Finance (No. 2) Bill

Gavin Newlands Excerpts

2nd reading
Wednesday 17th April 2024 Commons Chamber

[Drew Hendry]

That is a very good point. I do not think that the Government understand what happens to people. I do not think they are paying attention to medical advice, such as an article in The Lancet drawing attention to the health deprivations that result from living in fuel poverty or extreme fuel poverty. They do not understand the effect on children’s learning and wellbeing over this period, or, ironically, the higher costs to public services as a consequence of fuel poverty: for instance, people have to rely on the NHS more because of associated health conditions. The Bill is doing nothing substantial to alleviate such dire circumstances.

Before I move on to other issues, I have to ask why the Bill has no updated actions to stop companies taking advantage of the cost of living crisis. For example, the Government are aware, as is the Financial Conduct Authority, that car insurance in the UK is now 34% higher, and that younger and older drivers have seen bigger premium increases than others. The claims rate is under 18%, premiums have increased by 34%, and average premiums for some age groups have jumped by over 50%.

Surprise, surprise: drivers in Scotland are among those who have seen their premiums rise the most. This time, however, it is something they share with Londoners. The Government cannot put that down to the fact that there are different market forces and so on, because insurance premiums have risen by only 2% in France, 5% in Spain and 6% in Italy, so what is going on? The Bill contains no action on end-of-contract scams by mobile and broadband operators either. The Government are allowing a punishing cost of living free-for-all to continue while they are distracted with feeding their culture wars and giving peerages to their pals and donors.

While the UK Government remain idle, pretending that the cost of living crisis has ended, the Scottish Government have taken proactive steps to tackle inequality and reduce child poverty. They have implemented game-changing policies such as the Scottish child payment, which has lifted 100,000 children out of fuel poverty, yet it is an uphill swim to protect families while Westminster makes the big and wrong decisions. Austerity continues to hinder necessary investments that are essential for Scotland’s burgeoning industries. Brexit has disastrously impacted on our economic activity, international standing and business confidence. Investment in the UK remains the lowest among the G7 countries.

It is common for the Tories, and indeed the Labour party, to say that there is no magic money tree when it comes to public finances, which is why they must always cut, cut, cut to follow their so-called fiscal rules. But here is the rub: the closest thing we had to a magic money tree was our EU membership, which could still be adding to our reserves. According to research by Bloomberg, Goldman Sachs, Cambridge Econometrics and others, around 5% of our annual GDP has been lost because of Brexit. If we had that back, it would generate well over £100 billion per year, generating a potential tax take for the Treasury of over £40 billion per annum. We could plug the holes—we do not have to be going through this—but that is not the path that has been decided for us. The Government have hacked the tree down to mulch, and all that they and Labour can do now is promise more cuts.

The Bill fails business and industry, too. The SNP has long advocated a £28 billion annual investment and a robust green industrial strategy to harness the full potential of the green transition. Labour used to agree—indeed, its advisers are annoyed that the party is not going forward with it—but it has reversed on that policy, as was confirmed earlier. Such an approach is essential if we want to meet our climate change targets. Indeed, as we stand at the moment—with Scotland as part of the UK—it is one of the few industries that the UK could take forward with gusto.

Despite the obvious needs, what have the UK Government done? They have only recently decided to boost funding in allocation round 6 for offshore wind projects—an effort still inefficient to meet the necessary targets. Following the failure of the fifth round of contract for difference allocations to secure any new products, it is unacceptable that the Government have failed to rectify the shortfall in deployed capacity, leaving us well behind our 21 GW target for the upcoming rounds.

This Bill is a testament to the UK Government’s ongoing failure to adequately invest in the renewables sector, thereby endangering our net zero targets, jeopardising energy security and stunting the long-term growth of Scottish communities. It is time for a drastic change, and we need a Government who will be aligned with the needs of the Scottish people in the future—an independent Scottish Government.

Where in the Bill is the action to help our tourism and hospitality industries? Selective cuts to VAT would have been a mechanism that could have been deployed to help those sectors, and it could and should have been used to help struggling high streets and town centres. Where is the VAT-free shopping that business organisations were crying out for?

[Gavin Newlands (Paisley and Renfrewshire North) (SNP)]

I am grateful to my hon. Friend for giving way on the point about VAT-free shopping. We led the charge a number of years ago on the extra-statutory concession on the removal of VAT-free shopping at airports, which is crucial to Glasgow airport in my constituency. We even managed to get the hon. Member for Moray (Douglas Ross) to vote with us on that occasion, but we have still seen no action from this Government to conclude that. That is one of the excellent points in our reasoned amendment. Does my hon. Friend agree that it is the SNP that will be working for the people of Scotland, not this Government?

[Drew Hendry]

That is exactly right. This is one of the many things that the UK Government have been called on to do, but they have been deaf to industry asking for them and often begging for help on some of these issues.

This spring Budget has introduced disastrous cuts to Scottish capital funding, with the aforementioned conspiracy of silence that the Institute for Fiscal Studies identified permeating the halls of Westminster concerning the severity of cuts planned over the next Parliament. This Government’s legacy will undoubtedly be marked by the failures of their austerity measures, the calamitous aftermath of Brexit and the misguided policies—“misguided” is a very gentle word—of Trussonomics.

Austerity under the Tories has stripped our public services to the bone, exacerbated inequality and decimated living standards. This addiction to austerity, paired with the Government’s fiscal rules, has proved utterly ineffective at reducing debt, which as a percentage of GDP has tripled in the past 15 years. The House of Commons Library has revealed that the Scottish block grant is set to fall to its lowest-ever level as a percentage of UK Government spending in the history of devolution. Between 2023 and 2025, Scottish capital funding from the UK Parliament is projected to fall by 16.1% in real terms. These Tory cuts continue to wreak havoc across all areas of the UK, with councils across England on the brink of bankruptcy and many already in special measures.

Regrettably, austerity will not end with the demise of the Tory party, as the Labour party is also committed to these same spending plans and fiscal rules. Both the Tories and Labour are engaged in that conspiracy of silence. They have had the opportunity to talk about the level of austerity necessary, in their view, over the next Parliament, but their silence threatens to cripple the already underfunded public services across the UK. With an estimated further £20 billion of cuts needed, by their calculations, over the next Parliament, it is imperative that both Westminster parties come clean ahead of the general election about the level of austerity they intend to impose on Scotland and the rest of the UK. The public have a right to know the extent to which these parties plan to decimate our public services, should they come to office, and to be told explicitly which Departments will suffer the most severe funding cuts. We know that they are both in favour of increasing the privatisation of the NHS to facilitate their plans. Let’s hear the rest.

All we have here today is a zombie Bill from a zombie Government at the fag end of a zombie Parliament, with activity in this Chamber at record lows. The Chancellor’s recent spending plans not only cut funding in Scotland but extended taxes on Scotland’s natural resources, which, as we heard earlier from across the Chamber, have been funding the UK’s economy for so many years. The Government are offering little to stimulate growth in the Scottish economy, and it is abundantly clear that neither of the Westminster parties possesses the ambition required to invest adequately in our economy and reduce inequality.

In Scotland, the SNP is supporting people through the cost of living crisis by freezing council tax, which is already lower by hundreds of pounds a year than in the rest of the UK; by using progressive taxation to ensure that the majority still pay less income tax and the minority who can afford it pay a little more; by supporting working people; by ensuring a strike-free NHS with better-paid nurses and doctors, and committing to keep it in public hands, just like ScotRail, Scottish Water and more; and by helping families with 1,140 hours of free childcare, no tuition fees for students, and much more.

In Westminster, we have been given Brexit, a loss of more than £100 billion to the economy, a reduction in the available and skilled workforce, more than £100 billion of fraud and waste, ballooning and unfair electricity charges, higher fuel debt, higher food prices, higher mortgages, higher rent, higher insurance costs, and a betrayal over the £28 billion a year needed for the just transition to renewables while our natural resources are exploited to the hilt. Our ability to build new things such as hospitals and more has been sabotaged by enormous cuts to the budget for Scotland and more pressure on services to come.

Barnett consequentials are just that—consequentials of decisions in this place. They have consequences, and Scotland sees that. Scotland needs the powers to introduce our own comprehensive industrial strategy, invest robustly in high-growth industry, and effectively reduce poverty. The only path forward for Scotland is to have a Government who truly plan to fix the economy and tackle inequality, and that is through an independent Government in Scotland. I am delighted to have moved our reasoned amendment.