Budget Resolutions

Kirsten Oswald Excerpts

Wednesday 27th October 2021 Commons Chamber

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

Thank you, Madam Deputy Speaker. I think that we are used to the Prime Minister perhaps being fast and loose with facts, making things up as he goes along, but I have to say that I think better of the Chancellor. I have to say gently to him that if he thinks he is going to cut air passenger duty for Inverness and the highlands and islands, he is wrong—because there is no air passenger duty in Inverness. One would have thought that if he were going to make announcements, he would check his facts first.

More fundamentally, COP26 kicks off this weekend. What on earth are we doing? When we are saying to the rest of the world that we are trying to engage other countries to step up to the plate with their climate obligations—the Prime Minister has spoken today about the importance of 1.5°—the Chancellor wants to cut air passenger duty on domestic flights. [Interruption.] I can see him nodding his head. He is increasing air passenger duty on long-haul flights, admittedly, but the fact is that carbon dioxide emissions per mile are much higher for domestic flights than for long-haul flights.

What on earth are we doing? How can we say that we are taking our climate obligations seriously? By the way, the Scottish Government, exactly because of our climate responsibilities, took the decision in 2019 to remove our planned reduction in air passenger duty. Chancellor, this is a disgrace. Quite frankly, it shows that this is not a Government who understand the climate challenge that we all face. The Chancellor should withdraw and remove that proposal.

The Budget that the Chancellor has just delivered is tantamount to grabbing 20 quid out of people’s pockets, handing them back a tenner and expecting them to be grateful. Today’s announcement does not even come close to compensating for the tax rises and cuts that he has imposed over the past month. Let us take our pensioners as an example: with the removal of the triple pensions lock, there will be a £6 billion saving for the Government from their raid on pension tax credit and on pensioners.

That is the harsh reality under this Tory Government. The raw reality of that fiscal trickery means that millions of families and workers will be worse off this winter. This is a Budget that brazenly cuts taxes for the banks, while it cuts universal credit for the poor. We welcome the changes to the taper relief, but they do not change the fundamental fact that everybody on universal credit has just lost £1,000.

The Chancellor who once promised to do “whatever it takes” is now a very distant memory. The true test of this Budget was whether it would act radically and tackle the cost-of-living crisis, the Brexit crisis and the climate crisis, and it has failed that test on all three fronts. Instead of doing “whatever it takes”, the Chancellor has done as little as possible. The Tories’ half-hearted rhetoric about fairness has predictably only produced half-measures when it comes to soaring household bills and the crippling cost of inflation.

Perhaps worst of all, before the Chancellor stood up today, millions in poverty knew that they were facing the choice between heating and eating this winter. The ultimate failure of this Budget is that when the Chancellor sat down, those millions of people were still left with that terrible choice. I think that once the full details of today’s announcement sink in, the Tories’ cheers for their Chancellor will quickly fall silent. We can already sense that discontent growing among Government Back Benchers in the red wall seats, because another hidden truth of this Budget is that it only promises capital spending tomorrow, but delivers austerity today.

The Chancellor is living in the naive hope that the public will somehow have forgotten what his Government have hit them with over the last few weeks. He came in today and bragged about his Government’s generosity, but for the last month his Government have hammered working people and ordinary families with regressive national insurance tax rises, the premature ending of furlough, and, worst of all, that disgraceful £1,000 cut in universal credit. I am sorry to break it to the Chancellor, but the public have far from forgotten. They know the political choices that this Government have made, and they know the choices that have made them poorer. They know that they have been badly hit in the pocket by this Government, and that today goes nowhere close to making up for it. They know, too, that the rise in the minimum wage is welcome, but I must say to the Chancellor that the Living Wage Foundation will update the real living wage on 15 November this year. That will reflect what is happening.

Perhaps the Chancellor and the Secretary of State for Scotland might listen, because this is important. This is about the poorest—this is about people in poverty—and I am asking the Chancellor to recognise the Living Wage Foundation’s announcement on 15 November of the real living costs for the poorest in society. While I welcome today’s announcement of the increase in the minimum wage to £9.50, I ask him to give a commitment that that figure will rise to the amount of the real living wage this year, because that, fundamentally, is what will keep people out of poverty. We know that a full-time worker on the minimum wage this year will still be hundreds of pounds worse off because of the cuts in universal credit.

The smoke and mirrors act about rising wages just doesn’t cut it. The Chancellor may want folk to think he is giving with his left hand, but in reality he is taking much more out of their pockets with his right hand. However, no one is fooled. The only people who are living in their own parallel universe are the neighbours in Nos. 10 and 11 Downing Street. In the real world, people are struggling with a Tory cost-of-living crisis that this Budget fails to fix.

Under the leadership of the Prime Minister and the Chancellor, the public are being hit with an energy crisis, a Brexit crisis, a labour crisis and an inflation crisis, and it all adds up to a Tory cost-of-living crisis that is punishing workers and punishing families. It is a deeply damaging pattern that has become all too familiar. What we are experiencing is a United Kingdom in constant crisis, and it is very little wonder that Scotland wants out. [Interruption.] They are predictable. I hear, from a sedentary position, the Secretary of State for Scotland—at least, that is what I think his job title is—

[Kirsten Oswald (East Renfrewshire) (SNP)]

Who does not have a mask on.

[Ian Blackford]

Who does not have a mask on, despite the fact that Members of this House are falling ill with covid.

I say to the Prime Minister and I say to the Secretary of State for Scotland that the simple fact of the matter is that all of us have to recognise democracy, and the Conservatives have to recognise that an election to the Scottish Parliament took place this year. There is a majority for independence in that Parliament, and that Parliament will bring forward a referendum Bill. It ill behoves those who lost the election in Scotland—and the Conservatives have lost every election there since 1955—to deny the right of the people of Scotland to their own sovereign will, their own sovereign decision, to have a referendum on our future, offering us the hope that is failing from this Tory Budget today. More and more people are coming to the view that independence now offers safety and stability—an escape from the constant crisis of Westminster control. They are coming to the view that we can simply no longer afford to pay the price of being part of this failing union.

The defining decision of this Budget is the failure to fully reverse the cuts in universal credit. Tapering the rate is only tinkering around the edges of the problem. The decision was fully wrong and it needs to be fully reversed, because not only was the cut to universal credit the wrong policy, but it came at the worst possible time. [Hon. Members: “ Callous!” ] It was a decision that was callous, and it was a decision made before the rapid rise in inflation was truly known. But instead of having the strength to admit that they were wrong, the Tories have decided to dig their heels in. Earlier this week, the Chancellor, in many of his pre-Budget announcements, said that this Budget was a chance for him and his Government to get back to

“a more normal way of doing things”.

It is therefore very telling that in the same Budget he has confirmed that disgraceful cut in universal credit. He is cutting the surcharge on banks from 8% to 3%. So “back to normal” for this Chancellor clearly means one thing. It means the mindless mantra of the Tory long-term economic plan. It means austerity for the many and tax cuts for the few.

There is a very simple way for the Tories to prove me wrong. They can do the right thing: reverse the cut in universal credit, and put £,1000 back into the pockets of those who desperately need it. And while they are at it, they can remove the benefit cap, the two-child limit, the rape clause, the sanctions regime and the five-week wait, and—finally—introduce statutory sick pay at the level of the real living wage.

As well as those permanent measures, specific and targeted measures are needed to help with energy prices for the winter ahead. That is particularly true for the 2 million pensioners in poverty who have been let down by the removal of the triple lock. We believe that the fairest way to help is to introduce an emergency energy payment to cover families who simply cannot afford the soaring cost of heating and electricity bills. That would be, at the very least, the best way to protect people this winter.

I suspect that inflation will not be the pressing issue of this Budget alone; I fear that it may well be the defining issue of many Budgets to come. The Bank of England’s new chief economist has warned that inflation could soon hit 5%. Mortgage holders are rightly fearful that that this inflationary spike will be met with a sharp rise in interest rates. The Chancellor seems to think that all this is merely transitory, but complacency on this issue is not an option. History shows how quickly an inflationary spiral can get out of control.

It is worth remembering that in 1980 the inflation rate hit 18%. None of us can afford to go back to that place.

However, the inflationary threat is just one element of what amounts to a perfect storm of economic vulnerability. The covid crisis can no longer camouflage the deep damage that Brexit has done, and the single biggest threat to our recovery remains being dragged out of the European Union, against the wishes of those who live in Scotland. The consequences of Brexit are here and they are hurting: our exports down 14% year on year, our fishermen blatantly betrayed, our farmers sold out in fire sale UK trade deals, labour shortages, food shortages, medical shortages. It cannot be said often enough that Scotland is paying the price for a policy that we never supported.

Brexit has already cost billions, but while the European Union is giving Ireland €1.05 billion to mitigate the damage of Brexit, Scotland has yet to receive a single penny of compensation from Westminster. So I would like to ask the Chancellor: where is same billion-pound package of support for struggling businesses that have been hit by Brexit? I know those on the Government Benches do not like to hear this, but what those businesses also need is a return to freedom of movement. They need the 1% hike to employer and employee national insurance halted, and our hospitality and tourism sector needs the 12.5% VAT rate to be made permanent. All those businesses badly need a break from Brexit.

As we know, this Budget comes a matter of days before COP26. Keeping the target of 1.5° alive depends on a Government commitment to embrace the green economy, but let us be honest: this Budget today does not help. The fact that this crucial conference is happening in Glasgow is a chance to show moral leadership, but it is also an opportunity to grasp the opportunities that the green economy can provide. Moving to a just transition from oil and gas is essential to capture the economic opportunities of the new energy technologies and to support people into new jobs. The depth of anger felt in the north-east of Scotland at this Government’s decision to renege on their promise to ensure that we have carbon capture and storage in Scotland obviously has not hit home on the Government Benches.

If this Chancellor was—[Interruption.] Chancellor, this is really important. This is about our ability to get to net zero, and it is about the fact that the Treasury has blocked carbon capture and storage in Scotland. I say this directly to the Chancellor: perhaps he will meet me in the coming days to ensure that the Scottish Acorn project is put back on track and that we increase the number of carbon capture and storage projects from two to three, for the simple reason that we need that to deliver on our net zero targets and to deliver 15,000 jobs in Scotland for that just transition.

I say to the Government directly: let us ensure that we give some hope to the north-east of Scotland, because £350 billion of tax revenues has been taken out of the North sea. We need a helping hand to deliver that just transition, and I need the Secretary of State for Scotland to stand up for us—to stand up for Scotland and ensure that we get that just transition.

If the Chancellor was serious about supporting Scotland, he would have stood up today and announced that the Scottish cluster would go ahead. The reality is that it was a purely political choice to deny Scotland carbon capture and storage. What on earth is the Secretary of State for Scotland doing? Sitting on his hands and failing once again to stand up for Scotland’s interests. [Interruption.] I hear “Hee haw” from the SNP Benches. Maybe he is the Secretary of State for hee haw.

It is not only on carbon capture where this Government are holding back our renewable opportunities. I am passionate about the potential of tidal stream energy, but the contracts for difference budget of this UK Government means there is currently no route to the domestic market for that industry. Despite the Prime Minister’s warm words in response to my questions last week, there is no ring-fenced £71 million budget for tidal stream energy—a small pot of money that would kick-start the opportunities in this industry and prevent it from being lost overseas.

Let us be real about this—[Interruption.] It is really important that the Chancellor listens to this debate. It is his debate. We are serious about the opportunities—[Interruption.] He can point to the clock all he likes, but we are talking about the future of the renewable energy industries in Scotland, and about paying attention to what the industries are saying.

We know about the breakthroughs in technology, and we know that the Royal Society has painted a picture of an industry that could represent 20% of our electricity needs throughout the United Kingdom, but it needs to be kick-started with financial support. However, when we were all talking about our responsibilities to net zero, it is the UK Government who are standing with their foot on the brake preventing this industry from getting off the ground and delivering for people— not just in Scotland, but right across the United Kingdom.

There is also no commitment to match the Scottish Government’s £500 million investment for a just transition in the north-east of Scotland. Now that the Chancellor has blown up the idea of a Boris bridge across the Irish sea, he should have plenty of spare money to invest. On that point, can I ask him whether the estimated £20 billion cost for that cancelled bridge will now be ring-fenced for future transport projects in Scotland and Northern Ireland? Or is that just one more promise that will be broken—just one more example of Westminster holding back Scotland’s green future?

This Budget could have been an opportunity to do things differently, to get a grip on the cost-of-living crisis and to kick-start a fair recovery. But this Budget does not signal recovery. It signals that this Chancellor is dragging us into another winter of discontent, but I can assure the House that Scotland has been discontent with Westminster control for more winters than one. Our country has not voted for a Tory economic plan since 1955. Westminster’s choices are not our choices. The last thing Scotland needs is another winter of discontent imposed by another Tory Government.

Ultimately, we know that democracy is the only cure and the only solution to that deep discontent. That is why, when the crisis of the pandemic has passed, Scotland’s people will have the right to choose their own future—an independent future. It is a manifesto promise that we made, and it is a democratic promise that we will keep. I look forward to the judgment of the people of Scotland. I look forward to a future that is fair, green and European. I look forward to an independent Scotland.