Budget: Scotland

Tracy Gilbert Excerpts

Tuesday 7th January 2025 Westminster Hall

[Dave Doogan]

No. If the hon. Gentleman can get one of his colleagues to intervene, I will give way to them.

The Government’s decision to raise national insurance was like them showing that they do not know how the real economy works without showing that they do not know how the real economy works. It is a punitive lowering of the floor and increasing of the rate to try to wring out of employers the money required to recover the economy. It is a drag on employment, investment and wage rises. It is absolutely unforgiveable and totally counter to what the Labour party stated, ahead of the election, was its aim: to create a Budget for growth. There will be absolutely no growth as a consequence of that autumn statement. The Government think they will raise over £20 billion but, by the Treasury’s own measure, that figure is down to around £10 billion after they have made all the compensations. It is a massive swage of pain for very little gain in investment.

In moving the motion, the hon. Member for Livingston said that we in the SNP are keen to spend the extra money we will get but not to say how we would raise it. Actually, I will tell him how we would raise it, and our way would be much more cogent than what the Labour Government in Westminster have said they will do. Over and above that, in a Scotland-specific context the hike in duty on Scotch whisky was, in the words of the industry itself, “an indefensible tax grab”. Yet somehow we are expected to believe that everything will be okay because Anas Sarwar is going to speak to the Chancellor about it. The Chancellor will presumably then do what the UK Government always do when Labour in Scotland ask them to do something: absolutely nothing, if not the exact opposite.

The hon. Member for Livingston also talked about energy. He should go up to the north-east of Scotland to talk about energy: we are six months into this Government and there is no evidence whatever of GB Energy making any impact in Scotland. The last time I checked, it had one employee and was based in Manchester. The hon. Member also talked about the investment that would be realised. Somehow, the Acorn project in Scotland —the most deliverable carbon capture, usage and storage project across GB—is still not being funded by the Labour Government, despite their funding a further two CCUS projects in England, in addition to the two already there. Sadly, it is England 4, Scotland 0—it is like a football match.

[Tracy Gilbert (Edinburgh North and Leith) (Lab)]

The point about green jobs and giving consent at Berwick Bank was made earlier. I ask the hon. Gentleman: when will that happen, to enable investment to come forward? That is another example of things being held back.

[Dave Doogan]

Like the hon. Lady, I am very hopeful that we will see Berwick Bank approved and into the construction phase as quickly as possible, to cement Scotland’s enviable position as the renewable powerhouse of Europe. She shares that ambition with me, but what we are talking about is due process. It ill behoves elected Members of any stripe or any Parliament to meddle in the statutory process of a consenting major development; that will unwind in the way it unwinds, but I very much hope it is positive and expedient.

I turn to the Women Against State Pension Inequality—the WASPI women. They will absolutely have been left wondering what they have done to deserve such a catastrophic betrayal by the Labour party of their very modest and reasonable ambitions. During the debate on the autumn statement, I said that it was fantastic news that the Government, to be fair, had made sure that the money was there for the infected blood scandal and that the postmasters were properly compensated. Neither of those two scandals was of the UK Government’s making—well, not deliberately of their making; certainly not the infected blood scandal—but the WASPI women’s situation was. We now know the Government have turned their back on those people in the most reprehensible way possible.

The Chancellor promised a growth Budget and the hon. Member for Livingston says it is a growth Budget, but sadly it will

“leave GDP largely unchanged in five years”.

The inflation forecast will compound that. Inflation is set to rise to 2.6% and interest rates by 0.25% just; mortgage rates, after a brief period of respite, are on course to rise again. For years, people up and down these islands, especially in Scotland, have been hammered by the cost of living crisis. They, alongside small businesses, will be looking at this hatchet job by the Labour party and wondering what on earth will be coming next. The Institute for Fiscal Studies, no less, has pointed out that somebody will pay for these higher taxes; that somebody will be the ordinary working person. The Office for Budget Responsibility estimates that there is only a 54% chance that the Labour Government will meet their own fiscal rules through this Budget, raising the question of why the Chancellor thinks this amount of economic pain is worth such a low level of fiscal gain.

What about investors in the agricultural sector? Scotland’s agriculture is a very much larger part of its economy than overall UK agriculture is of the UK economy, but I am sure the Chancellor never bothered to speak to anybody in Scotland about her raid on farms through her farmers’ death tax. Labour could have done something progressive to stop outside investment and farmers disrupting that market, but they did not and they threatened the very existence of Scottish agriculture.

What would the SNP have done? We would certainly not have put this colossal fiscal drag on the economy of Scotland. We would have made sure that what we did was progressive and proportionate and that it would increase economic growth. I am sure Labour Members are not very supportive of an income tax in Scotland—

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[Tracy Gilbert (Edinburgh North and Leith) (Lab)]

It is a pleasure to serve under your chairship, Ms Vaz. I congratulate my hon. Friend the Member for Livingston (Gregor Poynton) on securing this important debate. Seeing as we are so short of time, I will try to cut my speech down to a minute.

An area of the Budget I welcome is the announcement over the recess from the Ministry of Housing, Communities and Local Government of the allocation of £150 million to community projects across the UK, including £1.7 million to North Edinburgh Arts, part of the new MacMillan Hub in my Edinburgh North and Leith constituency. The new hub is the first of its kind in Scotland, co-locating a community-owned venue and third sector and council services for the benefit of local residents.

The MacMillan hub will provide an accessible and high-quality creative learning, enterprise and meeting space, alongside a social enterprise café, a community garden, a public library and a dedicated skills hub, as well as an early learning and childcare centre for 185 children. The investment will be transformative for Muirhouse and the constituency, and will be a joined-up approach of the sort that I hope to see more of for our communities.

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[Andrew Bowie (West Aberdeenshire and Kincardine) (Con)]

It is a genuine pleasure, again, to serve under your chairship, Ms Vaz. I congratulate the hon. Member for Livingston (Gregor Poynton) on bringing forward this debate, although, rather like the hon. Member for Angus and Perthshire Glens (Dave Doogan), I was a little surprised that it was a Labour MP bringing forward a debate on the impact of the Budget on Scotland.

As much as I would like to spend my time attacking the incompetence of the Scottish Government and their record, this is a debate on the UK Budget brought forward by the UK Government, so that is what I will focus on. I am grateful that the hon. Member for Livingston has given us the opportunity to express the worry and the concern felt across Scotland as a result of the frankly disastrous Budget that the Labour party unveiled at the end of October, which has already seen business confidence plummet, inflation tick up and hard-fought-for growth stall—quite a feat.

Members do not need to take it from me, though; they can take it from Scottish business organisations. The Scottish Hospitality Group called the Budget a

“blow to businesses across the country.”

The Scotch Whisky Association called it a “hammer blow” to the industry, Offshore Energies UK called it a “difficult day” for the oil and gas sector, and the National Farmers Union of Scotland said it will cause “huge difficulties” for family farms, all while the OBR forecasts lower growth for the UK as a whole. With the biggest ever tax increases in one Budget hitting Scotland—already the highest-taxed part of the UK—even harder, Labour’s tax-raising Budget is straight out of the SNP playbook, and sadly will hammer hard-working Scots.

Let us take some of the decisions in turn. There was the decision to raise employer national insurance contributions, which, by the way, was a flagrant breach of the manifesto commitment not to do so. NICs have been raised by £25 billion, lowering the point at which contributions start. This Labour Government are hammering the worst off, those in part-time work and those starting out by hampering their ability to get or hold a job. Labour’s jobs tax will cost nearly £900 for the average Scottish job.

[Tracy Gilbert]

Does the hon. Member agree that, actually, 200,000 Scots—some of the lowest-paid, poorest families in our communities—will benefit from the new deal for working people?

[Andrew Bowie]

There are businesses across Scotland that are now seeking to lay people off, not employ new staff. In Aberdeenshire in the north-east, energy companies are seeking to lay off staff as a direct result of decisions taken by this Government. In fact, the negative impact of the Budget on growth and investment in Scotland will actually have a detrimental effect on all people in the workplace. So no, I do not agree that any of the decisions taken in the Budget will be to the benefit of hard-working Scots. In fact, I believe directly the opposite. This jobs tax—the increase in national insurance contributions —is an attack on our working people, our small businesses and our economy by this economically illiterate, as proven so far, Labour Government.

For family businesses such as Walker’s Shortbread, William Grant, Tunnock’s or GAP Group, the situation is compounded by the changes to business property relief brought in by the Government. In GAP’s case, that will mean that a company that employs 2,100 people and that already pays more than £50 million in taxes annually will have an additional tax bill of between £50 million and £100 million, simply for wanting to move the business to the next generation. As Douglas Anderson of GAP said to The Times yesterday, this is

“a state penalty on family businesses.”

It is simply unfair.