Treasury Spending: Grants to Devolved Institutions

Stephen Kerr Excerpts

Tuesday 3rd July 2018 Commons Chamber

[Stephen Kerr (Stirling) (Con)]

rose—

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

rose—

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[Douglas Ross (Moray) (Con)]

I am shocked—shocked that a debate entitled, “Spending decisions of HM Treasury and their consequences for grants to the devolved institutions” could muster just one Scottish National party speaker. The hon. Member for Aberdeen North (Kirsty Blackman) and the SNP Chief Whip sitting in the corner, out of a parliamentary group of 35 MPs, is all they can muster. The hon. Member for Carmarthen East and Dinefwr (Jonathan Edwards) has just rightly said that this is a debate about bread and butter issues that he is happy to be debating, yet other nationalists in this place seem to be happy to be absent.

I will be looking very closely tomorrow at the SNP Opposition day debate on the claim of right for Scotland: yet another argument in this place about constitutional matters. Will the SNP Benches be so sparsely populated for a debate on the claim of right for Scotland as they are tonight about the money we spend in Scotland and the public services we get? I think my constituents and people across Scotland will wonder why they send SNP representatives down to Westminster if they cannot even turn up to a debate about spending in the devolved Administrations.

This is an important debate that affects all our constituencies across Scotland and Wales. It is about the money we put forward in Westminster to be spent in the devolved Administrations. I want to pick up on points made by my hon. Friend the Member for Angus (Kirstene Hair). My NHS area is suffering at the moment. NHS Grampian is one of the poorest funded health boards anywhere in Scotland. I continually receive complaints about local healthcare and waiting lists. In fact, I wrote to the acting chief executive today about someone who has to wait up to two years for an ear, nose and throat check for nosebleeds that stop her leaving her home, because she is so worried about having another severe nosebleed. When she went to the NHS in Scotland, they said, “You can go privately and get it done within a week or two.” But NHS Scotland, overseen by the SNP for the past 11 years, says she has to wait up to two years. That is not acceptable to my constituent or to anyone else.

I note that the two SNP Members in the Chamber are not intervening to say that that is wrong. They know that after 11 years, under a First Minister who was previously Health Secretary, another Health Secretary who was her friend, and now a new Health Secretary, health in Scotland is suffering because the SNP is performing poorly in this area despite significant investment by the UK Government. We have already heard that £2 billion extra has been invested in Scotland as a result of last year’s Budget. By 2020, the block grant will have grown to over £31.1 billion: £31.1 billion is going to the SNP Government in Scotland and the way they are spending it is letting us down.

[Stephen Kerr]

Will my hon. Friend confirm that because of our hard-nosed lobbying of the Treasury, the £2 billion that was dismissed as not real money is very much real money, and it is investment in Scotland that we badly need?

[Douglas Ross]

Absolutely. The Chancellor said at the Dispatch Box during that Budget debate that his ear had been bent by the Scottish Conservatives. It was not bent by the SNP—not surprising, because they do not seem to turn up to debates about the economy in Scotland. It was the work of the Scottish Conservative MPs, working alongside our Ministers within Government, that achieved that for Scotland. The resource budget in Scotland has gone up by almost £100 million in the last year. Those real-term changes are positively impacting on people in Scotland and all we get from the SNP are more and more complaints.

I know that time is short, Madam Deputy Speaker, but I was interested that in the 20 minutes that the hon. Member for Aberdeen North spent introducing the debate, there was no mention of the recent reshuffle. This is important when we talk about the money that goes to Scotland to spend on the devolved Administration. She did not mention that in a decade of the SNP being in power in Scotland, the number of Ministers has gone from 16 to 26. The cost of Ministers in Scotland has gone up by £400 million. That does not include the extra funding that will go to their private offices or on their car hire. I notice that the hon. Member for Perth and North Perthshire (Pete Wishart) has just come in. Clearly, a message has gone out—“We must get more people on our Benches.” They have now gone up to three, and it will be interesting to see his contribution to the debate.

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[Luke Graham]

This debate is about devolved funding for our constituents. If the hon. Gentleman wants to talk about that, he should go somewhere else.

We have just ascertained in the Chamber that Scotland has received more money from the UK Government. It is now important to look at how it is actually spent. As my hon. Friend the Member for Angus (Kirstene Hair) said, about one third of the 2018-19 budget went on health and sport, but one of the next biggest areas of funding is finance and the constitution, where 11.8% of the budget is being spent. Now, finance and the constitution are all perfectly fine and important things, if they want to make those choices, but it is more relevant when we consider the percentage of spending that goes on education and skills, which is 8.4%. The No. 1 priority for the SNP Administration only gets 8.4% of the funding, versus the—wait for it—12.4% from the Westminster Government that goes on education and skills.

[Stephen Kerr]

rose—

[Luke Graham]

It is the SNP Government’s No. 1 priority and yet our schools are plunging in the international rankings. I give way to my hon. Friend.

[Stephen Kerr]

My hon. Friend has pre-empted my point. Will he remind the House what has happened to Scottish education in the last 11 years under this SNP Scottish Government?

[Luke Graham]

The performance has been lamentable. Scotland’s schools have fallen in the rankings in reading, mathematics and science. We have gone from No. 1 in the UK to No. 3. Scottish education, which was once a byword for excellence in the world, is now merely ranked as average in most international tables. That is not doing Scotland down; it is recognising a problem because we want to solve it.

I am conscious of time so I will come to my last point. We have all heard of “tax and spend” Governments, but we rarely hear of “tax and underspend” Governments, yet that is what we have in Edinburgh. In 2017-18, the Government underspent by £453 million. The Finance Secretary in Edinburgh says, “This is all part of a plan. It is normal to underspend on your budget.” I think the Chief Secretary to the Treasury would probably say it is not normal for Departments to lobby to underspend on their budgets; in fact, they want to meet or exceed those budgets.

This underspend covers £66 million for volatility; £100 million for a new social security system—instead of actually working with the UK Government to build a better devolved social security system; and £50 million from better tax receipts that they are not refunding or reinvesting in Scottish local authorities. This would be bad in one year, but it is in addition to the £191 million underspend from the previous year. The SNP continues to scream for more powers and spending, and yet when its receives the powers, it does not use them, and when it sees the money, it does not spend it.

My constituents are fed up with the mismanagement of the SNP. That is why we Scottish Conservatives have stood here tonight. Why is it that, despite more money going from Westminster to Edinburgh, we still face cuts to our local council services, in Clackmannanshire and in Perth and Kinross, cuts to music education, cuts to support services for disabled people, cuts in infrastructure, cuts to our roads and paths—[Interruption.] If the hon. Member for Perth and North Perthshire (Pete Wishart) wants to make an intervention, he is more than welcome to do so. [Interruption.] Oh yes, I am conscious of time so I will not give way. It is time for the SNP to take account of the money its receives and to take responsibility for the budgets it receives from Westminster; it is not time for my constituents to carry on paying for the mismanagement of the SNP.

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[Stephen Kerr (Stirling) (Con)]

It seems to me that we often get carried away when we speak about money in this place. We speak about giving an extra couple of billion here, or an extra 10 million there. For most people—and I include myself in their number—such amounts are hard to imagine.

When we examine the figure of £453 million, we can come up with some interesting statistics. If £453 million were paid in pound coins, it would weigh 9.5 tonnes, and would stack into a pile almost 2 miles high. The total budget for the Forth Valley health board, which covers my constituency in Clackmannanshire and Falkirk, is about that amount, and it is more than twice the budget for council services in my constituency. For that amount, every one of my constituents could be educated, have their bins picked up and have their roads repaired for two years. That is the size of the Scottish Government underspend. I will say that again: this is the amount of money that was allocated to them and was not spent.

The SNP does not like that figure to be discussed and generally disseminated; it resists scrutiny, undermines Scottish parliamentary committees, and has subverted the freedom of information process in Scotland. But it is right during this debate that we speak about the services that could have been provided with the money allocated for the last financial year had it been spent—the healthcare that could have been provided to the sick, the educational equipment that could have been bought for our students, and the roads that could have been fixed or repaired for our motorists by the Scottish Government. The Scottish taxpayer is now the highest taxed of all taxpayers in these islands.

Of course, I defend the right of the SNP Scottish Government to set their spending priorities according to the priorities they have set for that Government. That is their prerogative. The devolved Government can and must reflect the different needs of Scotland. But it is right to throw a spotlight on the mismanagement of the public finances in Scotland and ask questions about the services being cut around Scotland while Derek Mackay runs up a huge Government surplus.

This comes at a time when councils are increasingly dipping into their reserves, and that is a direct consequence of SNP budget cuts. A recent Scottish Government report reveals that in 2017-18 councils spent £126 million from their reserves and this coming year it is predicted that councils will need to call on an additional £113 million- worth of reserves. These reserves are not being used for landmark projects; it is a last resort to keep day-to-day services going.

This might seem like a small issue, but to my constituents who contacted me it is a big deal. I am speaking now of the Stirling play bus. It is an old bus that many children in Stirling and the surrounding district for the past few decades had enjoyed. It went around Stirling, right into the most remote villages and into the heart of the some of the most deprived communities in my constituency. It was a place to play when the weather was not so good and it gave kids a place to go during the summer. The bus was, sadly, scrapped this year having finally given up the ghost. Stirling Council—an SNP and Labour-run council since last year—took the opportunity to reduce play services and remove all mobile provision of this kind, as a cost saving by a council strapped for cash.

It is shocking that this should happen while the Government of Scotland run up a surplus of half a billion pounds. I know Members from across Scotland will have many hundreds of such examples and I could go into many more myself; this will take some explaining on the part of the SNP Scottish Government.

As has been widely reported, the Scottish Fiscal Commission is forecasting that the Scottish Government are facing a £1.7 billion shortfall in public finances over the next five years, as Scotland’s economy lags behind the rest of the UK, with growth remaining below 1% a year until 2023. As my good friend and colleague Murdo Fraser MSP said:

“Derek Mackay might like to fool us all into thinking this £453 million underspend figure is an insignificant sum. But it’s higher than what the SNP’s independence blueprint”

—the growth commission—

“said it would cost to create a separate state. The finance secretary is having to put money aside to meet a projected shortfall in tax revenues due to Scottish economic underperformance.”

Those are the words of Murdo Fraser, and I concur with them.

In the minute I have remaining to me I would like to raise an issue pertinent to my Stirling constituency specifically: the governance of the Stirling and Clackmannanshire city region deal. I am delighted that my right hon. Friend the Chief Secretary to the Treasury is answering this debate because she played no small part in delivering the city deal for Stirling and Clackmannanshire. For that we on these Benches are indebted and very grateful. But I am concerned about the governance that is prescribed for a city deal. I hope she will be able to reassure us that the approach for the governance of the city deal will be pragmatic—that it will be light touch—and will not be left at the mercy of a bureaucratic system of committees and joint boards. I wonder whether having the deal anchored within a council is the best way to achieve what we are striving to achieve. I do not want the Stirling and Clackmannanshire city region deal to find itself in the category of city deals described in a recent FSB Scotland briefing, which welcomed the city deals but questioned their

“lack of engagement with smaller businesses”

and the

“lack of transparency inherent within the deals”.

I look forward to hearing what my right hon. Friend the Chief Secretary to the Treasury—and she truly is a right hon. Friend to Scotland—will have to say in response to that specific concern.

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[Stephen Kerr]

Will my right hon. Friend take this opportunity to confirm to the House that the UK Government contribution to the Stirling and Clackmannanshire city region deal is £45.1 million? The SNP asked the question, and I think it is worth repeating that it is £45.1 million—thanks in no small measure to my right hon. Friend.

[Elizabeth Truss]

I can indeed confirm that the money allocated by the UK Government to the Stirling and Clackmannanshire deal is £45.1 million. I thank my hon. Friend for his hard work on that deal. I will be looking at the issues across Government to make sure that we deliver these deals in the best possible way to deliver real value for local communities. That is what MPs have been campaigning for and I will look into that very carefully.