Budget Resolutions

Debate between Luke Graham and Neil Gray

1st reading: House of Commons
Thursday 1st November 2018 Commons Chamber

[Neil Gray (Airdrie and Shotts) (SNP)]

It is a pleasure to speak for the SNP on the final day of debating the 2018 Budget and to follow the right hon. and learned Member for Rushcliffe (Mr Clarke), who is always a hard act to follow. I hope I might be able to provide some detail on the caution that he was unable to deal with in the time available to him.

Today, we focus on families and communities. Where better to start in that regard than by detangling the Chancellor’s spun lines on family budgets. Pay growth is continuing to falter. We have had the worst decade of wage growth in 210 years, making it easy for the Chancellor to say that a modest rise in regular pay rates is the highest in 10 years. Even if that level were to be sustained—and that is unlikely unless there is a significant change regarding the UK’s productivity crisis—it is unlikely that pay rates will return to pre-crisis levels until the middle of the next decade. No wonder we have growing rates of in-work poverty. This Government are failing to make work pay.

Just take the announcement on universal credit, by which I am bitterly disappointed. It did not live up to anyone’s expectations. It did not match the ambition set by the hon. Members for South Cambridgeshire (Heidi Allen) and for Plymouth, Moor View (Johnny Mercer) on work allowances alone. Like me, they wanted work allowances to be fully restored to pre-2015 levels. The Chancellor failed to do that and failed to tackle the other ways in which universal credit is failing utterly. He reinstated just half the cuts to just one part of the cash cow that is universal credit, which the Treasury has milked dry. Indeed, even the right hon. Member for Haltemprice and Howden (Mr Davis) yesterday welcomed the investment but quickly said that more will need to follow. I agree: very much more will need to follow.

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

Will the hon. Gentleman give way?

--- Later in debate ---

[Neil Gray]

I will in just a minute. I shall give way only a couple of times as I am conscious of the fact that other Members wish to speak.

Yesterday, the Prime Minister said that 2.4 million people are to benefit by up to £630 a year from Monday’s changes. That was pure spin. What she should have said is that those families will be up to £630 less worse off. The Secretary of State for Work and Pensions herself said that universal credit is costing people £2,500 a year, and the Resolution Foundation said that that figure applies to 3.2 million households. Even if we are to believe the Prime Minister’s figures, for 2.4 million people the income cut from universal credit will be reduced to at least £1,700 a year. The rest of the 3.2 million households will still see a cut of £2,400 a year.

[Luke Graham]

Does the hon. Gentleman agree with the chief executive of the Joseph Rowntree Foundation, who welcomed the Chancellor’s move to increase funding and said that it would make universal credit

“a tool for tackling poverty”

and for easing the burden on low-income families?

[Neil Gray]

Of course, what the hon. Gentleman does not mention is that before the Budget the Joseph Rowntree Foundation was calling for the work allowances to be fully restored to pre-2015 levels, so I shall take what the hon. Gentleman has to say with a pinch of salt.

That cut of £2,400 a year is before we look at the cuts in other areas of universal credit that will swallow up any gains made from the Chancellor’s announcements on Monday. According to the House of Commons Library, the benefit freeze is going to cost low-income families just short of £5 billion next year alone. That one-year cut via the benefit freeze is worth more than the entire work allowance investment announced by the Chancellor for the next four years, which will be worth £3.8 billion. It is your typical Tory giving half with one hand and taking back double with the other. It is not an end to austerity; it continues to ingrain austerity. Little wonder, then, that the Government’s own expert adviser on social security, Sir Ian Diamond, has said that the next phase in the universal credit roll-out could push thousands into hardship or even out of the benefits system altogether. For shame!

Scottish Economy

Debate between Luke Graham and Neil Gray

Wednesday 27th June 2018 Westminster Hall

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

It is a pleasure to serve under your direction, Mrs Main. I congratulate the hon. Member for Rutherglen and Hamilton West (Ged Killen) on securing this important debate on a matter that is close to my and many of my colleagues’ hearts.

I will begin by looking at some of the statistical indicators for Scotland’s current economic performance, starting with GDP. Scotland’s GDP was 1.7% in 2015; it plummeted to 0.2% in 2016 and rose marginally, to 0.4%, in 2017. In comparison, UK GDP was 2.3% in 2015, 1.9% in 2016 and 1.8% in 2017. The employment rate in Scotland in the first three months of 2018 was 75.2%, compared with a UK rate of 75.6%. The unemployment rate in Scotland was 4.3%, slightly higher than the UK rate of 4.2%, over the same period.

[Neil Gray]

Will the hon. Gentleman give way?

[Luke Graham]

Not just now. According to figures provided by the House of Commons Library, the unemployment rate for my constituency of Ochil and South Perthshire is 0.5% higher than the UK unemployment rate. Meanwhile, the Scottish Fiscal Commission’s predicted growth rate for Scotland is 0.7% in 2018, 0.8% in 2019 and 0.9% thereafter until 2022. In comparison, the Office for Budget Responsibility forecast the UK growth rate to be 1.5% this year, 1.3% next year and to rise thereafter to 1.5% over the same period.

The more observant among us will have noticed that for every single one of those economic statistics, Scotland lags behind the UK in terms of economic performance. However, it is not just in GDP, employment and unemployment rates or forecast growth that that is the case. Scotland’s median weekly earnings are also lower than those of the UK. When it comes to small business confidence, Scotland lags about 23 percentage points behind the UK. Meanwhile, Scotland has higher public sector expenditure per head yet lower public sector revenue per head than the UK. Put simply, Scottish taxpayers are not getting value for money from their public sector.

Under the guidance of the SNP, the Scottish economy has grown at half the UK rate. It has failed to meet its targets to match the UK GDP growth rate and succeeded only in overseeing the slowest growth rate of any country in the EU.

Public Sector Pay Policy

Debate between Luke Graham and Neil Gray

Tuesday 5th June 2018 Westminster Hall

[Luke Graham]

That is right. We need to look at pay, but we need to look at overall packages as well, including pensions and other rights and responsibilities that both public and private sector employees benefit from. I am really clear that the public sector should always be as competitive and attractive as the private sector in both pay and packages, and I certainly do not argue that there should be any decrease in that.

[Neil Gray (Airdrie and Shotts) (SNP)]

The hon. Gentleman appears to be outlining a case for the end of public sector pay restraint. Will he advise us what he feels the Government could do to ensure that Departments are able to fund the pay rises that my hon. Friend the Member for Glasgow South West (Chris Stephens) talked about? Might that include the Treasury investing in those Departments?

[Luke Graham]

Yes, that is the point I am making. Recommendations will be forthcoming as part of the delegated pay reviews. I will come to the NHS shortly, but some of the NHS pay increases that were put forward have been funded. I am sure that the Minister will talk about funding in further detail.

[Luke Graham]

I am a Back Bencher, not a Minister, so I am wary of committing the Government, but yes. My point is that where pay increases are recommended, the Government should fund them. Given that inflation is now increasing after a period in which people had to make sacrifices and we had to have more financial control, it is only fair that we ensure that there are sustainable pay increases across Departments and the different sectors of public life to reflect the increases in the private sector.

As real wages grow across the United Kingdom—much like the economy as a whole—I am glad that some hard-working public sector staff are reaping the benefits of the UK Government’s new, more flexible approach. For example, the pay rises of between 6.5% and 29% over the next three years in the NHS in England represent great progress. I welcome the fact that pay increases will be larger for lower-paid staff and smaller for those on the highest salaries. The hon. Member for Glasgow South West mentioned that those increases compare with increases of 3% plus 1% in Scotland.

We should be really clear, because sometimes we do not get the full story on Scottish issues. We speak in favour of some of the pay increases, but it is clear that the increases have been between 6.5% and 29% in the NHS in England, and 3% plus 1% in Scotland, as the hon. Gentleman said. We all face challenges—I just wish the Scottish National party would be more honest about those challenges.

[Neil Gray]

Will the hon. Gentleman give way?

[Luke Graham]

I will, but let me complete this point.

It is right that pay increases have been directed more at people who are just about managing and at those on lower incomes. They should benefit those who really need a pay rise. I note that the devolved Administration in Scotland mirrored the UK Government’s 1% pay policy when it was in place, and I am glad that public sector workers in Scotland will now also receive increases. I hope they are as generous as the ones afforded by the UK Government.

[Neil Gray]

Does the hon. Gentleman accept that the pay differential between the NHS in England and the NHS in Scotland is 1% in favour of employees in Scotland?

[Luke Graham]

We have to be very careful about making generalisations. On a case-by-case basis, especially for some lower-income workers, that 1% differential does not apply. I would be more than happy to talk to the hon. Gentleman elsewhere and go into that level of detail.

We are talking about pay, but the other side of the equation is tax. I am disappointed that the SNP Administration in Edinburgh have decided to increase income tax in Scotland. Anyone who earns more than £26,000—slightly below the average wage in the United Kingdom—is now a so-called high earner and has to pay more income tax than their English and Welsh counterparts. That includes teachers, nurses and doctors. Importantly, it also includes armed forces personnel stationed in Scotland, who now pay more tax than any other British armed forces personnel stationed around the world.

[Neil Gray]

That is not true.

[Luke Graham]

It is.

[Neil Gray]

rose—

[Luke Graham]

I will let the hon. Gentleman intervene, but I will come back on that point.

[Neil Gray]

I am sure the hon. Gentleman understands and appreciates that the terms and conditions of armed forces personnel ensure that there is an even playing field between different areas of deployment. That means that if there are spikes or drops in taxation or any other cost of their employment, they do not have to suffer those themselves. They will get the pay rise, but they will not have to suffer the tax rise.

[Albert Owen (in the Chair)]

Order. Mr Gray will respond to the debate from the Front Bench, so he will have protected time. I ask him to be a bit more disciplined and allow Back Benchers to have their time, too.

--- Later in debate ---

[Neil Gray (Airdrie and Shotts) (SNP)]

I am in awe at my constituency neighbour, the hon. Member for Coatbridge, Chryston and Bellshill (Hugh Gaffney), for enabling us to have more protected time for the Front-Bench speeches, given what you said earlier, Mr Owen. It is a pleasure to take part in the debate with you in the Chair, and I must add my congratulations to those given by others to my hon. Friend the Member for Glasgow South West (Chris Stephens) on securing this debate, and on his detailed and passionate speech. My hon. Friend’s advocacy in this place and his previous trade union role, as has been acknowledged in the House already, make him ideally suited to lead such a debate. My wife is a local authority primary school teacher and is therefore impacted by public sector pay policy, although, thankfully, not that of the UK Government.

My hon. Friend the Member for Glasgow South West made a valid point regarding the ability of the UK Government to adhere to the Equal Pay Act 1970 when they are engaged in 200 pay negotiations, and the hon. Member for Solihull (Julian Knight) expressed his alarm at such a notion. My hon. Friend also highlighted the incredible statistics on low pay in the Department for Work and Pensions—the irony is not lost, I am sure—and the proportion of staff receiving tax credits. The fact that those workers will now be under additional universal credit conditionality from their own employers represents an incredible state of affairs.

A public sector pay rise, as outlined by my hon. Friend, is helpful for the economy and the private sector, as well as providing workers with the ability to enjoy a fruitful existence. When we add the fact that we are living through the worst decade for pay growth in 210 years, that is a major concern. My hon. Friend also touched on low pay and the situation in Scotland, and the more generous Scottish Government pay offer. He made a good, detailed and passionate speech, and I commend him for that.

I was reprimanded by you, Mr Owen, for jousting during the speech of the hon. Member for Ochil and South Perthshire (Luke Graham). He made a point about the need to end pay restraint. Of course the Scottish Government were the first in these isles to lift the pay cap and fund the pay offer to the workers for whom they are responsible, and the hon. Gentleman appeared to support my call for the Treasury to fund Departments to bring about an end to the 1% cap. I look forward to his next appearance at Treasury questions when he will make that strong point to the Chancellor. He also spoke about the 6.5% pay offer to the NHS in England. That, of course, is spread over three years—a point that has already been made from the Labour Benches. I am sure that the hon. Gentleman was not trying to suggest that that offer is comparable to the 3% being offered on an annual basis in Scotland. My point about the 1% pay differential between England and Scotland is that it includes those in band 1—the lowest paid as well as those in higher brackets.

The hon. Member for Easington (Grahame Morris) made a good speech, advocating for the Treasury to fund an end to 1%. He also talked about the apparent temporary nature of the pay cap. He was right to say that where the UK Government, not the Scottish Government, have responsibility, the pay cap is in effect still in place.

The hon. Member for Solihull also made a good speech. He was right to say that civil servants in Whitehall and across these isles are incredibly talented and do a fantastic job. He also appeared to acknowledge that pay restraint should have been temporary—and should have ended. I challenge him, as I did the hon. Member for Ochil and South Perthshire, to challenge their Treasury colleagues to fund UK Departments to end the 1% cap.

The hon. Member for Barnsley East (Stephanie Peacock) spoke from experience, as a former teacher and also given the impact of public sector pay restraint in her area. What she said was absolutely right. My constituency neighbour, the hon. Member for Coatbridge, Chryston and Bellshill, made a typically impassioned, if pithy, speech, and we were grateful for his contribution.

As has been alluded to, we have made a far more generous offer in Scotland to our fantastic public servants. We look to reward them for the work that they do for us all. To tackle low pay, the Scottish Government have committed to paying the real living wage of £8.75 an hour, as opposed to the UK Government’s minimum wage premium of £7.83 for over-25s and their minimum wage of £7.38 for those between 21 and 24, £5.90 for those between 18 and 20, and £4.20 for under-18s. This year they have also offered a graduated pay rise starting at 3% for workers earning up to £65,500. That rise will benefit three quarters of all public sector employees in Scotland.

[Luke Graham]

I praise some of the devolved Administration’s moves to make sure that there is correct funding for people on lower incomes, but does the hon. Gentleman recognise that the national living wage was brought in by a Conservative Government and it would not exist otherwise? As well as criticising, he should give a little praise, too.

[Neil Gray]

My problem with the so-called national living wage is the fact that it is not national, because it is not available to under-25s, and it is not a living wage, because it does not get near the real living wage. Its branding was clearly an attempt to make it look as though it were the real living wage; that is massively problematic. I acknowledge that it is a large pay increase for some, but not all, of those on the minimum wage. It is important for the UK Government to acknowledge the fact that under-25s in particular are still being penalised.

[Luke Graham]

rose—

Scottish Welfare Powers

Debate between Luke Graham and Neil Gray

Tuesday 20th March 2018 Westminster Hall

[Neil Gray]

I absolutely concur.

The hon. Member for Ayr, Carrick and Cumnock suggested that the Scottish Government are not following due process in preparing for the new system, and that they are not ready for the new powers because there is a lack of detail in the plans. I politely suggest to him that both statements cannot be true. Indeed, both are false. He himself acknowledged many of the areas in which the Scottish Government have used their powers to act. The Bill to create the new Scottish agency passed Committee stage at Holyrood—it did so with remarkable consensus, given the topic of discussion—so the process has been followed in a timeous fashion.

The Scottish Government are in regular contact with the hon. Gentleman’s colleagues in the DWP about how the two systems relate to each other. I wonder whether the Minister has done the groundwork that the Scottish Government have. We have yet to see evidence that he has. On the process point, the hon. Gentleman is clearly wrong.

[Luke Graham]

Does the hon. Gentleman agree that benefits across this country should at least be of one high standard? We have to be careful that, in creating another agency, we do not end up duplicating services, creating more cost for our taxpayers and delivering a worse service for our constituents. In other words, there has to be an incremental benefit, not duplication, more cost and bureaucracy.

[Neil Gray]

I agree with the hon. Gentleman’s constructive intervention to a point. That is why the Scottish Government are taking time to consider setting up the agency and are doing what they can to liaise with the UK Government about how the systems will operate in tandem.

The hon. Member for Ayr, Carrick and Cumnock is also wrong on the detail point, which relates to our readiness. From the Bill’s progress in Committee alone, we know that private companies will not be involved in delivering assessments. A new benefit will be provided to overcome his Government’s removal of housing benefits from most 18 to 21-year-olds.

Universal Credit Project Assessment Reviews

Debate between Luke Graham and Neil Gray

Tuesday 5th December 2017 Commons Chamber

[Neil Gray]

I just welcomed it, but I said that it does not go far enough and needs to go further. Citizens Advice Scotland is concerned about the removal of implicit consent for it to act on clients’ behalf on UC. Clients are now required to provide explicit consent and therefore to be present when their cases are being discussed. We, as MPs, have implicit consent—why has it not been extended to advocates like our local CABs? When I recently visited Airdrie CAB and spoke at its annual general meeting, it was concerned about its ability to represent its clients on universal credit in practical and in volume terms. We, as well as Conservative Members, get that feedback when we go to our local CABs and jobcentres.

It is not just the former Social Mobility Commission chair who has intervened in the past few days on universal credit. In Scotland, our Children’s Commissioner, Bruce Adamson, has suggested that legal action against the UK Government may be required to protect the human rights of children and to stop them being impoverished. Mr Adamson was damning in his criticism of universal credit, saying that there are

“a number of issues around the way in which Universal Credit is calculated and how it is paid. But this leads to a much, much deeper issue… We are talking about things like having a warm and secure place to live, having regular hot, nutritious meals and also the ability to access things like transport to get to school and to enjoy social and cultural activities that we know are so important to their development.”

He wants to avoid legal action, and said:

“We really need political leadership here and we need to make sure that we are never in a situation where children are going without the basics that they need.”

I absolutely agree.

Given Scotland’s Children’s Commissioner’s comments about the impact of universal credit on child poverty, we have to wonder what are in those DWP project assessment reviews, especially when the Joseph Rowntree Foundation reported this week that 400,000 more children and 300,000 more pensioners are living in poverty now than five years ago. The JRF says that while there are still significant challenges for Scotland to face regarding poverty levels and the impact of poverty, levels of poverty are lower in Scotland than in the rest of the UK. It also found that falls in poverty among pensioners and families with children have been greater and more sustained in Scotland than elsewhere. That shows that our approach is working. But imagine what we could do on poverty in Scotland if, instead of spending hundreds of millions a year on mitigating the effects of the bedroom tax and other Tory cuts, we spent that money on proactive anti-poverty measures or on the council tax reduction scheme, which has been shown today to benefit one in 10 Scots.

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

rose—

[Neil Gray]

I am really pressed for time now; I do apologise. [Interruption.] I have taken interventions. Madam Deputy Speaker has indicated that I was to keep within 10 minutes.

When the likes of the Child Poverty Action Group, the Poverty Alliance and others predict that further roll-out of universal credit in its current form, coupled with the benefits freeze, will force even more children into poverty in the coming years, the UK Government need to wake up to the evidence that their policy choices make them an agent in rising poverty, as opposed to the Scottish Government, who are working hard to protect low-income families.

In conclusion, the reports may well be as glowing about universal credit as Ministers have been, but the Government’s desperate obstinacy and obfuscation over a period of two years would suggest otherwise. Given the intense pressure that has been put on Ministers in recent months by the Scottish Government, MPs from across the House and expert charities, I imagine that had the reports been positive, they would have found their way into the public domain to support the Government’s position. It is normally the cold light of day shining on harsh truths that forces people from their entrenched positions, so the Government should make these reports public. Let us see the DWP’s assessment of universal credit, and let us all come together to find a way to fix universal credit and help those who need help the most.