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Economic Recovery

Volume 678: debated on Wednesday 1 July 2020

What recent discussions he has had with the Chancellor of the Exchequer on the Government’s plans to support economic recovery as the covid-19 lockdown restrictions are eased. (903964)

What recent discussions he has had with the Chancellor of the Exchequer on the Government’s plans to support economic recovery as the covid-19 lockdown restrictions are eased. (903966)

What steps he is taking to support the recovery of the Scottish economy as the covid-19 lockdown restrictions are eased. (903969)

What assessment he has made of the prospects for the recovery of the Scottish economy as the covid-19 lockdown restrictions are eased. (903971)

I would like to take a few moments to pay tribute to Glasgow’s emergency services for the enormous courage they showed in dealing with last week’s shocking knife attack. Our thoughts are with all those who were caught up in that terrible incident. In particular, I know that the whole House will join me in wishing Constable David Whyte a speedy recovery from the injuries he sustained in trying to help others.

I have regular discussions with my Cabinet colleagues, including the Chancellor, on all aspects of the impact of the coronavirus pandemic in Scotland. As we emerge from tackling this global crisis, we are determined to get Britain’s economy back firing on all cylinders, and as we do, protecting people’s health remains our top priority. However, just as we entered lockdown together, the best way to ensure the recovery of our economy is by working together across the United Kingdom.

May I associate myself with the Secretary of State’s opening remarks?

In his insipid word salad of a speech yesterday, the Prime Minister committed barely more money to rejuvenate the British economy post coronavirus than we have committed to refurbishing the Palace of Westminster. The Scottish Parliament lacks the powers to properly borrow and invest that other tiers of government take for granted. Will the Secretary of State commit to look again at the fiscal framework and giving Scotland the borrowing and investment powers it needs for the future?

As the hon. Gentleman will know, the fiscal framework is due to be reviewed in 2021. In the interim, we have given huge support to Scotland from the British Exchequer, with £3.8 billion in business support for the covid crisis, and the furlough scheme, which has supported almost 800,000 jobs. There is a capital budget for Scotland this year of £5.4 billion, and there is no shortage of projects that need to be done, so I ask him to encourage the Scottish Government to get on with them.

Some people are facing much more than just a financial meltdown as we emerge from this crisis. A year ago tomorrow, the all-party parliamentary group on terminal illness published a report on heartless Department for Work and Pensions rules that mean terminally ill people can only access fast-track benefits if they can prove that they have six months or less to live. Under pressure from the APPG, Marie Curie, the Motor Neurone Disease Association and others, this Government launched their own review, yet we have had only silence since. In the meantime, thousands of people have died waiting for support. The Scottish Government have already committed to scrap the arbitrary six-month rule when they take over the personal independence payment, but universal credit and employment and support allowance are reserved. Will the Secretary of State urge his colleagues to finally end this pernicious policy?

As the hon. Gentleman knows, universal credit support has been increased during the covid crisis, but the point he makes about the last six months of life is one that I would like to raise with the Secretary of State for Work and Pensions. If he writes to me on the subject, I would be pleased to push the case for him.

Mr Speaker, I do not need to tell you that Scotland has some of the most beautiful landscapes across our country. My nephews are Scottish, and like many young people, they rely on the tourism and hospitality industry for work. Those industries are likely to take a lot longer to recover. What discussions has the Secretary of State had with the Chancellor of the Exchequer to ensure that businesses and young people employed in those sectors will continue to receive the Government support they need?

As the hon. Lady will know, the Chancellor is making a statement a week today. I have had discussions with him about the support. The furlough will continue for another four months, until the end of October, and there is a variable element to it now, so that people can go back to work part time. The tourism and hospitality industry will effectively go through three winters unless we get it up and running this summer. It is deeply regrettable that the First Minister has encouraged reckless talk. This talk of quarantining people from other parts of the United Kingdom is disappointing and divisive, and it is not the language we should be hearing from a First Minister because it undermines the joint efforts we have made in tackling covid-19, and it is bad for business—especially the tourism business.

Unemployment very often causes misery and can lead to a downward spiral of opportunity. With the unemployment rate in Scotland the highest in the UK, what steps will the Secretary of State take to protect and create jobs in Scotland?

The unemployment rate is going up faster than anywhere else in the United Kingdom, and we are proving in Scotland to be slower at reopening our economy—something I regret. It is important that we get our economy reopened as quickly as possible, because that is the best way to save jobs. As I say, we are currently supporting almost 800,000 jobs through the self-employment support scheme and through the job retention scheme. It is important that once we get back to near-normal, our economy bounces back as quickly as possible. The best way to achieve that is to keep money in people’s pockets, and the 80% furlough has done just that.

I echo the Secretary of State’s remarks about our heroes in the public services in Glasgow who responded to the stabbings last Friday. I am sure that he, and the whole House, would wish to join me in expressing our deepest sympathy and all our thoughts to the family and friends of the three-year-old boy who was tragically killed yesterday when a car went out of control and mounted the pavement in Morningside Road in my constituency—a very young life taken far too soon.

As lockdown measures are eased, some sectors of the Scottish economy, as we have heard, will take much longer than others to return to some sort of normality, particularly tourism, hospitality and the creative industries. It is vital that both Governments continue to protect jobs and support businesses by extending the current furlough support to those hard-hit sectors. Even now, far too many are falling through the cracks of Government schemes—for example, many freelancers working through pay-as-you-earn contracts. With many taxpayers in this situation going from full income to no income, will the Secretary of State commit to raising in Cabinet the need for Government to support those taxpayers who have received nothing, and for an extended sectoral furlough scheme for Scottish industries?

Let me start by echoing the hon. Gentleman’s remarks about the shocking incident on the pavement in Morningside Road yesterday.

The Chancellor acknowledged right at the beginning that we cannot save every business and we cannot save every job, but there has been a huge rapid response from the United Kingdom Government to covid-19, with unprecedented sums going to Scotland in the form of £3.8 billion for business support and, as I mentioned, the 800,000 jobs that have been supported. I have raised this with the Chancellor and we have talked about how we go through to the next stage. He will be addressing that when he speaks to the House a week today.

I appreciate that answer from the Secretary of State, but there are still too many people who have gone from full income to no income while paying full taxes.

The former SNP finance spokesperson and author of the First Minister’s Growth Commission report has said that Scotland will have the worst performing economy in the developed world post covid. The response by the SNP Finance Minister was to reignite the demand for full fiscal autonomy, which would have the effect of creating a multi-billion-pound black hole in Scotland’s public finances. First, has the Secretary of State undertaken any analysis of the impact that this policy would have on post-covid recovery in Scotland? Secondly, rather than both Governments playing politics, will he work collaboratively with the Scottish Government to seek solutions to the immediate post-covid budget challenges so that we can save as many jobs, businesses and public services as possible?

The Scottish Finance Minister, Kate Forbes, has questioned the Barnett formula and has raised full fiscal autonomy as a preference. I would say to the people of Scotland that, for £100 of spending per head in England, the Barnett formula guarantees £125 per head of spending in Scotland. The Barnett formula has produced the extra £3.8 billion of covid support. Last year, the Barnett formula plugged a £12.6 billion deficit in Scotland’s spending. Along with the furlough scheme, these things would not have been possible under full fiscal autonomy. In fact, had the Scottish Government imposed that on the Scottish people, I would call it full furlough absence.

We now go to the SNP spokesperson—[Interruption.] Order. Who is clapping? We do not clap. We want to hear the SNP spokesperson, Mhairi Black.

I would like to echo the remarks of the Secretary of State with regard to the events in Glasgow. Our thoughts are with all those affected.

The Secretary of State says that the Chancellor will be updating the House with regard to the furloughing scheme, so I will note that with interest, but could he tell us specifically what recommendations and requests he has made to the Treasury with regard to Scotland?

Discussions that we have with the Treasury ahead of a statement are confidential, but I have highlighted the threats around tourism and hospitality, and I say again to the hon. Lady that the First Minister’s remarks about the border are irresponsible. If we think back to 26 April and “The Andrew Marr Show”, she admitted that it was a border that she had no control over, so let us not undermine the Scottish economy by moving too slowly as we come back—we need to crack on—and let us not undermine Scottish business by talking about keeping people from other parts of the United Kingdom out of Scotland.

Let us also not undermine public health when it comes to the decisions that we make. Scotland has sought to trial universal basic income in four separate locations. Given that the Scottish Government would be providing the funding for this, does the Secretary of State know why the UK Government are blocking it, and what assistance will he provide in unblocking it?

On the hon. Lady’s first remark about public health, it is absolutely imperative that we protect lives, but we must also protect livelihoods. On universal basic income, we do not believe it is the best way to deliver social security because it is not targeted at those who need it most. We believe universal credit is the best thing because it gets people back into work, and getting people back into work gets them out of poverty. Countries such as Finland and Canada have tried universal basic income and walked away from it. The Joseph Rowntree Foundation also found that it can increase poverty and it said that it is not the way forward in the report that it released two years ago, so we will not be moving towards a universal basic income.