, can he raise interest rates, print money and quantitatively ease? His analogy is completely and utterly defunct.

[Graham Evans]

I did not catch the hon. Gentleman’s final word, but I use that analogy because when I was at school we used to have home economics, and we have to make difficult decisions at home. I was merely making the point that we all have difficult decisions to make. That analogy applies not only to families throughout the country, but to the Government. I am sorry that the hon. Gentleman does not feel it is a good analogy. Perhaps I shall wait to hear his speech and comment on it.

I welcome the Chancellor’s steps to return balance to the country’s finances and to continue the Government’s commitment to take the lowest earners out of tax altogether by raising the personal allowance to £11,500. I sat on the Work and Pensions Committee in the previous Parliament, when the Government’s mantra was helping to make work pay. That is the right course of action to take.

I come to a subject that is very close to my heart, and I declare an interest as the chairman of the all-party group on beer. I welcome the relief of £1,000 for pubs with a rateable value of less than £100,000, which will benefit 90% of pubs. I also welcome the discretionary fund, which enables local authorities to make awards to businesses in their areas on a case-by-case basis. However, I am somewhat disappointed about the inflationary rise in beer duty, which is now 43% higher than it was a decade ago, 13 times higher than the rate in Germany, and significantly higher than those of our major brewing neighbours in Europe. None the less, the Government do have a proud track record of three reductions in beer duty, a beer duty freeze and the removal of the hated beer duty escalator. Although I welcome the introduction of duty bands to target high alcohol-by-volume white ciders to encourage responsible drinking, it is important to remember that 70% of the drinks bought in pubs are beer.

The current bracket for reduced-rate beer sits at 1.2% to 2.8% ABV. However, current HMRC duty receipts demonstrate that, in the six years since the policy was introduced, such beer represents just 0.15% of the market. I know that the Minister will be aware of the cross-industry campaign to split general beer duty rate into two tiers— 2.8% to 3.5%, and 3.5% to 7.5%—and to reduce the duty rate for 3.5% ABV beers, which have much less alcohol in them than the UK average and are highly drinkable for UK consumers. I hope that we can work together on this matter over the coming month to encourage a broader selection of lower strength beers to become part of the norm in UK drinking culture. I will be encouraging the industry to step up to the plate with lower strength beers that can be drunk and enjoyed in the great British pub.

This Government have a plan to build an economy that works for everyone, and the Budget continues with that plan by building on the foundation of our fundamental economic strength. It makes sure that our economy remains strong so that we can properly fund our public services, it helps ordinary working families to make ends meet, and it makes it clear that Britain is open for business.

--- Later in debate ---

[Callum McCaig (Aberdeen South) (SNP)]

As the Scottish National party’s spokesperson on business, energy and industrial strategy, may I too admonish my hon. Friend the Member for West Dunbartonshire (Martin Docherty-Hughes) for missing Business questions this morning? Nevertheless, I agree wholeheartedly with what he says on whisky duty, national insurance and WASPI women. I will come on to talk about national insurance contributions in a moment.

The Budget was dressed up as something a little bit different and a little bit bland. It really was bland, but parts of it did not ring true. The Chancellor seemed to think he could demonstrate that Tory austerity has not been felt most keenly by those who do not have the means to bear it. That may be true if we look at it in a very narrow sense—the top 10% of earners, when all things are taken into consideration, have borne a slightly greater share—but the lowest three deciles have borne a similar percentage decline in their income as a result of the Government’s policies. It may be easy to say that those in the top decile have taken the greatest hit, but the reality is that a 1% or 2% fall in income will mean considerably more to those in the bottom three deciles than it will for those in the top 10%.

The Chancellor said in his Budget speech:

“As a result of the changes we have made since 2010, the top 1% of income tax payers now pay 27% of all income tax”.—[Official Report, 8 March 2017; Vol. 622, c. 813.]

He wears that as a badge of pride, but that is not an indication of a fair society. It is the very opposite and it demonstrates that we live in an incredibly unfair society where 27% of income tax is being paid by 1% of the population. That is because they earn, unjustifiably, more than the rest of the population. That is not a badge of honour; that should be a badge of shame for this Government.

We have heard talk about how the Government want to use technical education and reforms in the Budget to put entrepreneurship and technical skills at the heart of the British economy, yet the single key announcement in the Budget was the change to national insurance contributions for the self-employed. They are the entrepreneurs. They are the folks with the technical skills we need in our economy. As we have heard from Member after Member today, those people do not enjoy the same benefits and protections enjoyed by those of us who are employed. That is why they deserve a differential in terms of their national insurance contributions. To dress this up as anything other than a naked tax grab is entirely disingenuous. This will not help our economy and it is coming at precisely the worst time. It must not just be stopped, but cancelled entirely.

The most disappointing aspect of the Budget for me was the utter silence on the energy challenges we as a country face. Next to nothing was said on renewables. There was nothing on how we decarbonise our economy. There was nothing on how we tap the massive potential in Scotland, particularly in our rural communities. There was nothing on how we can get contracts for difference for our island communities or how we tap the massive potential of our tidal streams. We heard nothing on the implementation of carbon capture and storage, which we will need if we are going to be able to afford, in both a financial and technical sense, to meet the carbon budgets we as a Parliament agreed.

[Hannah Bardell]

rose—

[Callum McCaig]

I will not give way, as others still wish to speak.

The privatisation of the Green Investment Bank is pushing ahead at precisely the wrong time. As part of this, I hope that the Government will reflect on the challenges they face and cancel that sale.

Oil and gas has raised its head as an issue, given the changing dynamic in Scottish political debate. In 2014, the then Prime Minister promised Scotland a £200 billion oil bonanza if we voted no. He told us that the industry relied on the broad shoulders of this United Kingdom. Well, those shoulders have barely shrugged in defence of the 65,000 people, many of them in my constituency, who have lost their jobs while the Government have been asleep at the wheel.

I and my party will take no lectures from folks over there on the oil and gas industry. We have seen an absolute dereliction of duty; the Government have been asleep at the wheel. This Budget provided an opportunity to right that wrong, but what did the Government do? Did they come forward with the exploration incentives that the industry needs? No, they did not. They simply reheated a previous commitment from the last Budget and said that they would set up a discussion group. Frankly, that is not good enough. When people are losing their jobs, it is not enough to sit down and have a chat over a cup of tea. An independent Scotland would undoubtedly have acted; it would have acted swiftly and decisively to save these people’s jobs.