Reducing Costs for Businesses

Jamie Stone Excerpts

Tuesday 11th January 2022 Commons Chamber

[Lee Rowley]

My hon. Friend tempts me to get into policy, which is not the purpose of Opposition day debates—as much as the Opposition would like it to be—nor something that I have control over. He has made his point, however, for which I thank him.

We had all that support, and then when omicron came along, the Chancellor announced a further £1 billion of support for the most affected businesses, in particular, again, hospitality and leisure businesses, which had seen a steep drop in consumer demand. Taken together, that shows the Government acting in extraordinary times. I am pleased that the IMF praised our support measures as,

“one of the best examples of coordinated action globally”.

[Jamie Stone (Caithness, Sutherland and Easter Ross) (LD)]

I thank the Minister for courteously taking my intervention. As the House knows, I represent the furthest away constituency of mainland UK. Does he agree that in such a constituency, where distance is a huge issue, businesses face special challenges owing to remoteness and the cost of transportation and every other service?

[Lee Rowley]

The hon. Gentleman makes an important point that demonstrates the different challenges for different businesses in different parts of the country, and why the half-baked plans that the Labour party has put forward today—almost—demonstrate that it does not have a coherent plan to face the challenges.

All those measures came on top of more than £79 billion of Government loan schemes, which have directly supported over 1.5 million businesses. On the specific point in the Labour motion about repayments, which the hon. Member for Stalybridge and Hyde did not discuss to any great extent in his opening speech, we have already changed the way that they work to provide greater flexibility for individual circumstances through things such as “Pay as you grow”.

At every twist and turn of the virus, the Government have acted decisively to protect businesses and livelihoods. I refute in the strongest possible terms the charge made by the motion that we have failed to support UK businesses through the pandemic.

--- Later in debate ---

[Stephen Flynn]

I hoped that the right hon. Member was going to rise to defend Brexit, but unfortunately he chose not to do so, because the fact is that it cannot be defended. It cannot be fixed, as the Labour party seems to think it possibly can.

I talk to businesses in my constituency regularly, and hear about the challenges that they face. Goods that took a couple of days to ship to the continent now take a couple of weeks, if not a couple of months. The order book is not there. The impact is huge. Those businesses’ ability to grow has been constrained and, in exchange for that, the Government tell them they can perhaps have a trade deal with Australia instead, which will do a fraction of good in comparison to the damage being done by leaving the EU. And that is of course before we get on to the labour shortages I mentioned earlier, which are enormous. Businesses seeking to function and to grow simply cannot get the employees they were able to get before. We see some puzzled expressions on the faces of Conservative Members; perhaps that is because they have not been engaging with the hospitality sector. Would the hon. Member for Stourbridge (Suzanne Webb) like to clarify whether she is disagreeing with the fact that businesses have difficulties in terms of labour shortages? I will happily give way to her. No? Of course not, because the reality is that labour shortages are damaging businesses exponentially. She continues to shake her head, but that is the reality on the ground in hospitality, food processing, agriculture, right across the board, and that is before we get to the public sector challenges, including in recruiting staff to our care homes and hospitals.

So Brexit should be at the forefront of our debate and, frankly, I am a little disappointed that the Labour party seems to be trying to walk away from that. Notwithstanding that, a lot in the Labour motion is somewhat difficult to disagree with. It seeks to raise various topics, including businesses. I think all of us across the Chamber realise there are challenges in relation to business rates; it does not take a genius to figure that out. However, I have some concerns with Labour’s proposals, albeit not necessarily with the motion. What comes next? What does Labour want to replace this with? Coming from a local authority background, I know the huge role business rates play in funding local authorities. Unless you can say, “This is what we are going to replace it with” it is inevitable that the public will say “Where is the detail?” Without seeking to do the Conservative party’s job for it, that is a fair question to ask and Labour is going to have to answer it in due course. We in Scotland have done things slightly differently from the UK Government because in Scotland there is currently 100% rate relief for retail and hospitality, which does not exist in England at present. That is a phenomenal benefit to businesses—[Interruption.]—irrespective of what the chuntering Member, the hon. Member for Peterborough (Paul Bristow), is saying.

Beyond business rates, important though that is, the energy situation is of great concern to businesses throughout this United Kingdom and the Government are offering no solutions to that. The easier choice today would of course have been to back the earlier motion in relation VAT, but as I see it the Government have not offered any support for businesses with their energy costs. That is a wrong that needs to be righted as soon as possible, otherwise businesses, not just households, are going to face an unenviable position.

[Jamie Stone]

I can think of examples of families I know personally where the budgeting is so tight that just a pound or two either way gets them into a bad situation. If the fuel bill, or the diesel bill for the car, goes up, they spend less money shopping, and that in turn hits wee businesses in Aberdeen South, in the highlands or wherever. It is a vicious spiral in the wrong direction.

[Stephen Flynn]

Absolutely. My hon. Friend makes an excellent point illustrating the knock-on impact the economy will face as a result of the crisis before us. Before finishing, I want to reflect on two further points.

Space Sector: Leicester Space Park

Jamie Stone Excerpts

Wednesday 1st December 2021 Westminster Hall

[Jamie Stone (Caithness, Sutherland and Easter Ross) (LD)]

Thank you, Ms Bardell. It is a pleasure, as ever, to serve under your chairmanship. I warmly congratulate the hon. Member for Leicester West (Liz Kendall) on a hugely enthusiastic speech on an issue that she obviously cares deeply about.

I do not need to tell you, Ms Bardell, as a Scot, what a dark cloud—the highland clearances—hangs over the history of Scotland. One thing we in the highlands have always feared is that our young people would continue to leave and go to live elsewhere. It has been one of the tragedies of life in the highlands. On occasion, an Opposition Member ought to have a pop at the Government, but on this occasion, I will not do so, because the news that Sutherland was being considered for one of the UK’s first vertical space take-off sites was greeted with huge enthusiasm locally. It meant that there was hope that young people could stay nearby and see something encouraging for the future. We have the roads, we have the rail, we have the airport at Wick and we have the skills at Dounreay.

It is a curious fact that this issue unites me and the leader of the Scottish Conservative party. One might say that that was an unlikely combination, but the hon. Member for Moray (Douglas Ross) has the manufacturing company Orbex in his constituency, and it is as committed to the Sutherland take-off site as the local people are.

I will pay tribute to two people and one organisation—Highlands and Islands Enterprise—as well as to the Highland Council. The Highland Council planning committee decided unanimously to approve the application for the space site in Sutherland, and that is unusual, to say the least. Highlands and Islands Enterprise has also gone out of its way to support the project. I will name-check Mr Roy Kirk, who has done tremendous work in bringing this forward, and a splendid person called Dorothy Pritchard, who is the chairman of Melness Crofters’ Estate. She has been a doughty fighter in taking us to where we are. Two challenges were mounted in court to stop the project, but they have both been defeated.

I will conclude with an offer that I made some weeks ago in the Chamber to the Prime Minister, to whom I also give credit for his support. It was no empty offer; I have checked with the people of Melness Crofters’ Estate, and they have said they will indeed offer the Prime Minister a delicious highland tea, including home-made scones, at the first take-off. I now fondly offer the same invitation to the Minister, who will be very welcome in my constituency come that happy day. I have also promised a rather large number of drams of good whisky from the highlands, but I will not go over that again.

[The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (George Freeman)]

It is a great pleasure to serve under your chairmanship, Ms Bardell, and to join two very esteemed colleagues from the other side of the House and support the eloquent advocacy of the hon. Member for Leicester West (Liz Kendall) for this key sector.

It is my great pleasure to be back in Government, now as Minister for Science, Research and Innovation at the Department for Business, Energy and Industrial Strategy. It is my mission to deliver the Prime Minister’s vision of the UK as a science superpower and, crucially, as an innovation nation—both themes that go to the heart of Members’ contributions.

To frame that mission, it is worth making clear that we are already a global powerhouse in science. What does “superpower” mean? I am defining it as the UK using our science for global good, to help to prevent the melting of the ice caps and understand the oceans, space and the new frontiers; being a global science nation, open to people from all around the world to come to do science, which is fundamentally collaborative; and ensuring that we attract more global research and development into the UK. It is great that we are going from £15 billion a year to £20 billion, and on to £22 billion on the journey to 2.4%. To get there, we will have to attract hundreds of billions of pounds over the next 10 or 20 years. I relish that prospect, and I think we can do it, because supply chains are global.

Fourthly, we must use our leadership in science to support the values of this country’s liberal democracy, and to make sure that cyber, artificial intelligence, space and all those other sectors are not dominated by one or two forces who may not be our best friends, but that we build clubs—commonwealths, one might say—of international collaborators who share our values. The innovation nation piece is about making sure that everyone in this country can benefit, as the hon. Members for Leicester West and for Caithness, Sutherland and Easter Ross (Jamie Stone) have already said. To be an innovation nation—this is a passion of mine—we have to move from being a service economy that is really good at science in some silos and does a bit of innovation to being a nation in which every person can feel, see, touch and experience the excitement of science, as well as the opportunities it presents for careers in innovation. I have said this in every speech, but let me say it again. That includes the windy outreaches of Scotland, Northern Ireland, Wales and, dare I say it, Norfolk, as well as coastal towns, left-behind towns and places that may not necessarily feel that they are at the heart of the Cambridge cluster. The good news is that the pace of technology and innovation means that we can create clusters all around the country, and that is my mission in this role.

I congratulate my good friend the hon. Member for Leicester West on securing this debate and raising this issue, as well as her tireless advocacy for the Leicester cluster. Leicester is indeed a vital location in the UK space ecosystem, and I pay tribute to the University of Leicester for its leadership and for being the home of the National Space Centre, which would not be there if it were not for the university’s leadership. That university has been hugely helpful in building the space engineering apprenticeship trailblazer group. As the hon. Lady has eloquently said, not only is the National Space Centre in Leicester drawing people into science and driving a new generation to take an interest in the potential of space to create jobs and opportunities, but it is key to levelling up and creating opportunities in that cluster.

The hon. Lady has described her local cluster eloquently and powerfully, so let me explain the national cluster that we are on the road to developing. As she has said, part of my mission is to make sure that people see the space economy as more than just some American billionaires going into space in rockets. This is about highlighting that space technology is fundamental to our everyday lives. It is key to our telephones, our weather forecasting, most of our banking and our digital transactions, and, crucially, understanding earth observation data, climate change and net zero. It is fundamental to the sustainability of our economy, our society and our planet. It is key to stress that, so that people understand that this is not a vanity project for one or two countries, but is fundamental to a modern, dynamic economy. The truth is that space innovations are already being realised in sectors ranging from autonomous vehicles to wearable technology and health and life science. When I met Tim Peake, he was conducting 32 experiments in space, including experiments on bone density and eye and retinal damage, both of which repair when astronauts come back, giving us a real insight into those diseases and how we might prevent them.

Space technology is so much more than the rockets and the big launches that a generation of us grew up watching on our televisions; it is integrated into the economy. However, that is not to say that those two things are not linked. Part of our strategy is to be the first European country to do domestic launch. After all, we are the Department for industrial strategy, and in order for our downstream skills to grow and for us to support and attract investment, we need to have an ecosystem.

[Jamie Stone]

Further to the Minister’s point about being the first country to achieve launch in Europe, I am sure he would agree that there is a great prize to be won here in terms of the British economy and what we can sell to the world.

[George Freeman]

The hon. Member makes an excellent point, with which I completely agree. As he will know, we are very ambitious to make sure that we use that first launch into polar orbit from both Scotland and Cornwall. We are in a magnificent position globally to lead in that sector, and by launching, we also build the ecosystem for serving satellites, supply, and all those supporting industries that the UK is phenomenally good at. We are also using satellite technology to support a whole range of innovations across the economy. The NHS will shortly be starting to pilot drones for medicines delivery, particularly into remote areas, and the Rosalind Franklin rover that has been built in the UK will blast off and land on the surface of Mars, so we are a genuine space economy powerhouse.

The Government profoundly recognise the importance of the space economy. It was my great privilege, on day three as Minister, to launch the UK space strategy. I felt a little bit guilty because it was the culmination—the summit—of years of hard work that I was simply lucky enough to be able to read out, but it has landed internationally and sent a strong signal.

For the first time, the space strategy integrates the defence and civil sectors. I have already met my counterpart at the Ministry of Defence to map out where the MOD is investing. It was allocated significant space funding in the latest comprehensive spending review, some of which was, quite rightly, driven by primary security issues, but some of it can be used to support the wider ecosystem. In the middle of the Venn diagram, there is an area where the Department for Business, Energy and Industrial Strategy and MOD are working together, and then some of the strategy delivery lies principally with BEIS, as the industrial strategy Department. This is an exciting time, and we are now turning the space strategy into a space plan, which will set out where we are going to invest and in what in the next few years.

The space sector already employs 45,000 people in the UK, over 75% of whom hold at least a first degree, so this is very highly skilled sector, which is key to the Prime Minister’s vision of creating a high-skill economy and moving away from being overly dependent on low-wage service labour.

Space employees deliver 2.6 times the UK average in terms of productivity, so for the Treasury this is a sector that is at the vanguard of driving UK economic growth. That is why we are completely committed to supporting it and to supporting a diverse workforce, as the hon. Member for Leicester West rightly highlighted. We are using the benchmarks created by the 2020 space census to measure that progress.

The sector already directly contributes more than £6.5 billion to UK GDP and underpins a further £360 billion in the wider economy, so this is not a small sector. It is already a substantial sector, in which we see substantial growth opportunity. That is why we have set out the level of leadership and governance that we have done. We have established a new National Space Council, led by the Prime Minister, to co-ordinate space policy. We have also created the National Science and Technology Council—the science Cabinet Committee on which I sit with the Secretary of State—which is designed specifically to lead a cross-Government integrated approach to key technologies and sectors, such as space, so that we integrate defence, civil, the industrial strategy and the global security issues around cybersecurity and data security. We are putting in place the mechanism of government to ensure that this is a cross-Government plan.

On 27 September, as the hon. Members for Leicester West and for Caithness, Sutherland and Easter Ross both highlighted, I announced the space strategy. Its ambition is very clear—to make the UK one of the most attractive and innovative space economies in the world. We are in a competitive environment. Russia, China and India all have substantial sovereign programmes, but there are a number of nations—Japan, Spain, Australia, Canada, France, Italy and others—who are looking to be part of a global space technology economy, and who clearly see the UK as fundamental to that. We want to build a domestic space and satellite cluster on that opportunity.

We launched the national space innovation programme pilot in 2020. That was the UK’s first ever dedicated fund for advancing space technology, innovation, products and services, and we have just announced follow-up funding of £7 million to help fund 11 projects in the scheme. We will be setting out the next phase in our forthcoming science space plan.

We have set out our ambition to be the first country to launch small satellites from Europe, and we have kick-started that work with grants worth £40 million to support the work required to deliver that ambition. As the hon. Member for Caithness, Sutherland and Easter Ross made clear, we are on track for the first launch from the UK next year, whether it is in quarter 3 or quarter 4. We see a huge opportunity, particularly for Scotland and Cornwall, to be at the heart of that launch economy and to drive that supply chain.

As the hon. Members for Leicester West and for Caithness, Sutherland and Easter Ross have highlighted, this sector, properly harnessed, is key to supporting the sustainable jobs and opportunities for the regions of this country—not all of this is in the golden triangle—and that is partly why we are so supportive of the sector’s potential. The sector also underpins modern public services.

Turning to the points that the hon. Member for Leicester West made earlier, Space Park Leicester is absolutely integral. It is an excellent example of a locally led regional technology hub and I encourage other regions to look at it. Space Park Leicester’s plans align hugely with our own ambition to promote sector growth and I am delighted that the first two phases of Space Park Leicester are complete, having been delivered through a partnership between the university and the local enterprise partnership, through the growth deal and Research England.

Both hon. Members made some really important points that I want to refer to. The hon. Member for Leicester West spoke about skills and inclusive growth. As the former co-chair of the all-party parliamentary group on inclusive growth—I have had to stand down—I know that she is absolutely right that if we are going to create an economy in which a new generation can see new opportunities, we need new sectors that will create opportunities in new places.

The high-level vocational qualification piece is key. I have already met the Minister for Further and Higher Education, my right hon. Friend the Member for Chippenham (Michelle Donelan), and the Secretary of State for Education to highlight that skills are one of the key barriers to cluster growth but also one of the key opportunities for the Government. We will pursue that agenda and look to address that career path.

The hon. Member for Leicester West made an important point about the power of the space economy to attract a new generation of girls and boys into science, technology, engineering and mathematics. For many people, the excitement of space is a gateway to discovering the opportunities in the broader science and innovation economy.

A key focus of my mission at BEIS is on clusters. I am pushing the Department, Innovate UK and UK Research and Innovation hard to think about regions—not simply to allocate funding on the basis that a bit of it goes to each of the Government regions, but to think about the clusters that will really drive growth and investment. I encourage the hon. Member for Leicester West to continue to make the case, as she has done powerfully today, that Leicester is at the heart of a cluster, and to follow up with me on that. I think she is right about Leicester in that regard, and I will talk to Innovate UK and UKRI about how we support such clusters over the next few years. That will be about infrastructure, connectivity, skills, data and planning. I would be delighted to come and visit Leicester.

The hon. Member for Caithness, Sutherland and Easter Ross highlighted similar points, and I pay tribute to his passion and commitment to using this area to promote opportunity for a new generation. The highland clearances were a long time ago, but the fact that they are still a sore point speaks volumes, and we need to do more to create opportunities, as he has highlighted. As he said, my hon. Friend the Member for Moray (Douglas Ross) is hugely supportive of creating such opportunities, and it is nice to see a flourishing of cross-party working for the good of Scotland. The Orbex opportunity is huge, and I join the hon. Member in paying tribute to local leaders, because for national strategies to work we need local leaders to deliver.

Space is a huge opportunity, and—from Goonhilly in Cornwall to satellite manufacturing hubs in Surrey and Glasgow, the Leicester cluster and up in Scotland—we have the opportunity in the next few years to do something really significant for the UK economy, for global science innovation and, just as crucially, for a new generation of people in left-behind areas, who need to see that they have an opportunity in the economy of tomorrow.

Question put and agreed to.

Income Tax (Charge)

Jamie Stone Excerpts

Thursday 28th October 2021 Commons Chamber

[Edward Miliband]

The hon. Lady is completely right about that. She anticipates my next point brilliantly; it is a useful segue. If we want to understand why growth is so anaemic, she is right that we need look no further than the Chancellor’s failure to seize the opportunities for green growth. This is an important point: the prudent and responsible economic call—I suspect the Business Secretary agrees—for economic growth is to invest at scale in the transition to a zero-carbon economy. Let us be honest, it is now a completely open secret that the problem is that the Chancellor is not a believer, and it showed yesterday. As we prepare to host the most important international summit ever on climate change, as delegates gather from all around the world, and as the eyes are on Britain, what did he unveil as his flagship measure yesterday? To cut air passenger duty for domestic flights. You literally could not make it up. People want good and affordable rail services, but the plan for rail seems to have been postponed again, and instead there will be 400,000 more domestic flights as a result of that decision. Once again, that shows that the Treasury is not signed up to the agenda.

I am such a nerd that I was reading the OBR report last night and there is an interesting and illuminating bit on, I think, page 176—Members can check—which says, in OBR language:

“the…costs involved in getting the rest of the way”—

to net zero—

“remain significant and their apportionment between businesses, households, and government…remains largely unclear. This leaves the costs associated with the transition to net zero as a major source of longer-term fiscal risk.”

Let me underline that point for the House. The July 2021 OBR report, which for the nerds among us is brilliant, and which I strongly recommend to Members as bedtime reading—Madam Deputy Speaker is laughing at me, or perhaps with me—warned of the danger of not acting on the climate and of debt climbing to eye-watering levels as a result. When my hon. Friend the Member for Leeds West said yesterday that debt would rise to 300%, I noticed a Conservative Member at the back look at his hon. Friend and say, “Oh that can’t be right,” but that is what it says. The interesting thing about that report is that it warns not just about the danger of not acting, but about the danger of delay. It says that delaying action on the climate by a decade will double the cost of the transition as we lock in high-carbon choices.

[Jamie Stone (Caithness, Sutherland and Easter Ross) (LD)]

Does the right hon. Gentleman share my disappointment that the Budget had so little for the potentially huge industry for the UK of offshore floating wind energy? He talks about delay. If we delay, we will lose out to other countries in that race, and they will not show any mercy on that front.

[Edward Miliband]

The hon. Gentleman makes an important point. We have been successful in offshore wind generation, and it is right to acknowledge that. The ground was laid by the last Labour Government, but I will leave that to one side. We have been successful at generating the wind energy, but not the jobs. He is completely right that we have not delivered for many people when it comes to jobs.

As I was saying, not acting increases the cost, so the prudent responsible choice is to invest. I will mention some key sectors, because again, there has been a deafening silence. I come back to the steel industry, which is such a litmus test. It needs about £6 billion of investment to get to net zero by 2035. The view is shared on both sides of the House that it needs to get to net zero and that it is a foundational industry that we need and that is incredibly important to communities across the country. There are 20 demonstration projects around Europe but none here at the moment. It requires a partnership of the public and private sectors and needs both sides to invest. There is a crucial role for the Government in that.

We have set out a commitment of up to £3 billion over a decade to create that partnership with the steel industry so it can make the transition and we can keep those good jobs with good wages that are vital to many communities. It is a test of us as a House of Commons.

The Government talk about a £250 million clean steel fund, but even that has still not been delivered. I hope that it is still Government policy, but it seems to be in the balance and might have been got rid of. That is not good enough. The Treasury has to understand that unless we invest in steel, automotive and hydrogen, we will fall behind in the global race, as the hon. Member for Caithness, Sutherland and Easter Ross (Jamie Stone) said.

--- Later in debate ---

[Edward Miliband]

I completely agree. I actually take a crumb of comfort from the Business Secretary, when he defends the sorry saga of the green homes grant, pointing to some of the money given to local authorities and what they did. That is what we need at scale—locally led, house by house, street by street. We are miles behind other countries.

On green investment, a philosophical difference is emerging. I worry that the Government will increasingly leave individuals and industries on their own to face the costs. I do not think that is true of the whole of Government, but the Treasury remains a fundamental block to the green investment that we need. There was a whole saga about its net zero review and the fact that it emphasises short-term costs rather than long-term gains. Frankly, that is a big problem for our country.

[Jamie Stone]

rose—

[Edward Miliband]

I will make some progress and finish.

Labour would deliver a climate investment pledge of £28 billion extra every year for the rest of the decade. That is an investment in bringing down energy bills; delivering affordable public transport and cleaner air; and backing British industries with a real plan for jobs and wages. That is what real action on the climate emergency and industrial strategy looks like.

Given the cost of living crisis, the immediate issues facing business, and the need for longer-term investment, this is not the Budget we require. It does not make choices to help working people; it hits working people. It cuts taxes for the banks but raises taxes for workers. It deserts key British industries and it fails to invest, as we need to, in the green transition. If the big challenge of the future is how we build an economic model that rights the wrongs of the past, this Government cannot be the answer and nor was this Budget.

--- Later in debate ---

[Alison Thewliss (Glasgow Central) (SNP)]

It is a pleasure to see you in the Chair, Madam Deputy Speaker.

This Budget may have fallen a few days short of Hallowe’en, but for many of my constituents and people across these islands, it represents a real horror show. The past 18 months have been difficult for many people, but yesterday we saw that this Government are prepared to continue to heap misery upon misery by balancing their spending on the backs of the most vulnerable. Not even the most cynical among us could have imagined tax breaks on sparkling wine and short flights just weeks after universal credit payments were cut.

We have all seen the headlines over the last few weeks about monetary tightening, but the self-enforced fiscal tightening in this Budget is much more worrying. The Chancellor tried to fend off criticism and evade proper scrutiny by trailing Budget announcements in the press before presenting them to this House—and his sleight of hand did not stop there. He instructed the independent Office for Budget Responsibility to produce its Budget forecasts using out-of-date figures to increase his chances of being able to cut taxes before the next election. That is a cheap trick, and people should not fall for it.

It was an illusion, too, to try to make out that the Chancellor’s actions yesterday do not come on the back of 11 years of Tory austerity—11 years of the same Government on those Benches, albeit in different guises—of cuts to public spending that this Budget does not come close to reinstating, and of assumptions predicated on some iffy figures peppered through the Budget Red Book. On this Chancellor’s watch, the public are facing a Tory cost of living crisis—an energy crisis, a poverty crisis, an inflation crisis—and the people who can afford it the least are bearing the brunt of it.

The furlough scheme has now ended, and while we do not yet know the full impact of the withdrawal of that support, economists expect that there will be a rise in under-employment and a subsequent squeeze on wages. When the UK Government should be stepping up to tackle the challenge of this cost of living crisis, they are compounding matters with this spending review. It is difficult to remember a bleaker outlook.

IFS director Paul Johnson said on Twitter:

“This is actually awful. Yet more years of real incomes barely growing. High inflation, rising taxes, poor growth keeping living standards virtually stagnant for another half a decade”.

The OBR has said that since it closed its forecast, its analysis is consistent with

“inflation peaking at close to 5% next year,”

even higher than the 4% the Chancellor alluded to yesterday. That is further evidence that high inflation may not be temporary, as the Prime Minister has previously said, and that even those families who are relatively well off will feel the impact of it.

We must not be misled by this UK Tory Government. When the Tories talk of a living wage, it is not a real living wage, determined by the Living Wage Foundation; it is a pretendy living wage, and it is not enough to live on. The Government may claim that the increase to £9.50 matches the real living wage as it stands today, but in reality that is yet a further deceit, because the increase in the minimum wage will not match the real living wage by the time it is implemented. We are three weeks away from Living Wage Week, which will see the most up-to-date real living wage for the UK announced. It will almost certainly increase from £9.50, because the real cost of living pressures we face are taken into account and folded into that figure.

That pretendy living wage has age discrimination baked in, with workers who start the same job on the same day legally entitled to less if they just so happen to be younger. There is a £5,000 gap between an 18-year-old and a 25-year-old. House of Commons Library figures lay bare the difference between the wage paid to the youngest and that paid to older workers, which has grown from 20% at the establishment of the minimum wage to a staggering 97.5% in this Budget. There is absolutely no justification for that. Rent is not cheaper for young people, electricity is not cheaper, childcare is not cheaper, nor is food and nor is travel, so why have this Government decided that their labour should be?

I commend the more than 2,000 real living wage employers in Scotland and I hope that many more will join them. Of course, the minimum wage increase will be gobbled up by the Chancellor’s other monstrous policy choices—the £20 cut to universal credit and the increase in national insurance. People who are out of work or not earning very much will see no overall benefit to these changes, and those on legacy benefits, including people with disabilities and carers, are again forgotten about altogether by this UK Tory Government. Of course, some people are not even entitled to support in the first place, including those with no recourse to public funds—and the many who were excluded from support schemes completely during the course of the pandemic found that they were not entitled to support either.

Those out of work are a big and varied group, including people who have cancer; people who have disabilities; people who care for their children who have disabilities; veterans; people who have been injured at work, and people who are struggling to find a job. All of them are now flung into the Chancellor’s pile of “undeserving” universal credit claimants. That is not good enough, and he should hang his head in shame. The Joseph Rowntree Foundation has estimated that that particular group of people—those the Government think are undeserving—now has the lowest main rate of out-of-work support in real terms since 1990.

Let us look in a little more detail at the situation for those who are working. The Chancellor said that the annual increase resulting from the minimum wage increase is £1,000, but overnight analysis from the Joseph Rowntree Foundation puts that figure at an absolute maximum of £364 when the taper rate and cost of living increases are factored in. Some people on universal credit will be nearly £700 worse off. On top of that, every person on universal credit is, of course, £1,000 worse off from the scrapping of the uplift. My back-of-a-Twix-wrapper calculation says that these measures mean that the Chancellor is cutting incomes for those on universal credit by between £600 and £1,700 a year. And it is clear from page 136 of the Red Book that the Chancellor’s giveaways are being funded from the pockets of pensioners, who have lost their protections under the triple lock.

These are policy choices. They are not an inevitability of the situation in which we find ourselves. This spending review is a chance to show the UK Government’s priorities, and unfortunately, it seems that their priority is to give their friends in the City a tax cut, paid for by ravaging universal credit. It is a political choice to cut the tax surcharge on bank profits from 8% to 3%. It is a political choice for the Chancellor to tie his own hands with fiscal rules while our economy is still reeling from a pandemic that has not yet ended. It is a political choice to take food out of the mouths of children by removing the £20-a-week universal credit lifeline, to keep the appalling two-child limit and the rape clause and to maintain a five-week wait for new claimants. It is a political choice to refuse to increase statutory sick pay in line with international standards. And it has been a political choice to press ahead with Brexit in the middle of a pandemic, in the face of all reason.

The Chancellor barely mentioned Brexit in his speech yesterday, even though it is the single biggest policy change the UK has made for generations. Scotland did not vote for Brexit, yet our businesses are having to adjust and absorb the costs of this Government’s mistakes. The OBR says that the evidence so far shows that the impact of Brexit will be a 4% hit to GDP, with knock-on effects on living standards. That is bigger than the expected long-run effect of the pandemic. The OBR’s own analysis cites migration and trading issues as driving factors of the supply chain issues currently hitting our businesses, on top of debt through covid and soaring energy prices that businesses also face and will pass on to consumers.

While the EU is giving Ireland €1.05 billion to mitigate the damage of Brexit, Scotland has yet to receive a single penny piece from Westminster. We need urgent clarity that the £4.6 billion annual increase to the Scottish Budget will be new money, rather than giving with one hand and taking away with the other, as this Government so often do. The £150 million small business fund for Scotland, like the rest of the funding, should be disbursed by the Scottish Government and their agencies, not by Westminster—or, in this case, the British Business Bank, whose good work should not be politicised through this brazen Tory power grab. It is little wonder that more and more people are coming to believe that Scotland’s future will be best served by its becoming an independent European country.

The OBR also said in its outlook report that labour supply constraints are likely to suppress productivity, and it cited constraints on immigration as an example of that. It is very likely that the Government’s restrictive and arbitrary immigration rules are having a long-term negative fiscal impact. That will be of no surprise to Members across the House who proudly represent, as I do, communities with high levels of immigration. As MPs, we see daily the impact of the hostile environment—the widespread misery and harm that it causes, but also the economic impact—and it is only going to get worse. The Refugee Council, for example, says it will cost the Government £400 million more in prison costs to implement the provisions of the new Nationality and Borders Bill. That is an awful lot of taxpayers’ money to treat people so badly. Removing the right of people to work as they wait, sometimes for years, for the outcome of an asylum claim is as dehumanising as it is senseless. My constituent, Sandra, is studying adult nursing at university and is on track for first class honours. She desperately wants to work and contribute to the NHS in Scotland, but has been waiting over a year for contact from the Home Office. She does not have any faith that it will happen before she graduates. That is a shameful waste of her talent and skills, and there are many, many more like her.

Members of this Government will stand and applaud the NHS, but they fail public sector workers at every opportunity. The Chancellor talked about unfreezing public sector pay, but that is a previously announced change that will not generate Barnett consequentials and so will have no impact on the Scottish budget. It is also worth noting that ending the freeze during this period of high inflation does not go far enough. It is effectively a pay cut. If the Government are serious about levelling up, they should commit to public spending and pay public sector workers a fair wage.

The Chancellor should take a leaf out of Scotland’s book and deliver a national care service, creating jobs and increasing the quality of public services for years to come. This Government should stop talking about care as if it is a burden. The Women’s Budget Group says that a high-quality care service requires investment of £28 billion per year over and above current spending, but that that would produce 2.7 times as many jobs as an equivalent investment in construction.

The Tories promised £500 million for family hubs in England to support parents and children, including breastfeeding and mental health advice. That is welcome, no doubt, but the anti-poverty campaigner Jack Monroe perhaps put it best when she said:

“for every £1 the Tories have taken out of local council funding…in the last decade, Sunak’s budget announcement is putting 0.5p of it back and expecting us to all jump for joy at his largesse and conveniently forget about that 99.5%”.

Now, I try not to get too deeply into matters relating to England and I do not intend to do so, but in my capacity as chair of the all-party parliamentary group on infant feeding and inequalities, I congratulate the Secretary of State on his new arrival. I hope the services his family needs have been there for him. Health visiting and support services in England were lost in the pandemic in many areas, with new parents left unsupported. I urge him to put a figure on breastfeeding support specifically. An expert in this field, Dr Natalie Shenker, suggests a figure of at least £30 million to be truly transformational, covering: additional training, Baby Feeding Initiative community service accreditation, ramped up peer support, integrated specialist lactation support, and comprehensive hospital-only milk bank services. I look forward to engaging with Ministers on that and invite them to present their detailed plans to the all-party group.

In the run up to the spending review, I met business representatives from all sorts of industries, as I am sure the Treasury team did. I was impressed by the well thought out proportionate policy ideas that would have genuinely helped both individual firms and the wider economy in this difficult time, such as: the call from the Federation of Small Businesses to increase to the employment allowance to encourage firms to hire more staff and to take action on increasing energy prices; the Finance and Leasing Association’s call to extend the super deduction to those who lease equipment, which is particularly important as firms face increased costs and increased debt repayments in the coming year; the call from Scope and employers such as 4ICG in my constituency to expand the restrictive eligibility to the Kickstart scheme to support more disabled and young people to apply, because at the moment many lose out to their great loss and frustration; and an online sales tax to encourage people back to the high street.

This UK Government chose none of those things. Instead, they chose: an increase to national insurance, which is a tax on jobs; yet more Brexit red tape; and an industrial strategy that was scrapped before it could be implemented, leaving creative industries in particular without any clarity on the support they are entitled to. There is a lot of talk about science, but there is much that comes from the arts and they have been lost in that conversation. For example, the Glasgow School of Art produces exceptional graduates who should be a part of the strategy, but they do not see their place within it. The Chancellor will say that he has offered cuts to business rates, but, of course, that does not apply to businesses in Scotland, who have already benefited from the Scottish Government’s action. The Scottish Government offer 100% rates relief to retail and hospitality for a full year, the only part of the UK to do so. That was done without consequential funding from the UK Government.

I welcome the review of alcohol duty and hope it will lead to better outcomes on public health. I am concerned, however, that the measures trumpeted yesterday fail to support hospitality and tourism more widely. A few pence off a pint, sooked up by the large breweries, does nothing to support a sector hard hit by the pandemic. Retaining the reduced 12.5% VAT rate for the hospitality industry would make a significant difference as supply chain costs and prices for fuel and labour increase, and it would increase the sector’s attractiveness and global competitiveness. It baffles me that the Chancellor would ignore that call from UKHospitality. I urge those on the Treasury Bench to reconsider and see what more they can do in that regard.

All eyes are on my constituency of Glasgow Central this month for COP26. This Budget and spending review fell woefully short of the ambition required to tackle the global climate challenge: nothing for carbon capture in Scotland and nothing on our need to grow and scale up the renewables industry in Scotland, not just wind farms but tidal and wave.

[Jamie Stone]

Further to my intervention on the right hon. Member for Doncaster North (Edward Miliband), it is all about delay. One of the terrifying aspects of delay is that we have the skills in Scotland—welders, fabricators, pipe fitters—but the people with those skills are ageing. Every year that goes by, we are missing the opportunity to educate the next generation, the young people who came to the reception on UK renewables in the Commons yesterday. That is another reason why we cannot countenance delay at any price.

[Alison Thewliss]

The hon. Gentleman makes an excellent point. This is an industry with a future. Climate change is the most significant challenge we face and investing in those industries now will set us up for the future. Carbon capture and storage in Scotland would have employed 20,000 people, a pipeline of jobs in an area that much needs it and a transition from the old to the new. The Government ought to be investing in that or giving us the powers in Scotland to do it in our own right.

There should have been measures to tackle energy inefficiency, such as cutting VAT on insulation and solar panels for houses. Such measures encourage people to play their own part in that effort. What do we have instead? We are cutting air passenger duty on internal flights. Manchester United were roundly condemned for taking a 10-minute flight to Leicester recently, but the Chancellor wants to encourage this! He wants more climate profligacy and that is utterly irresponsible. He could have put the money from the scrapped £20 billion Boris bridge through the Beaufort’s Dyke munitions dump into green infrastructure, but he has failed to do so.

The Tories have cut Scotland’s budget when we need to be investing more to stimulate the economy and have undercut the devolution settlement, taking powers from the democratically elected Parliaments of Scotland, Wales and Northern Ireland. The Budget is great news for the 1%, but bad news for equality, inclusive growth and the environment. Time and time again, the people of Scotland are seeing a tale of two Governments with divergent priorities: this Westminster Tory Government providing tax cuts for short-haul flights, sparkling wine and their pals at the banks; and a Holyrood SNP Government determined to stand up for people and businesses, and deliver a fairer, greener Scotland.

I look forward to the day when we do not have to live with the choices made by a UK Government that Scotland did not elect, but have a Government chosen by the people of Scotland with our people’s priorities at their heart.

--- Later in debate ---

[David Mundell (Dumfriesshire, Clydesdale and Tweeddale) (Con)]

It is a pleasure to follow the hon. Member for North Tyneside (Mary Glindon). I am sure that her late husband would have been pleased to see her banging the drum for her constituency.

I want to speak in this debate because I want to make two points: the first is about levelling up; the second is about the impact of the spending review on the Foreign, Commonwealth and Development Office budget. First, however, it would be appropriate to reference my own constituency, which, outwith the highlands of Scotland, is the largest constituency in the United Kingdom. It is therefore extremely welcome news that fuel duty is to remain frozen, especially just now when family budgets are already under so much pressure. Over the past 12 years, since the freeze on fuel duty was introduced, I have argued for its extension. It currently saves the average driver £10 every time they fill up, compared with how the escalator would have operated. In a rural area, fuel costs are always higher, so the further freeze announced by the Chancellor will be welcomed across my constituency.

The Chancellor’s announcement of a £150 million fund to help thousands of small and medium-sized Scottish firms to recover from the pandemic is also good news. The UK Government’s furlough scheme helped to save hundreds of thousands of jobs during the pandemic, and this fund will now help small businesses in Scotland to grow back even stronger. I hope to see it benefit companies across my constituency when the full details are announced.

It is particularly welcome that, through the Barnett formula, the block grant to help support public services in Scotland is to increase by £4.6 billion. As we have heard from the hon. Member for Glasgow Central (Alison Thewliss), this is not welcome. We know that, however much money there might have been in that Barnett increase, it would never have been enough for the Scottish Government. Some grievance would always have been manufactured, however the funds were deployed. On this occasion, however, I want to express my own grievance, and it is about the way in which the Scottish Government allocate funds within Scotland. The south of Scotland is systematically starved of resources, and my constituents feel that, because we are not a nationalist-supporting area, we do not see resources coming into the south of Scotland.

[Jamie Stone]

Does the right hon. Gentleman agree that the problem affects a slightly wider area than just the south of Scotland, and that the very remote areas of the highlands have the same problem as he does?

[David Mundell]

Indeed. The very northernmost part of Scotland is well represented by his good self, and the hon. Gentleman does not sit on the SNP Benches.

--- Later in debate ---

[Jamie Stone (Caithness, Sutherland and Easter Ross) (LD)]

I am the only speaker for my party in this debate, so I hope that the House will forgive me if I adopt a slightly winding-up tone. I want to put on record what a pleasure it has been to take part in the debate after the long time we have spent dealing with covid. We are not out of its shadow yet, but hopefully we are on our way. How nice it is to be back in this Chamber speaking in debates in our normal way.

I do not think that I am known for having a pop for the sake of it in this place, and if the Minister were still here, I would thank him for the excellent work that has been done on the space launch front. That is very enthusiastically supported in my constituency. However, I am bound to make two points, the first of which is a national issue.

As the House will be aware, as my party’s Defence spokesman, I have made the point in recent times that I am particularly perturbed by the reduction in the numbers of our armed forces personnel, particularly in the British Army. Two points arise from that. The first is that if—perish the thought—we had to mount some sort of operation similar to the one in Afghanistan, I worry that the size of the British Army would not be sufficient to do that. Secondly, I believe that when it comes to recruitment, if the British Army gets below a certain critical mass, the brightest and best of our young people who might want to join our armed forces would take a look and say, “It’s too small. It’s beginning to look like a sunset industry. I’ll go and do something else.” That worries me about recruitment, because it is an issue for the British Army.

Returning to the Budget, I am deeply perturbed to see that there will be a cut of 1.4% in Defence spending over the next four years. I want to put on record that that is a dangerous cut, and I am surprised to see it in the context of what is a tax-and-spend Budget. We could debate the rights and wrongs of such a Budget, but I will not do so today. For those who have not seen it, I draw the House’s attention to the editorial in The Times today, which states that the Chancellor runs the risk of stoking inflation. If we take a tax-and-spend Budget and add it to the increase in the price of commodities in the world—the price of fuel has been mentioned, and we have to consider the ramifications of covid and Brexit—we could, perish the thought again, have inflation on our hands.

I am the oldest member of my parliamentary party at the august age of 67, so I lived through the horrors of inflation in the 1970s. I was working in the oil sector on a smallish wage, and during the year my wages started not to meet the costs of the bills I had to pay. Inflation is a bad, bad thing. I hope it does not hit us, but I fear it might.

This morning I telephoned a friend of my daughter—they were in the same class up in the highlands. I spoke to her and another friend, both single mothers living in council accommodation, and I asked, “What concerns you about the Budget?” Members might think that perhaps they did not take a big interest, but they did. One lady said to me, “It is the cost of the bills I have to pay. I am concerned that I may not be able to afford them.” The other young lady said, “I am concerned about education. I am concerned about special needs assistance for my child.” I believe they speak for a lot of people, as other hon. and right hon. Members have touched on.

These worries are out there. When we think about how inflation would add to those worries, it becomes scary. When we think about what inflation would do to our hard-pressed frontline services, it becomes very worrying indeed. I put down those two markers at national level.

I end on a point that might not ingratiate me with SNP Front Benchers. The right hon. Member for Dumfriesshire, Clydesdale and Tweeddale (David Mundell) mentioned the great jug of money called Barnett consequentials that is poured out towards the Scottish Government after passing through a sieve. I think he was referring to the fact that in some parts of Scotland the sieve seems to have a hole, and in other parts of Scotland it seems to have a very fine mesh. What we in the highlands fear, with all due respect to my good friends in the SNP, is that the money rushes through the hole to the central belt and does not come to more rural areas. That is the challenge the right hon. Gentleman posed to the Scottish Government.

I have spoken many times in this place about maternity services in the far north of Scotland and how pregnant people have to make a return journey of 200 miles to give birth. There are so many pressures because of rurality, distance and sparsity of population. With the best of intentions, I sincerely hope that the Scottish Government will address those inequalities with the moneys they are being afforded through the Barnett consequentials. I live in hope, but there is a nagging doubt at the back of my mind.

Post Office Closures

Jamie Stone Excerpts

Tuesday 19th October 2021 Westminster Hall

[Jamie Stone (Caithness, Sutherland and Easter Ross) (LD)]

It is a pleasure to serve under your chairmanship, Mr Betts. I congratulate the hon. Member for Motherwell and Wishaw (Marion Fellows) on bringing forward this important debate, which is very pertinent to my constituency. I want to touch on the tragic death of Sir David. When I arrived four years ago, I remember that he was one of the very first to be a friendly face and greet me. That is all I will say, but that sort of thing stays with you the rest of your days. I mourn his passing, as does my party.

In 1616 it was under the rule of a Scottish king, King James VI of Scotland and I of England, that the Scottish postal service was set up, so we rather led the way. Shortly after the restoration of his grandson King Charles II in 1660, the network of post offices in England was set up. So, once again, a Scottish king showed the way. We have had huge trouble with closures of branches, as others have said, but I will not repeat their remarks. I am going to use one example—the village of Balintore in Easter Ross. When the aforementioned retail business pulled out, we were left with the prospect of having no post office whatsoever. I say to the Minister that I give absolute credit to the people working at the post office for their valid attempts to secure some other arrangement, and they have done it in conjunction with the local Seaboard Memorial Hall. We are going to have a post office—thank God—once again in the village of Balintore. It is not just Balintore but Shandwick and Hilton, and a lot of people live there—believe you me.

It was great that this particular community had a vibrant hall committee that was willing to step in and see whether it could meet halfway with the post office in order to take up the service. They did that, but the trouble is that, looking at my vast constituency—if the Boundary Commission for Scotland has its way, it will get vaster still—not every community has a whole committee or some sort of organisation that is willing to step into the breach to take on that role. Therefore, it is patchy. To use a hackneyed phrase, it is a bit of a postcode lottery in terms of where people live. For the record, I say, “Well done, Balintore,” but it is not so easy to replicate that.

The final point I want to make in my brief contribution is that in a remote part of Scotland, such as my constituency, the post office network is part of the fabric of society, as others have mentioned. People say, “Oh well, the young people can go online,” and so on, but it is not quite as simple as that. Post offices are important to young people as well, and I think we have come to appreciate the value of the face-to-face aspect of the post office through the pandemic.

[Kirsten Oswald]

The hon. Gentleman is making a really important point. The post office has a place right at the heart of our community, especially in difficult times, in my constituency, which is not remote. Tariq Chishti of Netherlee post office has received an award for going above and beyond during the pandemic to support people who were having real difficulty. The staff at Barrhead post office, which I visited recently, have done the same. The Minister should really take heed of the hon. Gentleman’s point about the community at large—all of the community—requiring this service and benefiting from it. That is at the heart of the debate.

[Jamie Stone]

I thank the hon. Lady for that very useful intervention. Her point is very well made indeed.

[Jonathan Edwards]

Further to some of those points, I have been quite fortunate in my constituency, where the Post Office has innovated and placed a sub-post office within the community centre. A common theme of the debate is that it all comes down to remuneration and whether we can make that sustainable. That is the vital point that we need to get across to Ministers.

[Jamie Stone]

My final point is simply this: where there is a post office service being conducted in a retail premises that is not a post office—a newsagent or some other business—there is an issue. I can think of an example in my constituency, where privacy tended to be invaded. Someone would be queuing up and talking to the lady about his or her pension or whatever, but the people behind wanted to buy a copy of the Daily Record or whatever. The person at the counter was uncomfortable with the feeling that the person behind could hear what was being said. That is perhaps an issue for another day, but I say to the Minister that we must remember that for some transactions in post offices, or however we do it in the future, there is a confidentiality aspect. I have no doubt that the Seaboard Memorial Hall in my constituency will do an excellent job and will tackle that privacy aspect of the work as well.

[Mr Clive Betts (in the Chair)]

There are two more Members who wish to speak. As long as we finish by 10.28 am for the wind-ups, we have time for both hon. Members.

--- Later in debate ---

[The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Paul Scully)]

It is a pleasure to serve under your chairmanship, Mr Betts. I congratulate the hon. Member for Motherwell and Wishaw (Marion Fellows) on having secured today’s debate, and on all the work that she and other Members do in the APPG on post offices. It is a very vibrant and diverse APPG, and I always enjoy speaking with its members and sharing thoughts with them.

I thank you, Mr Betts, and others for the tributes that have been paid to our friend and colleague Sir David Amess. In giving my tribute, I want to respond to the hon. Member for Strangford (Jim Shannon), who talked about the Government’s social vision for the Post Office, because two of the three things in our vision really chime with what Sir David did and what he stood for. The main building blocks are to deliver a convenient and trusted local service offer that meets customers’ needs—working closely with postmasters, who play a hugely important role in their communities—and to ensure that the Post Office’s services continue to be easily accessible to all consumers, particularly the vulnerable groups that need them most. The third, which perhaps does not relate directly to Sir David but is so important for the Post Office, is to support the Government’s access to cash and financial inclusion agenda by ensuring that basic cash and banking services are available throughout the network to meet the needs of individual customers and small and medium enterprises. We have heard about the importance of those services throughout the debate.

The post office network is unique. With more than 11,500 branches, the Post Office is the biggest retail network in the UK: there are more post offices than bank branches and building societies combined. Thanks to Government funding, we have ensured that we have the most stable post office network in a generation, with 99% of the population living within three miles of their nearest branch. As I go through my speech, I will try to cover some of the issues that have been raised about the network, but over the past decade, while the country’s high streets have undergone a significant period of change, the number of post office branches has remained broadly stable. As we have been discussing, that business has continued, and must continue, to evolve to meet customer need. What has not changed, though, is how undeniably important post offices are to communities. Our local post offices have never been more important or more valued than in the past 19 months, as the country has faced the unprecedented challenges of responding to the pandemic.

[Jamie Stone]

Does the Minister accept that his point about 99% of the population living within three miles of their nearest branch does not apply to my constituency?

UK Gas Market

Jamie Stone Excerpts

Monday 20th September 2021 Commons Chamber

[Kwasi Kwarteng]

The issue of interconnectors is very important. There were clearly incidents with a couple of the interconnectors last week, so we need to guarantee that they are safe, but my hon. Friend is quite right to say that the 80 GW target is still very much something that we intend to achieve, and I am working with and speaking to Ofgem to be able to get there.

[Jamie Stone (Caithness, Sutherland and Easter Ross) (LD)]

As you know, Mr Speaker, this is a bit personal for me because the village of Altnaharra is the coldest place in the UK every year. With the cut to universal credit, far too many people are going to have to make the hellish choice between switching off the electricity and paying for food. Did I hear the Secretary of State correctly? Will he maintain the fuel price cap where it is at the moment? Secondly, will he look positively at a Northern Rock-type of enterprise to pick up the customers of those companies that, perish the thought, might go under?

[Kwasi Kwarteng]

There are two issues there. I have said that I have committed to the price cap mechanism, but it is not up to me as Secretary of State to determine what the level of the cap is. That is an issue for Ofgem. Secondly, we have made some progress on protecting customers and there is an ongoing need to do that, but I would be happy to speak to the hon. Gentleman and to discuss his ideas on this.

Fuel Poverty

Jamie Stone Excerpts

Thursday 8th July 2021 Commons Chamber

[Jamie Stone (Caithness, Sutherland and Easter Ross) (LD)]

Good afternoon, Mr Deputy Speaker. I shall try to be brief. A subject like this is one where I always prick up my ears, because the village of Altnaharra, in the centre of the Kyle of Sutherland in the north of my constituency, is always the coldest place each winter in the whole of the UK. I want to do two things: I want to share some statistics that have been provided to me; and I want to namecheck the Highland Council, which takes fuel poverty extremely seriously and has done good work.

The Highland Council’s own report identifies huge areas of the highlands in fuel poverty. Nearly all the county of Sutherland has a fuel poverty level of 70% of households. The Kyle of Sutherland Development Trust carried out research recently which showed that one in four children in Sutherland live below the poverty line. All this, as we know, has been exacerbated by the pandemic.

Fuel poverty, boy oh boy, has been an issue for very many years. It is made worse by the electricity distribution charges that are levied by area. As a result, the highlands is disproportionately affected with the highest distribution charges levied anywhere in the UK. That is, ironically, in spite of the fact that we produce huge amounts of energy from green power—wind and hydro—which we actually export to the central belt of Scotland, sending it down south. The result is that the cost of each unit of electricity in the highlands is significantly higher than in London or in the central belt of Scotland.

In September last year, the Highland Council wrote to the UK Government asking them to bring in a national distribution charge for electricity to prevent that unfair practice. The reply said that they would not, but that a £60 million fund would be made available to mitigate the impact of higher distribution costs. My good friend Councillor Richard Gale, the councillor for East Sutherland, does not think there has been a reply or any further comment from the Government. May I therefore very politely ask my friend the Minister if she could possibly look at that and see what happened to the £60 million fund? If it could be forthcoming it would be fantastically helpful.

I completely support the argument put forward for the reduction in VAT on installation materials. That would be a tremendous step in the right direction. Let us hope that consideration will be given to it. Finally, the population of my constituency, and certainly the county of Sutherland, is an ageing population, so we can imagine how that is made still worse when we pile that on top of the fuel poverty issue. Thank you, Mr Deputy Speaker for your time and patience. That is my short speech concluded.

[Mr Deputy Speaker (Mr Nigel Evans)]

Very concise. Thank you very much.

UK Space Industry

Jamie Stone Excerpts

Thursday 4th February 2021 Commons Chamber

[Jamie Stone (Caithness, Sutherland and Easter Ross) (LD) [V]]

I am absolutely delighted that the hon. Member for Midlothian (Owen Thompson) has secured this debate.

As we have heard, the UK’s main proposal for a vertical launch site from the UK mainland is in Sutherland in my constituency. It would be churlish of me not to thank Her Majesty’s Government—the UK Government —and indeed the Scottish Government and the Minister for the work they have put into making this project come to the point that it has. Let me emphasise the massive local support in Sutherland for this project. It is enthusiastically supported. Local people see it as one way of stopping depopulation of the highlands, to which I shall return in a moment. At Dounreay in Caithness, we have a huge skills resource. It was, and still is, a nuclear facility, but it is being decommissioned. These people have tremendous skills and they must be redeployed. My ambition is to see the best-quality employment opportunities being offered to them as they leave the site in future.

We have the weather for this. We have a rail link to Thurso, which is nearby. We have a good road link up the A9. Most importantly, today the Scottish Government have confirmed that an SPO—specialised operations— permit will be given to Wick John O’ Groats airport in the next four years. That is crucially important in terms of the air link. The site has planning permission, as the hon. Member for Midlothian mentioned. A full environmental audit has been carried out. Both the UK Government and the Scottish Government have kept a close eye on all these aspects. This is massively important. As the hon. Gentleman said, if we get going with it, we will steal a march on other countries and we can do very well. It is important to be optimistic and look to the future once we get through the pandemic.

I started with thanks and I conclude with thanks—first, to Highlands and Islands Enterprise. This is a very simple equation. Making the Sutherland space launch become a reality will be a major factor in heading off our ancestral nightmare—depopulation and the prospect of highlanders, particularly the young, leaving their homeland to find work. That would be a tragedy. This project is one way of keeping the lights on in the straths and glens.

I have one final thanks—this may seem rather unusual—and it is to somebody who has actually gone out of his way to be enthusiastic about space launches from the UK: none other than the Prime Minister. When we come to the first launch, I hope that I will have the opportunity to buy him a dram. Indeed, I extend a warm welcome to all other Members to join us to watch the first rocket into space—I will pick up the bill.

Oral Answers to Questions

Jamie Stone Excerpts

Tuesday 3rd March 2020 Commons Chamber

[Paul Scully]

I thank my hon. Friend for that question. We will be strengthening the Small Business Commissioner’s powers. We already have a tough approach to large companies that do not comply with the payment practices and reporting duty. We are strengthening and reforming the prompt payment code and moving administration to the Small Business Commissioner. The business basics fund competition encourages SMEs to utilise payment technology and boost productivity, and the winners will be announced in April.

[Jamie Stone (Caithness, Sutherland and Easter Ross) (LD)]

Local crofters in Melness support the proposal to establish a vertical space launch facility in Sutherland, and they have written to the Prime Minister to tell him that. Does the Secretary of State agree that that would be good for the local economy and that the UK has a huge opportunity in terms of launching satellites for other countries that do not have launch facilities?

[The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Amanda Solloway)]

I thank the hon. Member for that question. We have united Departments across Government to develop a UK space strategy, which will help the UK lead the way in this fast-growing area and create thousands of jobs across the country. Our space strategy will support cutting-edge space science and technologies and foster world-leading British innovation.

Energy Efficiency Measures: Net Zero Buildings

Jamie Stone Excerpts

Wednesday 26th February 2020 Westminster Hall

[Jamie Stone (Caithness, Sutherland and Easter Ross) (LD)]

It is an honour to speak under your chairmanship today, Mr Pritchard. I listened to the right hon. Member for Ludlow (Philip Dunne) with the greatest of interest, not least because I come from one of the coldest parts—if not the coldest part—of the United Kingdom. There is a village called Altnaharra in Sutherland, which is a great favourite of Jeremy Paxman—he goes to catch salmon there. People also have a very good chance of seeing a golden eagle there. However, every year Altanarra is the coldest place in the United Kingdom.

I have been increasingly worried by something that all right hon. and hon. Members know about: the terrible thought of a pensioner deciding to switch off their heating because they simply cannot afford it. I want to put on the record my gratitude to Councillor Richard Gale, among other colleagues, who has helped to spearhead the issue that the right hon. Gentleman spoke about in East Sutherland and the wider highlands and islands. Although we generate an enormous amount of renewable energy from our onshore and offshore wind farms, in actual fact many of my constituents have heating bills they simply cannot afford.

In absolute fairness to the Scottish Government, I want to put on the record my thanks to them; I may sometimes take a pot shot at them, but they have put tackling fuel poverty at the top of their agenda. Credit should be given where it is due. My wife comes from one of the six counties of the UK part of Ireland—let me get my history right—and I understand that similar moves are being made at Stormont, which we should be grateful for.

In my brief contribution, I will make a couple of suggestions. I live in a particularly cold, energy inefficient house, so I know all about keeping a house warm. Hon. Members will probably be shocked to know that I know all about lighting fires and trying to stay warm and trying to haul ancient shutters shut and getting them to stay shut. Oddly enough, old-fashioned wooden shutters were quite good at energy insulation, although I am not advocating that we step back to 18th or early 19th-century building construction. The right hon. Gentleman talked about retrofitting; that is the problem we face in the highlands. Notwithstanding the good measures undertaken by the Scottish Government, in some ways we were slightly better at these things 25 years ago than we are today.

That leads me to my next point. A long time ago, when I was a councillor in the 1980s and 1990s, home improvements could be undertaken in several ways. The Scottish Office—then part of the UK Government, not today’s Scottish Government—would allocate two forms of capital funding to councils, known as block A and block B. Block A was used to build, renovate or do up houses in the public rented sector—that is where council houses were built. Block B was for renovating or repairing properties in poor condition that should be lived in. That included spaces above shops, because there was a tendency for many living spaces above shops not to be used in quite the way they had been when the shopkeeper lived there, as a certain former Prime Minister of this country did.

The system worked extremely well; my own Ross and Cromarty District Council was able to say, “Right, we’ll take a particular part of a village in the highlands, and target the whole of one street where there are privately owned cottages and people do not have proper insulation.” We would call it something like a care and repair scheme, which worked extremely well. There was a dividing line between the rented and not rented sector—block A and block B—but all that was capital; it was borrowing as opposed to revenue, so it was easier for the Scottish Government, and ultimately the Treasury, to use the public sector borrowing requirement and the Public Works Loan Board to get the cheapest money in town and direct it at the problems that had to be sorted out.

Today, we know for a fact that money has never been cheaper, so in some ways it is easier for the Treasury to borrow a large amount of money at a cheap rate and direct it straight at what it wants to achieve, be that building ships or whatever. As the right hon. Gentleman said, it should be relatively easy for the UK Government to direct a chunk of money at housing, given that it does not come off the revenue budget—in other words, they do not have to raise taxes to spend. They will have to cover the borrowing costs, yes, but they are very cheap. That is one suggestion worth thinking about, as it worked well in the past. Perhaps we will hear more detail about what the Scottish Government do from the hon. Member for Kilmarnock and Loudoun (Alan Brown)—he will know better than I do. The Scottish Government are doing their best.

My final point, because this is a brief contribution, is that I have spoken in this place about trying to encourage people, for carbon reasons, to buy and use electric cars. However, even for those with lots of power points for charging, electric cars are expensive things to buy. A lot of people are put off by the cost. I have suggested some kind of tax break for people who buy an electric car, taken off their pay-as-you-earn code. That might be a constructive way of looking at it. To encourage householders to think about making their homes highly efficient, it might be worth making it work for them to do the work, as well as there being Government assistance. That would address the point that right hon. and hon. Members made about heat pumps. Heat pumps work, but they are fiendishly expensive to put in, and the disruption is something else. But if the goal for the house owner at the end is worth it, the game is worth the candle—I think that is the right expression.

This is an enormous issue for me, because it is so dashed cold up in my part of the world. I wish it was not so. Who knows? Climate change may have us all growing grapes on the straths of Sutherland and Caithness in the years to come, but I doubt it.

UK Oil and Gas Industry

Jamie Stone Excerpts

Tuesday 25th February 2020 Westminster Hall

[Andrew Bowie (West Aberdeenshire and Kincardine) (Con)]

I beg to move,

That this House has considered the UK oil and gas industry.

It is a pleasure to have you in the Chair, Mr Robertson, for this important and timely debate. It is important because the oil and gas industry is a major employer and a major contributor to the Exchequer, and its success is vital to the economic growth of not just my constituency but all those represented in the Chamber and indeed the entire country. It is timely because never before has an industry—indeed, a country—faced such challenges, had to react to such quick-changing expectations and move at such speed alongside an ever-evolving debate about our future energy needs and how we address the UK’s contribution to anthropogenic climate change.

It was nearly two years ago, in April 2018, that the last debate on the UK’s oil and gas industry was held in this place, led by my former colleague and constituency neighbour, the former MP for Gordon, Colin Clark, and responded to by the then Minister for Energy and Clean Growth, the former MP for Devizes, the right hon. Claire Perry—how times change! When I read that debate in Hansard at the weekend, what really struck me was how little reference there was to climate change: in fact, the phrase was used just four times. There was little comment from anyone on how the UK and indeed the world needed firm, ambitious action to reduce our climate emissions.

That is remarkable, given that but a year later, in May 2019, the UK Committee on Climate Change recommended a target of net zero carbon emissions by 2050. A month after that, the then Prime Minister Theresa May committed the UK to that target and, a month after that, on 27 June, the United Kingdom passed legislation committing us to net zero by 2050, making us the first, and as yet only, major economy to do that. I bet that no one in the Chamber for that debate two years ago—or here for this one—foresaw the speed of that change. No one could have envisaged Her Majesty’s Government committing to such an ambitious and challenging target. Likewise, I bet that nobody could have ever imagined the chief executive officer of BP saying, as Bernard Looney did last week, that

“The world’s carbon budget is finite and running out fast. We need a rapid transition to net zero…We all want energy that is reliable and affordable, but that is no longer enough…It must also be cleaner.”

He went on to say:

“This will certainly be a challenge, but also a tremendous opportunity. It is clear to me, and to our stakeholders, that for BP to play our part and serve our purpose, we have to change. And we want to change. This is the right thing for the world”.

He did that as he unveiled BP’s commitment to be a net zero company by 2050.

Perhaps we should have foreseen such a speech from one of the world’s largest and the UK’s most successful companies, engaged in the extraction of fossil fuels and with a long history in the North sea; the UK oil and gas industry has, throughout its history, had to battle for its success, be that through economic slumps, environmental challenges, tragedy offshore or simply the difficulties that arise from extracting oil and gas from under the North sea. The industry has had to fight, develop, innovate, experiment and persevere to maintain its continued success. I know, from talking with men and women across the industry at all levels, that it stands ready to do all that again as it plays its part in our future energy mix, leading the way as we transition to net zero.

[Jamie Stone (Caithness, Sutherland and Easter Ross) (LD)]

The hon. Member is making a knowledgeable and impassioned speech about a subject equally dear to my own heart. I would not have settled in Easter Ross and brought up three children if it had not been for the UK oil and gas industry; I owe it everything, as does my family.

More recently, we have assembled wind turbines in the Nigg yard in Easter Ross, which now make up the Beatrice field. The hon. Member talks of reaching targets—surely offshore wind farms such as the Beatrice farm off the coast of Caithness and Sutherland are the way forward.

[Andrew Bowie]

I thank the hon. Gentleman for his intervention and I could not agree more. The importance to the wider Scottish economy, and indeed the UK economy, is demonstrated by what we see going on in Caithness, Aberdeenshire and further south. Offshore wind is vital to our wider energy mix and meeting our target of net zero by 2050. We have seen such advances in that field over the last few years in terms of reducing the cost of producing energy through offshore wind, so it is incredibly promising and very good to see as part of a wider energy mix.

I represent a constituency in the north-east of Scotland: West Aberdeenshire and Kincardine—a part of the world synonymous with the oil and gas industry. According to the House of Commons Library, some 151,000 people are employed directly by the oil and gas industry across the UK. Of course, in reality, the number is much higher than that: Oil & Gas UK puts the figure at about 270,000, with many support, engineering, technology and even legal recruitment and accounting companies involved, engaged and reliant on a thriving oil and gas sector. Nowhere is that more apparent than in the north-east of Scotland. More than 68% of all direct employment in UK oil and gas is in Scotland and more than 80% of that is in the north-east of Scotland, in and around Aberdeen.

In Westhill, I have the privilege to represent the subsea capital of the world, with more subsea engineering companies per square mile than any other place on the planet. At Badentoy business park in Portlethen, at Blackburn, in the neighbouring constituencies of Aberdeen North, Aberdeen South, Angus and Gordon, and further north along the Banff and Buchan coastline—and even further north than that, in Caithness—there are hundreds of companies employing thousands of people engaged in every imaginable aspect of work in and for the oil and gas industry.

--- Later in debate ---

[John Howell (Henley) (Con)]

It is a pleasure to serve under your chairmanship, Mr Robertson.

Earlier in my career I was involved with the oil and gas sector as a taxation expert, dealing with the taxation of oil and gas companies. I echo the point made by my hon. Friend the Member for West Aberdeenshire and Kincardine (Andrew Bowie) that, in the Budget that is coming up, there should be no changes that rock the oil and gas industry. We do not need to throw bricks at an industry that is already doing so much to help with the net zero carbon targets that we are trying to achieve.

The context is the enormous decline in revenues from the oil and gas sector. Back in 2008-09, revenues were at something like £13 billion; they are now down to just over £1 billion. That is a colossal collapse, and we need to do something to encourage the oil and gas sector and to help it survive.

The sector also needs more capital investment. Capital investment has fallen to one of the lowest levels in history and is now down to about £5 billion a year. That is coupled with a decline in drilling and an increase in the rate of decommissioning costs to almost £2 billion, which is quite a large increase—I see that the hon. Member for Caithness, Sutherland and Easter Ross (Jamie Stone) is about to intervene on me.

[Jamie Stone]

The hon. Gentleman read my body language extremely accurately. Contingent on what he has rightly said about how the industry is changing, thinking about the UK’s future in what—whichever side of the argument we are on—is going to be a period of change, and having been in the industry myself, what worries me is that we do see a slight deskilling in terms of welding techniques and working in stainless steel. Those skills could be pertinent to the hydrogen industry, and they are very hard to replace. I am not saying there should be a fiscal change, but we must be aware of those skills and safeguard them for the future, whichever way this country goes.

[John Howell]

In just a second, I will tackle an issue that I hope will help with the hon. Gentleman’s concerns.

The figures have already been quoted for the number of people employed in the oil and gas sector in the UK. Just over 30,000 are employed full time, but in the supply chain, which is the most important part and which I want to concentrate on, the number is close to 150,000. That is a phenomenal number of people to have to deal with.

I have been, and still am, the Prime Minister’s trade envoy to Nigeria. The link here is in the Aberdeen sector of the supply chain, which I have been involved with, to try to get people to go to Nigeria. Why should they be interested in Nigeria? The skills that we have in Aberdeen are just the sort required to set the Nigerian oil and gas sector on the right course. Historically, a huge amount of the income from that sector has not even reached the Ministry of Finance; it has got nowhere near—it has simply been diverted. When so much of the industry is essentially black market, it is difficult to get efficiency, but we have all the expertise in Aberdeen and other places throughout the UK to be able to bring that.