Universal Credit and Child Tax Credit: Two-child Limit

Debate between Ged Killen and Neil Gray

Tuesday 27th November 2018 Westminster Hall

[Neil Gray (Airdrie and Shotts) (SNP)]

I wish I had Andy Gray’s left foot, Mr Streeter. It is a pleasure to serve under your chairmanship, and to receive that footballing accolade. That was some light relief after a stark debate.

I welcome, congratulate and thank my hon. Friend the Member for Glasgow Central (Alison Thewliss), who secured the debate. She has been tenacious, dogged and diligent in her campaigning, and it has been a pleasure to be on the Benches with her as she has gone about that in the past three years, and to provide what support I have been able to give for her work. It has merited awards at all levels, although I know that is not why she does it. She does that work to make the lives of her constituents and of the people up and down these isles better. She recognises injustice when she sees it, and she seeks to tackle it. I commend her campaigning efforts, which continue today.

My hon. Friend’s speech, as ever, was detailed. She highlighted the fact that next year this abominable scheme is set to get even worse, as children will be targeted regardless of when they were born. She is right to challenge people—Ministers in particular—to state the circumstances in which those children will be living for the duration of their childhood and the ways parents should budget for them. I would love to see an 18-year family budget in front of me. She was also right to say that 73,500 households have already been affected, a large proportion of which already include people in work. The apparent principle behind this policy, which is to get more parents into work, is self-defeating as it is already happening. I suspect there is an ulterior motive that the Government do not wish to discuss.

My hon. Friend was right to mention the rape clause exemption, because that despicable, disgusting example of UK Government policy has meant that 190 women have had to note the names of children who were born as a result of rape. That we allow that to continue is a stain on us as a society. I find it extraordinary that the Minister can sit and listen to the stories that my hon. Friend read out and the examples from Turn2Us of people in desperate need of help, and then shrug his shoulders as if this is not an issue and nothing needs to be done. I suggest that he comes to one of our constituencies to hear how this policy is impacting on our constituents. Perhaps he could do a shift at Turn2Us and listen to people in desperate need of help as a result of policies that he continues to support. My hon. Friend was right to say that the children impacted by this policy have no say over events that control their lives. They have been targeted by austerity, which is shameful.

The hon. Member for Stretford and Urmston (Kate Green) was right to point out how incompatible this policy would have been if the Government had targets to reduce child poverty. No wonder that the new Secretary of State and Ministers were so desperate to attack Philip Alston personally for the initial findings in his report. I think they protest too much, because they know all too well the problems with child poverty that they are causing.

Again, I commend my hon. Friend the Member for Glasgow Central, and thank her for securing this debate. It has been a good, positive and largely consensual debate, not least because no Conservative Member chose to speak. From the Labour Benches, the hon. Member for Bethnal Green and Bow (Rushanara Ali) was absolutely right and made an interesting speech, and I welcome her support for my hon. Friend’s campaign. The hon. Member for High Peak (Ruth George) made another helpful speech, and I commend her work as chair of the all-party group on universal credit. She gave good, if horrible, examples of the traumatic devastation caused by this policy. The hon. Member for Bury South (Mr Lewis) was right to point out the poor choices made by this Government. We made those points clear during a debate on the Budget, and that was reinforced by the intervention of my hon. Friend the Member for Kilmarnock and Loudoun (Alan Brown), who highlighted that between 2017 and 2025, £80 billion will have been spent by the Government on tax giveaways. That should give us all pause for thought.

The hon. Member for Midlothian (Danielle Rowley) was right to say that the policy will have a disproportionate impact on women and people from ethnic minority groups, and the hon. Member for Glasgow North East (Mr Sweeney) was right to point to Labour’s record in government, which I acknowledged, although Labour policy has perhaps been rather sketchy from then until now. My hon. Friend the Member for Glasgow East (David Linden) was right to ask how on earth, when discussing policy around the Cabinet table, nobody stood up and said, “Actually, you know what? I see where this is going. This is a disaster of a policy. This is disgraceful, not just from a social perspective but economically in terms of forcing people, including children, into poverty.” How did nobody round that table, or since then, speak up and say that this is wrong? I find that incredible. My hon. Friend was also right to highlight the religious discrimination at the heart of this policy, and I commend him for that.

This would not be a Westminster Hall debate if I did not sum up a good speech by the hon. Member for Strangford (Jim Shannon). The question why we should make these choices for families was at the heart of his remarks, which is absolutely right. This policy is not about people making choices about being in or out of work, as my hon. Friend the Member for Glasgow Central so eloquently put it; this is about limiting the choices of people on low incomes and their families, and about how many children they can have and what they do in their circumstances. The hon. Gentleman was also right to highlight evidence from Women’s Aid and Refuge. The list of organisations that the Government are ignoring and being tin-eared about could go on.

In conclusion, let me mention the work that the Scottish Government have done since 2010 to mitigate the UK Government’s disastrous austerity policies. Work on the bedroom tax involving more than £100 million a year has been mentioned, but something that is often forgotten about, and one reason why Scotland performs much better than the UK on child poverty levels, is the council tax reduction scheme. That scheme has cost the Scottish Government £1.4 billion in recent years—a substantial investment to ensure that people on low incomes do not suffer the burden of council tax in the same way as other people across the UK, whose council tax reduction scheme has been scrapped by the Government. In Scotland we have also utilised some of the flexibilities available to us for universal credit, which costs another £1 million a year.

[Ged Killen]

Will the hon. Gentleman give way?

[Neil Gray]

I am just about to conclude my speech and I am conscious of time.

The Scottish Parliament and the Scottish Government will continue to do all they can to ensure that we do the best possible, and the hon. Member for Caithness, Sutherland and Easter Ross (Jamie Stone) was right in his bipartisan and measured speech. He said that the Scottish Parliament cannot be a Tory mitigation Chamber; it has to be more than that. There must be a limit to saying that the Scottish Government must always paper over cracks that have emerged from Tory policies. We must go after the problem at source. Therefore, rather than having a party political fight with the Labour party—I am not interested in that—I want us to continue with what, for the majority of this debate, was a cross-party attack on the Government’s policies. If Scottish Labour Members continue with that focus, instead of attacking a Scottish Government who are already mitigating the effect and doing what they can to reduce child poverty in Scotland, we will have a fair debate. We must end this two-child cap and the benefit freeze, and ensure that the Government do what they can in terms of work allowances and universal credit. Until that time we will not stop campaigning against this Government, and I hope Labour Members will join us in that.

Scottish Economy

Debate between Ged Killen and Neil Gray

Wednesday 27th June 2018 Westminster Hall

[Ged Killen]

I thank the hon. Gentleman for his comments; I know we have very different views on tax and spend, and I do not think we will resolve them here.

To add to all that, Scotland is more unequal than ever. The wealth disparity means that the average household would need to save every penny of their income for 43 years to enter the top 10% of wealthiest Scots. A failure to increase wages, build more houses or spread wealth means that the most significant factor in determining whether a person will own their own home or secure a top-tier job is not their skills and talents, but who their parents are and where they live. A Scotland where circumstances of birth will take people further than their skills and talents is not the kind of country we should aspire to be, but that is the situation we find ourselves in.

Despite those facts, the vision put forward by our governing parties is not for the radical transformation that is clearly needed. On one side, one of Scotland’s Governments supports a damaging Brexit policy that will cut the ties of Scotland and the rest of the UK to the EU’s internal markets and the customs union. The Fraser of Allander Institute has modelled that with each degree of separation from those two tenets of the EU, Scotland will be more and more damaged. Scotland faces being between 2% and 5% worse off in GDP terms as a result of this Tory Brexit, while in the worst of cases, under a no-deal Brexit, in which we default to World Trade Organisation rules, wage growth will go into reverse, the economy will shrink and, most worryingly, Scotland’s successful food and drinks exporting industry could suffer as much as a 26% reduction in trade.

[Neil Gray (Airdrie and Shotts) (SNP)]

Can the hon. Gentleman explain how the position of his party’s Front Benchers on Brexit is any different from that of the Conservative Government?

[Ged Killen]

I thank the hon. Gentleman for his comments; he is obviously not paying very close attention in the Chamber. The UK Governments have very clear red lines drawn all over the place, and none of them seem to reach any kind of consensus. [Interruption.]

[Ged Killen]

Thank you, Mrs Main. The Labour party position is quite clearly putting jobs and the economy first. If the hon. Member for Airdrie and Shotts (Neil Gray) intends to contribute to this debate, perhaps he can explain why it is very important for Scotland’s economy to remain in the European Union but his party wants to take us out of the United Kingdom. That is something I would find difficult to square.

The UK Government, the Scottish Government, the Institute for Fiscal Studies and the Fraser of Allander Institute have all warned of serious damage to Scotland’s economy as the result of a no-deal Brexit. Worryingly, recently it has seemed that some members of the Conservative party believe that that is an acceptable outcome. In no circumstances should any public representative be recommending that that risk be taken in pursuit of gains that, in my view, are vastly outweighed by the negatives.

On the other side of the equation we have the SNP Government, who have produced a growth commission to set out how they want to see Scotland’s economy grow in the future. In 2015 and 2017, the SNP stood on a manifesto that claimed that it was anti-austerity. The publication of the growth commission and the endorsement of its policies by the First Minister should represent the day when the mask slipped and the SNP was shown to be the party of austerity that we know it to be.

In the growth commission, the Scottish Government propose reducing Scotland’s budget deficit through an approach that would see spending on public services and benefits fall by about 4% of GDP over a decade. Compare that with the policies of the Conservative UK Government, as set out by the Office for Budget Responsibility. The UK Government’s projections see spending on public services and benefits over a five-year period, from 2018-19 to 2022-23, falling by 0.9% of GDP. The plans set out by the SNP in the growth commission would mean the Scottish Government cutting public expenditure on public services and benefits close to five times faster than this Conservative UK Government.

In its model for the future of an independent Scottish economy, the SNP has given up on monetary policy as a tool for stimulating the economy. By not proposing a new currency and by setting public spending and borrowing targets that even George Osborne would have considered ambitious, the SNP has baked serious public spending cuts into its preferred future economic model. Relying on fiscal policy alone to reduce Government debt and budget deficits, they will have to introduce spending cuts, raise taxes or do a combination of both. That is the dictionary definition of austerity.

Those are the most optimistic of figures. The IFS says that, with an ageing population adding to the pressures on the health, social care and state pension budgets, keeping to the growth commission’s targets would likely require cuts to many public services, with the commission not taking the time to spell out exactly where the axe would fall and who would lose out as a consequence. Furthermore, the IFS also said what all know to be true:

“It is also inconsistent to claim that these plans do not amount to austerity but the UK government’s current policy does”,

particularly while the growth commission’s plans

“imply slightly slower real growth in spending than the UK Government is currently implementing.”

I am sure that the SNP will not cease to call itself the anti-austerity party, even after the growth commission’s publication. However, the facts speak for themselves. These are empty calls and stolen clothing. The growth commission is most disappointing because of its lack of ambition. The two Governments of Scotland have produced plans for the future of the Scottish economy that leave much to be desired, and it is therefore up to the Labour party to present a true alternative.

The Scottish economy has three core structural problems: stagnant GDP growth, low productivity and demographic challenges caused by a projected significant increase in the over-65 population and a shrinking in the relative size of the economically active population. Labour has a vision to address all three problems. The problems of growth and productivity cannot be separated; they are twin problems. The Scottish labour market is strong—we have a relatively low unemployment rate by European standards, and an exceptionally low youth unemployment rate.

However, while unemployment has decreased over the years, wages have stagnated and economic output has not matched the increase in the labour force that would usually be expected. That is because, while jobs have been created, they are predominantly low-skill, low-wage jobs that have not helped to accelerate growth; nor have they been productive enough to increase wages. By introducing a minimum wage of £10 per hour, we can reverse the trend of low wages and encourage investment to improve labour productivity. If we increase the minimum wage, companies will have to invest in technology and training to improve the output of their workforce to match the demands they are under. No longer will low-wage, gig economy jobs serve to undercut the advantages of investment.

[Neil Gray]

The hon. Gentleman talks about raising the minimum wage, which is a laudable aim for us all to strive for. However, we are talking about Scotland’s economy, and he will of course realise that this area of economic policy is reserved to the UK Government, so this is not in the gift of the Scottish Government to enforce.

[Ged Killen]

The hon. Gentleman will of course realise that we are in the UK Parliament. Scotland has two Governments, and I am talking about Labour’s vision for both. [Interruption.]