Budget: Scotland

[Valerie Vaz in the Chair]

I beg to move,

That this House has considered the fiscal impact of the Autumn Budget 2024 on Scotland.

It is a pleasure to serve under your chairmanship, Ms Vaz. I am delighted to begin this important debate on the fiscal impact of the UK 2024 Budget on Scotland. The Chancellor delivered a Budget on 30 October that was the largest settlement for the Scottish Government in the history of devolution. It means an additional £1.5 billion for the Scottish Government to spend in this financial year, and an additional £3.4 billion in the next. That amounts to a total of £47.7 billion for Scotland’s budget in 2025-26, the biggest financial settlement in the history of devolution.

The Budget keeps Labour’s promises to Scotland and the Scots, who put their faith in a Labour Government. The road ahead is not easy, nor were all the individual decisions made in the Budget, but the appalling economic inheritance left to this Government by the Tories, who gave us austerity, Brexit chaos, Boris Johnson and Liz Truss, needs clearing up.

After 14 years of Tory chaos, division and decline, the Budget turns the page on those lost Tory years, fixing the foundations and rebuilding our country. It supports Scottish businesses to get the Scottish economy motoring again. It provides funding for green freeports, city growth deals, Great British Energy and hydrogen projects to fire up growth and deliver good jobs across Scotland. It will remove connectivity black holes, through Project Gigabit and the shared rural network, boosting 4G coverage in the highlands and islands, and provide £125 million for GB Energy, headquartered in Aberdeen, with hubs in Edinburgh and Glasgow. It will fund two hydrogen projects in Cromarty and Whitelee, and extend the innovation cluster in the Glasgow city region for a further year.

The Budget will implement the 45% and 40% rates of theatre, orchestra, museum and galleries tax relief, to provide certainty to businesses in Scotland’s thriving cultural sector. It will provide Scotland’s world-renowned whisky industry with up to £5 million for His Majesty’s Revenue and Customs to reduce the fees charged by the spirit drinks verification scheme, and end the mandatory duty stamps on spirits from May this year. It will kick-start growth at a local level by investing £1.4 billion in local growth projects across Scotland for the next 10 years, including £26 million for the Forth green freeport.

The list goes on. The Budget supports working people by boosting the national living wage, resulting in a pay rise to around 200,000 of the lowest-paid Scots, and extends the temporary 5p cut in fuel duty, benefiting an estimated 3.2 million people in Scotland by £58 a year. The Budget also supports Scottish pensioners and those on welfare benefits. The Government’s commitment to the triple lock will see over 1 million Scottish pensioners benefit from £8.6 million a year more during this Parliament.

Pension credit is up, benefiting 125,000 of the neediest pensioners in Scotland. The Budget uprates working-age benefits by inflation, resulting in 1.7 million families in Scotland seeing their working-age benefits going up by an average of £150. It also reduces the maximum level of debt repayments that can be deducted from a household’s universal credit payment each month, from 25% to 15%. That will benefit the average Scottish family by more than £420 a year. And that is not all: Labour’s manifesto commitment to Brand Scotland has been realised. An initial investment of £750,000 this year will fund trade missions, promote Scottish goods and services around the world, and help Scottish businesses export for the first time.

This Budget also marks the end of the era of austerity. It provides billions of investment in public services and prioritises investment in our economy to jump-start growth, while raising money from those with the broadest shoulders. It provides significant increases in investment to ensure that we have the public funding available for Scotland’s NHS, schools and public services. In short, this Budget is good for Scotland.

One other thing that the Budget did was to remove the ringfence around agricultural support payments. Surely an intervention as significant as that in the operation of a UK-wide market should be made on a UK-wide basis. I do not understand the rationale for the Treasury decision. Can the hon. Gentleman explain it to me?

As I said at the start, not all the decisions in this Budget were easy. We had been left a horrible economic inheritance by the Tories, and we needed to make decisions to tackle that and clear the mess up that they made.

The decisions in the Budget mean that the Scottish Government are receiving more per person than the equivalent UK Government spending for the rest of the UK. As I said, in 2025-26, we will see the biggest financial settlement to the Scottish Government in the history of devolution. Sadly, however, we know from bitter experience that more money to the Scottish Government does not guarantee success, because the Scottish National party is taking Scotland in the wrong direction and being careless with Scotland’s money.

The hon. Gentleman speaks about the ending of austerity, but how can he say that when we have seen the removal of the winter fuel payment and a refusal by the Labour Government to end the two-child cap?

We have delivered the largest budget settlement in the history of devolution—that is the end of austerity. [Interruption.] Well, you have it to spend.

SNP decisions have left a black hole in Scotland’s finances. The billions in extra cash delivered in this Budget must not be used simply to cover up the SNP’s “buy now and pay later” policies. That money must reach the frontline, to bring down waiting lists and drive up educational standards. The SNP has nowhere to hide now.

The changes to national insurance contributions mean that Aberdeenshire council has to find an extra £13 million in its budget this year. How will that help with education standards and health in Aberdeenshire?

The largest settlement ever received by the Scottish Government in the history of devolution is driving up additional funding that can be spent in Scotland. The SNP has nowhere to hide; it has no more excuses. It cannot continue to blame others for its economic and financial incompetence, because the problems in Scottish public services are not solved by simply having more money to spend. The Scottish Government need to get much, much better at spending it.

I am grateful to the hon. Gentleman for giving way, and I apologise for chuntering from a sedentary position earlier; that was not very polite of me. He says that we need to see an end to the SNP’s “buy now and pay later” approach. Of course, he will be familiar with the fact that the SNP Government, or any other Scottish Government, must have a balanced budget every year, so what does he mean by “buy now and pay later”?

You can borrow to invest. Also, the hon. Gentleman’s party has announced that it is ending the two-child cap but with no money to pay for it—that, to me, is “buy now and pay later”.

Scots can see that the SNP has lost its way and is out of ideas, and that its Ministers are incompetent and wasteful with public money. Scots earning over £29,000 a year pay more in tax in Scotland than people in the rest of the UK, which Scottish Labour will look at if we win the next election. What do Scots get for those higher taxes? They get a Government who waste millions on delayed discharge and agency staff in our NHS, ferries that do not sail and pet projects that do not deliver for Scotland, all while decimating local community funding, which means that vital services are lost.

Where, for example, is the vision for reform of Scotland’s NHS, which lurches from crisis to crisis? What was once an annual winter crisis now stretches further and further into other seasons. Our heroic NHS staff do a fantastic job under the most difficult circumstances, but they and the Scottish public are being badly let down by their political leadership, who waste millions on delayed discharge and agency staff.

This week, we have seen the UK Labour Government commit to a plan to get waiting times down from 18 months to 18 weeks, and to put in place the firm foundations to deliver proper social care services. Where is the SNP’s ambition on either of those two issues?

Labour colleagues like nothing more than to talk about the Scottish Government—they do it every time they get the opportunity. But does the hon. Gentleman not understand the depth of anger right across Scotland about this Budget, whether it comes from pensioners who are freezing in their homes right now, child poverty campaigners who are disappointed that it will do nothing about the two-child benefit cap, employers who are paying the cost of the national insurance rise, or farmers?

I call Gregor Poynton—

Is this the reason behind the massive fall in Labour support in Scotland?

That was a long intervention. As I said before, they have the powers and the money, and it is up to the Scottish Government to make the decisions that SNP Members talk about. They complain about every single penny that we have raised in this Budget, but that money is being invested in Scottish public services. They cannot enjoy the money that is being spent on the one hand and complain about every penny piece that has been raised on the other.

A National Care Service Bill that was ill-thought-through has now been binned, and there is no plan to reform or be ambitious for Scotland’s NHS to deliver the care our constituents need. The proposed East Calder medical centre in my constituency is a textbook example of how these failings manifest themselves at a local level. Patients, doctors, the local community and the health board all agree that we need a new health centre in East Calder. The one thing holding it back is the Scottish Government’s management of NHS resources. With this year’s unprecedented Budget settlement, the funding is now there to deliver projects such as this, and there can be no more excuses.

Where is the planning reform to unleash growth and get Scotland building again? There is a terrible shortage of planning officers in Scotland and no plan to tackle it. There is no substantive commitment to build more homes or any sign of the action needed to make that happen. The drift and lack of vision is summed up in the Scottish Government’s behaviour around the proposed Berwick bank offshore wind farm. The planning application was submitted in December 2022 but still awaits a decision from Scottish Government Ministers. What are they waiting for? Why are they dithering? Why is it taking so long for Scottish Ministers to get a grip of this important decision? As the Aberdeen & Grampian chamber of commerce has said, all they are achieving is putting potentially billions of pounds of investment and thousands of high-quality green jobs at risk.

A number of hon. Members wish to speak, and we will have to take the wind-ups at about 3.28 pm.