Tax Avoidance and Evasion

Luke Graham Excerpts

Tuesday 14th November 2017 Commons Chamber

[Kirsty Blackman (Aberdeen North) (SNP)]

Thank you, Mr Speaker. It is not common for me to exceed 10 minutes, so I will try to stick to that. Let me start by thanking you for granting this debate under Standing Order No. 24, as I very much appreciate that, and the right hon. Member for Barking (Dame Margaret Hodge) for securing it. I also wish to thank all the journalists who have done all the work on the Paradise papers. They have done a huge amount of work in investigating this, exposing the issues and bringing them to the attention of the international media as well as this House. They deserve to be thanked for that.

I normally have quite a lot of time for the Minister—I find him to be often wrong but generally reasonable—but the speech he made today was badly pitched. The one made by the right hon. Member for Sutton Coldfield (Mr Mitchell) was much better, in that he talked not only about resting on the laurels of all the great things the Government have done, but about what the Government were going to do and could to in the future. [Interruption.] And should do, absolutely. I hope the Minister listens to the voices from across the House and what they are calling for. As has been said, this is not a party political issue. I do not have a huge amount of respect for the actions of either the Labour Government or the Conservative Government on tax avoidance and evasion. I do not think either party has done a particularly good job on that. A huge amount more can be done, as Members from across the House would agree.

Transparency International looked into companies dodging tax and found 766 UK companies that were involved in corruption and money laundering, to the tune of £80 billion. A quarter of those companies that were investigated by Transparency International are still active—the UK Government could take action on those organisations. The UK Government are making a number of incredibly ill-advised and not great decisions at the moment, on things such as closing HMRC offices and their continued pursuance of austerity. The only reason the Government are tackling Scottish limited partnerships is the work done by a number of journalists, as well as colleagues from my side of the House. I appreciate that the Government have taken action on that, but it took a very long time for them to be convinced by MPs such as Roger Mullin to make any move on it.

As I said, not only this UK Government but previous ones have successively failed to crack down on this. The UK tax code is out of hand and requires simplification. The changes the UK Government are making, in conjunction with the Office of Tax Simplification, have not gone far enough. It still requires a van to carry the tax code; people can no longer carry it, because it is so significant. The potential for loopholes and for people to dodge things as a result of that incredibly complicated tax code is ridiculous. The hon. Member for Bootle (Peter Dowd), the shadow Minister, talked about the UK Government previously calling for the EU’s sanctions around tax dodging to be watered down. That was grim action for them to take, particularly in the wake of the Paradise papers, when this call came. The UK Government should be leading by example. They should not just be saying, “Oh, we’ve got the tax gap down to 6%.” They should be saying, “The tax gap is still 6%. We have a huge amount of work to do to crack down on that final 6%.” The UK has the opportunity to lead the world in this regard and it should do so.

[Luke Graham (Ochil and South Perthshire) (Con)]

Does the hon. Lady think the introduction of further tax bands and thus further complication by the SNP Administration in Edinburgh is an additional complication or a simplification of the UK tax code?

[Kirsty Blackman]

The hon. Gentleman is confusing income tax with a number of other types of tax. What has happened in Scotland in relation to the paper that has been produced, which sets out a number of options and their effects, and then consults on them, is way more transparent than any action that any UK Government take in advance of any Budget, where they pull rabbits out of hats. The Scottish Government have entered into dialogue with the other parties, which have the opportunity to take that chance to criticise or to praise. They should do that, as he should. The Scottish Government and the SNP have called for this area to be devolved to Scotland because we think we would do a better job.

As everyone knows, tax evasion is illegal, but the Paradise papers highlighted that tax avoidance is immoral.

HMRC Closures

Luke Graham Excerpts

Thursday 2nd November 2017 Westminster Hall

[Luke Graham (Ochil and South Perthshire) (Con)]

It is a pleasure to serve under your chairmanship, Mr Davies. I congratulate the hon. Member for Cumbernauld, Kilsyth and Kirkintilloch East (Stuart C. McDonald) on securing this important debate.

This reform of the HMRC estate takes place against the backdrop of large organisational changes in HMRC and the drift towards a more digital economy. The changes, some of which are being made in the Finance Bill, are about making tax digital. People’s interaction with tax and HMRC services online is becoming increasingly important. That change, combined with the change in footfall on the high street and accessibility reviews carried out across the HMRC estate, led the Minister and the Government to make these changes.

Making tax digital is a key part of these changes. Although slightly delayed, it is still in line with the timeline for some of the individual office closures. Combining our staff and skills resources in regional hubs will enable us to improve customer support, which, as hon. Members have said, is allegedly poor, by clustering skills together, and technology will enable us to deliver a better service for our constituents.

It is important that we strike the right balance between cost savings and the accessibility of services. I am sure the Minister appreciates that HMRC is a vital public service, so it is important that we ensure that there is access in smaller towns and cities throughout Scotland and the rest of the United Kingdom. Although the closures in Scotland are proportionate with those in other parts of the United Kingdom, it is important that HMRC proactively looks at outreach schemes to ensure smaller towns and villages still have access to HMRC facilities and services. That is very important to many of my constituents in South Perthshire, Kinross-shire and Clackmannanshire.

I will close on this point. I want to be very brief, because lots of other Members want to speak. The closures are taking place in the context of massive change in our economy and our society as a whole. They are not just about cost saving, but about looking at how our constituents engage with the Government. If this were just a stand-alone measure without the other Government initiatives to make tax digital and increase online accessibility and interaction with constituents, I would stand firmly against it. However, because it is part of a suite of options, HMRC services and investment in digital infrastructure, I believe that some of these measures can and should work for our constituents.

I reinforce the point I made earlier. Many smaller towns and villages in rural parts of our country will need accessibility, especially if their broadband connectivity is not as good as it is in other parts of the UK. We need to ensure that HMRC is proactive in reaching out to those communities and ensuring that they can still access the services they require. The Government want them to engage with the cost-saving initiatives over the next five to 10 years, as outlined in the paper under discussion and others.

--- Later in debate ---

[Imran Hussain]

I absolutely agree; the hon. Gentleman makes a fine point.

[Luke Graham]

As the hon. Gentleman mentioned, connectivity is key. I represent a constituency that is not so well connected, so I certainly empathise with some of the challenges that his constituents face. Will he join me in asking the Minister whether, if the Government do not change their position on some of these closures, we can do as Opposition Members have mentioned and use Brexit as an opportunity to look at moving Departments outside London and other key cities, to ensure that our towns and secondary cities—especially those that have already faced closures by other Departments—are just as well connected?

[Imran Hussain]

Absolutely; I agree. I was coming to that very point and to the point made by my hon. Friend the Member for Oldham West and Royton, who I thank for giving us a perspective from a place where closure has already happened. He showed us the failures there, and made the plea that we should learn from that lesson and not do the same in other places.

My final point, which is related to the point made by the hon. Member for Ochil and South Perthshire, is about the northern powerhouse. If we are serious about these things—certainly in the case of Bradford—the economic distribution must be fair and equitable, but again the distribution is swinging to the major city in the region. With respect to Leeds and everyone there—my point is not against Leeds—it is the northern powerhouse, not the Leeds powerhouse. We must have equitable distribution in our economic welfare. I urge the Minister to listen to all Members today, and to use this opportunity to pause the proposals. I have already made the point around Brexit, and I think the Minister has scope to pause the proposals and give further time for consideration.

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[Chris Stephens]

I do, and I think it has been driven by cost. One other area is that while I and my hon. Friends were campaigning in our constituencies to get re-elected, HMRC, during purdah, was signing contracts, and it did not wait until after the election to inform the House of those changes. I sympathise with the point that the hon. Gentleman made. Of course, during the process, we had the Concentrix disaster. HMRC had to terminate its contract early because Members of Parliament from right across the House had major complaints about how Concentrix was dealing with its business.

In the National Audit Office’s report, the key findings stated that:

“it will be longer until HMRC starts to realise savings. In the long term, it still expects its new estate to reduce its running costs. It now estimates cumulative efficiency savings by 2025-26 of £212 million, reduced from the £499 million estimated in its strategic outline case in November 2015. By 2025-26, HMRC expects its annual running costs to be £83 million lower than they are now”.

Whether it is £83 million, £212 million or even £499 million, those are drops in the ocean compared with the Government’s own accepted figure for the tax gap of £36 billion. The figure researched by the Tax Justice Network and PCS puts the tax gap at £119 billion. A major reorganisation and rationalisation of the most vital Government Department, putting at risk the very ability to carry out the tax collecting function for savings that are not properly costed, is irresponsible management and governance.

The Scottish Government are consulting today on the Scottish approach to taxation, to accompany gradual increases in its taxation powers. HMRC’s plans could well result in the severe limiting of HMRC expertise based in Scotland, which will become even more important as the Scottish Parliament debates increases in taxation.

[Luke Graham]

Does the hon. Gentleman agree that recent figures show that unpaid tax is at a record low, so some of HMRC’s performance has improved and it is actually doing quite well? Will he join me in asking the Minister to give assurances that that performance will continue, even with the closures and movements going forward?

[Chris Stephens]

I will meet the hon. Gentleman halfway. I do not believe that unpaid taxes are at a new low. In fact, I think the report I referred to earlier, published by Tax Justice Network and PCS, showed a gap of £119 billion. That certainly suggests to me that one of the major focuses of HMRC should be collecting tax and going after the rogues who are registered in the Cayman Islands and other places, shuffling money. I will meet the hon. Gentleman halfway on that.

HMRC faces a number of challenges requiring investment in offices and infrastructure, and no one from HMRC or from the Treasury has so far explained what changes they will make in the “Building our Future” programme to meet these challenges. I will not avoid saying, “We told you so,” because we did, time after time, in this place and elsewhere. We know that UK overseas territories are used to avoid billions of pounds of tax. We know that the uncollected tax avoided by these high-rolling spivs runs into tens or even hundreds of billions of pounds. It beggars belief that, at a time when there is more focus than ever on tax dodgers and their theft from public services, HMRC are shuttering dozens of offices across the country, losing staff and skills that could otherwise be used to target the high rollers who cost our hospitals, infrastructure and schools billions each year.

It is therefore somewhat ironic that Mapeley, to which HMRC’s office estate has been outsourced, is based in Guernsey, a notorious tax avoidance hub overseen by the UK Government. Downing Street confirmed yesterday that HMRC will need up to 5,000 new staff as a direct consequence of Brexit and the UK leaving the customs union.

Oral Answers to Questions

Luke Graham Excerpts

Tuesday 24th October 2017 Commons Chamber

[Mr William Wragg (Hazel Grove) (Con)]

11. What assessment he has made of the effect of Government investment on infrastructure since 2010.

[Luke Graham (Ochil and South Perthshire) (Con)]

14. What assessment he has made of the effect of Government investment on infrastructure since 2010.

[The Economic Secretary to the Treasury (Stephen Barclay)]

Infrastructure is at the heart of the Government’s economic strategy, and our investment will boost productivity and growth. Since 2010, more than £250 billion has been spent on public and private sector infrastructure.

[Stephen Barclay]

My hon. Friend makes a good point. This Government have committed to the largest rail investment programme since Victorian times, including a £55.7 billion investment in High Speed 2. He will be aware of the Chancellor’s announcement in Manchester last month of £300 million to improve connectivity to High Speed 2 across the northern region.

[Luke Graham]

Will my hon. Friend confirm his commitment to the Tay cities and the Clackmannanshire and Stirling city deals, and will he commit to meeting the local leaders and me to discuss how we can deliver this transformational change for our region?

[Stephen Barclay]

The Government remain fully committed to agreeing both city deals, and to working constructively with the Scottish Government and local partners. I am, of course, very happy to meet my hon. Friend to discuss this further.

Devolved Powers in Scotland

Luke Graham Excerpts

Tuesday 17th October 2017 Westminster Hall

[Luke Graham (Ochil and South Perthshire) (Con)]

It is a pleasure to serve under your chairmanship, Mr Hollobone. I will make it nice and brief. Devolution, as my colleagues rightly said, was meant to bring power closer to people and to ensure that our two levels of government worked better together.

I want to focus on spending choices in health and education. In health, we know that there is a gap. In England, spending has been increased by 50% in the last 10 years. In Scotland, spending has increased by 34% and, after 20 years of devolution and 10 years of SNP Government, Scottish people still have the lowest life expectancy in the whole United Kingdom. That is a problem.

My real focus today, however, is on education. To put it bluntly, the nation of the enlightenment is foundering under the yoke of nationalism. Despite substantially higher overall spending in Scotland—£37.9 billion, up from £34.2 billion—Scottish schools and colleges have suffered. Spending in further education has been squeezed by the decision to abolish the graduate endowment fee, increasing the burden on the public purse to pay for free tuition fees for Scottish and EU students, although not for our nearest neighbours from England, Wales and Northern Ireland. That decision has actually led to a smaller percentage of deprived children going to university than in any other part of the United Kingdom. Just 12.5% of the poorest 20% in Scotland go to university, versus 20.2% in England. Since 2006, our reading score has dropped from 499 to 493; our mathematics score from 506 to 491; and our science score from 515 to 497.

That is unacceptable, but it is not just the SNP’s spending decisions in education and health that are harming Scotland; it is the deliberately divisive nature of the SNP Administration—from frustrating the relationship with the UK Government to the Cabinet Secretary for the Economy, who is from my constituency, refusing to meet me about a city deal for four weeks and counting. That is neither good nor bad devolution; it is dysfunctional devolution, and we need to bring it to an end.

--- Later in debate ---

[Luke Graham]

Will the hon. Gentleman give way?

[Tommy Sheppard]

Sit down, please. I have not got time.

Despite that adversity, there have been many achievements. Time is short, so let me list just 10. First, in Scotland, people get free medicine. Since that policy was introduced, 34,000 free prescriptions have been issued in Stirling.

In Scotland, we do what we can to make taxation progressive. Higher-rate taxpayers in Scotland today pay more than they do in England. People with larger houses pay more when they sell them than they do in England, and people who live in larger houses pay more council tax than they do in England.

Ways and Means

Luke Graham Excerpts

Ways and Means resolution: House of Commons
Wednesday 6th September 2017 Commons Chamber

[Kirsty Blackman (Aberdeen North) (SNP)]

I appreciate the chance to take part in this Ways and Mean debate, which is one of the few not to follow a Budget—somebody told me it is the first since 1987, when I was 1.

From the shadow Front Bench, the hon. Member for Bootle (Peter Dowd) talked about some of the process issues and timelines involved in how we got to where we are now, and I want to briefly mention them. The spring Budget was presented to the House on 8 March. We are looking at introducing the Finance Bill, which takes up some of the measures from that spring Budget, now, which is a pretty long time from 8 March. We have seen some changes from what we expected to happen, and what the Office for Budget Responsibility suggested might happen is not necessarily what has happened in the intervening period, so it is a bit strange that, in the main, the measures we are looking at are almost exactly the same as the ones introduced in the Finance Bill back in March. I understand that there needs to be a consultation, but I am concerned about the length of this process and about whether the changes to legislation in this Finance Bill are wholly appropriate.

In my intervention on the Chair of the Treasury Committee, I mentioned the Public Bill Committee taking evidence. I have raised the issue before and I will not stop raising it. The Finance Bill Committee should take evidence from external organisations so that it is in the best possible position to make the best decisions. I have been on a Finance Bill Committee and found it a useful experience whereby Members on both sides of the House had an in-depth debate about the matters raised. Enabling the Committee to take evidence would only add value to the scrutiny provided both by the Opposition and by Back Benchers, particularly those from the Conservative party.

The Minister will probably be surprised to hear that I welcome some of the Government’s proposed Ways and Means resolutions, including the changes to the treatment of corporation tax with regard to museum and gallery exhibitions. However, I wish to raise the issue of the Value Added Tax (Refund of Tax to Museums and Galleries) (Amendment) Order 2017. The intention was that it be laid before the House in advance of the summer recess, but then the general election happened. The order has not been mentioned and I am concerned that some museums and galleries may lose out on the VAT that they had expected to get back. They expected it to be paid to them, but the amendment has not yet been laid before the House. I know that that is a slightly different matter from that in the Ways and Means resolutions, but it is related to it. I would appreciate it if the Minister or his team could look into the order.

I also welcome the changes to grassroots sports and to pensions and legal advice. It is particularly important that people have better access to legal advice, especially when they are not the accused and are entering legal situations. That is a scary prospect for a number of people, so it is incredibly positive that they will get easier access to appropriate legal advice.

The Scottish Government’s programme for government was announced yesterday and they are incredibly positive about changes to enable electric vehicles to become more prevalent on our roads and petrol and diesel vehicles to be phased out. I am therefore pleased that there are likely to be changes to electric vehicle charging points. I hope that this Government will continue to make changes to allow electric vehicles and their associated infrastructure to become more affordable.

I support the Government on a couple of other things. If the proposed changes in the Ways and Means resolutions on petroleum revenue tax are the same as those proposed in the previous Finance Bill, they are positive because the oil industry has asked for them. I am pleased that the Government have acted on that. I am also pleased that the Government will take action against people who have been found to be enabling tax avoidance schemes, not just those who participate in such schemes. That is really positive and I hope that it will achieve the Government’s intention and discourage people from being clever and coming up with tax avoidance schemes. My fingers are crossed and we will wait to see what happens.

Members would not expect me to be positive about all of the Government’s proposals. I am concerned that there is a lack of evidence for the Government’s desired outcome regarding some of the proposals. Resolution 13, on business investment relief, sends a mixed message. Whereas the Government’s changes under resolutions 24 and 26 intend to make it more difficult for non-doms to benefit from their tax status, resolution 13 will make it easier for them to do so in a way that their next-door neighbour may not. Now, I would be less concerned about that if the Government had provided appropriate evidence to show why the scheme is a good thing. They have made it clear that they want to increase the use of the scheme, but I have not seen any evidence to explain why. They have not shown me that the scheme is working as it was intended to work, nor that it is having a particularly positive impact on the businesses that are receiving funding from it. I understand that 200 to 400 people take part in the scheme every year, which means that a pretty significant amount of legislative effort and time is being put into making a change that enables a very small number of people to make this investment. I would be interested to see more of the Government’s figures.

I am concerned about resolution 41, which deals with errors in taxpayers’ documents. It specifically includes changes that may result in people who seek tax advice getting into trouble for having errors in their documents. The onus is now on an individual to ensure that the person from whom they seek tax advice is suitably qualified, which is rather difficult for people to understand. I have had people come into my surgeries and tell me that they have sought immigration advice from somebody they thought was a solicitor, but who turned out not to be a solicitor. I am concerned that some people who have tried their very best to stay on the right side of the law, to pay the amount of tax that they should pay and to fill in the forms appropriately with the help of an adviser will be caught by the measure accidentally. I would appreciate it if the Government could look at that.

I am interested to see how the Government will play another couple of issues, if they look exactly as they did in the Finance Bill. One is the changes to gaming duty. I understand that the Government are trying not to penalise casinos with the changes to the duty that casinos pay, and that they are trying to change the rules around remote gaming to make it clear how much tax the companies should pay. That is welcome. But when the Government are doing things such as increasing alcohol duty to discourage negative behaviour, it seems strange to me to allow casinos to pay less tax—or not to increase the amount of tax that they pay—because it will achieve the opposite of what the Government are trying to do in encouraging positive behaviour. I will be interested to see how that looks, and we will continue to scrutinise it.

We will also continue to look at the dividend nil rate. The Ways and Means resolution allows the Government to change things in either direction. If the dividend nil rate allowed people to have more dividends before they paid tax, I would be particularly concerned about it; but if it allowed people to have less in dividends before they paid tax, as was the situation in the previous Finance Bill, I would be much more positive about it.

Those are the main proposals that I have concerns about, but I would like to see the detail that the Government will produce. I am pleased that the Minister has made changes to digital reporting, which was in our manifesto. We have particular concerns about the smallest companies, especially those in particularly rural areas, who struggle to get access to the right digital infrastructure. Both Governments have made commitments about digitisation and access to superfast broadband, so having this slightly further down the line makes more sense. I am pleased that the Government listened and made changes, but we will be scrutinising the proposal and making sure that the business community is as happy with it as it can be.

Moving to digital reporting will make the process easier for people, but I reiterate that, as the hon. Member for Coventry South (Mr Cunningham) has said, the closure of tax offices is a concern, even when it comes to Making Tax Digital. Computer systems can be quite black and white, and they often give yes/no answers when the answer should actually be “maybe”. Especially in the initial period, people who are trying to fill in the forms may need to phone the tax office to ask for assistance about what to put in each box. I am not convinced that businesses can access enough support to find out about that.

The Government will expect me to raise the issue of VAT on police and fire services, because such a debate would not be complete without my raising it. We would very much like the Government to bring forward VAT changes for police and fire services in Scotland. They have done so for organisations such as the London Legacy Development Corporation—the legacy body from the Olympic Games—and for Highways England, both of which are national organisations in the same boat as the Scottish police and fire services.

[Luke Graham (Ochil and South Perthshire) (Con)]

On the point about VAT on Police Scotland, does the hon. Lady recognise that the SNP Administration in Edinburgh knew that they would incur VAT charges by centralising the police forces? They knew that would be one of the repercussions before that action was taken.

[Kirsty Blackman]

Such a policy was in the Conservative party manifesto for the Scottish Parliament election that year, so the centralisation of Scottish police and fire services was also supported by the Scottish Conservatives. Yes, we knew that that would be the case, but we do not think it is fair, and we have made the case that it is not fair on numerous occasions. Organisations such as Highways England and London Legacy do not have the same VAT treatment as the Scottish police and fire services, and that is why we are asking for such a change.

I know that this legislation has been cobbled together—it is just the bits that did not get through last time—but none of the changes the Government are making will combat the current increases in inflation, and the Government are not increasing wages so that ordinary people can afford such increases in the cost of living. In Scotland, we are lifting the 1% public sector pay cap, and I very much hope that the UK Government will take the same decision to lift the public sector pay cap in England and that when they do so—if they do so—they will ensure that that is fully funded.

I have one last thing to mention, particularly in relation to tax raising and tax avoidance, which is about customs officers and customs checks. I am slightly concerned that the UK Government are losing out on some of the revenue they could receive because they no longer use customs officers in the way they used to, but instead make them dedicate most of their time at borders to making sure that people are travelling legally rather than to ensuring that goods are being transported legally. I know that some stuff is in place—but not enough. I want the Government to be scrutinised more effectively on this, and for the Government to monitor what happens at ports more effectively to ensure that the appropriate tax is paid on things coming into and going out of the country. Making a change to ensure that they are checked appropriately and are therefore taxed appropriately can only bring in more revenue.

In summary, there are a number of good things in the Ways and Means resolutions, but I have concerns about several of them. I have significant concerns about some resolutions, such as resolution 13 on business investment relief, and I am also pretty concerned about resolution 4 on termination payments, because I have not seen any evidence to show that the issue is as significant as the Government are suggesting. The likelihood is that the SNP will vote against those resolutions if there is a vote. I appreciate that I have used up my time, and I am grateful to hon. Members for listening.

[Luke Graham (Ochil and South Perthshire) (Con)]

I want to build on what my right hon. Friend the Member for Loughborough (Nicky Morgan) said about resolutions 39 and 40 on Making Tax Digital. As the co-founder of a small accounting firm and as MP for Ochil and South Perthshire, it is clear to me that many small businesses had concerns about the initial proposals made before the recess. Although I certainly welcome some of the concessions that have been made, I hope that the Financial Secretary recognises some of the additional cost burdens that the reporting requirements will place on small businesses. The Federation of Small Businesses estimates that they amount to about £2,770.

As I have said, I welcome the Government’s concessions —especially excluding companies with revenues below £85,000, and pushing out the timeline for companies to have to enrol in a digital reporting scheme in future—but may I ask the Government to continue to consult widely with Members of the House and business bodies across the United Kingdom, including in Scotland? In addition, will they look to work with some of the new technology providers and cloud accountancy services providers, which could provide the Government with more efficient and effective ways of getting the information they seek without necessarily requiring a manual reporting submission quarterly?

My second point is about VAT and Police Scotland. In my intervention, I pointed out that it was a result of the actions of the SNP Administration in Edinburgh, but we may have some cross-party agreement on the fact that the outcome for Scotland is less beneficial, so colleagues and I will ask the Government to review the matter as part of the forthcoming Budget process.

Oral Answers to Questions

Luke Graham Excerpts

Tuesday 18th July 2017 Commons Chamber

[Mr Hammond]

The hon. Gentleman is exactly right; those who talk the economy and its prospects down are not doing the country any favours. It is not about borrowing more or taxing more; it is about growing our economy faster and increasing productivity so that we can have sustainable jobs and economic growth that produces the taxation to support our public services as well as rising living standards for our population.

[Luke Graham (Ochil and South Perthshire) (Con)]

9. What progress is being made on reducing youth unemployment.

[The Economic Secretary to the Treasury (Stephen Barclay)]

Youth unemployment is at a record low: 5.1% of 16 to 12-year-olds are unemployed or not in full-time education. That compares with 9.4% in 2009, under the previous Labour Government.

[Luke Graham]

Although I welcome the record unemployment figures that the Minister has given this morning, youth unemployment is still higher in my constituency and in Scotland than the UK average, so will he work with me and others across the House to encourage more investment in my constituency and in Scotland as a whole?

[Stephen Barclay]

I will be very happy to work with my hon. Friend, because we recognise that work is the best route out of poverty. Indeed, unemployed households are 13 times more likely to be in relative poverty than those with people in full-time work.

Balancing the Public Finances

Luke Graham Excerpts

Tuesday 11th July 2017 Westminster Hall

[David Linden]

I will not, because Members have taken quite a long time. Despite several years of austerity, Her Majesty’s Government continue to miss their targets on debt, deficit and borrowing. Quite simply, austerity has failed to rebalance our public finances, and we need to reassess and re-evaluate our approach.

The biggest contributor to a sluggish UK economy and the biggest threat to our public finances is the reckless hard Brexit currently being pursued by Her Majesty’s Government. That has not been helped by Labour Members voting to give the Prime Minister a blank cheque by voting against single market membership only two weeks ago.

Scottish National party Members will continue to stand up not only for access to but membership of the single market and customs union. When we look at our public finances, we see a major trade deficit, which in the three months to April was £8.6 billion, up from £6.9 billion in the previous quarter. By turning our back on the single market and pursuing a hard Brexit, we risk delivering further shocks to our already precarious economy.

The UK economy grew by just 0.2% in quarter 1 of this year. In comparison, in the same quarter Scotland’s economy grew four times faster. That was somewhat of a surprise, not least because colleagues in the Scottish Conservative party were briefing last week that Scotland was about to move into recession, which certainly did not happen.

We face difficult financial decisions in Scotland, not least because Scotland’s budget faces a real-terms cut of £2.9 billion due to UK austerity. That figure of £2.9 billion is significant, because had Barnett consequentials been followed during the Government’s grubby deal with the Democratic Unionist party, Scotland would have stood to receive £2.9 billion.

I want to move on and to some of my concerns about the deeply worrying consequences posed for Scotland by a hard Brexit. The stark reality is that Brexit threatens to cost the economy around £11 billion by 2030 and result in 80,000 fewer jobs compared with remaining within the EU. We understand and accept that, despite 62% of Scots voting to remain in the EU, we are leaving. However, the Scottish Government have sought to be reasonable and amicable, and have come forward with a compromise that would allow Scotland to remain within the single market. Unfortunately, those pleas have fallen on deaf ears.

We know that Her Majesty’s Government are pursuing a reckless approach to the economy, with a hard Brexit coupled to an ideologically driven obsession with austerity. SNP Members believe it does not have to be like that. Cuts are a choice, not a necessity. During the recent general election campaign, we put forward a responsible and credible fiscal plan that would return a balanced budget by the end of the Parliament. However, in doing so, we would generate an additional £118 billion cumulatively over the next Parliament, with around £10 billion flowing to Scotland. Our fiscal plan would stabilise net borrowing at the level it was before the financial crash and see debt begin to fall as a share of GDP from 2019-20.

Ministers and Conservative Members regularly tell us how employment is high under this Conservative Government. What they do not say is that much of that is due to part-time work or, worse still, exploitative zero-hours contracts. Unstable and low pay is a worry for my constituents in the east end of Glasgow, with the Resolution Foundation estimating that the period 2011-2020 will be the worst decade for wage growth in 210 years. That is before we take into account the Government’s con trick of the living wage, which will actively discriminate against under-25s.

[Luke Graham (Ochil and South Perthshire) (Con)]

Will the hon. Gentleman give way?

[David Linden]

I will not, because of time pressures.

Austerity strangles the lifeblood out of an economy by exacerbating inequality. The Government’s tax and welfare reforms disproportionately affect the least well-off. Charities have warned that current planned welfare cuts are set to drive a potential fall in incomes of 10% for the poorest third of working-age households and a rise in inequality not seen since the 1980s.