Budget: Scotland

Harriet Cross Excerpts

Tuesday 7th January 2025 Westminster Hall

[Gregor Poynton]

We have delivered the largest budget settlement in the history of devolution—that is the end of austerity. [Interruption.] Well, you have it to spend.

SNP decisions have left a black hole in Scotland’s finances. The billions in extra cash delivered in this Budget must not be used simply to cover up the SNP’s “buy now and pay later” policies. That money must reach the frontline, to bring down waiting lists and drive up educational standards. The SNP has nowhere to hide now.

[Harriet Cross (Gordon and Buchan) (Con)]

The changes to national insurance contributions mean that Aberdeenshire council has to find an extra £13 million in its budget this year. How will that help with education standards and health in Aberdeenshire?

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[Harriet Cross (Gordon and Buchan) (Con)]

I congratulate the hon. Member for Livingston (Gregor Poynton) on securing this debate, although I find it odd that Scottish MPs have been celebrating the Budget, as if it was the best thing ever to come to Scotland, given that it is nothing short of disastrous for so many of the key sectors that underpin Scotland’s economy, communities and livelihoods.

The Chancellor spoke, and still does, about protecting working people—and, indeed, about growing the economy in order to help working people—yet her decision to increase employers’ national insurance contributions does exactly the opposite. This £25 billion tax grab from businesses impacts on their resilience, growth, investments, hiring decisions and longevity. The scale of this tax rise and the betrayal by Labour, who promised not to raise taxes on working people, including national insurance, is completely unprecedented.

For the avoidance of any doubt, and because I know that Labour seems to struggle with this, business owners are working people, and they employ working people—they are working people who contract working people and supply working people, who then can work elsewhere. This NICs rise is a tax on working people across Scotland and the UK, and there is no credible way that that can be denied. It is also an up-front tax and a tax for having employees. Businesses pay it just for having employees on the books, before they even open their doors. Take weeks like this in Scotland, including in my Gordon and Buchan constituency, where many businesses have not opened because of snow and ice; the bill for this tax is still racking up, despite them not being able to trade.

Of course, the effects of NICs are felt more widely, not just by businesses. Charities, GPs, pharmacies and local authorities are all also impacted. I have met with my local medical practice in Inverurie, and its NICs bill is going up by £75,000. It cannot pass on that cost, and if it reduced services, its funding would be reduced. What do the Labour MPs who are celebrating the Budget suggest that that practice should do? As I have mentioned, Aberdeenshire council now needs to find £13 million to cover the NICs rises, and that is on top of the £40 million black hole it already faced due to north-east councils being so poorly funded by the Scottish Government.

Moving on to other matters, the changes to business property relief and agricultural property relief are cynical, cruel, misguided and absolutely damaging to the key sectors of our economy. Family businesses up and down the country, including in Scotland, are the backbone of our economy. These changes will decimate family businesses, who have been nurturing for generations, who are the centre of their communities and who employ over 14 million people nationwide. The changes to APR, which I have spoken about a lot, demonstrate the Government’s complete disconnect from rural farming and ways of life. We know that the Treasury figures are incomplete. They do not consider farms where only BPR had been claimed. Labour seems to think that all farmers are married, that both spouses will be able to pass on the farm at the same time and that, effectively, it is okay to force farmers into early retirement—for them to have to leave their family home or pay full market rent to stay at the property where they have lived their entire lives.

The Treasury is hiding behind the claim that only 2,000 estates will be affected, but the Country Land and Business Association, the National Farmers Union and the National Farmers Union of Scotland say that the number of farms affected will be more like 70,000. These figures need to be considered. The Chancellor, as we know, is literally making farmers decide between selling their farm, their land, their buildings or their machinery to raise the funds. This will leave farms commercially unavailable or severely damaged, and we are talking about farms in our constituencies across Scotland, including many of those of the Labour Members here.

We have heard others talking about whisky, so I will touch on that just briefly. The Prime Minister stood in a whisky distillery in Scotland and promised to back the Scotch whisky industry to the hilt, but he failed to mention that he was going to increase tax by 3.6%, bringing the tax on a bottle of whisky to over £12 for the first time.

[Dr Arthur]

The hon. Lady is making heartfelt points, but we are yet again hearing a long list of our money-raising initiatives that the Conservatives opposed while being cheered on by their SNP colleagues. I would be interested to know how the Conservatives would have raised the money needed to get public services in Scotland back on track. An extra £5 billion is going to the Scottish Government to fund services such as the NHS in my constituency and in the hon. Lady’s constituency. Where would her party have found that money?

[Harriet Cross]

As I said, the Government can give with one hand and take with the other, which is what is happening with NICs; they are taking that money out of councils, so the increase is completely irrelevant. The removal of the ringfence from some budgets has meant that there has been no real-terms increase in the rural affairs budget in Scotland, and that has impacted our farmers—it goes round in circles.

On oil and gas, the changes to the energy profits levy and the removal of the investment allowances in the Budget had an instant impact. Apache announced very soon afterwards that it would pull out of the North sea, citing the onerous impact of the EPL. The Aberdeen and Grampian chamber of commerce warned that 100,000 jobs are at risk, and Offshore Energies UK said that 35,000 jobs tied to specific projects are at risk. Those changes in the Budget have real-life consequences across Scotland, but particularly in Gordon and Buchan, Aberdeenshire, Aberdeen and north-east Scotland.

The Budget shows the Labour Government’s fundamental misunderstanding and undermining of Scotland’s economy and communities. From family farms and businesses to distilleries, our energy sector and the high street, the Government have chosen to burden, rather than support, businesses across Scotland.

[Valerie Vaz (in the Chair)]

We are going to have to go down to an informal three-minute limit to get everyone in.

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[Harriet Cross]

That means, therefore, that 60% went to everyone else—that 60% of farms in this country rely on APR to pass their farms down to the next generation. They rely on BPR as well. This is the next generation of farmers who provide our food security and who employ people in local and rural areas. Does the Minister not think that that is a really important thing to maintain?

[Kirsty McNeill]

As the hon. Member will be aware, each year almost three quarters of estates eligible for APR in the UK are expected to be entirely unaffected by these fair and proportionate changes. Ours was a Budget, just as this is a Government, squarely for working people. The hon. Member for Angus and Perthshire Glens (Dave Doogan) complained of the tax burden. Unlike the SNP Scottish Government, which simply want to clobber teachers and nurses with ever higher taxes, we have delivered on our pledge not to increase national insurance or VAT on working people in Scotland. That means that they will not, thanks to this Budget, see higher taxes in their payslips.

Hundreds of thousands of workers in Scotland will benefit from an increase in the national living wage and a record increase to the national minimum wage. The Chancellor made the decision to protect working people in Scotland from being dragged into higher tax brackets by confirming that the freeze on national insurance contribution thresholds will be lifted from 2028-29 onwards, rising in line with inflation, so that people can keep more of their hard-earned wages.

We have begun the difficult work of restitching our fraying safety net. Thousands of Scottish households will be £420 a year better off on average, as a result of our change to the universal credit fair repayment rate. Around 1.7 million families in Scotland will see their working-age benefits uprated in line with inflation, a £150 gain on average, in 2025-26. Maintaining the triple lock means an increase in the state pension of £470 next year, on top of £900 this year, for 1 million Scottish pensioners.

Let me pay special tribute to the campaigners and fellow trade unionists who fought for changes to the mineworkers’ pension scheme. Thanks to their efforts and the decisions of this Labour Government, nearly 7,000 retired mineworkers in Scotland will get an extra £1,500 on average in their pension. Finally, that is justice for those who powered our country.

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[Kirsty McNeill]

I will make some progress. I have been listening very intently to the speeches and chuntering from some hon. Members; I have not been taking any notes on economic credibility. The Fraser of Allander Institute, Audit Scotland and the Institute for Fiscal Studies have all confirmed that the challenges in Scotland’s public finances are a mess of the SNP’s making. As for the party that brought us Liz Truss, the verdict of the people of South West Norfolk tells us all we need to know.

I urge everyone instead to listen to my hon. Friends the Members for Dunfermline and Dollar (Graeme Downie), for Airdrie and Shotts (Kenneth Stevenson), for Glasgow East (John Grady), for Edinburgh North and Leith (Tracy Gilbert) and for Glenrothes and Mid Fife (Richard Baker) about how to get Scotland growing. Our objective is not simply to rescue our economy from the havoc wrought by the Conservatives, but to grow it. That is why we support Great British Energy, providing £125 million next year to set up the institution at its new home in Aberdeen. That is a huge boost to the granite city, inexplicably voted against by the right hon. Member for Aberdeen South (Stephen Flynn) and his fellow SNP MPs, all sent here to deliver for their constituents but who instead sought to sabotage investment that would benefit them.

I am also pleased that we have been able to confirm our commitment to invest nearly £1.4 billion into important local projects across Scotland over the next 10 years.

[Harriet Cross]

Will the Minister give way?

[Kirsty McNeill]

I will make some progress. We have also confirmed that all 12 regions of Scotland will be covered by a growth deal. Our investments include nearly £890 million of direct investment into freeports and investment zones, the Argyll and Bute growth deal and other important local projects across Scotland.