Spring Statement

Kirsty Blackman Excerpts

Wednesday 13th March 2019 Commons Chamber

[Mr Hammond]

I can confirm to my right hon. and learned Friend that the OBR’s central forecast is based, as before, on an assumption of a deal done with the European Union so that we exit via a transition mechanism and have a future close trading relationship with it. I can assure him—I am sure he needs no reassurance—that I will not be remotely tempted by the policies or the profligacy of the shadow Chancellor. My right hon. and learned Friend is absolutely right that until such time as we are sure that we will not exit via a disorderly no deal, I have to keep that fiscal powder dry, but no one will be happier than me when I can release some of that headroom to support public services, capital investment and lower taxes in this economy.

[Kirsty Blackman (Aberdeen North) (SNP)]

There is no certainty about the future health of the economy. Whatever happens regarding the Prime Minister’s deal—whether this House eventually accepts or continues to resoundingly reject it—we are still not clear about what the UK’s future trading relationship with the EU will look like. What is clear is that Brexit is bad for the economy. So far, the picture is bleak. Key economic indicators show that the UK economy grew by a meagre 0.2% in the fourth quarter of 2018. The OBR previously forecast growth of 1.6% for 2019. Even with the assumption of a smooth Brexit, it has downgraded that to 1.2%. Whatever the Chancellor’s spin, is that not the cost of Brexit?

Of course, the Chancellor predicted that himself. He told Radio 4:

“The economy will be slightly smaller in the Prime Minister’s preferred version of the future partnership.”

We now face the prospect of a no-deal Brexit, which would have a severe impact on the economy, people and businesses across Scotland. It could push the Scottish economy into a deep recession, similar in scale to the financial crash of 2008. The British Retail Consortium estimates that no deal could hike food prices by some 29%. My constituents cannot afford that. Will the Chancellor commit to voting against no deal tonight?

Given such massive uncertainty, we needed a bit more than this damp squib of a statement. It is a laudable aim to have only one Budget a year, but in these circumstances, the Chancellor should have brought forward an emergency Budget, and I call on him to do so.

We need the Chancellor to explain how he will fix the fiscal gap created by discouraging immigration. We know that the average EU citizen who chooses to live and work in our country contributes £34,400 annually to the Scottish economy. How will he plug that gap? Will he exempt those coming for PhD-level roles from the salary cap, as well as from the visa numbers cap? We need the Chancellor to provide funding to small businesses that are not prepared to cope with Brexit. Only 8% of Scottish firms feel fully ready.

We need concrete action to tackle the lack of productivity growth. It was woeful anyway, compared with our European neighbours, but over the past two years business has been so focused on Brexit damage limitation that it has lacked the resources to increase growth and productivity.

This week the New Financial think-tank said:

“Our conservative estimates show that banks and investment banks are moving around £800bn in assets; asset managers have so far transferred more than £65bn in funds; and insurance companies have so far moved £35bn in assets.”

That appears to have entirely passed the Chancellor by.

People who live in these islands have suffered through a decade of austerity. According to the Joseph Rowntree Foundation, the current benefits freeze has made life harder for more than 27 million people across the UK. It is the biggest policy behind rising poverty, costing families an average of £340 a year. If the freeze continues, by 2020 it will have driven 400,000 people into poverty. It must end now.

While the poor get poorer, the rich get richer under this Government. FTSE 100 CEO pay has gone up by 66% while the Tories have been in government, while wages for the rest have failed to reach 2008 levels. The Chancellor has had many opportunities to press his colleagues to halt the roll-out of universal credit. The system is broken and it must be fixed before more misery is inflicted. His emergency Budget should end the benefits freeze and halt the roll-out of universal credit. He has managed to find money for plenty of other things—he has allocated billions of pounds to the Democratic Unionist party to buy its support, but he has failed to allocate the £3.4 billion to Scotland that should have been our share of that largesse. Will the Chancellor ensure that the Barnett formula is properly applied to the new funding he has announced today, unlike his actions regarding the DUP deal?

Scotland’s resource block grant for 2019-20 is almost £2 billion lower in real terms than in 2010-11. That is a direct consequence of the Chancellor’s continued obsession with austerity. He has created the stronger towns fund, pumping money into leave-voting areas as yet another bribe. How well did that work this week? The Chancellor has not yet announced details of the shared prosperity fund. Especially important is whether it will replace the £2.4 billion a year that communities across the UK currently receive as a result of EU structural funds. Will he provide us with full details now? Will he give a cast-iron guarantee that the Scottish Government will be treated as equals and will continue to distribute the funding in Scotland, as has been the case under the EU programmes?

Yesterday, a majority of Scottish MPs put their names to an amendment saying that the best future for Scotland would be as an independent country within the EU. With independence, we will be able to encourage immigration, recognising the benefits brought by those who come to live, love and work in our country. We will be able to reject austerity, supporting our citizens when they need it most. We will be able to increase productivity, improve participation in our workforce and encourage and support companies to grow. We will be able to trade frictionlessly with Europe, a market eight times the size of the UK. Scotland has been badly served by consecutive Westminster Governments. We need to take our lifeboat and get off this sinking Brexit ship.

[Mr Hammond]

I am sure it was a momentary oversight by the hon. Lady that she did not say anything about the decommissioning measures that will be so important to her local industry in Aberdeen and that are listed in the written ministerial statement. She says that no deal will be bad for the economy, and I absolutely agree, but if she understands that, why did she not vote for the deal? I have a great deal of respect for her, but I am afraid she is creeping towards the practices of those on the Labour Front Bench when she quotes the fourth quarter growth figure of 0.2% without mentioning the more recently published growth figure of 0.5% for the first quarter of this year. [Interruption.] If she does the maths, she will find that is okay.

The hon. Lady talked about the downgrade that the OBR has applied to the 2019 growth figure. We would of course like it to be higher, but she has to see the figure in the global context. I know she understands this. Germany’s economy has slowed down and France’s economy has slowed down. Across the G7, we are exactly in the middle of the pack. We will grow faster than Germany, Japan and Italy this year. We will grow exactly the same as France and slower than Canada and the US. That is a perfectly creditable performance. Would I like to do better? Of course I would. If she is going to be honest with the House, she needs to put what she says in the context of what is happening across the global economy.

The hon. Lady asked about PhD-level roles. They will be completely exempt from the visa cap. She asked about assets being moved abroad. Of course I am concerned about that, and £35 billion of insurance company assets moved abroad is £35 billion more than I would like, but she needs to understand that that is in the context of the many trillions of pounds of assets that the companies are managing in London and, increasingly, in Edinburgh. Edinburgh’s ranking in the global asset management league table has once again risen, which we are extremely pleased about.

The hon. Lady talked about pay for the lowest paid. Those on the national minimum wage and the national living wage have seen their incomes increase by an average of £2,750 a year since 2016. She asked about universal credit. Universal credit delivers. People on universal credit are more likely to be in work than those trapped on legacy benefits. I have put billions of pounds into the system over successive fiscal events to smooth the transition to ensure that the movement of people from legacy benefits on to universal credit operates smoothly.

Finally, Scotland gets its share of the increased spending on capital and resource, but precious little thanks do we ever hear from those on the SNP Benches in exchange for it.