Budget Resolutions

David Linden Excerpts

Monday 1st November 2021 Commons Chamber

[Peter Grant]

The sad thing is that no matter how much anyone in this House presses the Scottish Government on their decisions, a record amount of that money coming back to Scotland has already been decided not by the elected Members of the Scottish Parliament, but by Members of the UK Parliament who could not get elected in Scotland. Record amounts of that money come with strings attached and conditions attached that tell the Scottish Government how they have to spend our money.

In response to the hon. Gentleman’s specific question about the amount, if he looks carefully, he will see that, yes, there are welcome increases for capital spend, but the day-to-day service provision budgets of the Scottish Government will continue to be under intense pressure. While we welcome the increase in capital spend, the Departments of the Scottish Government—just like the Departments of this Government and the departments of local authorities the length and breadth of England and Wales—will find that the resources to meet the ever-growing demand on their day-to-day services will be as tightly pressed as ever.

While the Government will try to pull the wool over our eyes and say, “It is all covid’s fault”, we cannot and will not let them forget that the British Government’s management of the economy during covid has been among the worst of the world’s major economies. The International Monetary Fund has predicted that the long-term economic damage from covid in the UK will be worse than in the other G7 economies. Even that does not tell the whole story, because while the Secretary of State rejoiced in the fact that we hope the long-term economic damage of covid will be restricted to 2%, he forgot to tell us that Brexit is twice as bad as that. I wonder why he forgot to mention that the long-term, self-inflicted damage of Brexit is likely to be twice as bad as the long-term damage of covid.

[David Linden (Glasgow East) (SNP)]

In talking about the self-inflicted damage from this British Government, whom people in Scotland have not voted for by majority since 1955, does my hon. Friend accept that when Government Members talk about how kind the UK Government have been in giving money to the Scottish Parliament, more often than not the Scottish Parliament and the Scottish Government are having to use their resources to mitigate bad decisions that come from this place, such as the cut to the universal credit, which renders the Scottish child payment, described by charities as a “game-changing” child payment, as utterly useless?

[Peter Grant]

My hon. Friend is absolutely right. Giving spending powers and in some cases tax-raising powers to the devolved Parliaments of Scotland, Wales and Northern Ireland was never supposed to be a way of making up for the cuts to those same budgets coming through from Westminster, but all too often that has been happening.

To return to the director of the Institute for Fiscal Studies, his response to the Budget was:

“This is actually awful. Yet more years of real incomes barely growing. High inflation, rising taxes, poor growth.”

How can anyone think that is something to celebrate? The IFS also said that someone on median earnings might see their pre-tax pay just about keep ahead of inflation, but after paying the higher income tax that the Government are imposing, plus the higher national insurance tax, that median earner will be worse off in real terms. An analysis published by the Joseph Rowntree Foundation found that many of the worst off—people on universal credit who do not have a job—will be poorer as a result of this Budget. Even the reduction in the universal credit taper, welcome as it is, does not make as much difference as the Tories are claiming. For 40% of universal credit claimants in Scotland it will make no difference at all, because they have not got a job. [Interruption.]

The hon. Member for Stoke-on-Trent North thinks it is funny that many people will not benefit from the Budget. I do not see what he finds funny at all. While 40% of universal credit claimants in Scotland will get no benefit at all from the changes to the taper, 100% of his constituents on universal credit will be £1,000 a year worse off. I look forward to him defending that to his constituents—I would not try to defend it to mine.

All of that prompts a question: if people on average earnings will be worse off, and if the worst off—the lowest earners in our society—will be worse off, who really benefits from the Budget? The Chancellor’s banker buddies will benefit, thank you very much. Many of them will be raising a glass to toast a 5% cut in the corporation tax they pay, while the customers who pay their wages—individuals and small businesses alike—will struggle to cope with increased taxes. As my hon. Friend the Member for Glasgow Central (Alison Thewliss) alluded to last week, the Manchester Uniteds of this world who think it clever to take a 10-minute flight to go to a football match will gain, and the champagne quaffers in the members’ enclosure at Ascot will have something to cheer, but very few of my constituents will have anything to cheer at all.

I welcome the news that alcohol excise duties are to be reviewed at last, but let us see the result of the review before we welcome it unconditionally. As I said in a Westminster Hall debate, it cannot be right that the duty on a glass of whisky is 16% higher than the duty on a glass of wine that contains exactly the same amount of alcohol. I make no apology for reminding the House that, over the summer, all those people in the enclosures at Ascot, Henley or wherever almost certainly enjoyed the product of the skilled workforce of the Cameronbridge distillery in my constituency. It is the biggest grain distillery in the whole of Europe, and it swells the Treasury’s coffers to the tune of about £3.6 billion a year in excise duties alone. That is £3.6 billion a year from one manufacturing establishment in my constituency. The fact that for decades many people in the towns of Methil, Buckhaven, Methilhill and others have been living on or below the breadline close to a distillery that generates such massive wealth for the coffers down here in Westminster is testimony to the failure of successive British Governments to put the wellbeing of the people front and centre of their taxation and spending plans.

If the Chancellor is genuinely concerned about improving living standards for people on low incomes, he should start by reversing some of the savage cuts that he has made and reinstating the election manifesto promises that he has broken. He should reinstate the pensions triple lock, reverse the £20-a-week cut to universal credit, reverse the hike in national insurance that penalises small businesses for each and every new job they create, and scrap the two-child limit and vile rape clause. If he really believes in a guaranteed living wage for all, let us hear him—or, at least, the Minister in summing up—commit to increasing the legal minimum wage later this month and every November to match the real living wage, measured not by how much the Government are willing to ask employers to pay but by how much independent analysis shows human beings in these islands need to live on.

The Secretary of State asked what we might do as alternatives. If the Chancellor is looking for ways to save money, he could look at the gross inefficiency in the Government’s own Departments. Recent National Audit Office reports show that eye-watering sums of money have been wasted in delays and inefficiency. In the Ministry of Defence, nuclear infrastructure, Crossrail, High Speed 2 and the national criminal intelligence database, hundreds of millions of pounds—billions of pounds—are being thrown away through waste and inefficiency. He should get a grip on that; then we could improve services without necessarily having to increase taxes.

If we want to see where we could stop spending money, we could start by scrapping the programme of new nuclear power stations that are designed to rig the system in favour of nuclear energy that, when it finally comes on stream, will cost more than twice as much as offshore wind power. Sooner or later, our constituents will be forced to pay that price increase. We should scrap the monstrous white elephant that is the nuclear weapons programme: a programme whose only purpose is to commit the worst crime in the history of the planet. The Government should ditch plans to spend a quarter of a billion pounds on a new royal yacht Britannia, although, given whose ego it is clearly designed to satisfy, perhaps we should rename it the good ship Borisannia.

This is a Budget that has been imposed on Scotland by a Government we did not elect and who will never have the consent of our people to rule over us. It is partly the result of a covid pandemic, which could perhaps have been predicted, but was not. We all have to live with the consequences of that. It is largely the result of a Brexit that our people did not vote for.

The Budget seeks to level down Scotland’s status to something approaching that of a forgotten English county. I want Scotland to be levelled up. I want Scotland’s status to be levelled up to that of an equal partner of our friends in Europe and elsewhere.

The Chancellor claimed that his Budget would strengthen the Union, but what he has done is increase the pace of Scotland’s journey to a true levelling up, and bring forward the day when the sovereign people of Scotland reassert our inalienable right of self-determination, the day when our place in the world is levelled up to match that of the other prosperous, outward-looking, inclusive, democratic and independent nations. If Conservative Members think that it is not coming, why have the Government given a 20% budget increase to the Secretary of State for Scotland, whose only purpose is to peddle the myths—[Interruption.] Why do they need to spend 17.5% to 20% more on a Department, the only purpose of which is to campaign for a no vote in a referendum that they say is not coming, but that we say is coming very soon?

--- Later in debate ---

[David Linden (Glasgow East) (SNP)]

Somewhat uncharacteristically for an Opposition Member, I will start by mentioning some of the measures in the Budget that I do welcome.

Reducing the universal credit taper rate from 63% to 55% is certainly a modest step in the right direction, as is the £500 increase in the work allowance. However, I should make it clear that wider reform of universal credit is still desperately needed—a point to which I will return later in my speech. I also welcome the freeze in duty for Scotch whisky, which has had a torrid time in recent years as a result of Brexit, the pandemic and punitive US tariffs. I shall return to that later as well.

One of the so-called flagship announcements in the Budget was the announcement of that modest reduction in the universal credit taper rate, and I do not deny that some, although by no means all, will be able to benefit from it. However, despite all the hyperbole—some of which we have heard today—we must not lose sight of the fact that the Chancellor has merely tinkered around the edges of universal credit. The stark reality facing many of my constituents in Easterhouse, and across the east end, is that a modest reduction in the taper rate will come nowhere near to compensating for last month’s £20-a-week cut in universal credit.

We should also remember that changes in the taper rate will not benefit those who are out of work or unable to work owing to sickness or a caring responsibility, or indeed those who have a disability. Those living with a disability had already been cruelly overlooked by the Government on the £20 uplift at the beginning of the pandemic, so this is arguably a double blow to a group of people who are impacted—arguably even more so—by the cost-of-living crisis. We know that only about four in every 10 universal credit claimants are in work, so this change in the taper rate will not benefit 60% claimants living in Carmyle, Craigend or Carntyne.

To be blunt, this Budget was a missed opportunity to strengthen the UK’s social security net, which too many in our communities still fall through. We should have used this opportunity to build back better by scrapping the benefit cap, ending the punitive sanctions regime, binning the two-child limit and the rape clause, dropping the five-week wait, and abolishing the bedroom tax elsewhere in the UK. Instead, the Chancellor has opted to focus on tinkering around the edges, rather than transforming the lives of the most vulnerable in our communities. By scrapping the triple lock, it is clear that the Chancellor is balancing the books on the backs of pensioners who continue to get a raw deal from a pension system that they have paid into their whole lives.

I want to raise another concern that arose from Wednesday’s statement, and I do so as chair of the all-party parliamentary group on Scotch whisky. I welcome the freeze on alcohol duty, which we know disproportionately hits our iconic Scotch whisky sector. That sector supports 42,000 jobs, hundreds of which are in my own constituency of Glasgow East. However, it is worth reminding the House that the freeze on duty only gives breathing room to an industry that already faces a 70% tax burden. It will not be lost on the Scots that the same Budget that saw duty for Scotch whisky stay the same saw a tax cut for English sparkling wine. For a Government who talk a good game on levelling up, it seems that our premium spirit is indeed missing from that all-important level—something that our Scottish Tory colleagues might want to explain in their speeches tonight. Let me say clearly to the British Government: by all means, fly in and have your photo opportunities at Speyside distilleries and announce another review on alcohol duty, but do not be surprised when there is a backlash from distillers who can see that Scotch whisky will be left at a severe competitive disadvantage by a Treasury that must do much more to support Scotch.

The theme for tonight’s debate is levelling up, but this Budget demonstrates that levelling up is all spin and no substance. The Red Book says that this Budget is about

“a stronger economy for the British people”.

In truth, it delivers more for sparkling wine than it does for social security. I can tell the House that my constituents in Cranhill will not be popping the prosecco and toasting this smoke-and-mirrors Budget.

--- Later in debate ---

[Helen Whately]

I am sure that the hon. Lady well knows, having followed this debate and recent conversations about the Budget, that constituencies and Members on the Conservative Benches and on the Opposition Benches have received funding from the levelling-up fund, including Members of the Opposition Front Bench. I encourage the hon. Lady’s constituency to bid in future rounds of the levelling-up fund. So far—[Interruption.] If she would please listen to what I am saying rather than continuing to shout at me. She asked me a question and I am responding. It is important to her constituency that she listens. Her constituency is clearly seeking levelling-up funds. I would be delighted if it received them. It will have the opportunity to bid for further funding in future rounds, along with other Members and constituencies that have expressed an interest in doing so.

Across the UK, we are creating the conditions for businesses to invest and flourish, because businesses create jobs and drive the growth that will see people’s living standards going up. This was an argument that was made skilfully by my hon. Friend the Member for Bosworth (Dr Evans) among others. Hence, we have a £1.4 billion global Britain investment fund and £1.6 billion additional funding for the British Business Bank’s regional funds.

As we pursue levelling up, we are empowering local leaders to shape and drive the transformation in their communities—local leaders who know best what their communities need. That was a point made by my hon. Friend the Member for Henley (John Howell) among others and exemplified by the £5.7 billion five-year consolidated transport settlements for the eight city regions.



During today’s debate, I heard several colleagues make comments such as “Don’t forget about the south”, from my hon. Friend the Member for Southampton, Itchen (Royston Smith); “Don’t forget about London”, from my hon. Friend the Member for Wimbledon (Stephen Hammond); and “Don’t forget Suffolk and Norfolk”, from my hon. Friend the Member for Waveney (Peter Aldous). I also heard, “There’s not enough money for the north.” I assure hon. Members across the House that levelling up will happen across the UK, in all regions and nations of the United Kingdom.

[David Linden]

One wonders why the Government need to level up after 11 years in power, but that is perhaps a damning indictment of their record in office. The Minister talks so much about levelling up and a level playing field, so why is it that English sparkling wine gets a tax cut in the Budget, but Scotch whisky only gets a duty freeze?

[Helen Whately]

I am delighted to pick up on the hon. Member’s comments. I am surprised that he did not welcome the level of funding—the highest ever block grant—that Scotland is receiving as part of the Budget and spending review. We are making much-needed reforms to the alcohol duty system, which has been recognised by many commentators over the years as dysfunctional and in the interests of neither public health, nor our economy. We are now moving to a fairer system that taxes more alcoholic drinks at a higher level. This is also fair to whisky. The hon. Member for Glenrothes (Peter Grant) called for whisky and wine to have the same duty rate by unit of alcohol. That is exactly what we are proposing in the reforms that will be introduced in 2023, because we recognise the importance of many parts of the sector—whether it is beer, cider, English and Welsh sparkling wine, or whisky—to the UK economy.

We are ensuring that regions that have historically received less investment are no longer overlooked. For example, some £500 million of the £1.7 billion of the first round of the levelling up fund will indeed go to the north of England, but there are examples of levelling up fund investment all around the country.