Budget Responsibility Bill

Dave Doogan Excerpts

2nd reading
Tuesday 30th July 2024 Commons Chamber

[Dave Doogan (Angus and Perthshire Glens) (SNP)]

I am very pleased to follow the hon. Member for Glasgow North (Martin Rhodes), who just delivered a textbook maiden speech, and negotiated his way around the fairly awkward changes to the Glasgow constituencies. Judging by the unanimous reactions in the Chamber, the two former servants of his constituency that he saluted were hard-working representatives in this Chamber. I would like to reciprocate. He mentioned the former Labour Minister in the Scotland Office Ann McKechin, who invited me to her constituency office in Glasgow when I was a mature student around 2010-11. She gave me a good hour of her time, which I then thought was fairly generous. As an MP, I now realise just how generous that was to someone who was not her constituent and who, within two or three minutes, clearly demonstrated signs of a particularly different political outlook. I congratulate the hon. Member.

I welcome the Bill and commend the Government on introducing it. I am not certain that it is what they say; I will develop that point in a wee moment. Who among us could forget the aftermath of the Truss-Kwarteng debacle, which plunged businesses and households across these islands into chaos? The pair of them then disappeared off into the sunset, leaving us here to pick up the pieces of their arrogant and economically illiterate fiscal experiment while in government. If anyone has forgotten, it is not mortgage payers up and down these islands, who are still paying the price of that Tory Government misadventure. Mortgage rates spiked at 6% after the mini-Budget. Figures out last week from Moneyfacts show that the average rate for a two-year fixed deal is still 5.79%.

We in the SNP warned at the time that the mini-Budget would lead to economic chaos, so we can only support the measures in the Bill to help ensure that there is never a repeat of that ridiculous performance.

An independent assessment by the OBR for major and permanent fiscal interventions is welcome. It is responsible and the SNP supports it, but to be clear it is no silver bullet. It will not fix the economy, and nor will it prevent fiscal incompetence from the current or future Chancellors, their officials or junior Ministers. It will not fix the credibility of Chancellors who, for example, on taking office say they did not know about the £20 billion black hole in the previous Government’s fiscal plan that they were adopting, even though they were warned about it repeatedly and in public by the SNP, the Institute for Fiscal Studies and others.

The SNP welcomes efforts at increasing economic transparency, but the truth is that Labour has also been substantially short of honest with the public in this area. The new Government are seeking to create a counter-narrative or counter-reality to uphold the belief that the cuts and tax hikes that Labour will soon visit upon businesses and communities across these islands have been done to Labour by the Tories, rather than done to the people by Labour. That is the truth of the matter. If Labour is serious about restoring faith in, and the growth of, the economy, much more action is needed from the Government. No economy ever cut its way to growth; rather, growth is a function of investment.

In closing, I greatly fear that the new Labour Government are getting a bit carried away with their own success and are sailing off from reality at some knots. I cite the nauseating “Government of service” hyperbole, the Potemkin energy company that is GB Energy, which is abject nonsense, and now the “fiscal lock” set out in the Bill. An assessment by the OBR is not a lock on anything. It does not enable or prevent anything. It does not confine, nor does it decide anything. Parliament will never allow it to be used as a shield for the Chancellor. From its beginning to its end, it is simply an impartial assessment leaving the hands of the Chancellor of the day free to prosecute whatever plan they wish, consistent with the OBR’s assessment or not. And so it should be, because Parliament is here to hold the Government to account—as are the people across these islands, which we have seen recently.

To be clear, this provision is certainly no replacement for the rigorous parliamentary scrutiny of fiscal policy. That is a core function of this House, which I am sure that you, Madam Deputy Speaker, agree with. In the interests of consensus, will the Minister concede this minor point of detail—that “fiscal report” is far more realistic in terms of what it actually means than “fiscal lock”, for this nevertheless welcome measure?

[Madam Deputy Speaker (Ms Ghani)]

I call Blair McDougall to make his maiden speech.

Budget Responsibility Bill

Dave Doogan Excerpts

Committee of the whole House
Wednesday 4th September 2024 Commons Chamber

[Dave Doogan (Angus and Perthshire Glens) (SNP)]

It is a great pleasure to follow the hon. Member for Portsmouth North (Amanda Martin) and that rundown of her fantastic constituency. I want to go there now that I have heard about it, although she might be surprised to know that I am quite familiar with that part of the world around Portsmouth North, Fareham, Gosport, Hayling Island and Southsea. It is a beautiful part of the world, and while it cannot compete with Scotland in scenery, it certainly wins the day when it comes to weather in the summertime. She might also be surprised to know that there is a fairly high concentration of Pompey supporters in Perthshire. That is a legacy of the Royal Naval aircraft workshops outside Perth, when people used to go down to the Royal Naval aircraft yard in Gosport, and picked up a loyalty to Pompey from there. I offer many congratulations, not least on a fantastic maiden speech but also on those exceptional shoes.

I am concerned, indeed troubled as many people will be, about the role of the Treasury and Chancellor in the last couple of months. We are here to talk about budget responsibility, and I wonder what answer we would get if we were to ask the 80% of pensioners on these islands who are about to be stripped of their winter fuel payment what they think is responsible about that budget intervention. We could ask the millions living in poverty across these island—a disgrace in and of itself—what they think about budget responsibility in their lives, now double scuppered by Labour’s two-child cap. We could ask the millions of working poor across these islands, who are trying to do right by their children, their employer, and just pay their bills to get by, and who put their kids to bed every night and then sit up all night worrying about everything, what difference this fiscal lock will make to their lives.

The Chancellor’s first two acts on taking up her role was to make life harder for the poorest families in society who have the least. Once she had dispatched them, she turned her fire on pensioners, removing their winter fuel allowance. Austerity 2.0—it does not matter to Scotland whether austerity comes in a Labour or Tory wrapper, it is still as caustic. That is relevant because the Chancellor wants us to believe that the Bill and the fiscal lock will make everything okay, but it does not. The Office for Budget Responsibility will take no view on the qualitative merits or otherwise of any Treasury decision, but merely on the quantitative dimension in fiscal terms. There are no locks in the Bill to protect the people of these islands from this Labour Chancellor.

We hear ad nauseam that the Chancellor had no choice in any of these actions, and the worst inheritance since the war, and it goes on and on. Well:

“The numbers may be a little bit worse than they thought at the time, and I think there were some things that were hidden from view, but the overall picture over the next four or five years is very, very similar to what we knew before the election.”

Those are not my words, but those of Paul Johnson, the director of the Institute for Fiscal Studies. If that is not good enough, the SNP warned throughout the election that if Labour stuck to Tory spending plans, taxes would rise and/or budgets would be cut, and here we are. The SNP even challenged Labour in Scotland on that point during the election, and the leader of Labour in Scotland, Anas Sarwar, said,

“read my lips: no austerity under Labour”.

He is not saying that now is he, because he cannot. Perhaps the Chancellor, or those on her Front Bench, can advise us about whether Mr Sarwar was having a stumble with the truth that day, or whether they had forgotten to let their branch office in Scotland in on the plan. Despite all that, the Chancellor and her Treasury Front Bench persist in their claims about a £22 billion black hole to defend their indefensible attacks on the poorest in society. It is unacceptable, and the Bill, if enacted, will do nothing to protect communities from that.

I am also troubled by the language that those on the Treasury Front Bench seek to use to accrue some form of disproportionate credit for bringing forward the Bill. At its core, the Bill is nothing more than an additional provision to the existing Act, and the exaggerated language around it exposes the weakness of the Government’s position on this fiscal lock. Nothing is either locked in or locked out by the Bill. The OBR cannot stop any Budget or fiscal adjustment, good, bad or indifferent. That is Parliament’s role, as other right hon. and hon. Members have pointed out. On Second Reading I pointed that out to the Minister, who declined to concede on the absolute fact that the position is as I have just set out. I hope he has had a chance to reflect on the so-called fiscal lock, which is nothing more than an administrative assessment of Treasury plans on which nothing is contingent. The hon. Member for Walthamstow (Ms Creasy) said that she is keen for those on the Treasury Front Bench to be held to a higher fiscal standard. Fair enough, but the Bill will not do that. This is in abstract the narrowest one-dimensional protection from bad fiscal policy.

Labour Members are seemingly addicted—the Bill evidences this—to some sort of pound shop exaggeration, and a troubling reliance on hyperbole when detailing something profoundly ordinary. The fiscal lock and the Bill will not protect the devolved nations and their budgets from the austerity of the Labour Front Bench. Before the general election, when Labour in Wales was facing NHS budget pressures, the now Secretary of State said that

“all roads lead to the Tories”

and Westminster, in accordance with those budget pressures. Now, after the election, we have a Labour Government, the SNP in Scotland is facing those same budget pressures, and it is the SNP’s fault. They cannot have it both ways. They have got the job and they need to own it.

The Chancellor claimed that the SNP should raise income taxes to pay for her cut to the winter fuel allowance in Scotland. The cheek of it! I remind those on the Treasury Front Bench that 70% of taxes raised in Scotland go directly to the Treasury. We have paid our dues, and shame on the Chancellor for trying to get Scottish taxpayers to pay twice to compensate for her axe wielding. The double standards of it all are staggering. She wants the Scottish Government to raise income taxes in Scotland, which is precisely what she refused to do ahead of the UK general election. Why will she not mirror the Scottish Government’s progressive income tax regime to increase taxes slightly on those of us who are better off, and reduce taxes slightly for those on the lowest incomes? That would raise nearly £16 billion for the Treasury. If she had done that and followed the SNP Scottish Government’s lead, she would not have had to attack our pensioners’ winter fuel allowance. A significant element of budget responsibility is ensuring that people own their decisions and their own mess. Labour will find that SNP Members are keen to help them in that pursuit. In summary, there is nothing particularly to object to in this inherently ordinary and transactional provision in the Bill, except for the behaviour of the Government advancing it.

[The Chairman of Ways and Means (Ms Ghani)]

I call Will Stone to make his maiden speech.