Budget Resolutions

Peter Grant Excerpts

Monday 1st November 2021 Commons Chamber

[Michael Gove]

The hon. Lady has made an important point. There are specific and long-standing issues in Knowsley and other parts of Merseyside that we need to address as part of levelling up. However, I think she does herself down slightly, because I understand that thanks to her advocacy in her constituency two levelling-up bids succeeded, and although they do not affect Knowsley, they do affect Liverpool. Some £20 million has gone towards helping Liverpool City Council with regeneration, and £37 million has gone towards recovery. Those sums are not insignificant.

Nevertheless, I take the hon. Lady’s point about Knowsley. I think it important to remind her, and indeed the House, that the £1.7 billion in the levelling-up fund which was allocated by my right hon. Friend the Chancellor is just one third of the total sum allocated over the course of the spending review, and I look forward to working with her and with other colleagues to make sure that the remaining funds can be allocated effectively.

[Peter Grant (Glenrothes) (SNP)]

I do not know whether the Secretary of State heard this, or indeed whether the hon. Member for Garston and Halewood (Maria Eagle) heard it, but when the hon. Lady asked what her constituents had to do to get their fair share of levelling-up funding, the clear message from the Tory Back Benches was that they had to return a Tory MP. Tory MPs clearly think that it is all about putting money into Tory-held constituencies. Does the Secretary of State agree with his own MPs that levelling-up funding will be targeted at Conservative constituencies, or does he need to have a private word with them afterwards to stop them giving away party secrets?

[Michael Gove]

We do not need to look into the crystal ball; we can just read the book. There are a number of Scottish National party MPs whose advocacy has ensured that they receive levelling-up funds in their constituencies. I congratulate the hon. Member for Edinburgh North and Leith (Deidre Brock) on securing £16 million for UK Government money for the Granton gasholder in her constituency. The hon. Members for Central Ayrshire (Dr Whitford), for Aberdeen North (Kirsty Blackman) and for Aberdeen South (Stephen Flynn)—and even the right hon. Member for Ross, Skye and Lochaber (Ian Blackford)—have managed to secure money from either the levelling-up fund or the community ownership fund in this Budget.

It is fantastic that we have Scottish National party MPs petitioning my right hon. Friend the Chancellor of the Exchequer to bypass the Scottish Government in order to spend UK Government money in their constituencies. [Hon. Members: “More! More!”] And indeed there will be more, because in the forthcoming community renewal fund allocations, more money will be going to constituencies represented by Scottish National party MPs. That is because, as the Chancellor of the Exchequer pointed out in his Budget speech, we are stronger, better and wealthier together. It is great that Scottish National party MPs are putting the UK Government’s money where the Scottish Government’s mouth isn’t.

Levelling up is about making opportunity more equal across our whole United Kingdom. It is a recognition, as the Prime Minister and the Chancellor of the Exchequer have said, that while talent is spread equally across the United Kingdom, opportunity is not. If levelling up is to succeed, yes, we need funds such as the levelling up fund, but we also need a systemic approach to how the Government support local government, other institutions and the private sector in order to spread prosperity.

One of the challenges that we face when it comes to levelling up is that the difference between the more economically successful areas of the United Kingdom and those that are less successful involves a kind of “Anna Karenina” challenge. In the first line of that novel, Tolstoy points out that all happy families are happy in a similar way, but each unhappy family is unhappy in its own way. We can apply that to communities that need more help. The challenges that Knowsley faces are different from the challenges that Grimsby faces. The challenges that Bury faces are different from those that Burnley faces. We need to recognise that while all the challenges faced in coastal towns, in satellite towns around our major cities and in rural areas have common features, they all deserve to be addressed in a unique way.

If we are going to improve economic productivity and wellbeing, we need to recognise—as the Under-Secretary of State for Levelling Up, Housing and Communities, my hon. Friend the Member for Harborough (Neil O’Brien), has pointed out—that for levelling up to succeed, we need to ensure that local leadership improves and that we build on the success of, for example, combined authority Mayors such as Andy Street and Ben Houchen. We also need to improve living standards where they are lower, and to improve public services, particularly where opportunity has fallen behind. We also need to play a part in helping to restore pride in place, so that communities feel in a genuine sense that they have taken back control.

The Budget succeeded in addressing many of these challenges by ensuring that the funding was there to focus on each of the ingredients that require to be in place if we are to have levelling up. One of the first and most important areas in which the Budget made provision for change was in education, particularly in further education and in skills. An additional £3.8 billion is being spent over the course of the spending review period. That is a real-terms increase for those 16 to 19-year-olds who are in full-time education, and there is additional money to ensure that our groundbreaking T-levels are more available. There will be additional hours for those in further and technical education to ensure that they get the very best tuition, and there will be skills boot camps to ensure that we can accelerate the move of people into the labour market.

There will also be eight new institutes of technology—prestige further education institutions concentrated in the areas that most need levelling up. On top of that, the multiplier programme will provide more than £500 million to improve adult numeracy across the United Kingdom. All of this comes together in a package to recognise that, as well as building on the success of our education reform programme in schools, we also ensure that adult, technical and vocational education at last receives the focus, attention and funds that it deserves.

As well as investing in skills, we are going to invest better in small and medium-sized enterprises, which are of course the engine room of our economy. That is why the Chancellor outlined plans for the British Business Bank to expand in order to ensure that SME finance is more readily available. Regional funds are being extended across the northern powerhouse. The existing success of the BBB’s Cornwall operation is being extended to cover the whole of the south-west, and there will be new branches of the bank opening in Scotland, Wales and Northern Ireland in order to build relationships with small businesses and to ensure that they have access to the debt and equity finance that they need.

Alongside that, there will be increased investment in research and development. An additional £20 billion will be spent over the spending review period, going up to hit our £22 billion target, and this research and development money will move outside the greater south-east, where so much research and development expenditure has been concentrated in the past, in order to ensure that, whether it is in Manchester or Newcastle, areas of university excellence that require additional investment to ensure the smarter diffusion of innovation into the economy are supported in the way that they should be.

On top of that, we have the global Britain investment fund: £1.4 billion that will ensure those sectors that are strong and growing in our economy get the additional inward investment they need to drive up economic growth. We know inward investment is often the route to higher productivity, and that is why there will be £1.4 billion specifically targeted on the automotive sector, on renewables and on life sciences.

--- Later in debate ---

[Peter Grant (Glenrothes) (SNP)]

It is a privilege, as always, to lead on behalf of Scotland’s national party in this or any other debate.

Anyone watching today’s proceedings or any of the proceedings on the Budget who thinks this was a sensible way to take decisions about billions upon billions of pounds of public money really needs to get out and look at what happens in proper Parliaments in proper democracies where those Parliaments are given a chance to scrutinise budgets for weeks, if not months, and where Opposition parties are invited to put in their proposals and sometimes get them accepted by the Government of the day. Several Conservative Members have demanded to know what Labour would do if this was its Budget, knowing perfectly well that it would not matter how brilliant an idea came from the Labour Benches, or any other Opposition Benches, it would not have a cat in hell’s chance of getting into the Budget, because the single criterion that matters most for the way that a suggestion is taken in this place is not how good it is but what side of the House it has come from. It is no wonder that this place is in such a mess.

[Douglas Ross (Moray) (Con)]

Can the hon. Gentleman explain how he believes the Scottish Budget will take place this year now that his party has gone into a coalition of chaos with the Scottish Greens? Will there be a similar adoption of ideas from the Opposition parties in Scotland?

[Peter Grant]

During the previous time that there was a pro-independence majority in the Scottish Parliament, that majority Government did in fact open their door to discussions with the other parties, and the hon. Gentleman’s party was quite happy to take advantage of that. He may remember, in fact, that it was an initial suggestion from his party that led to the Scottish Government introducing and maintaining to this day a record of 1,000 additional police officers compared with the maximum number that ever existed in Scotland under the previous Lib Dem-Labour coalition.

This will be seen as the year the Tories finally ditched any pretext that Budget day has anything to do with the public finances, helping the economic recovery or sustainable growth. Budget day has become purely and simply a propaganda exercise for the Government, and particularly for the Chancellor. That is what the days and days of utterly inexcusable leaks were about—leaks that until 10 years ago would have meant automatic dismissal or resignation for the Chancellor. The Chancellor seems to measure its success not by how effectively it closes the gap between rich and poor, because it does not, or by whether it delivers on any of his party’s manifesto promises—that is on the off chance that anybody can find any that havenae been broken—but on how many favourable headlines he gets in the right-wing press. It is almost as if the Chancellor has worked out how important the right-wing press is going to be in choosing the next Tory leader in a year or two’s time when the present incumbent gets fed up with being Prime Minister and goes off to do something different.

This Government have a track record of spending millions of pounds on pushing soundbite slogans that are utterly meaningless. [Interruption.] I will give way to the hon. Member for Stoke-on-Trent North (Jonathan Gullis) if he has got—[Interruption.] Okay, if he does not want to intervene he can keep his mouth shut. In 2015, George Osborne gave us a “long-term economic plan” that changed, on average, every three months until he resigned. In 2017, we had “strong and stable”, leaving Britain weaker and less stable than it has ever been in peacetime. In 2019, we had “get Brexit done”, which meant we all got done over by Brexit, and in 2019 also we had an “oven-ready deal” that left most of us feeling that we had been stuffed like Christmas turkeys. This month’s catchphrase is “levelling up”. Looking at the detail of this “levelling up” Budget, it is like claiming that you have levelled out the potholes on the road by digging a massive great hole somewhere else in the road to supply the rubble to fill in the original potholes. It is about filling in holes left behind elsewhere in our economy and in our public services by 11-and-a-half years of a failed Tory Government trying unsuccessfully to maintain a failed British state.

The Government want us to believe that they are making things better for some people without making them worse for anybody else. Some people will get a bigger piece of pie, but nobody will have to make do with a wee-er piece of pie. You cannae do that unless the pie is getting bigger, but the fact is that the pie is still much, much smaller than it was when the Tories came to power.

The Institute for Fiscal Studies said in response to the Budget:

“For most departments, the budget increases announced today will be welcome, but not enough to reverse the cuts of the 2010s.”

If the best the Tories can say about this Budget is that, with a following wind and a wee bit of luck, they might just be about be able to remediate most of the damaging cuts they have inflicted on us during their term of office, that does not strike me as a cause for celebration. That is why they will not see a great deal of positive responses to the Budget from those on this side of the House.

[Andrew Bowie]

rose—

[Peter Grant]

I give way with pleasure.

[Andrew Bowie]

I understand and respect that we have political differences on our respective sides of the House, but surely the hon. Gentleman can join us in welcoming the fact that this Budget delivers the largest ever block grant to the Scottish Government in history since the Scottish Parliament was created. Perhaps he can expand on how he will be pressing the Scottish Government to spend that extra funding that we have delivered from the UK Government to Edinburgh.

[Peter Grant]

The sad thing is that no matter how much anyone in this House presses the Scottish Government on their decisions, a record amount of that money coming back to Scotland has already been decided not by the elected Members of the Scottish Parliament, but by Members of the UK Parliament who could not get elected in Scotland. Record amounts of that money come with strings attached and conditions attached that tell the Scottish Government how they have to spend our money.

In response to the hon. Gentleman’s specific question about the amount, if he looks carefully, he will see that, yes, there are welcome increases for capital spend, but the day-to-day service provision budgets of the Scottish Government will continue to be under intense pressure. While we welcome the increase in capital spend, the Departments of the Scottish Government—just like the Departments of this Government and the departments of local authorities the length and breadth of England and Wales—will find that the resources to meet the ever-growing demand on their day-to-day services will be as tightly pressed as ever.

While the Government will try to pull the wool over our eyes and say, “It is all covid’s fault”, we cannot and will not let them forget that the British Government’s management of the economy during covid has been among the worst of the world’s major economies. The International Monetary Fund has predicted that the long-term economic damage from covid in the UK will be worse than in the other G7 economies. Even that does not tell the whole story, because while the Secretary of State rejoiced in the fact that we hope the long-term economic damage of covid will be restricted to 2%, he forgot to tell us that Brexit is twice as bad as that. I wonder why he forgot to mention that the long-term, self-inflicted damage of Brexit is likely to be twice as bad as the long-term damage of covid.

[David Linden (Glasgow East) (SNP)]

In talking about the self-inflicted damage from this British Government, whom people in Scotland have not voted for by majority since 1955, does my hon. Friend accept that when Government Members talk about how kind the UK Government have been in giving money to the Scottish Parliament, more often than not the Scottish Parliament and the Scottish Government are having to use their resources to mitigate bad decisions that come from this place, such as the cut to the universal credit, which renders the Scottish child payment, described by charities as a “game-changing” child payment, as utterly useless?

[Peter Grant]

My hon. Friend is absolutely right. Giving spending powers and in some cases tax-raising powers to the devolved Parliaments of Scotland, Wales and Northern Ireland was never supposed to be a way of making up for the cuts to those same budgets coming through from Westminster, but all too often that has been happening.

To return to the director of the Institute for Fiscal Studies, his response to the Budget was:

“This is actually awful. Yet more years of real incomes barely growing. High inflation, rising taxes, poor growth.”

How can anyone think that is something to celebrate? The IFS also said that someone on median earnings might see their pre-tax pay just about keep ahead of inflation, but after paying the higher income tax that the Government are imposing, plus the higher national insurance tax, that median earner will be worse off in real terms. An analysis published by the Joseph Rowntree Foundation found that many of the worst off—people on universal credit who do not have a job—will be poorer as a result of this Budget. Even the reduction in the universal credit taper, welcome as it is, does not make as much difference as the Tories are claiming. For 40% of universal credit claimants in Scotland it will make no difference at all, because they have not got a job. [Interruption.]

The hon. Member for Stoke-on-Trent North thinks it is funny that many people will not benefit from the Budget. I do not see what he finds funny at all. While 40% of universal credit claimants in Scotland will get no benefit at all from the changes to the taper, 100% of his constituents on universal credit will be £1,000 a year worse off. I look forward to him defending that to his constituents—I would not try to defend it to mine.

All of that prompts a question: if people on average earnings will be worse off, and if the worst off—the lowest earners in our society—will be worse off, who really benefits from the Budget? The Chancellor’s banker buddies will benefit, thank you very much. Many of them will be raising a glass to toast a 5% cut in the corporation tax they pay, while the customers who pay their wages—individuals and small businesses alike—will struggle to cope with increased taxes. As my hon. Friend the Member for Glasgow Central (Alison Thewliss) alluded to last week, the Manchester Uniteds of this world who think it clever to take a 10-minute flight to go to a football match will gain, and the champagne quaffers in the members’ enclosure at Ascot will have something to cheer, but very few of my constituents will have anything to cheer at all.

I welcome the news that alcohol excise duties are to be reviewed at last, but let us see the result of the review before we welcome it unconditionally. As I said in a Westminster Hall debate, it cannot be right that the duty on a glass of whisky is 16% higher than the duty on a glass of wine that contains exactly the same amount of alcohol. I make no apology for reminding the House that, over the summer, all those people in the enclosures at Ascot, Henley or wherever almost certainly enjoyed the product of the skilled workforce of the Cameronbridge distillery in my constituency. It is the biggest grain distillery in the whole of Europe, and it swells the Treasury’s coffers to the tune of about £3.6 billion a year in excise duties alone. That is £3.6 billion a year from one manufacturing establishment in my constituency. The fact that for decades many people in the towns of Methil, Buckhaven, Methilhill and others have been living on or below the breadline close to a distillery that generates such massive wealth for the coffers down here in Westminster is testimony to the failure of successive British Governments to put the wellbeing of the people front and centre of their taxation and spending plans.

If the Chancellor is genuinely concerned about improving living standards for people on low incomes, he should start by reversing some of the savage cuts that he has made and reinstating the election manifesto promises that he has broken. He should reinstate the pensions triple lock, reverse the £20-a-week cut to universal credit, reverse the hike in national insurance that penalises small businesses for each and every new job they create, and scrap the two-child limit and vile rape clause. If he really believes in a guaranteed living wage for all, let us hear him—or, at least, the Minister in summing up—commit to increasing the legal minimum wage later this month and every November to match the real living wage, measured not by how much the Government are willing to ask employers to pay but by how much independent analysis shows human beings in these islands need to live on.

The Secretary of State asked what we might do as alternatives. If the Chancellor is looking for ways to save money, he could look at the gross inefficiency in the Government’s own Departments. Recent National Audit Office reports show that eye-watering sums of money have been wasted in delays and inefficiency. In the Ministry of Defence, nuclear infrastructure, Crossrail, High Speed 2 and the national criminal intelligence database, hundreds of millions of pounds—billions of pounds—are being thrown away through waste and inefficiency. He should get a grip on that; then we could improve services without necessarily having to increase taxes.

If we want to see where we could stop spending money, we could start by scrapping the programme of new nuclear power stations that are designed to rig the system in favour of nuclear energy that, when it finally comes on stream, will cost more than twice as much as offshore wind power. Sooner or later, our constituents will be forced to pay that price increase. We should scrap the monstrous white elephant that is the nuclear weapons programme: a programme whose only purpose is to commit the worst crime in the history of the planet. The Government should ditch plans to spend a quarter of a billion pounds on a new royal yacht Britannia, although, given whose ego it is clearly designed to satisfy, perhaps we should rename it the good ship Borisannia.

This is a Budget that has been imposed on Scotland by a Government we did not elect and who will never have the consent of our people to rule over us. It is partly the result of a covid pandemic, which could perhaps have been predicted, but was not. We all have to live with the consequences of that. It is largely the result of a Brexit that our people did not vote for.

The Budget seeks to level down Scotland’s status to something approaching that of a forgotten English county. I want Scotland to be levelled up. I want Scotland’s status to be levelled up to that of an equal partner of our friends in Europe and elsewhere.

The Chancellor claimed that his Budget would strengthen the Union, but what he has done is increase the pace of Scotland’s journey to a true levelling up, and bring forward the day when the sovereign people of Scotland reassert our inalienable right of self-determination, the day when our place in the world is levelled up to match that of the other prosperous, outward-looking, inclusive, democratic and independent nations. If Conservative Members think that it is not coming, why have the Government given a 20% budget increase to the Secretary of State for Scotland, whose only purpose is to peddle the myths—[Interruption.] Why do they need to spend 17.5% to 20% more on a Department, the only purpose of which is to campaign for a no vote in a referendum that they say is not coming, but that we say is coming very soon?

--- Later in debate ---

[Douglas Ross (Moray) (Con)]

I know that time is tight tonight, but I cannot let the speech from the hon. Member for Glenrothes (Peter Grant) go without some response. It was lacking much coherence and any credibility. We heard from him that the covid-19 pandemic should have been predicted. His party have been in government in Scotland for almost a decade and a half, and I do not remember at any point, prior to covid hitting, warnings about that pandemic.

As for credibility, I would have had a little bit of support for the hon. Gentleman if he could at least recognise that this Budget delivers £600 million of additional funding to the Scottish Government this year; and that, for the next three years, it delivers an additional funding pot of £4.6 billion each year for the Scottish Government added on top of what they already have, making it the most generous settlement since devolution in 1999. The SNP now has more money to spend as a Scottish Government than any of their predecessors, and it has to recognise that this has been a very good Budget for Scotland.

The hon. Gentleman spoke about a local distillery in his constituency and how the Government should look at the taxation scheme to support the employees in that distillery. I hope that he considers that when he goes to the SNP conference later this month, because a motion is laid down in its conference papers right now calling for his party to look at “raising additional revenue by taxing the significant profits of the Scotch whisky industry”.

[Peter Grant]

Will the hon. Gentleman give way?

[Douglas Ross]

I will give way, using my own time, to hear what the hon. Gentleman thinks about the proposal from his fellow SNP members to tax whisky even more.

[Peter Grant]

Does the hon. Gentleman accept that the SNP policy is that spirits should be fairly taxed regardless of how they are produced, unlike the system that has been maintained in the United Kingdom since the day alcohol taxation was first invented? Does he accept that that is the SNP’s policy as of now?

[Douglas Ross]

I will come on to taxation, because the Exchequer Secretary is sitting on the Front Bench and I want to make my own comments about that. However, there was nothing from the hon. Gentleman, leading the SNP in the response to the Budget debate tonight, about what his party are putting forward for debate at its conference later this month, which would see taxation on Scotch whisky go up. What we have seen from this Government is a fifth successive UK Government Budget that has frozen taxation on Scotch whisky, and that is something that I welcome for the many distilleries in Moray and across the country. There has been nothing from him or any SNP representatives so far tonight about the £172 million being invested by this Government on levelling-up projects across Scotland. From the borders to Edinburgh, from Ayrshire to Aberdeen, those projects will get funding from this Government.

The hon. Member for Inverclyde (Ronnie Cowan), another SNP speaker today, used a quotation to suggest that he would wash the money coming from the UK Government to deliver these projects. These are projects that have been outstanding in Scotland for years. If the SNP Government had acted to deliver them, they would not be looking for investment from the UK Government, but because we have devolution and Scotland has two Governments, we are seeing the UK Government delivering these projects where the Scottish Government have failed.

Finally, I want to comment on the duty freeze on spirits, which is very welcome in Scotland. We know that there is a wider review of alcohol taxation in the United Kingdom; the Prime Minister announced it at Roseisle distillery in 2019 on a campaign visit to Moray. While the Exchequer Secretary is on the Front Bench, will she reassure the distilleries in my constituency and the Scotch Whisky Association that this Government will be true to their word? In their briefing notes on the Queen’s Speech after the 2019 election, they said that the review would

“ensure our tax system is supporting Scottish whisky and gin producers and protecting 42,000 jobs supported by Scotch across the UK.”

That is what I will be holding this Government to. I hope to see a very good response in the near future.