Budget Resolutions and Economic Situation
Seema Malhotra Excerpts(1 year, 8 months ago)
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Seema Malhotra (Feltham and Heston) (Lab/Co-op)
The first test for the Budget was whether people would be better or worse off as a result. The Chancellor has failed that first test, because the OBR’s forecast and analysis delivers a damning verdict. In its executive summary, it says that real household income is due to fall by 5.7% in the next two years, which is
“the largest two-year fall since records began in 1956-57”,
with living standards lower than pre-pandemic levels even up to 2027-28.
There was no mention of support for mortgage prisoners and the Chancellor missed the chance to end non-dom tax status, which could have helped to fund an expansion of the NHS workforce. His pledge for potholes is all very well, except that the highways maintenance budget was cut in 2021 by £400 million, which would have been enough to fill 8 million potholes. There is good progress on childcare, prepayment meters and supporting the over-50s back to work, but all that is playing catch-up with where Labour has been.
My starting point is optimism and ambition for what Britain can become, and how we can rebuild our economy and restore our reputation for trust around the world after the devastating damage particularly done by September’s mini-Budget. That needs a serious plan for stability and growth, however, that commands confidence and makes Britain the best place to invest and to start or grow a business.
We know that it is the Government working in partnership with industry that will help British businesses to thrive, grow and invest if we are ever to achieve any of our goals, whether they are making all parts of the country better off or getting on track for net zero. The investment that businesses undertake to develop products and services, increase productivity, and create jobs is the most crucial ingredient.
The challenge that we have in the UK is that business investment has been lagging for years because of 13 years of Tory failure. That was a problem before the pandemic and the war in Ukraine, and makes it much harder for us to recover from those shocks. It is a consequence of the low-growth, low-productivity and high-tax economy that the Government have created. The continual chopping and changing of Government policies and priorities has made our economy less stable and has contributed to falling living standards, falling business confidence and falling consumer confidence.
In that context, let me speak to today’s Budget—what a missed opportunity. We needed to see a strong, serious industrial policy framework for the long term that businesses could trust and that could bring clarity, consistency, stability and certainty, which are even more necessary in the uncertain world that we face. Today’s Budget did not even come close, however, which is not surprising as the Government have spent the last few years watering down their industrial strategy and hoping that nobody will notice. The only E here was for everything but a serious plan. What a contrast that is with Labour’s clear strategic missions and priorities for the British economy and our goal of securing the highest sustained growth in the G7.
What we have seen today is little more than tinkering around the edges, more sticking-plaster politics and more attempts at short-term fixes, with a handout for the richest 1% slipped in. This Budget falls way short of the wider plan for green growth that our businesses and communities have also been calling for. The Chancellor announced a £20 billion investment over two decades to create carbon capture technologies, but, as ever, this is yet another poor imitation of Labour policy.
There has not been nearly enough of such policies. Last September, over 200 leading businesses and financial institutions wrote to the then Prime Minister, saying that they were committed to protecting and restoring nature and delivering a net zero economy in support of the UK’s targets, with delivery mechanisms strengthened across the whole of Government. However, the steps announced today are yet again a poor imitation of where Labour has been, and it has taken the Society of Motor Manufacturers and Traders to say:
“There is little…that enables the UK to compete with the massive packages of support to power a green transition that are available elsewhere.”
Small businesses should also be part of the transition to a green economy. Roundtables I am doing with small businesses across the country have shown how much they need to be central to our plans for growth. However, all we seem to see from the Government is a record of failure and a lack of ambition. The Federation of Small Businesses has said today:
“The distinct lack of new support in core areas proves that small firms are overlooked and undervalued.”
The latest ONS data available show that business deaths have outweighed business births for seven consecutive quarters.
Even schemes set up by the Government to help small businesses grow are falling short. The Government’s Help to Grow: Digital programme was billed as their flagship small business productivity policy, but after a year of its running, the Government pulled the plug in February because of low take-up.
When I recently asked the Minister of State, Department for Energy Security and Net Zero, what programmes were available for SMEs looking to transition to net zero, he cited the boiler upgrade programme. However, the scheme’s own impact assessment says that the impact of the scheme for small businesses is “negligible”. The latest data released from the scheme shows that 0.4% of all installations in the scheme have been for SMEs. So the evidence is clear: the Government are simply not serious about helping SMEs transition to net zero or about supporting them at all.
If the Government were serious about supporting small businesses, they would back Labour’s plan to help Britain become a clean energy superpower by 2030 and provide £0.7 billion in “help to green” grants for SMEs. The lack of a long-term shift in the Chancellor’s statement has left us with the usual sticking-plaster politics. This is the natural end result of what happens when a Government spend 13 years hollowing out public services and not investing in workers and businesses, and of having a tired Government who have run out of ideas.
Oral Answers to Questions
Seema Malhotra Excerpts(3 years, 9 months ago)
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The Prime Minister
My hon. Friend makes a very important point, and I know that it is something that everybody wants to see across this House—the sharing of data at local levels. There are particular problems, obviously, with sharing medical records—detailed medical records—with local government, but what we are doing is giving public health officials at local level all the information we can give them, without breaching that confidentiality, to find those hard-to-reach groups, and to get them and encourage them to take vaccines. Wonderful work is being done to get people to take vaccines. I encourage all Members, in your constituencies, to get your constituents to take up this offer.
Seema Malhotra (Feltham and Heston) (Lab/Co-op)
The Prime Minister
Of course we will, and my right hon. Friend the Secretary of State for Housing, Communities and Local Government will be bringing forward a plan very shortly. It is also important that mortgage companies do not unreasonably refuse mortgages on properties that are perfectly safe.
Public Finances: Scotland
Seema Malhotra Excerpts(8 years, 9 months ago)
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Seema Malhotra (Feltham and Heston) (Lab/Co-op)
May I start by thanking all Members who have made important contributions to the debate? I will mention just a few because of the brief time we have left. My hon. Friend the Member for Heywood and Middleton (Liz McInnes) spoke about how we need transparency to see if the agreement is fair, and challenged the SNP not just to manage Tory austerity but to do something about it. The right hon. Member for Wokingham (John Redwood) talked about how the position of the SNP is not to use tax powers, but it has given no indication of ever using them; indeed, the hon. Member for Edinburgh North and Leith (Deidre Brock) refused to say whether they would use new powers and seems to want local income tax.
Several hon. Members rose—
Seema Malhotra
I am afraid that, in the interests of time, I will have to proceed.
My hon. Friend the Member for North Durham (Mr Jones) said that there is a critical issue about the rest of the UK and the need to scrutinise the deal to make sure his constituents, too, are represented. While the hon. Member for Dundee East (Stewart Hosie) commented on the performance of the Secretary of State, he may want to work harder on getting his own facts right. He claimed that the Labour party has spent air passenger duty twice, and it is true: once on mitigating tax credit cuts, when Labour in the end no longer needed to use it for that, and then, secondly, reallocating it to supporting people to buy their first home.
As my hon. Friend the Member for Edinburgh South (Ian Murray) observed, the focus of today’s debate is the transfer of new powers to Scotland—powers that will transform the Scottish Parliament into one of the most powerful devolved Administrations in the world with the ability to make different choices to create a better Scotland. That is the essence of devolution: the chance to take a different path based on different circumstances; the chance to reject the short-term Tory cuts—false economies that will hurt Scotland. The new powers to be devolved to the Scottish Parliament will only enhance the range of choices on offer. The Scotland Bill that is due to transfer those powers was based on the recommendations of the Smith commission— recommendations which were agreed by all parties.
Of course, the Smith commission was based on the solemn promise made to the people of Scotland. The Scotland Bill was passed in this place and is currently being debated in the other place. The only sticking point—the only remaining obstacle—is agreement on the fiscal framework. Until that revised framework is agreed by the Conservative Government and the SNP Government, the Scotland Bill cannot be enacted, and without agreement, Scotland will never get the power and responsibility it has been promised. As Labour’s motion states, the lack of transparency from the Tories and the SNP continues to block progress.
The deadline for concluding the negotiations has consistently been pushed back, yet no one outside the two Governments knows the reasons why. We need a negotiated agreement in order to move on, otherwise the new powers will lie dormant; and we need an agreement before the Scottish Parliament rises for the Holyrood elections in May.
There has been a democratic deficit at the heart of the negotiations of Scotland’s revised fiscal framework. It is a deficit that must be closed, and that is the purpose of today’s debate. It is a deficit caused by the Tories in Westminster and the SNP in Holyrood, a deficit that is hurting, not helping, the people of Scotland—[Interruption.] An agreement has not been reached. Only when the Scotland Bill is enacted and the powers transferred can we truly move on from the constitutional wrangling that has come to dominate the political discourse in Scotland.
The questions that my hon. Friend the Member for Edinburgh South has asked remain unanswered, so I will reiterate them. The Chief Secretary to the Treasury announced today that he would be in Scotland—[Interruption.] I hope that he will have a chance to listen to me in a moment. He announced today that he would be in Scotland for more talks on Monday. What are his aspirations for that meeting? Perhaps he could share them with us today. Does he recognise 12 February as a final deadline? What will happen if that deadline is missed? Will the Secretary of State publish the final offers for both parties, for transparency purposes? Has consideration been given to agreeing a deal for a trial period, to allow for assessment and adjustment? I call upon the UK Government to publish all minutes and papers from the Joint Exchequer Committee negotiations and to assure the House that every effort is being made to ensure that an agreement on the revised fiscal framework will be reached and the Scotland Bill will be passed prior to the Scottish Parliament elections.
Scotland Bill
Seema Malhotra Excerpts(9 years, 5 months ago)
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David Mundell
The hon. Gentleman’s timing is impeccable, because I was just coming on to the so-called fiscal framework that underpins the transfer of tax and welfare powers to Holyrood. Alongside the Barnett formula, the framework will deliver a fair and lasting financial settlement for Scotland and the rest of the UK. The framework will provide the Scottish Government with the means by which they can determine a mix of taxation and spending specific to Scotland, but which fits with the UK Government’s overall fiscal plan.
This means that Scotland will continue to benefit from the pooling of risks and resources across the whole of the UK, but the Scottish Government will soon be responsible for raising substantial amounts of its revenue through taxation. As a result, it will be more accountable to the Scottish Parliament and to the Scottish people. The Scottish Government will in future be responsible for more than 50% of their funding. Changes in the Scottish Government’s funding will therefore be increasingly determined by changes to Scottish taxation.
The detail of the Scottish fiscal framework will be agreed between the UK Government and the Scottish Government on the basis set out in the Smith agreement. Discussions on the framework have already begun with the aim of reaching an agreement alongside the passing of the Scotland Bill. My right hon. Friend the Chancellor of the Exchequer has met the Scottish Government Deputy First Minister, John Swinney, today. This timetable demonstrates the Government’s determination to make quick progress on the fiscal framework.
Seema Malhotra (Feltham and Heston) (Lab/Co-op)
Will the Secretary of State clarify whether the final say on social security levels will rest with the Scottish Parliament?
David Mundell
The Scottish Parliament will have the capacity to top up welfare benefits. It could be said that it would have the final say on the level of benefit. UK benefits will obviously be determined in this House, but the Scottish Parliament will have the opportunity to top them up, as is clearly set out in the Bill.