Devolved Administrations: Borrowing Powers

Debate between Luke Graham and Ian Murray

Tuesday 9th July 2019 Westminster Hall

[Luke Graham]

I thank the hon. Gentleman for his intervention. I could not agree more. What I cannot understand is the clamour and constant push for powers from the SNP, who have been saying, “We want more powers; we need them.” We have the borrowing powers. We have the tax-varying powers. We have flexibility over the business rates. We have flexibility over council tax. It is Edinburgh that decides how much our local authorities get. Just like the hon. Gentleman, I have experienced my local authority being underfunded in a way that has meant that education and general maintenance in our counties has suffered. I cannot understand it either. I wish a representative from the SNP was here to put the SNP’s case for those cuts and its economic programme. Unfortunately, the SNP is completely absent from a very important debate.

[Ian Murray (Edinburgh South) (Lab)]

I congratulate the hon. Gentleman on securing this debate. These are the kind of debates we should be having to set the record straight about what is happening in Scotland and its fiscal position. He mentioned the Scottish Government’s underspend. I believe that they have returned more than £2 billion in the last four years in underspend. On the borrowing requirement, I understand that the Hong Kong dollar is an independent currency, but it is supported by reserves of double the GDP of Hong Kong. That means that if an independent Scotland were to set up its own currency, it would require somewhere in the region of £360 billion of reserves to support that currency. Where would Scotland get that from?

[Luke Graham]

I wish SNP Members were here to say how they would meet those responsibilities. I will not speak on behalf of the Scottish Labour party or the Scottish Liberal Democrats, but we are parties who support and respect devolution. We are the parties who are trying to make devolution work more effectively. That is why we are having these debates and changing the machinery of government to try to make it work more effectively. The SNP is the only party that does not believe in devolution. That is why it is not involved in these debates and why its members are not here today. All they care about is separation.

As the hon. Gentleman rightly points out, the SNP has not faced up to some of the responsibilities and costs of that separation. That is illustrated by the underspend. Some £100 million is somehow being rolled forward as part of setting up a new social security agency. That was agreed in 2016. We want to look at how to best serve our constituents. We do not want to be state building; we want to make sure that our constituents get the benefits that they need. Rather than spending £100 million-plus on setting up a new social security agency, which means our constituents will have to stop at three or four places to get the benefits they require, I would prefer to use that money to top up the benefits, and use current Department for Work and Pensions systems to ensure that constituents get the money they need. Our constituents would benefit, but we would not have to go through state building, and we would not have to spend money when it is not required. As I am sure the Chair appreciates, welfare is an incredibly complicated area of policy, and the systems that have supported our welfare state have been in development for over 60 years.

On the borrowing powers that we have on the resources side, there is power to borrow up to £300 million for forecast error. That is important, because as Derek Mackay, the Finance Secretary in the Scottish Government, recently outlined, their income tax forecast is down by around £1 billion. Again, this might be something that we should be debating in Westminster and Holyrood. The forecast error borrowing allowance is around £300 million, and it already looks like there will be a £1 billion gap. How will we bridge that responsibly without increasing taxes for people in Scotland, or irresponsibly having to go back to Westminster?

--- Later in debate ---

[Luke Graham]

It feels wrong to bash the SNP when its Members are not here to respond, but this is another clear example of the SNP putting the nationalist interest above the national interest. We could be using those powers to serve our constituents today, rather than deferring their use for years and years to further grievance and stoke the flames on social media.

Why is this important? Why did I apply for this debate on borrowing? It is so important because of the underspend that, as I said, has been widely reported. It was £450 million last year. It has certainly had a real impact in my constituency, which covers two council areas: Clackmannanshire, which is the smallest county in Scotland, and part of Perth and Kinross, which is in one of the largest counties in Scotland. We have seen impacts on frontline services. In Perth and Kinross, teacher numbers have reduced. We have had to increase waste charges, and we have had a 3% increase in council tax. In Clackmannanshire, we had the threat of closure of two primary schools, which I and council colleagues were against. We had the threat of closure of the Alloa Leisure Bowl, a reduction in our secondary school supplies and a 4% increase in council tax.

Given that the SNP argues for all those powers and makes such a stand about being stronger for Scotland, it cannot make such an argument in this place and then be absolutely weaker for our local authorities and let down our public services, children and communities in such a colossal way. As I said, the underspend could well be justified. If SNP Members were here—I was hoping to have a bit of a debate with them—they could justify it by saying they were carrying some spending forward to future years, as we said about the welfare and social security agency. We might disagree with that, but at least it could be justification. As colleagues will hopefully realise, and as I have argued, given the borrowing powers that exist, the development of the Scotland reserve, and the increase in block grant coming from Westminster, there is no need for huge underspends in the Scottish budget. We simply do not need them. We can use the borrowing powers when we need to. For example, should there be a Scotland-specific shock, we could access £600 million if we needed emergency cash for our frontline services. We can actually spend the money we need now, so why cut our local authorities when it is clearly not needed?

[Ian Murray]

The hon. Gentleman is making a very powerful argument. I know he might disagree with the policy issue, but there is a principle issue. The Scottish Government have full powers to do something about issues that they talk about a lot, such as the WASPI—Women Against State Pension Inequality Campaign—women and the rape clause in universal credit. They have the powers and a massive underspend, but they refuse to do anything.

[Luke Graham]

That is exactly my point. It is one of the main reasons I wanted to have this debate. Again, it is one thing to criticise on social media, but another to write letters to a paper when it is a one-sided argument. I applied for this debate because I wanted all parties to be here, and to have the opportunity to justify underspending by nearly half a billion pounds and then standing up in the Chamber and criticising the Prime Minister, the Government and often Opposition party leaders for their lack of policy and lack of caring for our constituents. That is inconsistent, it is indefensible economics, and it is unbecoming of MPs and a political party that sits in this Parliament.

Claim of Right for Scotland

Debate between Luke Graham and Ian Murray

Wednesday 4th July 2018 Commons Chamber

[Ian Murray]

I am glad to have taken that intervention, because it goes to the point—[Interruption.] People can start shouting, “Better Together!”, but I am going to stand up for the people of Scotland and my constituency, because I disagree fundamentally with what the leader of the SNP, the right hon. Member for Ross, Skye and Lochaber (Ian Blackford), said during his speech. He does not speak for the people of Scotland. We are entitled to have a different viewpoint. The hon. Member for Stirling (Stephen Kerr) is right, because this Chamber, when the Scotland Act 2016 was given its Third Reading and Royal Assent, delivered one of the most powerful Parliaments in the world, but it is the most centralist Parliament in the world. Local government no longer exists in Scotland. It is merely an administrative arm of the Scottish Government.

Look at what we have seen today. An SNP leader of the City of Edinburgh Council wants to be given the powers to deliver a tourist tax in Edinburgh that would help hard-pressed Edinburgh Council ratepayers with all the issues that they are currently going through, and the Cabinet Secretary slaps him down on Twitter and essentially says, “No.” Where is the sovereign will of the Edinburgh people who put Adam McVey in as leader of the council under the single transferable vote system? I do not want an SNP majority-led Edinburgh Council—I want a Labour majority-led council or a Labour council majority in a coalition—but that is what the people delivered. That is the sovereign will of the people who went to the ballot box. I think that we have to reflect—I say this very publicly—on what happened in Aberdeen, when voters went to the ballot box and delivered the numbers in Aberdeen to give us what we have there. There is an incredibly centralist Government and that is why it is the sovereign will of the Scottish people only when it suits.

Let me turn to what the sovereign will of the Scottish people is actually delivering. Again, that only suits the SNP when it suits its case. The SNP refused to back a people’s vote in a referendum on the final deal from the European Union. There will be lots of different views across this Chamber—in fact, there are lots of different views among Labour Members about whether we should have a people’s vote. However, the principle for me is that, if we believe in the sovereign will of the Scottish people, why not back an additional vote for the Scottish people and people across the UK to decide on the final Brexit deal that the UK Government bring back, and then let the sovereign will of the Scottish people decide? No. The SNP reluctantly fudges it and says, “Maybe we would back it, maybe we won’t, but only if independence is on the table as part of it.” It is only the sovereign will of the Scottish people when it suits.

I simply say, on the sovereign will of the Scottish people and the convention, that it is written down. It is being delivered. It has been delivered and everything that will be delivered in the future, in terms of the sovereign will of the Scottish people, will happen at the ballot box when the people of Scotland go to vote. That is exactly what they have done. Before SNP Members start jumping up and down and saying, “What about the Brexit referendum?”, the rules of the game are as follows. There was a UK-wide referendum. People voted to leave. We are part of the United Kingdom. I hope that we do not leave. I always say, “If we leave the European Union”—I will do everything in my power to try to stop it, and if I cannot stop it, I will do everything in my power to try to soften it, but we are where we are. We cannot pick and choose votes when it suits us to pick and choose.

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

The hon. Gentleman is making a strong point about the EU referendum. Does he recognise that it was based on the total number of votes across the United Kingdom, not on geography? So had the SNP joined Britain Stronger in Europe and proactively campaigned for remain, we could have got those few extra votes and kept us in. [Hon. Members: “We did!”] Not as part of Britain Stronger in Europe.

[Ian Murray]

I am sorry but I am not going to dance to the hon. Gentleman’s tune, because the Conservative party’s attitude towards Scotland at the moment is just as big a threat to the UK. It pushed through a referendum on Brexit, with the former Prime Minister betting everything on winning but losing. The attitude of the Scottish Conservatives is as big a threat to the Union at the moment. They are pushing through a hard Brexit as lobby fodder for the Prime Minister, rather than fighting for the interests of their own constituents. [Interruption.] I am happy for him to gesticulate and say, “Keep attacking the SNP,” but Government Members are just as bad on the sovereign will of the Scottish people as expressed at the ballot box. We were promised that Ruth Davidson would send Scottish Conservative MPs down to this Chamber to fight for the interests of Scotland, and not once has any of them taken a different view from the Chief Whip and the Prime Minister. So when Brexit happens and goes badly, you 12 will own it as much as the Prime Minister—sorry, the hon. Gentlemen will own it. You, Madam Deputy Speaker, will not own Brexit, because it will be owned primarily by the Scottish Conservatives.

On the theme of it being the sovereign will of the Scottish people only when it suits, I will finish with this. As we discussed, the SNP did not participate in this process, and they had no intention of ever participating in this process, regardless of the warm words we hear now, but now they grab on to this claim of right and talk about the sovereign will of the Scottish people, because it suits the SNP to do so. I suggest, very politely, that the UK Government and the Scottish Government desperately find a way to get around the table to improve the relations between two Governments so that they can at least try to work in the interests of Scotland, because while we have this flag-waving ceremony between the Conservative party and the Scottish National party, it is my constituents who lose out.