Budget Resolutions

Stewart Hosie Excerpts

Wednesday 6th March 2024 Commons Chamber

[Stewart Hosie (Dundee East) (SNP)]

In his statement, the Chancellor mentioned “not just higher GDP, but higher GDP per head.” There is just one slight snag: figures published today for GDP growth per capita from 2024 to 2027 are lower for every year than figures published only a year ago, so we are talking about not higher GDP per head, but lower GDP per head. I use that as an example; we hear the rhetoric and hyperbole of the Budget statement, but it rarely stands any scrutiny when one reads the Budget documentation. The Government can claim that they will meet both their fiscal targets at the end of a five-year rolling forecast period—indeed, every Government could say they will meet their targets at the end of a five-year rolling forecast period—but it is what happens in between those points that is important.

The Government told us a year ago that net debt would fall as a share of GDP in 2024-25, and that net borrowing would fall below 3% of GDP in 2025-26. However, by the autumn statement, only five months ago, we were told that debt would not fall until 2025-26, a year later—and they still forecast that the deficit would fall below 3% of GDP in the same year. We were also told in spring that GDP growth would exceed 2% in two of the next five years, and that productivity would sit between 1% and 1.3% every year across 2024 to 2027. By November, growth was not forecast to exceed 2% in any of the forecast years, and the productivity growth forecast was down for every single year. Today, the Chancellor announced that while the Government would still meet their primary debt target in 2025-26, the percentage of debt to GDP would be higher than it was only five months ago, so debt is not really falling; at best, it is stagnating. GDP growth would still not exceed 2% in any year to 2028, and that is important. That is another half-decade in which GDP growth will not even reach historical trend growth rates. That is absolutely shameful.

The figure for productivity per hour—a metric that the Government like—is lower cumulatively over today’s new forecast period than the figure was that they announced last November. The Chancellor said this was a Budget for growth, productivity and long-term investment, but debt is not really falling as a share of GDP. The deficit is not getting smaller—it is actually getting worse, compared with the forecast last year—and productivity growth, that perennial problem that we all recognise exists, is cumulatively lower over the entire forecast period than the Government announced last November.

[The Parliamentary Under-Secretary of State for Business and Trade (Kevin Hollinrake)]

Does the right hon. Gentleman agree that we have to increase growth? We all agree that we have to get all parts of the United Kingdom growing. If he looks at the figures from the Library, he will see that from 2011 to 2021, England grew cumulatively by 14.9%, Wales by 13.7%, and Scotland by 7.2%. Does he agree that the Scottish Government need to do more to stimulate growth in Scotland?

[Stewart Hosie]

I agree that we need growth across the piece. One of the tools to facilitate growth is tax credits, and I am sure the Minister recognises that tax credits are a function of corporation tax. If he is serious about encouraging growth in Scotland, the Government should devolve business taxation powers and power over the associated tax credits; we would then see how we got on.

Whatever was said at the start of the statement about growth and productivity, and despite the hyperbole, the big introduction and all the fanfare, this Budget delivers neither of those things, as evidenced by the numbers that the Government have published today.