Budget Resolutions

Debate between Ian Blackford and Catherine West

Wednesday 11th March 2020 Commons Chamber

[Ian Blackford (Ross, Skye and Lochaber) (SNP)]

Before I begin, I pass on my best wishes and those of my colleagues to the hon. Members for Mid Bedfordshire (Ms Dorries) and for York Central (Rachael Maskell)—we are thinking of them and, indeed, all those who are caught up in this terrible virus.

The scale and seriousness of the coronavirus demand a collective response. As I said last week, this virus requires all of us to demonstrate calm and practical leadership. This is the very least the public deserve from us at a time of deep and natural worry. SNP Members are committed to that approach. That example of leadership has been clearly embodied by our First Minister of Scotland, and I welcome the close co-operation between the Scottish and UK Governments on this matter.

The first priority in dealing with the crisis has to be about maintaining the health of all our people. The scale of the coronavirus has and will put added pressures on the NHS in Scotland and across the United Kingdom. I take this opportunity to thank all our NHS staff for everything they do, but most especially now, as they deal with the outbreak of this virus.

I welcome the fact that the Chancellor has committed to providing additional funding, but I wonder whether he will take the opportunity to tell the House how much of that additional spending on the coronavirus will come to Scotland. I also urge him to go further—the SNP Scottish Government have ensured that frontline health spending in Scotland is £136 higher per person than it is in England. Social care funding is £130 per capita higher than it is in England. Matching Scottish per capita NHS spending would provide health services across the UK with the resources, equipment and staff that needed now during this crisis and in the longer term. It would also allow Holyrood to increase funding for NHS Scotland by over £4 billion by the end of this Parliament.

[Catherine West (Hornsey and Wood Green) (Lab)]

Will the right hon. Gentleman take an intervention?

[Ian Blackford]

I will not.

We believe that that is the only adequate and prudent response to this unprecedented health crisis. As part of the Budget package, we also need to recognise the deep worry that people are experiencing about the impact of its consequences on their incomes, employment, rights and benefits. Just as our health response must be led by the best scientific advice, our economic response must be guided by the need for an appropriate fiscal stimulus that ensures that the economy is not tipped into recession. The employed and the self-employed need to be aided through the crisis. I acknowledge many of the measures taken today by the Chancellor to do just that, but more urgent and more targeted action is also required.

In particular, urgent measures are needed to help the tourism and hospitality industry, above and beyond what has been offered today. Industry leaders are already warning of the consequences of the coronavirus, with a raft of booking cancellations and a significant drop in numbers. The SNP is advocating a package of measures, including a temporary drop in the VAT rate to 5% to help businesses to reduce their costs—[Interruption.] I can hear the Prime Minister saying, “We’ve cut interest rates,” but—[Interruption.] Business rates, rather, but the problem, Prime Minister, is that these businesses are facing a crisis not of their own making.

Many of the businesses in my part of the world, in the highlands of Scotland, come through a fallow period over the winter. It is not just an issue of their seeing a reduction in business; in some cases, they are going to be desperately short of cash coming in through the door. Let us not forget that many of these businesses have relied on an EU workforce over the last few years. In anticipation of what is happening with the migration proposals from the Government and of the difficulty of recruiting labour, they have had to staff up. They have additional costs, but their revenues are about to fall through the floor. That is why I have written to all the major UK banks to ask them to support businesses and households through this period to make sure that working capital is extended to all businesses, and that no business—no good business in the hospitality and tourism sector—should be pushed to the wall as a consequence of what is happening.

Chancellor, a temporary drop in VAT would allow business to weather the storm as people follow public health advice and tourist numbers drop, but let me say, on the basis of the scientific advice that we have today, that Scotland is well and truly open for business, and I encourage people to come and experience the breadth and depth of our tourism offering. VAT was reduced in Ireland and it helped to boost both employment and tourist numbers. I urge the Chancellor, in the strongest possible terms, to consider a similar policy to help our tourism and hospitality sectors to come through this crisis.

Let me turn to the other measures in the Budget. The Chancellor has just delivered his first Budget speech—I welcome him to his position—and I give him credit for one thing: he did really well in fluently reading out Dominic Cummings’ handwriting. It is a strange irony that those who were most obsessed with taking back control from Brussels are now at the heart of the unelected, centralised elite who have grabbed control, not just in Downing Street but in the Treasury. Today they have produced a half-baked Budget thrown together by a bunch of Vote Leave campaigners drowning in the responsibility of government. I am talking about a group of ideologically driven campaigners—let us be charitable—so distrustful of Europe and the benefits it might have brought, economically, socially and culturally, and so caught up in their own meaningless slogans that they are blinded by the damaging reality they have caused. People are not fooled. The slogan “take back control” does not work when you have been in power for the last decade. We have not forgotten that the Tories have been in control and that we are all the worse for it. If the Chancellor really thinks that this Budget levels up after a decade of austerity, he must have bought himself a wonky spirit level. After delivering a decade of cruel cuts, the Tories are now offering a new decade of political and economic isolation outside the European Union.

The Budget is a warning of what may be ahead of us and a reminder of Scotland’s need to choose a different future. It has never been more stark: Scotland’s economic interests are not served by being part of this UK union. Rather than the instability and limitations imposed by the UK, independence now offers the Scottish people the chance to build a better, more prosperous and safer future. The 2016 Brexit referendum was the moment when our political futures met a point of divergence, and we are now on the cusp of the moment of decision for Scotland’s people. The Conservatives may have delayed our democratic right, but they cannot indefinitely block the voices and votes of the Scottish people. Scotland’s future will be ours to choose, and we will very shortly make that choice. I am more confident than ever that the Scottish people will choose to be an independent, equal and European nation.

As I have said, this is a Budget produced by a group of people who are expert in fabricating slogans but amateurs in delivering competent government. The Tories have a new slogan about levelling up funding and living standards. Let us judge them on their record. A reasonable place to start is basic income. The Office for National Statistics recently confirmed that the median income for the poorest 20% fell by 4.3% per year between 2017 and 2019. Institute for Fiscal Studies analysis shows that since 2010 the poorest 10% of households have lost an average of 11% of their income. That is £1,200 per year. For those with children the average loss was up to 20%, or £4,000. That is the cost of Tory Government to people in Scotland and the United Kingdom. That is the true Tory record: falling wages and growing hardship. While the gap between rich and poor grows, last month the ONS revealed that income inequality was as much as 2.4% higher on average than official figures had suggested over the decade since the financial crisis in 2008, and this Budget does not help by failing to implement policies that deal with growing inequality. The Tories still refuse to raise their pretend living wage to the real living wage and refuse to end the age discrimination that penalises our young people.

Another reasonable place to judge their levelling up record is overall public spending. Let us not be fooled by some of the rhetoric in the statement today. Since 2010, aside from health spending, the Tories have cut per person spending on public services by a whopping 21%. This Budget comes nowhere near either closing or reversing that devastating legacy. By any standard, by any measure, by any objective acknowledgement of fact, this Tory Government have failed to level up for anyone anywhere. They cannot be allowed to hide from these facts, just as they cannot be allowed to hide from their legacy.

Let us be clear: the poor becoming poorer was a Tory political choice. The Resolution Foundation has said that the fall in income for the poorest

“has been driven by policy choices, with gains from higher employment more than wiped out by benefit cuts.”

Why did the Conservatives take these political choices? As ever, they were serving their own interests and the interests of those they serve. For them, it is a simple and cynical calculation. A Government who rob Peter to pay Paul can always depend on the support of Paul. As far as the Tories are concerned, everyone else can go whistle.

I suppose we should not be surprised. This is a Budget advocated by a Prime Minister who once eulogised:

“some measure of inequality is essential for the spirit of envy and…is, like greed, a valuable spur to economic activity.”

Greed—a valuable spur to economic opportunity! That is the reality of the vision of the Prime Minister. That does not sound like a man determined to level up. The honeyed words and new slogans in the Budget will not change the long and bitter experience of Tory economics. People in Scotland know that they cannot believe their words, they cannot believe their promises, and they cannot believe that they will ever change—not ever.

If this really was the great investment Budget the Chancellor heralds, he should have started by paying up the moneys the Tories have been holding back from Scotland for years. I am grateful to a Scottish Parliament Information Centre—[Interruption.] I hear the Prime Minister talking about grievance. This is not about grievance; this is about the facts of what a Conservative Government have done for the people of Scotland. The Scottish Parliament Information Centre has confirmed that Scotland would be owed about £5.8 billion if the proper Barnett consequentials were applied to the DUP Brexit bung and the additional moneys since. That is the reality. That is added, of course, to the £175 million still owed to the Scottish Police Authority and the Scottish Fire and Rescue Service—money that was stolen from our vital public services. [Interruption.] I hear the hon. Member for West Aberdeenshire and Kincardine (Andrew Bowie) saying it was against all the advice. It was the vindictiveness of his Government that took these funds from the Scottish public services. That is the reality. Let us be crystal clear: the UK Government have chosen to rob Scotland’s public services of that money, and the silence from the Scottish Conservatives—their failure to stand up for our police and firemen—is audible to all.

The Budget also turns its back on the oil and gas sector in the north-east of Scotland. These industries face months of instability and uncertainty in the aftermath of the latest collapse of an OPEC deal to stabilise prices. The oil price has plunged, yet there was not a mention of it from the Chancellor. The impact of the global oil price slump will reverberate around the world, including hitting Scotland’s vital oil and gas sector. The oil and gas sector has generated £334 billion of net tax revenues for the UK Government since 1970. Having used the sector as a cash cow, the Treasury must support it in its time of need. The UK Government must deliver crucial support for the sector as part of a just transition to net zero emissions. Scotland still bears the scars from rapid de-industrialisation under previous Conservative Governments. That must never happen again, and it must not happen to north-east Scotland.

The failure of the Government’s investment strategy— the Chancellor admitted it today, and we see it in the productivity record—has unfortunately failed to diminish their arrogance in trying to dictate the investment needs of the devolved Administrations. We are told that the Treasury is considering an intra-UK connectivity study, which sounds suspiciously like another Tory power grab on the devolved Parliaments. Chancellor, how can people be expected to have faith in a Prime Minister who cannot build a bridge between London and London, and a Scottish Secretary who thinks a bridge is a euphemism for a tunnel? Having ripped up the Sewel convention, the Tories are on a mission to level down devolution. Chancellor, your Government are neither competent enough nor trusted enough to invest in infrastructure in Scotland. Go back and think again, and allow the Scottish Parliament to use extra capital resources to provide for Scotland’s infrastructure needs. We will deliver for the people of Scotland.

The Budget fails to attempt to fix, or even to acknowledge, the underlying fundamental problem of the economy. For the past decade, the Conservatives have presided over a crisis in productivity. Only last year, about 6,000 companies revealed that uncertainty over leaving the European Union had lowered capital spending by about 11% on average. That is what is really going on in the economy. According to the Bank of England, that has cut overall UK productivity by between 2% and 5%—a reduction in productivity created by the Conservative Government in power in Westminster. The overall perception of the UK’s productivity is not helped by the Prime Minister’s productivity levels; he downs tools and hides away whenever the going gets tough.

Static productivity is a direct consequence of choices made during the financial crisis. There was a massive quantitative easing splurge in the wake of the crash, but there has been no real return on that investment for ordinary workers. It did do one thing, though; a Bank of England analysis of the impact of quantitative easing showed that between 2006 to 2014, the 10% least wealthy households saw a marginal increase in wealth of around £3,000. The wealthiest 10% saw a £350,000 increase. In other words, printing money for the financial services industry ended up helping only those working in the financial services industry. Improved productivity, and capital investment for wider society, never got a look-in. I challenge the Chancellor: will he commit to a review of the impact of the bonus culture in financial services and its effect on general economic activity?

As I have said, the decade of Tory austerity and the inequality it inflicted has hit the poorest hardest. The brutal cuts have targeted children and the most disadvantaged. The benefits freeze, universal credit sanctions, disability assessments, the cruel two-child limit, the rape clause—the list of failed and punishing policies goes on and on. It is a legacy the Tories should be ashamed of, and should have the basic decency to apologise for.

If the Chancellor is serious about looking after those who have been left behind, he can begin to prove it by committing to four things. Will he increase the monthly allowance for universal credit and end the benefit cap; increase benefits above inflation and restore their value after the four-year freeze; scrap once and for all the two-child cap on tax credits and the rape clause; and follow the lead of the Scottish Government and bring in a child payment scheme similar to theirs, which has lifted 30,000 of our children out of poverty? If the Chancellor cannot commit to those four basic measures, which would reduce poverty and bring compassion into the social security system, his words and promises of levelling up will be shown to be hollow.

The devastating Tory legacy on social security has especially hit pensioners, who still receive the lowest state pension in the developed world, according to the OECD. They have also been denied their full rights. I am proud that the Scottish National party, with others, has stood shoulder to shoulder with 1950s-born women since the beginning of their campaign, and we stand with them still. They deserve justice, and it is disgraceful that their plight continues to be ignored in yet another Budget.

Another Tory attack on pensioners, and another broken promise, is of course the removal of free TV licences for the over-75s. This will hit 240,000 households in Scotland and 3 million across the United Kingdom. Chancellor, this is your Government’s responsibility, not the BBC’s. It is time to pay up. Stop punishing pensioners, and keep the free TV licence for all those over 75.

By far the biggest budgetary and economic decision that confronts these islands—[Interruption.] We are talking about some of the poorest in our society, and women who have been denied their pensions. I say to the Prime Minister that when I knocked on doors in the election campaign, I found that a great number of elderly people were alarmed by the loss of their TV licence. That is what we get from the Conservatives, but they sit laughing and scoffing. I find it remarkable. It is okay for them; the rest of the population can go hang.

By far the biggest budgetary and economic issue that confronts these islands remains our relationship with the European Union. We hope that the negotiations on our future relationship can be successfully concluded, but all the signs from this Tory Government are that instead of co-operation and close relationships, they are heading for divergence and deregulation. The UK Government’s negotiation mandate all but confirmed that choice. The consequences for workers’ rights, environmental protection, the shape of our economy and the nature of our society will be profound, and—this will be of little interest to this Tory Government—the impact will be felt most by those who already have the least: the vulnerable and the poor. Scotland will end up paying a heavy price for a future we did not back.

Our Government’s modelling shows that even if the UK Government secure a basic free trade agreement, Scottish GDP would be 6.1%, or £9 billion, lower by 2030 than if we had retained full EU membership. We heard from the Chancellor about the impact of a slowing global economy, and have heard about the impact that coronavirus may have on us, yet the Government are prepared to crash our economy and put Scottish workers on the dole. Not in our name! The harsh reality is that that lost GDP—let us put it in cash terms—amounts to £1,610 per person. A no-deal Brexit—heaven help us—will raise that figure to £12.7 billion, equivalent to £2,300 per person. This Tory Government will sacrifice our economic health. Why? For an ideology––the narrow ideology of the Brexit fanboys, led by Dominic Cummings, now running the Treasury. As the trade negotiations unfold in the coming months, the numbers are worth reflecting on, because it is worth reflecting on the fact that the Westminster Government are actively choosing to make Scotland’s people poorer. It is not an accident; it is by design.

On top of all that, the National Audit Office—[Interruption.] I find it remarkable to watch the reaction of the Prime Minister. I challenge the Prime Minister to tell me that the figures that I have just given on the impact of a free trade deal or a no-deal Brexit are wrong. The Prime Minister knows, just as I know—just as we know—that the Scottish economy is going to be harmed by what he wants to do in these trade negotiations.

EU Exit: Devolved Governments

Debate between Ian Blackford and Catherine West

Thursday 21st July 2016 Westminster Hall

[Catherine West (Hornsey and Wood Green) (Lab)]

It is an honour to contribute under your chairmanship, Mr Bailey.

It is quite right today for the devolved regions of the UK to exert influence, particularly as the democratic mandate in favour of their remaining in the EU is so strong. I do not need to welcome the new Minister—we have already been in this Chamber debating Gibraltar this week, and some of the arguments are not dissimilar—but I would highlight the lack of planning in advance of the vote on 23 June. It seems rather irresponsible for a Government who knew a year in advance that they were going to have a referendum not to put any preparations in place. That is unforgivable.

May I thank my hon. Friend the Member for Edinburgh South (Ian Murray) for securing this debate? I am pleased that it will be followed by one in early September, as soon as we return, so that we can have the argument at greater length, once the team has had some time to establish itself and maybe recruit some negotiators. My hon. Friend was quite right to say that many of us are disappointed to even be having this debate. There certainly was not a “punch the air”, independence day feel following the result in my constituency, where 75% of people voted to remain in the EU.

We know what the impact has been on the economy, in terms of the volatility produced and IMF forecasts being revised downwards. The impact has been felt particularly in low-income parts of the UK, producing the opposite result to what one would have thought. There is a lot more political work for many of us in the House of Commons to do—not necessarily in this place, but in those communities.

My hon. Friend was also right to emphasise the importance of protecting public services and to comment on the currency options, about which there is a lot of uncertainty, and on our future relationship with the EU where young people are concerned, particularly in terms of university funding and in science, research and development. I am pleased that Lord Falconer, who is an expert in these matters, and Lord Kerslake will be trying in the other place to establish a way forward, to help our deliberations not only in the devolved Administrations but here in Westminster, so that we can move forward with some kind of consensus.

I was very pleased to hear the hon. Member for Ross, Skye and Lochaber (Ian Blackford) mention the 173,000 EU residents living in Scotland. Indeed, many Members of Parliament across the UK have been contacted by EU citizens who not only feel a lack of certainty about their jobs and livelihoods, but feel that they were used as a bargaining chip in relation to expats living abroad. This is a quite unsatisfactory situation and one that I am pleased we have debated twice in the Chamber. I am sure we will be debating it again in the autumn.

[Ian Blackford]

What has changed since we had those debates in the Chamber is that we have a new Prime Minister. It would be good if the Government now reflected on the debates that have taken place and the uncertainty that exists for all EU citizens living throughout the UK. Can we not remove that cloud of uncertainty for them, so that they feel welcome, as they are, and can look forward to having a future as part of our communities?

[Catherine West]

The hon. Gentleman makes an excellent point. Sadly, it was the Prime Minister, when she was in her Home Office role, who failed to provide that clarity. It is down to us to put more pressure on the Government in order to create clarity. Does the hon. Gentleman agree that we are seeing a slightly negative climate in relation to EU citizens and those who come from abroad?

[Ian Blackford]

indicated assent.

[Catherine West]

I am an immigrant myself, and there is a slight sense that people are not welcome. Indeed, we have seen an increase in violent abuse against people from abroad. All Members of this House certainly would want to stamp that out; I think we are united on that point.

My hon. Friend the Member for Llanelli (Nia Griffith) made some excellent points about agriculture and fisheries. It is very important for Welsh farmers to be right at the front of these negotiations. I am sure that she, through her offices, will be making the point again and again about the importance of the tariff situation being clarified as soon as possible for basic products such as fish, beef, lamb and other exports. We know what a fragile situation many farming communities find themselves in. It is crucial that we in this House put their case again and again, because a lot of false arguments were made in the debate on the referendum. Farmers were told they were going to get part of the £350 million a week, as were the NHS and a number of other priority areas. We all know that money cannot be spent twice. We seek urgent clarification on agriculture, which is such a precious sector and yet is constantly being eroded and corroded. I look forward to the Minister clarifying his position on that.

I was also pleased to hear my hon. Friend the Member for Llanelli speaking in support of universities in Wales. We know what a crucial area of the economy education is as an export for Wales. There is a question mark over the position of EU nationals throughout Wales, be they teachers, students or in the workforce, where security is desperately needed. There is a delicate balance needed between the workforce not only in slaughterhouses and in fruit picking, but in more skilled occupations—for example, for nurses and doctors in the national health service. In some areas, up to 50% of the workforce are EU nationals—the right hon. Member for North East Bedfordshire (Alistair Burt) could probably tell me the exact figure. We have a very high number of EU workers across the UK, and their position needs clarification.

My hon. Friend the Member for Llanelli mentioned steel investors. We want to know exactly how the UK will replace the high-level negotiations that the EU undertakes on behalf of its members on steel. We would not want any sense of uncertainty to give an excuse to potential investors not to invest in our steel industry in Wales and other regions.

I know you want us to be brief, Mr Bailey, so I will be. The right hon. Member for North East Bedfordshire made a number of important points and was super understanding of the Minister—I am not quite as understanding; I want answers. The shortage of negotiators is appalling. That is what I meant by a lack of planning. If we know we will have to make changes, we should get people on board to do that. The Foreign and Commonwealth Office is very hard-pressed, and I would like to see much more funding for it. I am worried about the separate Departments mushrooming, competing and all saying slightly different things. That is a risk for what the right hon. Gentleman called the plumbing—I used to call it re-wiring—in terms of the way things are done, not only in the Palace but across the piece in the senior civil service. This debate has led, I am afraid, to a shopping list of issues for the Minister, but I know he will be up to the task.

Finally, as a London MP, it was a delight to hear from my hon. Friend the Member for Poplar and Limehouse (Jim Fitzpatrick). We are very proud of our new Mayor, Sadiq Khan, who is quite right to say that taxes raised in London—or a small proportion of them, anyway—could be spent more effectively in London. London Councils, which is now chaired by Councillor Claire Kober from the Borough of Haringey, says that we need to see more money that is raised in London spent on vital infrastructure such as transport and housing, because we know it contributes in the longer term to the prosperity of the whole United Kingdom.