The Economy

Debate between David Linden and Kelvin Hopkins

Thursday 22nd March 2018 Commons Chamber

[David Linden]

At least the Scottish Government produced a White Paper, which was a heck of a lot more than the UK Government provided in the run-up to the Brexit referendum. Perhaps the fact that there was not enough information was the reason why a number of people in the UK felt they could not make up their mind on the referendum.

The right hon. Member for Wokingham spent a lot of time talking about fishing. One of his great heroines is Margaret Thatcher, but it was of course Margaret Thatcher who said that the Scottish fishing industry was “expendable”, so I will take no lessons from him on fishing.

I am very grateful for the opportunity to contribute to this debate on the economy. My Chief Whip, my hon. Friend the Member for Glasgow North (Patrick Grady), who has just come into the Chamber, tells me that the debate can last until 5 pm. I will not speak for the next two hours and 45 minutes, because some members of the Press Gallery would not be happy, but this is a good opportunity for us to focus on the record of a UK Government who are very much asleep at the wheel.

[Kelvin Hopkins (Luton North) (Ind)]

I am sorry that I was not in the Chamber earlier, but I was watching the debate, and I listened very carefully to what the right hon. Member for Wokingham (John Redwood) said. As a socialist of the left, I clearly have some differences with him, but he focused on one thing with which I agree—the balance of trade and our enormous net financial contribution to the rest of the EU. That contribution amounts to about £100 billion this year: we are paying 5% net of our total GDP into the EU. Does the hon. Gentleman not agree that that is a very valid point?

[David Linden]

I am grateful to the hon. Gentleman for that point, and I am about to come on to Brexit. We know that Brexit is casting a very large shadow over the UK economy, and precious Government spending—up to £3 billion—is being set aside to counter the self-inflicted harm of a hard Brexit. After the Prime Minister took office, she said that she would deliver a red, white and blue Brexit, but I certainly did not expect such a Brexit to mean that passports would be made in France. But by all means—there you go.

One announcement that I do welcome is the Government’s decision on NHS staff pay. I welcomed it for the SNP from the Front Bench during yesterday’s urgent question. I commend the Government for taking action finally to give England’s hard-working NHS staff a pay rise, and I very much hope that the Welsh Labour Government will follow and do likewise.

Of course, in Scotland, the SNP Scottish Government was the first devolved Government in the UK to commit to lifting the public sector pay cap. We have already delivered on our promise on public sector pay, setting a 3% pay increase for those earning up to £36,500, which has the potential to benefit three quarters of Scotland’s public sector workforce. It is only fair that I declare an interest at this juncture in that my wife is a primary school teacher employed by Glasgow City Council and will receive that pay rise. Those earning over that threshold of £36,500 but less than £80,000 will receive a pay rise of up to 2%, and those earning over £80,000 will receive a £1,600 uplift. The 3% increase potentially covers 82% of NHS staff in Scotland for the next financial year, 2018-19. The Chancellor’s announcement will of course result in Barnett consequentials being allocated to the Scottish Government, and Ministers in Scotland have indicated that they will use this money to support “Agenda for Change” staff in Scotland.

Today’s general debate on the economy allows us the opportunity to take stock of the current economic climate, which does not make pleasant reading for Treasury Ministers. The independent Office for Budget Responsibility forecasts economic growth to be lower in each of the next five years than annual growth was in 2017, when it was 1.7%. Indeed, the Institute for Fiscal Studies notes that this puts the UK’s growth prospects

“among the worst in the G20.”

The right hon. Member for Wokingham—I am afraid that he is not in the Chamber—felt that my hon. Friend the Member for Glasgow Central (Alison Thewliss) painted a somewhat doom-laden picture, but that is just the reality. We can argue about politics, but we cannot argue about the facts. The IFS goes on to warn:

“Dismal productivity growth, dismal earnings growth and dismal economic growth are not just part of the history of the last decade, they appear to be the new normal.”

Britain now has the worst wage growth in 210 years, with a hard Brexit threatening to provide further shocks to an already fragile economy.

Treasury Ministers know that Brexit will be an economic disaster, and that is why the Government are setting aside £3 billion in 2018-19 and 2019-20 for expenditure on Brexit preparations. The Scottish Government will receive only 2.5% or £37 million of the funding allocated for 2018-19. I would be keen for the Exchequer Secretary, when he sums up, to explain how that figure was actually arrived at, because I certainly cannot work it out. It is deeply frustrating that the money we are receiving falls significantly short of the full Barnett share of the funding allocated at UK level.

I would be doing a huge disservice to Scotland if I did not take this opportunity to call once again, as many SNP colleagues have done, on Treasury Ministers to return the £175 million in past VAT payments to Scotland in respect of Police Scotland and the Scottish Fire and Rescue Service. I know that my own area commander would be more than happy to see some of that money coming back, and he could invest it.

[Kelvin Hopkins]

Does the hon. Gentleman not agree that the great advantage of being a United Kingdom is that we can redistribute from the wealthiest areas to those in greater need? Sometimes, through the Barnett formula and regional spending, money can be redistributed from places such as the south-east, which is very wealthy, to places that are less wealthy, such as Scotland.

[David Linden]

Yes, and one of those less wealthy places is my constituency of Glasgow East, but people there do not regularly come to me and say how wonderful the United Kingdom is because it has these lovely nuclear weapons that can defend the foodbank in Parkhead. I welcome the decision to include the police and fire and rescue services in the exemption from UK VAT, but it is only fair that the £175 million is returned to Scotland, so that we can invest.