Cost of Living

Ian Murray Excerpts

Tuesday 16th May 2023 Commons Chamber

[Ian Murray (Edinburgh South) (Lab)]

I am very pleased to be able to speak in today’s SNP Opposition day debate on the cost of living crisis, because for thousands of my own constituents—just as this is true for Members right across this House—this is the most pressing issue facing all households. After coming through the pandemic, millions of people have found the biggest health crisis in our lifetime being replaced by the biggest financial crisis in our lifetime, most of it compounded by this Government’s own decisions.

Bills are continuing to rise, and that is against a backdrop of wages failing to grow. The average Scottish worker’s wage is now £800 lower in real terms than it was when Labour was last in government. In my own constituency, it is almost £3,000 lower. At the same time, the price of everyday essentials has risen by an average of £3,500 since 2019. The cost of a typical food shop is up by £700 a year, and food inflation is far outstripping actual inflation, as we have heard. Transport costs are up by £800 and everyday fuel bills are up by almost £1,500. So it is little wonder that so many people are struggling to make ends meet. It is the No. 1 issue my constituents contact me about, and I am sure that is the same for every MP in this House.

The crisis shows no signs of abating; in fact, it is getting worse as the Government’s sticking plaster attitude to politics begins to run out. We used to say that too many are having to choose between heating and eating—we have used that phrase in this House a number of times—but it is becoming much more apparent that some are unable to choose as they cannot do either. Under Labour, we used to celebrate the fact that millions had been lifted out of poverty. Scotland’s two Governments are doing a very good job of thrusting them all back in—and more.

Despite what we have heard from the Conservatives—we will continue to hear this today, no doubt—about the miserly attempts by this Government to resolve the crisis, let us not forget that this crisis was made in Downing Street. They will blame and they have blamed covid and Ukraine, but we have had 13 failed years of this Government. Covid and Ukraine have merely hastened the chickens coming home to roost. Just nine short months ago, the former Prime Minister and the former Chancellor crashed the British economy with a reckless plan to give unfunded tax breaks to the very richest. The Conservative party crashed the economy, but there is no contrition and no acknowledgment of that.

The shortest-serving Prime Minister in history has left a long-lasting legacy of economic misery that ordinary working people up and down this country will be paying for for many years, and every Conservative MP who supported that reckless Budget was complicit and continues to be complicit. They are complicit in the Tory premium on everyone’s mortgages; they are complicit in the Tory premium on everyone’s food shop; they are complicit in the Tory premium on everyone’s energy bills; they are complicit in the Tory premium on everyone’s cost of living. And while being complicit in the premium, they are complicit in the discount on everyone’s pay.

Because while the former Prime Minister blew the doors off, this is a crisis that has been bubbling away for a long time. Growth in our economy has stagnated for more than a decade. In fact, had the economy continued to grow at the rate it did under the last Labour Government, we would have about £40 billion more to spend our public services and tackling the cost of living, without raising a single tax. That is the elephant in the room for the Conservatives. [Interruption.] They chunter from the Government Benches without any contrition for the fact that they crashed the economy and everyone is paying the price.

Since 2019 alone, there have been no less than 24 separate tax rises, all implemented by the current Prime Minister as Prime Minister or by the current Prime Minister when he was Chancellor. The tax and no spend Chancellor is now the tax and no spend Prime Minister, taking even more from the pockets of those that can least afford it at a time when they need every penny they can get.

Let me mention the story of constituent who came to see me worried about losing their family home because of higher mortgage rates. Those interest rate rises are a direct result of the Tories’ inflation crisis and the crashing of the economy. He said to me that he may lose his family home to pay for this Government being out of touch and their economic incompetence. Just think about that for a minute: a family losing their home as they can no longer afford their mortgage because of decisions made by this Government.

After 13 years, Britain is forecast to have the worst growth in the G7. In fact, if our economy continues along this growth path, by 2030 Britain will be less well off than Poland. The Government just do not get it, and they do not get the cost of living crisis. It is affecting everyone, with a disproportionate impact on the young, the old, the disabled, students and of course, as always, the poorest. The Government are out of touch beyond comprehension and should be out of time.

It is interesting, however, that in the motion and the amendment both the SNP and the Conservatives attack the Labour party. The SNP’s motion rightly talks about the damage caused by the Conservatives’ Brexit. Putting to one side the fact that this is partly an attempt to hide the SNP’s own complicity in the cost of living crisis, the mess the Tories have made of Brexit has undermined our country: we believe that and agree with the SNP on that. The Conservatives failed to negotiate a good deal with the European Union despite their “oven-ready” promises, and instead have left the country with a deal so thin and deficient that it has had lasting repercussions. Their entire Brexit project was driven by their own party interest rather than the national interest. Ever since, the Government have continued to weaken the relationships with our European neighbours and friends, with disastrous consequences for jobs, businesses and Britain’s place in the world. They are viewed by our European and international colleagues as untrustworthy law breakers.

But the SNP motion is completely wrong: Labour does not support a damaging Tory Brexit. The SNP playbook reeks of desperation and SNP Members absolutely know it. [Interruption.] They chunter, and they use that same line again and again, but I remind the House of their track record on Brexit: they would have taken Scotland out of the EU had they won the independence referendum in 2014; they spent less on campaigning to stay in the EU than they did on chasing 3,500 votes in the Shetland Scottish parliamentary by-election; they abstained on a vote in this House that would have delivered a customs union; they pressed for a general election in 2019 for their own party interest rather than continuing to try to fight the Government’s warped Brexit strategy; and we must remember that when the Division bell rang in this House to either back the thin trade and co-operation agreement or plunge the country into no deal, the SNP chose no deal. This Government have fundamentally failed to improve anything and the Brexit situation in the UK has been bad, but no deal would have been immeasurably inferior. Worse still, the SNP has a proposition for a separate Scotland that is incompatible with EU treaties for a new state wishing to join.

[Alan Brown]

Is it not the case that the reason we are not in the customs union is that some Labour MPs backed the Tories, and is it not the case that there are now two Baronesses in the House of Lords who were Labour MPs and have been rewarded for their work in helping deliver a hard Brexit—Baroness Gisela Stuart and Baroness Kate Hoey? That is where Labour were back then.

[Ian Murray]

Those two Baronesses were put into the House of Lords by the Conservative party, not the Labour party, and the reason they are in there and not in here is that they were on the wrong side of history. I draw the hon. Gentleman’s attention to what actually happened in this House in the two major votes when we had the indicative vote process in this House: I do not remember exactly now, but I think there were 42 SNP MPs, and they abstained on the customs union and the vote was lost by six—and that apparently was our fault. Let me emphasise again that on 12 or maybe 19 December, the Division bell rang in this House to either back the deal, which was not ideal—in fact it was a pretty disastrous deal—or back what was even worse, no deal, and the SNP chose no deal. That is what happened and that is what the Whip record in this place shows. The SNP’s Brexit and EU positions are as dishonest as they are broken.

The next Labour Government will build a closer relationship with the EU so that our businesses have the opportunity to grow and to create wealth and high-quality jobs across Britain. We see the trade and co-operation agreement as the floor of our national interest and not the ceiling, as the current Government do, and it will be up to the next Labour Government after the next election to renegotiate the TACA in 2025, as stated in the agreement. We will tear down trade barriers to help our businesses, we will support our world-leading scientists and service sectors, we will strengthen our security co-operation to keep us all safe and we will turn the UK into a green superpower, working with our EU neighbours and international partners. All of that will be done while repairing our tattered relationship and regaining the trust of others.

There is a reality that the SNP never acknowledges: the UK did leave the EU, and we cannot just wish that away. I know SNP Members like to promise the undeliverable because they know they will never have to deliver it, but anything other than saying that to the public is completely and utterly dishonest. It is only through sustainable economic growth that we can resolve the cost of living crisis, and that is exactly what Labour will deliver after the next general election.

Unsurprisingly, the SNP’s motion fails to mention that the SNP has been in charge of the Scottish economy for the last 16 years. A Scot who was finishing school when the SNP came to power is now in their mid-30s, perhaps with a family of their own, and they have seen that, much like with the UK Government, economic growth has been an afterthought, with Scottish businesses dismissed and jobs shipped overseas—although the SNP has done wonders for the UK motorhome industry, of course.

Huge promises have been made off the back of the renewable energy potential in Scotland, but little has been delivered. The truth is that the SNP Government—I give them credit for this—have created tens of thousands of highly skilled, high paid jobs in the renewables sector; it is just that none of them are in Scotland, but are instead in Denmark, Indonesia and everywhere else where that they have shipped off the contracts to foreign shores. So the renewables potential, which could create highly paid jobs and lower energy bills for everyone in Scotland, is being used to lower bills in Scandinavia, while we pay the highest bills in Europe. That is the work of the Scottish Government—nobody else.

When it comes to child poverty, after 16 years of SNP Government a quarter of Scottish kids are growing up in poverty. All the progress made by the previous Labour Government in lifting millions of people out of poverty has been reversed. Even the Children and Young People’s Commissioner for Scotland said the SNP had “absolutely failed” children and young people. SNP Members may enjoy their rhetoric, but their record of delivery is lamentable.

Their record on public services after 16 years of SNP rule is appalling. Their proposition for an independent Scotland is as economically illiterate as the Conservatives who crashed the economy; it is a proposition that will make the current cost of living crisis look like a tea party in comparison. Despite the SNP’s recent statements—including by their Westminster deputy leader, the hon. Member for Paisley and Renfrewshire South (Mhairi Black), who opened this debate—that they do not want to rid us of this Tory Government, I can assure them and the people of Scotland that a Labour Government will transform the country for every part of our country, because we have credible, fully costed solutions to the cost of living crisis.

The first thing we would do is introduce a proper windfall tax on the oil and gas giants, something repeatedly opposed by the leader of the SNP at Westminster until the polls showed it was popular. [Interruption.] SNP Members chunter again, but the record shows that when we brought to the House our proposition to introduce a windfall tax on the oil and gas sector, the SNP did not support it. Over the last year, the Conservatives have left more than £10 billion on the table which could have been realised by backdating the tax to January 2022, as Labour has been calling for, closing the tax loopholes the Prime Minister helpfully put into his windfall tax and taxing at the same rate as Norway. It is simply not right that oil giants are raking in unexpected billions of pounds off the back of British families. The next Labour Government will put an end to that injustice while the SNP sit on their hands, merely carping from the Opposition Benches.

The money raised from that would help Labour alleviate the pressure on families across Britain and would pay for our plan to help energy-intensive industries such as food manufacturers and processors with the cost of energy, helping to keep down prices in the supermarket. That point was also made by the Minister, although his means of doing that was not the same. We would cut business rates for small businesses, paid for by taxing the online giants, who have raked in huge profits in recent years while our high streets have suffered, and we would reverse the Conservatives’ decision to hand the top 1% of savers a tax break, while introducing specific measures to keep doctors in work. We would close the non-dom tax loophole—much to the frustration of the Prime Minister—and break the Tories’ high-tax, low-growth trap that is breaking our economy.

Listening to the hon. Member for Paisley and Renfrewshire South, it would seem that none of that matters and that we would be just as well off to keep the Tories. I do not agree, I am not sure that her constituents agree, and I am sure that the people of Scotland definitely do not agree. If the new First Minister and the SNP really thought that the people of Scotland were on their side, they would put their game playing to one side and call an election in Scotland so that the people of Scotland could choose their next First Minister. While we are on elections, perhaps the best way to resolve the cost of living crisis would be for the UK Government also to call an election so that we can kick this out-of-touch and out-of-time Government to one side.

--- Later in debate ---

[Douglas Ross]

The point I was moving on to is that there is not a single mention in the SNP motion about the oil and gas industry, heating homes, and making sure people have affordable energy in their homes and businesses. [Interruption.] The hon. Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry) says we should wait for his speech, but why not put it in the motion? Of course, the SNP cannot speak about oil and gas because it is in government in Scotland with the extremist Greens, who are against the oil and gas industry. The only reference to it in the opening speech by the hon. Member for Paisley and Renfrewshire South was in response to my intervention. I asked specifically about oil and gas, but I got an answer about nuclear. The SNP has given up on the north-east of Scotland and the 100,000 people employed across the UK in the oil and gas sector, because it would rather have the Greens in government and be anti-oil and gas. It would rather import oil and gas from other countries with a higher carbon footprint and a higher cost than support our oil and gas industry and those who work in it in Scotland.

Another issue that leads to problems with the cost of living in Scotland is taxation. Scotland is the highest taxed part of the United Kingdom. Indeed, the Scottish Fiscal Commission estimated that the divergence of Scottish taxation from the rest of the United Kingdom between 2017-18 and 2023-24 means that people in Scotland will have paid £1 billion more in taxation than their counterparts in the rest of the United Kingdom—£1 billion more in tax because the SNP has made Scotland the highest taxed part of the United Kingdom.

The SNP often likes to claim that the majority of working Scots pay less income tax than those south of the border. That has now been proven to be completely false. [Interruption.] I am sorry if I am keeping up the hon. Member for Glasgow East, but his constituents are paying more tax in Scotland because of decisions his Government have taken. If he thinks that is something to yawn about, I am pretty sure his constituents do not.

By not increasing tax thresholds with rising salaries, the Scottish Government have confirmed that anyone earning more than £27,850 in Scotland will pay more tax than those in the rest of the United Kingdom. We have calculated that the average Scot will earn £29,095 in 2023. Because of SNP policies and the taxation plans of the SNP Government at Holyrood, we are all paying more in taxation—more than £1 billion over that period. The majority of Scots and the majority of constituents represented by SNP MPs will be paying more in taxation because of the decisions taken by the SNP Government at Holyrood.

[Ian Murray]

The hon. Gentleman is rightly pointing to the high tax burden. I think he said—I apologise if I am paraphrasing—that we have the highest tax burden in Scotland because of decisions made by the Scottish Government. Does he therefore agree that we have the highest tax burden on working people in the last 80 years across the UK as a result of his own Government’s decisions?

[Douglas Ross]

I know we cannot have that conversation. The hon. Gentleman mentions 80 years. I am not sure what timeframe he is speaking about, but I was looking at the Scottish Fiscal Commission, which looked at the differential from 2017-18 to 2022-23. It said that people in Scotland paid £1 billion more in taxation than they would have done if they lived elsewhere in the United Kingdom. That is a damning indictment of the Scottish Government, who are not interested in growth and not interested in supporting people through the tax system. They are now making sure that a majority of Scots pay more in tax than people elsewhere in the country.

The final point I want to focus on is growth. The Government amendment rightly prioritises growing the economy. Of course, that also could not be included in the SNP motion because it does not support economic growth. It has brought Ministers into the Scottish Government from the Green party to serve alongside its own Ministers, and the Greens—they are quite open about this—are anti-economic growth. They do not believe in it. But we need our economy to grow. We need a growing economy to pay for the services that people across Scotland and across the United Kingdom rightly want and expect.

We also know that GDP grew more slowly in Scotland than in the rest of the United Kingdom during the period when Nicola Sturgeon was in office. From 2014 to 2021, GDP grew at a slower rate in Scotland than in other parts of the United Kingdom. The SNP has always been anti-economic growth. It has shown that with its previous policies and its previous performance. Now, by bringing the extremist Greens into the Government, it is continuing on that trend.

When we speak about the cost of living crisis and the issues affecting all our constituents, I hope that the SNP reflects more on what it could and should be doing with the powers and the finance it has in the Scottish Parliament. It should be looking to the future to grow Scotland’s economy and ensure we can fulfil our potential for all of Scotland, our constituents and our businesses. If we had a Government who were more focused on economic growth and on delivering for the people of Scotland, rather than on division and independence, Scotland would be a lot better off. I hope we will soon see the SNP Government in Scotland suffer for their repeated failures over 16 years, letting down young people, letting down taxpayers, letting down the health service, letting down education and letting down the justice system. This is a Government in Scotland who are tired and out of ideas. The sooner they are replaced, the better.

--- Later in debate ---

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

Many of my constituents, like many across the country, are struggling—struggling to pay their energy bills, struggling to put food on the table, struggling to keep their head above the financial flood waters that threaten them and their families. Energy bills are up 300% or so in the last two years, food prices are up 17% in the latest Which? survey—the prices of the cheapest and most essential foods have soared the most—and mortgages are up by 61% in just the past year. That, of course, was caused by the disastrous seven-week reign of the previous Prime Minister and her Chancellor.

The excuse frequently trotted out by those on the Conservative Benches—we have heard it again today—to justify the inflationary attack on us all, which hits the lowest paid the hardest, is Ukraine. The problem with that argument is that it shows just how short-sighted and backward-thinking UK energy and economic policy has been for decades. I am no geopolitical expert, but it seems to me that pegging our electricity prices to the wholesale cost of gas, putting so many of our eggs in a basket controlled by Putin and murderous oligarchs, and relying on a region that has never been renowned for its stability was nonsense on stilts.

Instead of using past decades to invest in our energy sector, build a green industrial base and begin the process of decarbonising our grid—thereby reducing our dependence on the likes of Putin—the Labour Governments of the past put their weight behind the dash for gas, while the Tories paid lip service to the very idea of industrial strategy. It is their economic strategy, exemplified by the previous Prime Minister and those catastrophic seven weeks, that has caused mortgage rates to skyrocket and left our economy in the mire, wrecking any ability to recover from the kind of shocks to the system we have seen over recent years, whether from covid or from Putin’s warmongering. Most of all, it is their kamikaze Brexit unleashed on our society that has destroyed what was left of the UK’s capacity to invest in its own recovery and future.

In 2016, my constituency voted two to one to remain in the EU. My constituents knew and know that our economic prosperity and our wider society are inextricably linked to our European allies. From the airport, which delivers the largest cargo exports by value in Scotland, to the whisky bonds and warehouses that slake the thirst of millions of Europeans, through to the universities and colleges with links to their contemporaries on the continent, and the hauliers based in my constituency who experience at first hand every day the Kafkaesque world created by the current Government—they have all been hit hard by Brexit, and so have their staff. They and we have lost a huge amount since Brexit.

But then, so has the Labour party. Many of us can remember the savage criticism that the right hon. Member for Islington North (Jeremy Corbyn) received from those on his own Benches because he, in their view, was a secret Brexiteer. Now everyone in the new model Labour party is a Brexiteer, including the current branch office manager in Scotland, elected after the previous democratically elected leader was booted from office by the big boss here. It is no surprise that they are getting very excited about their small increase in the opinion polls in Scotland, because—let’s face it—what else do they really have to get excited about? Their boss down here has declared that he does not care if he sounds like a Conservative, while the shadow Foreign Secretary, the right hon. Member for Tottenham (Mr Lammy), tells his radio listeners that the Labour party cannot be

“picking through all the Conservative legislation and repealing it”

if it ever got back into office.

The Leader of the Opposition promised the abolition of tuition fees for higher education—abandoned in England but maintained by a Scottish Government trying to ensure that education and learning is not the preserve of a wealthy elite. The Leader of the Opposition promised common ownership of the mail, energy and water—abandoned in England but maintained in Scotland, where it has jurisdiction, with water bills in Scotland being substantially lower and 35% more per capita invested in infrastructure. He also resigned from the Labour Front Bench after what he said was a “catastrophic” result in the Brexit referendum, but he is now happy for the UK to wallow in that catastrophe, while Scottish Government plan for a future within Europe and alongside our friends and allies.

Mr Deputy Speaker, the sad truth is that you could not put a fag paper between the two Front Benches in this place. They are both set on policies that will exacerbate and extend the cost of living crisis; both hellbent on ignoring reality and ploughing on with exclusion from the single market; and both sticking their head in the sand as to the damage that their ultra-free market economic policies are costing and will continue to cost ordinary households across these isles, regardless of who sits on the Treasury Bench.

[Ian Murray]

Will the hon. Gentleman give way?

[Gavin Newlands]

I wish the recently selected Labour candidate in Paisley and Renfrewshire North all the best in the next election, because she will need it, going round the doors with a Tory manifesto coloured in red and a leader who would sell his granny for a few hundred votes in a midlands marginal—and on that, I will give way.

[Ian Murray]

I thank the hon. Gentleman for giving way. Does he agree with his colleague, the hon. Member for Glasgow South (Stewart Malcolm McDonald), who said:

“‘Labour are just the same as the Tories’ is not a strategy, it’s the absence of a strategy”

and that telling people Labour and the Conservatives are the same “won’t get us far”?

[Gavin Newlands]

Who said it was a strategy? It is a fact. All I am doing is pointing out facts. If the hon. Gentleman wants me to read out all the examples of his leader going back on his word in terms of nationalising various industries, I am more than happy to do that, but I am not sure we have time for it. Everyone here and everyone in Scotland knows that his manifesto will be Tory lite at the next election. It might work in Edinburgh South, but it is not going to work in many places across the central belt of Scotland.

Finance (No. 2) Bill

Ian Murray Excerpts

2nd reading
Wednesday 29th March 2023 Commons Chamber

[Richard Fuller]

Will the hon. Gentleman give way?

[Ian Murray]

I am going to make some progress. I will give way to the hon. Gentleman in a moment.

Rather than a long-term permanent change, this change is for only three years. It only brings forward investment rather than increasing overall investment. The Government’s own policy paper on temporary full expensing, published on the day of the Budget, makes that clear. It says:

“This measure will incentivise businesses to bring forward investment to benefit from the tax relief.”

Meanwhile, the OBR forecast makes it clear that business investment between 2022 and 2028 is essentially unchanged as a result of these measures. If anything, there is a very slight fall. So let us be clear about the implication here: the Conservatives’ inability to provide long-term certainty means that measures in this Bill will bring no overall increase in business investment. That is not good enough. That is why, as part of Labour’s mission to secure the highest sustained growth in the G7, in government we would review the business tax system and set out a clear road map to provide certainty and boost investment. We believe that our economy’s long-term underperformance on capital investment needs long-term measures to be put in place as part of a tax framework that supports and incentivises investment.

Alongside stability and certainty, a key principle in our tax system is one of fairness. The importance of fairness in the tax system applies to individual taxpayers and to businesses too. We in the Opposition want to make sure that British businesses face a level playing field, and that is why we have for so long pressed the Government to back an ambitious global minimum tax rate for large multinationals. A global minimum would help to stop the international race to the bottom. It would help to stop British businesses that pay their fair share of tax being undercut by large multinationals that do not, and it would help to raise revenue to support British public services.

We are therefore glad to see provisions in this Finance Bill that will, as part of the international agreement fostered by the OECD, ensure that large multinationals pay a minimum level of 15% tax in each jurisdiction in which they operate. We have raised the need for such an international deal many times with the Government. It was in fact nearly two years ago, on 13 April 2021, on Second Reading of an earlier Finance Bill, that I first raised with Treasury Ministers the question of a global minimum corporation tax rate. In that debate, I pressed Treasury Ministers to confirm to the House that they and the Chancellor of the time backed plans for a global minimum corporate tax rate, and that they would do all they could to make it a reality. Ministers appeared lukewarm, so I pressed them again in subsequent debates on 20 April and 28 April, urging them to make a clear statement of support in favour of a global deal. They held back from doing so.

At the time, the Ministers’ response seemed to lend credibility to a report by Bloomberg that implied that the real reason behind the Government’s position might have been to disguise their real agenda—namely, a desire to keep alive the possibility of a race to the bottom in the future. In the end, however, plans by President Biden to set the global minimum rate at 21% did not receive wide enough support and a figure of 15% was agreed. That figure was welcomed by the then Chancellor, who began to support the deal in public. Now, however, the deal faces a new front of challenges, as the Minister acknowledged earlier in her comments. Her Back Benchers have begun to be open in their hostility towards the implementation of the deal.

[Richard Fuller]

The hon. Member is a very thoughtful man. I think one of the reasons that he might be hearing some questions from Conservative Back Benchers is that he has just positioned himself as the advocate for the policy that our Front Benchers are now implementing. I have a question of substance for him on his research. He has just mentioned the original position of 21%, and has been clear in saying that what business wants is clarity, so can he give us some clarity? Is it the intention, if there is a future Labour Government, that they will press OECD countries for an increase in that 15% to achieve the 21% that he has been advocating?

Draft Social Security (Class 2 National Insurance Contributions Increase of Threshold) Regulations 2022

Ian Murray Excerpts

Tuesday 29th November 2022 General Committees

[The Chair]

Not in scope.

[Ian Murray]

I take your judgment on that, Mrs Cummins.

More specifically, I ask the Minister to refer to the explanatory memorandum to the regulations, in particular, paragraph 12.3 on the impact of the changes. It explains that a

“Tax Information and Impact Note covering the wider NICs threshold changes…was published on 23 March 2022.”

The explanatory memorandum confirms that that impact note

“remains an accurate summary of the impacts that apply to this instrument.”

Can the Minister confirm whether she believes that that statement will remain true if the current Finance Bill passes unamended?

In the tax information and impact note, we see figures reproduced in the section on “Exchequer impact” from the spring statement 2022. Those figures show the cost to the Exchequer of the increase of the primary threshold and lower profits limit from July 2022, and the removal of class 2 NICs liabilities between the small profits threshold and lower profits limit from April 2022. The figures in the information note are set out from 2021-22 to 2026-27, and presumably they make certain assumptions about the level of the personal allowance. I would be grateful if the Minister could therefore confirm whether, if the Government are successful in freezing the personal allowance through to 2027-28 in the Finance Bill, the figures for 2026-27 would change? I would be grateful if the Minister could confirm whether she therefore expects the cost to Government in that year to reduce, which would represent a relative tax rise on working people.

Cost of Living Increases

Ian Murray Excerpts

Wednesday 16th March 2022 Commons Chamber

[Ian Murray (Edinburgh South) (Lab)]

I am pleased that we are debating this important topic and I thank the SNP for bringing it to the Chamber again. Opposition parties have held a number of debates on the cost of living, which is critical for every part of the country.

The cost of living crisis really matters because millions of families across the UK face the hardship of not knowing whether they will be able to pay their bills. That worry plagued many when we spoke at the Dispatch Box on the topic in January, but in the interim, the Government have done close to zero to help. Listening to the Minister, everything in the country seems to be okay, but all her words will be no consolation to those who have to make the difficult decision about whether to heat or eat. That is the biggest single indictment of the Government to date.

In the intervening period, we have of course seen the most awful, barbaric and illegal invasion of Ukraine, which has not helped and has led to higher prices in many areas as a consequence. Yesterday, the Office for National Statistics revealed that average earnings fell 1% in the three months to January, which is the biggest fall in earnings in a decade. It is against that backdrop that working people face this crisis.

Although the Government may seek to convince people that the crisis is entirely the result of the war in Europe, the reality is that it long predates the Russian invasion. Let us be crystal clear with the public: the cost of living crisis for my constituents and every constituent across the country was with us in spades before Ukraine. One of my constituents described the crisis as “everything going up” but his wages; energy bills are due to skyrocket next month with the lifting of the energy price cap and there might be much more to come later this year.

[Matt Rodda]

My hon. Friend is making an excellent point that a lot of the pressure on families predates the current crisis by some months. There are an enormous number of food banks across the whole of the UK—in Scotland and England—and my experience of working with constituents and those hard-working charities is that there is an enormous need out there that predates the crisis in Ukraine. I hope that the Government will listen to that point.

[Ian Murray]

My hon. Friend raises a critical point and we have to keep dragging the Government back to their responsibilities as a result of being in power. Much of the crisis in our public services, including the NHS and social care, also predates covid but the Government keep telling us that perhaps that is not the case.

Inflation hit 5.5% in January and is expected to rise even further. Scots are facing the prospect of council tax, water bills and train fares rising while wages, as I have said, are falling in real terms. Perhaps unsurprisingly, the Conservative party failed to back the fully costed plans of the shadow Chancellor, my hon. Friend the Member for Leeds West (Rachel Reeves), to tax the oil and gas companies’ excess profits to reduce people’s energy bills. Instead, the Chancellor’s response to the crisis has been to make matters worse, not better. We have already heard about the buy now, pay later scheme using taxpayers’ money to lend money back to taxpayers via the energy companies that they will have to pay back on future bills. That is not helping; that is deferring the problem.

The Government have refused to exempt VAT on skyrocketing energy bills, which was supposed to be one of the much-vaunted Brexit dividends.

[Martin Docherty-Hughes (West Dunbartonshire) (SNP)]

When the Minister winds up the debate, I wonder whether he will address the point that, as the hon. Gentleman rightly alludes to, part of the energy cost is pre-Ukraine. We left the European Union and its single energy market, which is detrimental to the rest of the UK.

[Ian Murray]

Those are some of the consequences that we start to see when the chickens come home to roost.

When the Minister responds, perhaps he can also clarify the Government’s policy on VAT on energy bills, because VAT is one of the most regressive taxes. By removing VAT on energy bills, the Government would remove a regressive tax that affects the poorest the most. I understand that if they remove the VAT, they help everyone, but perhaps it could be done temporarily and perhaps the £2.5 billion-plus, and increasing, that is taken from VAT on energy bills could be diverted to those who are required to pay higher energy costs.

There will be the largest tax burden since the 1950s, which is astonishing for a Conservative Government, and a more than 10% increase in national insurance, not just for working people but for businesses. We have a Conservative Chancellor who is high tax and the highest-taxing Chancellor in more than 70 years.

[Mike Kane (Wythenshawe and Sale East) (Lab)]

My hon. Friend is making an excellent speech. Do I understand rightly that Labour’s fully costed windfall tax on the energy companies is opposed by both governing parties in Scotland?

[Ian Murray]

It certainly is. To correct the Minister—I hope it is not the third time already; I am on only the second page of my speech—she assumed that the SNP motion backed a windfall tax on oil and gas, but it is actually the opposite. The motion is not to back a windfall tax on oil and gas, but to back a windfall tax on everything but oil and gas—maybe the SNP can clarify that later.

This Chancellor is also presiding over the largest hit to disposable income since the second world war. How are any of those policies helping, alongside, as we have already heard, the largest ever overnight reduction in support for the poorest households through the reduction in universal credit and the scrapping of the triple lock for pensioners? They are making people poorer and taking more money out of their pockets at a time when everything is going up—a cocktail of Government decisions that mean the discussions around the dinner table for many families are about the worry of paying the rent, the mortgage or the energy bill or for the weekly shop or to fill the car they need for work.

Families face a perfect storm of the Government’s own making: rising taxes, rising bills and rising inflation, and lower wages in real terms. This is all the result of over a decade of Conservative mismanagement of the economy. They like to think they have been in government only since 2019, but they have now been in place for 12 years. The policies of a succession of Tory Chancellors have created a low-wage, low-growth insecure economy.

I want to talk for a minute or two about the Scottish Government’s role in this. As the hon. Member for Aberdeen South (Stephen Flynn) rightly said when he moved the motion, the Scottish Government have a stake in this and I am grateful that the SNP has brought this debate to the House. The SNP is correct to point out the lack of action by the UK Government in trying to tackle this, as we have all discussed, but it is not an observer in this crisis as it is in government and can also help.

Scots are facing the prospect of higher council tax bills, because for over a decade the Scottish Government have decimated local government funding and spent 15 years promising to scrap the council tax—a promise that they continue to break at every election.

[Owen Thompson (Midlothian) (SNP)]

I find it particularly useful that the hon. Gentleman mentions council tax, given that the Labour administration in Midlothian proposed a 4.7% increase in council tax. Thankfully, the SNP amendment to that ridiculous proposal was accepted and that amount was reduced.

[Ian Murray]

We do not want to see council tax bills rising anywhere across the country, but my own council, the City of Edinburgh Council, has had £1 billion ripped out of its budget over the last 10 years by decisions to take Conversative austerity, times it by four and pass it on to local authorities. [Interruption.] I hear the cries of “What?” behind me, but these figures can all be checked. The 3% of Conversative austerity is multiplied by four and passed on to our local authorities who are delivering these services. Councils are forced to make decisions that they do not want to make. [Interruption.] All those figures can be checked, Madam Deputy Speaker, despite the SNP Members chuntering from the back.

The Chancellor’s measly council tax rebate scheme, while welcome at £150, will distribute more money to the Scottish Government, but the SNP response is just to reflect that entire policy. The Minister mentioned this. To put that into context, there will be £150 off council tax in bands A to D in Scotland, which means I will get £150 off my council tax. How is that fair? Of course, I will be donating it to local charities, but that policy is money wasted that should be directed to those who need it the most.

What of this one-off windfall tax on the unexpected cash bonanza for the oil and gas sector? The SNP group here in Westminster has been more interested in standing up for Shell than standing up for Scottish taxpayers. [Interruption.] Again, Hansard has all of this documented. When my colleagues and I put down a motion in this House for a vote on a windfall tax on the enormous excess profits of the oil and gas companies, the SNP sided with the Conservatives and failed to back it. In fact, the SNP BEIS spokesperson, the hon. Member for Aberdeen South, who is sitting not yards from me and who moved this motion, defended that position vociferously in this House. The deputy leader of the SNP did not back our motion on BBC “Politics Scotland”, live on television, and the hon. Member for Gordon (Richard Thomson) said:

“I am sorry to say that I have not heard anything to persuade me why a one-off smash and grab on the North sea industry is the best way to deal with this crisis.”—[Official Report, 1 February 2022; Vol. 708, c. 239.]

Let us see what this crisis is doing. Shell’s profits have quadrupled, in what its CEO has described as a “momentous” year, to an unexpected $19 billion. That is $600 a second in profit, driven primarily by the huge increases in energy prices. While Scottish families face the heartbreaking choice between eating and heating, the CEO of BP is describing the energy sector as a “cash machine” for his business. Under our proposals, he would be popping his corporate credit card in the cash machine, and giving a little bit of that money back to struggling families. Before both Governments—the Scottish Government and the UK Government—trot out the usual defence of harming investment, most of that unexpected profit is going to additional bonuses for shareholders in dividends and buybacks of shares, so such businesses will not be using that money for investment.

Now we see that the SNP, after weeks of defending not backing a one-off windfall tax to help Scottish people pay their bills, has its own proposal with one line in the motion about

“a windfall tax on companies which are benefitting from…impacts associated with the…pandemic or the…international situation”.

Surely that means oil and gas. Does it mean oil and gas? Does the BEIS spokesperson want to intervene and tell us if it means oil and gas? [Interruption.] Nobody on the SNP Benches is saying it means oil and gas, so what on earth does it include? Will it not affect investment, if that is the defence for oil and gas, in other industries? Do they have any detail on how much that would raise, how it would be implemented or who would be impacted?

Does this include every business that has turned a profit during covid? What about small businesses such as the micro-breweries that turned their hand to making hand sanitiser during the pandemic—should they pay? What about Pets at Home, because of the boom in people buying pets during the pandemic? The critical argument is that these businesses’ profits are not driven by the increases in energy costs that are hitting family finances directly. It is the oil and gas companies’ profits that are driven by the crisis, and it is they that should pay a little more. It is their additional, excess and unforeseen profits that are directly linked to the rise in bills paid by millions of families, and I have yet to receive an intervention to find out whether the SNP motion includes oil and gas—nothing. Quite obviously, we can come to our own conclusion that it wants to tax Irn-Bru, but not tax oil and gas.

[Gareth Davies (Grantham and Stamford) (Con)]

Not that I am going to make a habit of trying to defend SNP Members, but one of the reasons why they may not include oil and gas in their windfall tax plans is perhaps that they watched the Treasury Committee hearing with a panel of independent experts specifically on the windfall tax, who said that it would be ineffective and would damage investment. It would be ineffective because BP and other oil companies actually make their profits elsewhere, not in the North sea, and as a result, the costings the hon. Member describes are not up to scrutiny or robust. Could he explain to the House how he has got to the figures he is putting forward as fully costed?

[Ian Murray]

Yes, if we increase the additional rate on the oil and gas sector from 40% to 50%—10 percentage points extra—that will generate the money towards our fully costed plan for raising energy prices, but very well done for defending the Scottish National party, and both the Conservatives and the SNP knocked back the oil and gas sector’s windfall tax when it was brought to this House.

To go back to the central question of this debate on the cost of living crisis, many families are worried about the email dropping into their inbox telling them that a direct debit will treble, or the bill landing on the mat saying their energy bill will become unaffordable, yet both Governments refuse to ask the companies making the money, directly driven by the energy crisis and the energy prices that are generating those extra direct debits or those extra bills, to put a little bit more into the pot to help. With the SNP’s current policy in the motion, and SNP Members still will not tell us if it includes the oil and gas companies, AG Barr, a successful Scottish business that made more profit last year than pre-pandemic, would pay a windfall tax, but the oil and gas companies would not—taxing ginger, not taxing gas.

[Matt Rodda]

My hon. Friend is making an excellent point because surely the point is that, with the super-profits for these very wealthy companies, senior leaders of a number of them have been quoted as saying that they see their own business as a cash machine. If we contrast that with the day-to-day struggles of people of this country, surely he is putting forward the right policy.

[Ian Murray]

Those with the broadest shoulders should pay the most, but I just say to everyone in the country watching this who is worried about their bills that we have two Governments who could do something about this, but they are defending the profits of the oil and gas companies rather than trying to help them with their bills. We could achieve so much more if all put our shoulders to the wheel and helped with this energy crisis.

[Christine Jardine (Edinburgh West) (LD)]

The hon. Member makes an excellent point. Does he share my curiosity about whether the SNP’s problem is that it spent so much time saying that Cambo should not be developed and attacking the oil industry that it finds itself in a quandary and, as always, its main priority is what is the best argument for independence rather than what is best for the people of Scotland?

[Ian Murray]

If the SNP has an argument for not taxing the oil and gas companies, it can have the floor to tell us. I am happy to take an intervention. I am also happy to take an intervention that clarifies what their motion means. Does the line that says “a windfall tax” include the oil and gas companies? Not one SNP Member, including the BEIS spokesperson, will intervene and tell me that that is what it intends. That tells us all we need to know. The SNP is sitting on the fence, hoping that the Government get the wrong idea, and putting out the press release to say that the Government are attacking it.

[Stewart Hosie]

This is a serious debate affecting some tens of millions of families in the UK, so the sooner he stops wittering on about Irn-Bru and Pets at Home and makes a substantive point, the better for the viewing public.

[Ian Murray]

I make this substantive point. Your motion, which you brought to the House to debate today, says that you are happy to tax Irn-Bru and Pets at Home, but you are not willing to tell me whether you will tax the oil and gas companies. Am I correct? I am correct. Excellent.

[Mr Deputy Speaker (Mr Nigel Evans)]

Order. Please do not use the word “your”, because that is referring to me, and I am not doing anything.

[Ian Murray]

Apart from chairing the debate wonderfully, of course.

Let us make the serious point. We are debating the motion in front of us and we cannot get clarity from its mover about whether it includes a windfall tax on the oil and gas companies that would give every single household in Scotland £200 off their bills and the poorest 815,000 households £600 off their bills. That is what we are talking about. That is the substantive point that I am making.

Children will be going to bed cold or hungry—or both—and the best that the Chancellor can do is put up their parents’ taxes and lend them their own money to take a tiny amount off their energy bills. It is simply not good enough. The Trussell Trust says that two out of five people on universal credit are forced into a spiral of uncontrolled debt. Labour’s plan to tackle the cost of living crisis would put money in the pockets of Scottish families, helping them to make ends meet, and take worry out of receiving that unaffordable direct debit increase from their energy supplier. Across the UK—I repeat this again, because the right hon. Member for Dundee East (Stewart Hosie) wants a substantive point—we would introduce a fully costed, worked out plan for a windfall tax on oil and gas companies through which every single household in Scotland would get £200 off their bills and the 815,000 hardest hit households would get £600.

In Scotland, the Scottish National party has the power in its hands to do more than just bring Opposition day motions; it can change lives, too. That is what Labour would do. We would use the Barnett consequentials that the SNP has spent on replicating the Chancellor’s unfair policies to give a Scottish fuel payment of £400 to nearly 600,000 households facing the brunt of the crisis. We would top up the Scottish welfare fund so that local authorities could use their discretionary offer further to support households.

[Ben Lake (Ceredigion) (PC)]

I am interested to hear about the shadow Secretary of State’s proposals for Scotland. Has he had an opportunity to raise them with his colleagues in the Welsh Government, who have done exactly the same as the Scottish Government, whom he has criticised so heavily?

[Ian Murray]

The bottom line is that I should not be getting £150 off my council tax bill. That seems fair, and I think that we agree on that. We need much more imagination in how to get money into the pockets of the poorest who require it. The best way is to ask those with the broadest shoulders to put a little more into the pot. It is certainly not the whole host of Ponzi schemes reeled off by the Minister whereby people are lent their own money and will have to pay it back later. We need to implement long-term solutions to keep bills low such as improving the energy efficiency of Scottish homes and, as was mentioned, dealing with off-grid, which is a huge issue in Scotland.

That is a proper plan to tackle the cost of living crisis, unlike this back-of-a-cigarette-packet plan designed to help solve a political problem for the Scottish nationalists—who do not want to back a windfall tax on oil and gas but will not even tell us in public if that is what their motion is intended to do—or the Chancellor who is not only doing little to help but is costing people much, much more and making it worse. That is the difference Labour can and would make in power. We do not want just to oppose the Government in Opposition day debates; we want to replace them altogether, which the Scottish National party can never do.

[Several hon. Members rose—]

Cost of Living Increases

Ian Murray Excerpts

Monday 24th January 2022 Commons Chamber

[Ian Murray (Edinburgh South) (Lab)]

May I say how pleased I am that we are having this incredibly important debate today? While Parliament has been hopelessly paralysed by the Prime Minister’s refusal to do the decent thing and resign, I hope that the debate allows us an opportunity to discuss the human reality of this Government’s cost of living crisis.

Up and down this country, people are facing the anxiety that comes from worrying about whether they can pay their bills and heat their homes. Having to decide whether to eat or heat is an awful indictment of Britain in the 2020s. If that decision has to be made by one person, that is one person too many, but, under this Government, millions of people are having to make that decision. Moreover, there is total inaction; there is nothing to say. There is also nothing in this light parliamentary timetable to help. The Minister himself, in the near 20 minutes that he spoke, gave nothing to help families in this country in the cost of living crisis. The Government could have tabled an amendment to the motion—I am sure that the hon. Member for Glasgow East (David Linden) would have allowed it—for us all to vote for and back to help the people of this country with the cost of living crisis, but we have radio silence. Because of that inaction, more and more face hardship and worry.

Inflation stands at more than 5%, a 30-year high. Energy bills are to rise by 40%—on average by £700 per household—shortly. The average UK worker is still not any better off than they were when this Government took power more than a decade ago. The Chancellor is planning the largest tax hike in living memory, taking the tax burden on working people to its highest since 1950. What a record that is: a high-tax, high-inflation, low-growth Tory party. This weekend, we were led to believe that the entire Cabinet would get behind stopping the planned national insurance tax rise, but what did we hear today? We heard the Chancellor turning against his own national insurance hike by calling it the “Prime Minister’s tax”. That is a whole new definition—the Chancellor of tax-dodging. Nobody in the country is buying it. The Government should bring the question back to this House if they want to vote the national insurance rise down.

The human cost of the situation is stark. In the past year, Citizens Advice Scotland has seen a 38% increase in the number of people coming to it for advice about being unable to pay their mortgage. The figure is much higher for those unable to pay their rent. Polling conducted on behalf of the same organisation found half a million Scots cutting back on their food spending in order to pay their energy bills this winter—before those huge rises. What is worse is that official statistics on inflation do not capture the full extent of the difficulty facing families, especially those on low incomes. The food blogger, Jack Monroe, who rose to fame with recipes showing how to cook family meals for less than £10 a week, highlighted that on social media over the weekend. They gave examples of the cost of the cheapest pasta in the local supermarket rising by 141% in the past year, the cost of the cheapest bag of rice rising 344% and the cost of baked beans rising 45% year on year. At the same time, those on the lowest incomes have seen universal credit cut and their budgets tightened even further.

To make matters worse, as the hon. Member for Glasgow East mentioned, the costs of filling up the car have risen to their highest level ever and, while they rise like a rocket, they fall like a feather, needlessly costing families much more. Then we have Brexit infiltrating the supply chains, making it much more difficult to get food into the country, increasing costs in our supermarkets. That is the reality not of a global market, but of this Government’s decision making. Families are working every hour under the sun but are still unable to make ends meet, and the position is getting worse, not better.

[Joanna Cherry]

I am grateful to my constituency neighbour for giving way. He is talking about the price of food in the supermarket. Earlier, he will have heard me put to the Minister the problems identified by the British Retail Consortium with labour shortages affecting the food supply chain. Unless we were watching the BBC, we will all have seen the queues at the Kent ports over the weekend. What assessment has the Labour party made of the impact of Brexit on food price increases, and what does the Labour party intend to do about the problems of labour shortages and supply shortages caused by Brexit?

[Ian Murray]

I thank my constituency neighbour for that question. I hope that she watched with great interest the speech of the leader of the Labour party just a few weeks ago, and, indeed, the other speech he made before Christmas about making Brexit work. The reality is that this Conservative Government have given us a position whereby Brexit does not work. We have a thin deal that we said would fall apart, and it is falling apart. What we have to do is to get into power to fix the problems with that and to build on that relationship. That is the reality of where we are.

I listened with interest to the Minister not answering the hon. and learned Lady’s question about HGV drivers and the cost of food and supply chains. He rightly said that there is an ageing workforce, but that shows that the Government have not planned for the medium to long term in that regard—it is as if everybody just got older overnight, rather than there being some plan. It sums up the Government that they have not had the foresight to see some of those problems coming. None of the promises that the Brexiteers opposite made to us about sunny uplands have come to pass; indeed, the opposite has come to pass, as we can see in the supermarkets and in prices themselves.

Those of us elected to this place owe it to the millions of people across the country who face such hardship to do everything we can to alleviate and change it. In the UK in 2022, nobody should have to choose between heating and eating. The Government have shown no compassion and not even pretended to care. Let us remember that they voted to cut the £20 a week universal credit uplift for the poorest in this country and refused to feed school kids in the holidays. The only response to the crisis from the Government so far, in all the noise of partygate and everything else, was when they snuck out a £4.3 billion fraud write-off from covid funds and business loans, which was branded “nothing less than woeful” by their very own anti-fraud Minister, Lord Agnew, shortly before he resigned at the Dispatch Box a few hours ago in the other place. Maybe the Minister would like to do the same this afternoon: get to the Dispatch Box, resign, grab his folder and suitcase full of wine, and head for the hills. Any Minister with any kind of morality would be doing just the same thing.

I am pleased that the SNP has called the debate, but it is not a bystander in this crisis either. The SNP is the Government in Scotland and has been for 15 years. A 33-year-old today, struggling to feed their family while paying their energy bills, has spent their entire adult life under the Scottish National party Scottish Government. Such a person might wonder why the SNP did not support legislation put forward by Labour colleagues in Holyrood to enshrine as a human right the right to food. Perhaps we might be able to find out this afternoon why not.

Parliamentary time will be taken up “in weeks” with legislation for another referendum. People are having to choose between heating and eating, but that will be the SNP’s priority in Parliament and elsewhere for months. I accept that Parliament has the capacity to do other things, but nobody should be under any illusions. All the oxygen in the vacuum will be taken up in Scotland with another referendum or the thought of another piece of referendum legislation. That is the reality of what will happen. With the paralysis in this place, the Scottish Government are obsessed by what gets them out of bed in the morning, rather than the real, everyday issues of Scots.

[Alan Brown]

While the hon. Member is on the action of the Scottish Government, I presume he is going to commend them for bringing forward the £20 a week child payment as one way to help to mitigate the poverty being imposed by Westminster. Earlier he said that we all have a duty in this place to try to help people with the cost of living and energy crisis. In which case, why did Labour vote for the Nuclear Energy (Financing) Bill, the impact statement for which said that it could add up to £63 billion to household energy bills? How on earth is that helping people with the energy crisis?

[Ian Murray]

What a valuable and timely intervention that was, because I was just about to talk about the child payment. Indeed, we campaigned for the £20 child payment for some time in the Scottish Parliament and were delighted that the Scottish Government eventually introduced it. However, it is a key, targeted intervention that helps to address child poverty, so what we would like now—all the Scottish charities are saying this—is for it to be doubled to £40 a week.

[Patricia Gibson (North Ayrshire and Arran) (SNP)]

What would you cut?

[Ian Murray]

I hear hon. Members behind me asking from a sedentary position what we would cut—which is surely the same budget dilemma facing the Government that they have just been arguing about. What I would do is this. I would not spend money on an independence referendum; I would feed hungry Scottish children instead. Such a move, Mr Deputy Speaker—[Interruption.] SNP Members seem to have woken up. It tells you all you need to know about how Scottish politics works that when this Government are in total disarray, rather than turning their guns on them, they are turning them on the Labour party. Such a move to double the Scottish child payment—[Interruption.] “Where would you get the money from?”, they keep shouting. Such a move would take 80,000 Scottish children out of poverty overnight, so let us find the money indeed, with all these vanity projects and the wastage we have seen in Scotland.

[Brendan O’Hara (Argyll and Bute) (SNP)]

Will the hon. Member give way?

[Ian Murray]

I will give way if the hon. Gentleman will tell us how much the SNP has spent on ferries that has been wasted.

[Brendan O’Hara]

The hon. Member talks about the SNP turning our guns on the Opposition; perhaps if he was not so utterly thirled to trident missiles, we could find the money to lift Scottish children out of poverty. While the Labour party remains thirled to Trident, we cannot do it.

[Ian Murray]

It is a strange thing that over the past five minutes we have heard SNP MP after SNP MP justify why they cannot lift 80,000 children out of poverty. If that does not show how this country is stuck between two bad Governments, nothing will.

[David Linden]

Unfortunately, we on the SNP Benches have to turn our guns everywhere because there are very few guns behind the hon. Gentleman. He is focusing on social security and what we can do—I agree with him about how we can alleviate poverty and inequality—so will he tell us from the Dispatch Box that the next Labour manifesto will commit to the abolition of the welfare cap, about which Labour had nothing to say two weeks ago?

[Ian Murray]

There was not a vote on the welfare cap a few weeks ago. It was about giving more money to the poorest people in this country and SNP Members know that. I take umbrage with what the hon. Gentleman said about the number of people on the Labour Benches, because the criticism we always hear during SNP Opposition day debates is that the Labour party takes up too much time. We leave most of the time for SNP Members to speak and that has always been the case. SNP Members constantly complain that they do not get enough time in this place; they will get as much time as they like today.

I was delighted by that intervention; let me repeat my paragraph. Young children and families in Scotland might be wondering why the Scottish Government will not listen to charities or, indeed, to Scottish Labour’s policy and increase the Scottish child payment to £40 a week. SNP Members cry, “Where would we get the money from?” Such a move would lift 80,000 Scottish children out of poverty and could be done tomorrow under the powers of the Scottish Government. They are wasting money on ferries, Prestwick and vanity projects. The underwriting of the Gupta organisation puts half a billion pounds on to the taxpayer of Scotland. That is what we should focus on.

The Scottish Government passed their budget last month and pushed incredible cuts on to local authorities. They then turned round to those local authorities and said, “If you want the money to run local services, put it on council tax.” Nothing affects Scottish people more than their having to pay massively increased council tax bills because the Scottish Government are slashing the budgets of local government.

There is no better example of dither and delay than the devolution of welfare powers. In 2016, we agreed on a cross-party basis to the devolution of a whole host of welfare powers to the Scottish Parliament. Indeed, in essence the Scottish Parliament could now create its own welfare system if it implemented the policies. Six years on, the Scottish Government still delay the full implementation of the policies. In fact, they will take until 2025 to take full control of the devolved powers. It is important because with skyrocketing energy bills and increasing child poverty, the powers could be used to give, for example, a supplement to the winter fuel payment to help pensioners who are stretched by increased fuel bills. That is what should happen in respect of the changes to welfare powers in Scotland, but it cannot, because the welfare powers have not yet gone through as they should have.

We know that the best way out of poverty is the creation of highly skilled, highly paid jobs, so I must give credit to the SNP Scottish Government because over the past 15 years they have created a host of highly skilled jobs in turbine development, in the construction of ferries and in steel manufacturing. But none of those jobs have been in Scotland: they have been in China, Turkey, Poland and elsewhere. The decisions that the Government make have a fundamental impact on the way we deal with things in Scotland. The newly announced Scotland projects could generate billions of pounds of economic activity in Scotland, so every single job created should be in Scotland, with fabrication plants, British Steel and others.

Of course, as the cost of living crisis develops, the Prime Minister faces some difficulties of his own. Although much of the country is about to spend all their income from their jobs on energy, the Prime Minister is spending all his energy on saving his job. It seems that the choice in No. 10 is not so much about heating or eating but about whether it should be red or white. Little does the Prime Minister know that the cost of living crisis will affect him as well as everyone else in the country. Will the Minister tell us how much more a suitcase of wine from the Co-op will cost next year than it did this year?

As the Government party through the night, Labour offers a serious solution and leadership on the crisis. While the Government are hopelessly distracted by the chaos of their own making and more focused on infighting than on tackling people’s energy bills, we are calling on the Government to address the situation now. They could bring in a motion now to sort out this problem, with fully funded measures to reduce the expected price rise in people’s energy bills in April through a VAT cut on home energy bills that would save most households £200 or more, and targeted extra support for the squeezed middle, pensioners and the lowest earners, who would receive £600 off their bills, paid for by a one-off windfall tax on the North sea oil and gas producers who have profited from the price rises. Under Labour’s plan, every household in Scotland would save more than £180 off their energy bills, and 800,000 households in Scotland struggling with the cost of living would get an extra £400 in additional support. That is nearly £600 for those hardest hit by the energy price rises—critical money into the pockets of hard-pressed Scots now.

While everyone is dithering and delaying as we talk about new referendum Bills and why the Prime Minister is more concerned about his job, Labour proposes genuine action that would help families pay their bills over this most difficult year. That is the difference that Labour and leadership can make, and we will make it in power. With the support of the people of Scotland and those across the United Kingdom, that is exactly what we plan to do at the next election.

--- Later in debate ---

[Douglas Ross]

I have listened carefully to the hon. Gentleman, and I make this point: the tax rises that his Government are introducing in Scotland have made Scotland the highest-taxed part of the United Kingdom, and that is affecting nurses, teachers and police officers. That is who it is affecting right now in Scotland.

[Ian Murray]

Does the hon. Gentleman think that his Government’s national insurance tax rise in April helps or hinders that?

[Douglas Ross]

We have been clear, as my right hon. Friend the Chief Secretary to the Treasury said, that the Government have taken a difficult decision to focus that vital funding on health and social care—an issue that has not been grappled with for decades by parties on either side of the Chamber. It certainly has not been grappled with by the Scottish Government. Sometimes difficult decisions must be taken to ensure that we have a health service and support for older people in this country that has not always been available.

The hon. Member for Glasgow East mentioned local government, and I suddenly got excited, because I thought we were finally going to hear an SNP politician standing up against the disastrous cuts that Nicola Sturgeon and the SNP are imposing on local government, but he said “local government”—Hansard will show this when the report is published—and then did not say another word. The SNP has the highest ever block grant since devolution. Since 1999, more money than ever before has been going from the UK Government to the Scottish Government, and what do they do to local councils? They cut the local government budget by £371 million. That is a cut from the SNP Government to local government, when the UK Government are giving them more money than ever before to spend.

Leaving the EU: Impact on the UK

Ian Murray Excerpts

Wednesday 17th March 2021 Commons Chamber

[Ian Murray (Edinburgh South) (Lab)]

May I start by paying tribute to the hon. Member for Glasgow Central (Alison Thewliss), who set out the severe impacts that this Brexit proposition is having on the Scottish economy? It is a shame; the title of the debate is “Leaving the EU: Impact on the UK”, but I think we will need more than one debate to go through all the impacts. She ran very quickly through a lot of the impacts that are affecting Scottish business.

May I take Members back to Christmas eve? I am sure we can all just about remember that. We were all turning our attention to our family Christmas traditions. We were putting on our Christmas jumpers, double-checking we had everything for Christmas day, cutting sellotape with our teeth, examining the TV guide to see when we could watch “It’s a Wonderful Life”, and perhaps even thinking about a small libation or two. I am sure our thoughts would have been turning to family and friends who were unable to celebrate Christmas with us due to the lockdown. Then, out of the mulled wine haze appears not Santa Claus but the Prime Minister, sitting in front of the Downing Street Christmas tree delivering an “all I want for Christmas is as an EU trade deal” address to the nation.

The Prime Minister gleefully proclaimed that the UK and the EU had come to a last-minute trade and co-operation agreement, there would be no tariffs on goods, the Northern Ireland protocol would be maintained so the Government would not break international law, and, rather surprisingly,

“there will be no non-tariff barriers”.

I hope Santa was listening very clearly, as he really should not be delivering gifts to those who do not tell the truth. Going all the way back to the day after the EU referendum, it was always going to be the case that the cold reality of Brexit would one day disinfect all those undeliverable Tory promises given to the British people at the time and since, and that is exactly what has happened.

The bare-bones Brexit deal that was so lauded by the Prime Minister falls way short of what was promised and what was needed. It is not “get Brexit done”, as the Minister said; it is “get done by Brexit”. With our country facing one of the biggest economic recessions of any developed nation and with our businesses under increasing strain from the pandemic, they have to try to navigate new trading rules with the UK’s largest trading partner that have reduced exporting output by 60%. What will happen when the EU economies start to reopen fully? That is when the deal will truly be tested. It is holding back British businesses with reams of new red tape and unnecessary bureaucracy. Businesses were promised no non-tariff barriers, but the Government’s lack of leadership and clarity and their constant dither and delay mean that businesses are facing challenges that they certainly were not prepared for.

It did not have to be this way. The Government, instead of sticking their head in the sand, could have worked with industry to get ready. They could have focused on practical action to support businesses—measures such as recruiting and training the promised 50,000-plus customs agents we knew were needed to get the checks done. They could have used the transition period for what it was designed for—transitioning to the new arrangements. Instead, they wasted that period on negotiating the deal.

The Government think that the deal they got on Christmas eve is the end of the matter, but sectors of the economy know that this is just the beginning of huge difficulties and challenges, and for some it is unfortunately the beginning of the end for their business. It is certainly the beginning of the end for many that export, none more so than the Scottish fishing industry. That the Brexit deal is neither what Scotland’s fishing sector needed nor what it was promised will not surprise anyone. The devastating delays that the sector is facing were entirely predictable. There is anger and frustration from our fishers, who have been very badly let down. Elspeth Macdonald, the Scottish Fishermen’s Federation chief executive—I am glad I was not drinking at lunch time, Mr Deputy Speaker; that was my impression of Sean Connery as well—was scathing:

“This deal falls very far short of the commitments and promises that were made to the fishing industry by those at the highest level of government.”

It is a pattern, isn’t it?

What about Scottish agriculture? There has been nothing positive for farmers in leaving the EU with this deal. They are happy that no deal was avoided, but where are the sunny uplands they were promised? They, too, see something familiar. The Prime Minister is getting a reputation not just for overpromising and underdelivering, but for overpromising and then delivering nothing.

[Douglas Ross]

I am grateful to Ian Murray for giving way, because I just had to check—

--- Later in debate ---

[Ian Murray]

That was a boring and predictable intervention. The hon. Gentleman knows that we voted for the deal to avoid the very no-deal that his Government were threatening. He also knows—he is just about to rejoin the Scottish Parliament, assuming he wins his seat, and I hope he gets the rules in train before he does so—that that is not what the debate was about in the Scottish Parliament. It was about something completely different, not whether Members there accepted or did not accept the deal. The hon. Gentleman knows that not to be the case. [Interruption.] Rather than chuntering, it would be much better for the hon. Gentleman to give some reassurance to the fishing industry and the Scottish farming industry. This is what they are saying to us. It is what they are putting on the record. I am not making this up. It might be a good starting point to give them some reassurance and to work together to resolve some of the problems.

The trade deal leaves a huge amount of uncertainty and falls short of what is needed and what was promised. Scottish farmers are clear that they will not stand by and see a weakening of import standards for food and allow Scottish and British produce to be undercut by others. We need concrete guarantees that food and farming standards will remain at least as high as they are now.

What about services? The financial services sector in Scotland maintains 162,000 jobs and accounts for nearly 10% of GDP. Across the UK, the financial services sector contributed £75.6 billion to the Treasury in the year before covid. There is nothing in the agreement for the 80% of our economy that supports millions of jobs and livelihoods. I hope the Minister can tell us that the EU-UK memorandum of understanding with the financial services sector that is due to be signed by the end of March will give the sector what it was promised. The Government need to secure long-term agreement with the EU on financial services equivalence and to improve access to EU markets for the wider professional services industry, so that the UK and Scotland can remain global hubs for financial services.

I have mentioned just three sectors—the hon. Member for Glasgow Central mentioned others—that have been disadvantaged by this deal, but we could have talked about so many others, including chemicals, petrochemicals and energy. The list is endless. No wonder there is frustration, as it transpires that deals could have been done that would have made things easier for people. We could have stayed in the Erasmus programme. While I welcome aspects of the new Turing scheme, the Government could have done both. That would have been a truly global Britain—stay in Erasmus+ and do the Turing scheme for non-EU countries.

We could have had a deal for our performers and production tours—it was on offer, but it was turned down. Why? Government policy seems to be to cut off our nose to spite our face. I hope that a solution can be found, or it will be more damage to another jewel in the UK’s crown—our creative industries. Those issues do not need Government platitudes. We want not more promises to be broken, but action and resolution now. The Brexit reality includes everything from shellfish rotting on a motorway to stopping our musicians touring Europe. The sunny uplands that we were promised mean a 4% hit to GDP—the equivalent of £3,600 for every household in the UK, according to the House of Commons Library. It is a shame that we do not have time to deal with the Northern Ireland protocol and the effects on the Good Friday agreement.

It is worth coming on to the SNP’s approach to the EU, as the party has initiated this debate in the Chamber. We have heard time and again, in the Chamber and elsewhere, that the UK has left the EU so Scotland needs to leave the UK. The former Labour MP and Europe Minister, Douglas Alexander, said this week in an article in The New European:

“Independence for Scotland would represent a reckless ‘hold my beer’ response to Brexit”.

All of us who campaigned to stay in the EU and strained every sinew to ensure that the case was made are disappointed. Of course we are angry. Many are still grieving after leaving the EU, but if the response is ripping Scotland out of the UK that would add catastrophically to that position.

The UK has left its largest trading partner, the EU. Of course that is bad, and we will hear that throughout the debate. Scotland leaving its largest trading partner, the UK, would be immeasurably worse. We need a remedy for Brexit, not a hugely damaging “I told you so” moment from Scotland. I did not vote remain for my vote to be misappropriated—

[Alan Brown]

We hear a lot about the fact that England is our biggest trading partner—that is true—but does the hon. Gentleman accept that 62% of goods manufactured in Scotland go to the EU, so it is our biggest trader in manufactured goods?

[Ian Murray]

The London School of Economics report—the LSE used to be lauded by the First Minister—said that Scottish independence would be three times worse than Brexit. Everything that the hon. Member for Glasgow Central said has to be multiplied by at least three. Then we can see the impact of what would happen—[Interruption.] Here we go again. I am trying to shine light on the facts of what would happen. I am trying to shine light from the LSE, an organisation that used to be lauded and cited in the Chamber every single day by Scottish National party Members, and all we get is, “Are we better together?” We need answers to those questions. That is what people are crying out for—they want people to be honest and answer those questions.

I did not vote in the EU referendum for my vote to be misappropriated by the nationalists to break up the UK. It is not their vote to do that with. I wonder whether the no-deal SNP regrets spending less on the EU referendum than it did chasing a few thousand votes in its failed bid to win the Scottish parliamentary by-election for Shetland.

The most extraordinary aspect of the debate in Scotland is the SNP’s promising a seamless transition back into the EU if the public vote for a separated Scotland. That is another in a long line of assertions that are not based on fact and not backed by any satisfactory answers. Indeed, we heard the hon. Member for Moray (Douglas Ross) ask the SNP’s finance spokesperson what the currency would be. There was no answer. Can the House imagine the shadow Chancellor or the Chancellor standing at the Dispatch Box unable to tell the country what its currency would be? They would be laughed out of the Chamber. They would have to resign before they reached the Speaker’s Chair.

One thing is for sure: Brexit shows us that breaking up is incredibly hard to do, and I am disappointed again that the SNP has introduced a debate on the EU but not taken any time at all to set out how, why or whether it can get a hypothetically independent Scotland back into the EU. Perhaps it will answer some key questions, as its separation strategy seems to be very similar to the strategy of Nigel Farage and the Brexiteers. It wants to cherry-pick the best bits of the EU, but not take the bits that it knows the public would find unpalatable.

The SNP’s proposition is that Scotland would seamlessly rejoin the EU as an independent nation, but not take the euro, or sign up to Schengen, or meet the deficit and debt requirements, or have its own currency, or meet the exchange rate mechanism rules, or re-enter the common fisheries policy. The sterlingisation plan excludes it from entering the exchange rate mechanism.

Most astonishingly, the Scottish Health Secretary said on “Question Time” last month that Scotland would not need to sign up to the very trade and co-operation agreement that we are debating today between the EU and the UK, which I and the SNP are rallying against in this debate. How is that even possible? Scotland would become an independent nation and would seamlessly go back into the European Union, and then would not even have to implement at the border at Berwick the trade and co-operation agreement that was signed between the UK and the EU? That is just implausible.

We know that the relationship between Scotland and the rest of the UK, in the hypothetical event that Scotland was ripped out of the UK, would be determined by the very trade and co-operation agreement that was signed on Christmas eve by the Prime Minister. All the problems that are being faced by Scottish industries such as fishing, manufacturing, agriculture, exports and financial services that we might hear about this evening would increase fivefold or more, as the rest of the UK is far and away the largest market for Scottish goods and services. This just does not make sense, and it is about time the SNP faced up to those key questions and was straight with the Scottish public. That is all I ask: be straight with the Scottish public and answer the questions.

Scotland has two Governments making promises to the Scottish people that they cannot deliver, and making promises to the people and businesses of Scotland that they have no intention of delivering. The problem is that the UK Government see the relationship achieved with the limited last-minute deal between the UK and the EU as the ceiling of their ambition—we heard that tonight from the Minister—but we do not. We see it as being the floor from which to build. We need to work hand in hand with industry, business, our trade unions and our European partners and friends to achieve practical solutions so that we can face the challenges thrown up by this deal with the EU and grab those future opportunities.

This deal must be built on; it must be the start, not the end. We have to live in the reality, and while we would not have taken us to this position, that is where we are. The deal has to be about a deeper, mutually beneficial relationship that means businesses can thrive. That means repairing the tattered relationship with our EU partners. It means putting aside the ideological nationalist agenda from both Governments and working in the national interest. Now more than ever, we need what the Scottish public are crying out for, which is both Governments, Scottish and UK, working together to mitigate aspects and disadvantages of covid and Brexit, but I fear that I should not hold my breath.

[Mr Deputy Speaker (Mr Nigel Evans)]

There is now a four-minute limit.