PARLIAMENTARY DEBATE
Spring Budget 2024 - 1 May 2024 (Commons/Commons Chamber)

We have again seen calamitous events in Scotland this week. However, I wish Humza Yousaf very well for the future. I always found him to be a very decent man to work with, and there is no doubt that he was dealt a rotten hand.

Although I do not want to dwell unduly on the private grief of SNP Members, I very much hope that whoever becomes First Minister will work with us on the issues that really matter to people in Scotland, such as public services and our economy, and will not continue to obsess with independence.

This Government are taking long-term decisions to cut taxes for working people and to grow the economy. The spring Budget represented a significant milestone in the UK Government’s levelling-up mission, with investment into Scotland bursting through the £3 billion mark. In addition, the Scottish Government will benefit from a £295 million funding uplift through the Barnett formula for 2024-25.

The reality is that the Chancellor’s regressive spring Budget left the people of Scotland behind. In contrast, the SNP Scottish Government took the bold step of implementing a progressive tax scheme.

The Westminster establishment argued that Scotland’s income tax rates would somehow cause people to leave the country. Last week, however, it was revealed by His Majesty’s Revenue and Customs that the opposite is true, with many more taxpayers moving to Scotland than leaving. Will the Secretary of State join me in welcoming this brilliant news and congratulating the Scottish Government on standing up for the people of Scotland?

The hon. Lady’s point would be relevant if that report were not from 2018-19, long before we entered into six tax bands in Scotland, versus three in the rest of the UK. I absolutely do not agree with her.

The Secretary of State mentioned levelling up, which is curious. We know that the Budget cut public services across the board and cut Scotland’s capital funding, yet levelling up seems to benefit places such as the financial district of Canary Wharf, which has benefited by £16,000 per head. Is he suggesting that Scotland, but not other parts of the UK, should accept austerity from this Government?

That is a ridiculous remark. The levelling-up agenda in Scotland has been fantastically successful, and there has been absolutely no austerity. The Scottish Government have received a record block grant of £41 billion, the highest since devolution began. I am surprised that the SNP wants to talk about the Budget, because the Scottish Government’s Budget put taxes up and cut vital public services, so Scots are actually paying more and getting less.

What utter nonsense. The hypocrisy of this Tory party, which is busy gaslighting the Scottish public by complaining about cuts to capital spending while the Tory Government are busy cutting 16%, or £822 million, from the Scottish Government’s capital block grant allocation, is quite astonishing. With Westminster holding Scotland back yet again, can the Secretary of State tell us, as Scotland’s man in the Cabinet, whether he argued against these cuts? Will he argue for the Scottish Parliament to have the ability to raise more capital borrowing to mitigate these savage Westminster cuts and to help drive Scotland forward?

In the fiscal framework settlement, we made it very clear and agreed with the Scottish Government that resource funding could be reallocated, if they so wished, from the record block grant into capital funding. That is what has happened. Additionally, they have the ability to borrow £450 million, if required.

I also begin by passing on my best wishes to Humza Yousaf and his family. I always found him very personable in my dealings with him, although I disagree with virtually everything he has said or done as First Minister of Scotland, particularly putting up taxes and delivering poorer public services.

Is my right hon. Friend aware that businesses in my constituency are struggling to recruit employees from other parts of the United Kingdom because of the higher tax rates in Scotland, which are damaging our local economy?

My right hon. Friend makes a good point. I am well aware, as are businesses in Dumfries and Galloway, that having six tax bands in Scotland but three in the rest of the UK is not the way to incentivise people to go to work in Scotland or even to relocate their businesses there.

I call the shadow Secretary of State.

On this International Workers’ Day, May Day, Scottish Television journalists are striking for fair pay. I am sure the Secretary of State will join me in insisting that STV gets back around the table with its journalists to thrash out an acceptable deal. Given all the news that is happening this week, we need them back on the television.

I too pay tribute to the outgoing First Minister, Humza Yousaf. We may not have agreed on everything, but his historic appointment marked a pivotal moment in our multicultural public life in Scotland, and I wish him and his family well for the future.

The spring Budget was just another moment that exposed the damage done by the chaos of the former Prime Minister’s kamikaze Budget. The Secretary of State has been spinning that it brings taxes down, but is it not the case that the tax burden in Scotland and across the rest of the UK continues to rise? The Prime Minister now wants to mirror his irresponsible predecessor with an unfunded £46 billion policy to get rid of national insurance altogether. The Secretary of State sits around the Cabinet table, so which one of these have they discussed to pay for this: pensioners, the NHS or income tax rises?

I agree with the hon. Gentleman that the tax burden in Scotland is too high and rising, and people are paying more and getting less. Fortunately, the UK Government have taken the decision to partially offset that, not through income tax cuts but through national insurance cuts, with 4p coming off NI. To pick up on his last point, he was referring to an aspiration that this Government have. We have already reduced NI by 4p, a third, and we aspire to remove it altogether, because it is a tax on jobs.

This is a £46 billion, unfunded aspiration, and the Secretary of State and the Government will not tell us where they will get the money from. Scotland is trapped between two chaotic and failing Governments; we have had three Prime Ministers, and we will have had three First Ministers, in as many years. All the while, the right hon. Member for Aberdeen South (Stephen Flynn) thinks he is already the First Minister and calling the shots, although he has been shooting himself firmly in the foot. What is abundantly clear to the people of Scotland is that neither the Scottish Government nor the UK Government are even interested in delivering the change that Scotland needs. With neither Government wanting to let the people decide, will the Secretary of State tell the House who he thinks is most scared of a general election, the Tories or the Scottish National party?

We absolutely do not fear an election, whether for Holyrood or a general election. As I watch the nationalists implode again, I say, “Bring it on.” I hear them say the same from a sedentary position. [Interruption.] Bring it on! Chaps and chapesses over there, start polishing up your CVs.

I call the SNP spokesperson.

I, too, on behalf of the SNP group, put on record our sincere thanks to Humza Yousaf for his public service over the months and years. I wish him, Nadia and the rest of his family all the best in their future.

Let me also observe that fewer people in Scotland will see our proceedings today as Scottish Television is currently blacked out because of a strike by TV journalists. I implore the management of STV to get back around the table with the National Union of Journalists, improve its pay offer and try to settle this dispute.

The Budget that was approved a few months ago also contains forward planning assumptions on income and expenditure over the next three to five years. What assessment has the Secretary of State made of those assumptions on the Scottish public finances?

As I have said before, we have a record block grant. It is running over a three-year period and it averages out at £41.6 billion, and then there are Barnett consequentials added to that. This year, that figure is £295 million, based on the spring Budget’s figures.

That sounds like no assessment at all has been made. The truth is that, according to the Institute for Fiscal Studies, these forward planning assumptions involve public service cuts of up to £20 billion. That can only imply savage cuts to the Scottish block grant in the next two to three years. Sadly, these planning assumptions and the framework are endorsed by the Labour party. So if people vote either Conservative or Labour at the coming election, are they not consenting to massive cuts in public services in Scotland?

Of course I do not agree with those figures. Public services in Scotland are in a desperate state. In their recent Budget, the Scottish Government froze council tax, thereby putting more pressure on local authorities to deliver those public services.