Spending Review 2020 and OBR Forecast

Drew Hendry Excerpts

Wednesday 25th November 2020 Commons Chamber

[Rishi Sunak]

My hon. Friend is absolutely right about the importance of going to brownfield first. Today’s spending review makes available an additional £100 million for non-mayoral combined authorities to access remediation funding. My right hon. Friend the Housing Secretary will be able to talk to her in more detail about that, but it is exactly the kind of thing that I think could make a difference in her constituency.

[Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP) [V]]

By introducing the emergency measure to increase universal credit by £20 per week, the Chancellor was acknowledging what many people have known for years: universal credit is simply not enough to live on. If that was the case during the pandemic, why will he not commit to retaining this uplift permanently?

[Rishi Sunak]

We put in place a range of temporary measures because we were dealing with an unprecedented crisis. We are now working our way through that crisis, and the future looks considerably brighter than it did in March, not least because of the medical advancements and our ability to do improved testing, so we can look forward. We keep everything under review. The uplift lasts all the way to the spring. As we get to the spring and have more clarity about the future path of our economy and restrictions, we will of course be mindful of how to support and protect those who are most vulnerable in our society.

Public Health Restrictions: Government Economic Support

Drew Hendry Excerpts

Tuesday 13th October 2020 Commons Chamber

[Steve Barclay]

We have to balance the evidence that the Government receive from a range of quarters. My right hon. Friend will recall that when the initial advice from the Scientific Advisory Group for Emergencies was put forward, the Government came forward with a range of measures, such as the rule of six and the curfew. Indeed, if we look at the projections that were made at that time, we see that we could potentially have had 49,000 or so daily cases by 14 October when in actual fact the figure on that date was 12,872. That indicates the fact that the package of measures put in place by the Prime Minister and the Chancellor of the Exchequer have had an influence. However, listening to the SAGE advice, it is recognised that we need to go further and that is why the tiered approach has been set out.

[Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)]

The Chancellor of the Exchequer is proving exactly what Tory values are with this dogged determination to return to 1980s levels of unemployment. Switching away from the rhetoric of whatever it takes to hard choices exposes the fact that protecting jobs was an empty promise even before the end of furlough. He is risking more than 60,000 jobs in Scotland alone. The Institute for Fiscal Studies is clear. It says:

“Despite the claim by Chancellor Rishi Sunak last week that he would ‘always balance the books’, this will not happen, and he would be most unwise to try.”

Mass unemployment is a terrible policy, so will the Minister urge his boss to change course even at this late stage and extend furlough to save jobs, to use returned moneys to help those who have been excluded and to listen to the SNP demands for an £80 billion stimulus package? Will he listen to the nearly 70% of the Scottish public who want financial powers devolved to Scotland, or are the Government going just simply to plough ahead ignoring Scotland’s needs and further proving that Scotland needs the powers of independence?

[Steve Barclay]

It is a slightly odd premise to say that the Conservative Government are not supporting the response when we have spent more than £200 billion as part of that response, when we are currently supporting nearly half a million jobs in Scotland, when 8.9 million people across the United Kingdom have benefited from the furlough scheme and more than half of those are back in their jobs, and when more than 65,000 businesses in Scotland have benefited from our loan scheme. However, the hon. Gentleman is right in one aspect of his question. This Government are true to Conservative values and those are the values of the Union. It is through the shared broad shoulders that we are able to put in place the fiscal package of support that has enabled us to protect as many jobs in Scotland and around the UK as we have.

Covid-19: Future UK-EU Relationship

Drew Hendry Excerpts

Wednesday 15th July 2020 Commons Chamber

[Penny Mordaunt]

Bear with me.

I want to address the issues the report raises, because the reasons why we are having this debate are illuminating. The report proposes a two-year delay to our timetable and claims that not having one would reduce Scotland’s GDP. The version of the report I have seen says that that will be by £1.8 billion, but the hon. Gentleman refers to £3 billion—a figure that many dispute. However, some say that the cost to UK GDP of a delay would be around 2%.

There are a number of interesting graphs to support the right hon. Gentleman’s points, but I would ask any SNP Member present to add an additional line—one illustrating the hit to Scottish GDP from the break-up of the United Kingdom. Pre Brexit, the Scottish Economic Association put the cost of Scottish independence at 5.5% of Scottish GDP, stating that that would be even greater after Brexit. So why does £1.8 billion or £3 billion matter, when £5.5 billion does not?

The right hon. Gentleman cannot wring his hands about the 144,000 jobs contingent on exports from Scotland—jobs that we are determined to protect—while discounting the 545,000 jobs reliant on trade with the United Kingdom. He cannot claim to mourn the end of EU funding mechanisms that bring benefits to Scottish citizens—and that will be replaced, I might add—and at the same time discount the very real United Kingdom dividend to the taxpayers of Scotland of about £2,000 per household. He cannot complain about the results of negotiations, on the grounds that he thinks he has not been consulted, and at the same time advocate extending a transition period that would make us subject to EU laws, schemes and decisions over which he has had no say whatever. He cannot claim to use economic forecasts to make one argument, but disregard them for another. And he cannot claim to be a democrat, while ignoring the results of votes.

This debate is simply about creating conflict and division, just as the right hon. Gentleman’s press release today is. He has not seen the details of the proposal he alluded to at Prime Minister’s questions earlier, but he does not need to, because the facts are irrelevant to his case, as were many of the things he said in his speech about these proposals.

I want to turn to the substance of what we are doing to support business, because, after all, that is what matters. There will be significant changes and opportunities ahead, and we will help businesses and citizens to manage the necessary adjustments in a very practical and flexible way in order to minimise the challenges and maximise the opportunities. None of those schemes did the right hon. Gentleman mention.

In the withdrawal agreement struck by the Prime Minister, we removed several significant uncertainties that were a feature of our contingency planning ahead of 31 October. We are now taking the necessary steps to ensure that the UK is ready to take advantage of the opportunities. That includes the £705 million of investment announced to make sure we have the right infrastructure, tech and border personnel in place. That is in addition to the £84 million to boost the capacity of the customs intermediary sector. The border operating model and the phased approach we announced earlier have been put in place after extensive consultation with the sector and provide further clarity and certainty for the border industry and businesses.

While we have already made good progress in getting ready for the end of the year, there is still more to do. There are actions that we would strongly encourage businesses and citizens to take now to ensure we are ready to hit the ground running as a fully independent United Kingdom. That is why, earlier this week, we launched a new, major campaign to communicate the steps that we must all take to prepare for the end of the transition period.

[Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)]

I thank the Minister for eventually giving way. She asked many times why we have brought this debate today. Let me just pick out one sector and give her another 1.8. Scotland’s quality food sector exports £1.8 billion of food per year, 70% of which goes to the EU. My question to the Minister is, how many businesses in Scotland has she spoken to about the effects on them, because that, in just one sector, is why we are bringing this debate?

[Penny Mordaunt]

When I came into office I spent a considerable amount of time working with the central office of information and all Government Departments to improve our communications with business. An enormous number of meetings and forums take place not just with me and the Chancellor of the Duchy of Lancaster but with every single Department across Whitehall. Our officials continue to have those discussions and consultations, as do Ministers.

I would say to the right hon. Member for Ross, Skye and Lochaber, who mentioned one or two sectors: you have not spoken about any of the Government schemes. You have not spoken about the phased approach. You have not spoken about free services that are available from Her Majesty’s Revenue and Customs and how they can be improved. You have not called for any of that.

The right hon. Gentleman began the debate calling for leadership and for the Government to adapt. Indeed, the past few months have been an inflection point for nations and individuals. I call on the SNP to adapt: try co-operation; try finding some common ground for the sake of all our businesses and citizens. I would say that to you at any time but now more than ever, against the backdrop of this unprecedented time that we face.

--- Later in debate ---

[Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)]

It is a pleasure to follow the hon. Member for Leigh (James Grundy), who at least tried to make his point, even if I did not agree with a word of it. He at least tried to make a point that was worth making—by contrast with the bitter and twisted rant by the hon. Member for Berwickshire, Roxburgh and Selkirk (John Lamont)—and even managed to get the Loch Ness monster in, so he gets an extra point.

The Minister asked why we brought this debate to the Chamber. We did so because it is the right thing to do for people and communities and businesses across Scotland, who are facing a treble whammy of hits in terms of the economy, their lifestyle, their jobs and their family status. There are people living across Scotland, including in my constituency in the highlands and islands, who will be dealt a serious blow come January if there is no extension to the transition. The UK Government are not sleepwalking into this; they are running towards a cluster crisis.

My constituents—and Scotland—never voted for this and they do not want it. It is bad enough that the combined loss of economic activity in leaving the EU is estimated to be up to £3 billion. But on the covid emergency, the UK Government’s language—unlike that of the Scottish Government, whose aim is elimination of the virus—shows that they are planning for a second wave, with the forethought that we shall be going into a second wave while we are faced with a no-deal-Brexit exit—

[Douglas Ross]

Will the hon. Gentleman give way?

[Drew Hendry]

I will give way later.

No matter how the Prime Minister tries to cover it up by calling it an Australia-style deal, it is simply nothing and does no good for any of the people who will be affected in Scotland.

[Douglas Ross]

I seek clarity on the point the hon. Gentleman makes. He seems to be criticising the Government for planning for all eventualities in a pandemic. Is he honestly saying that Nicola Sturgeon and the SNP Scottish Government are not planning for all eventualities on covid-19?

[Drew Hendry]

The hon. Gentleman is a former Minister who resigned because his boss’s boss took a trip to Barnard Castle and so broke the covid regulations, so fair play to him, but of course that is the problem. He has left a legacy there and it is now an issue that the Government have to plan for that second wave. To clarify, in Scotland we are planning for elimination of the virus. That is the right thing to do.

We are facing a calamity. The Minister, who is not in her place now, said that she wanted us to focus on the policies of the UK Government—or should we say promises, or rather broken promises. For communities around Scotland, especially in regions such as the highlands and islands, there is another pressure caused by this reckless course. According to research by the Conference of Peripheral Maritime Regions, locally we will lose over £160 million and, Scotland-wide, over £800 million. That is the extra punch that our communities are losing out on in terms of EU structural funding. This is funding that underpinned further education, youth employment, smart cities, connectivity for islands and communities, small and medium-sized enterprises, apprenticeships, regeneration, innovation, productivity, social inclusion, and a whole lot more.

People in Scotland, across our cities, towns, villages and communities, are now seeing that the promises will not be delivered through the so-called shared prosperity fund, because it is not coming. Communities and charities have used the EU funding to benefit people, especially the most vulnerable and disadvantaged. They have been waiting now for years to find out what funding will be available post-Brexit, and in spite of promise after promise it is becoming clear that come January there will be none. The Minister had the opportunity to answer the question from my right hon. Friend the Member for Ross, Skye and Lochaber (Ian Blackford) about the shared prosperity fund earlier, and she chose not to do so.

I have been asking for clarification on this point since 2017, as have many others. A succession of Ministers, including the Prime Minister, have all promised details. They said they would consult widely. In 2018, the mantra was: “before the end of the year”. Time and again, they repeated that. In 2019, it turned into “shortly” and “soon”, and in 2020, it is morphing into “in due course”. In fact, we are now at the end point. There is no funding in place. Nobody can bid for anything as we enter 2020. All those promises have been broken, it has all been a glaik.

If the fund ever is established—let us imagine that it could happen somehow—it looks like yet another power grab will be at centre of it, with, ironically, as is proposed, another unelected body telling the devolved Parliaments what to do about the funding. In Scotland’s case, these should be decisions for the Scottish Parliament. It is no wonder—this has been repeated, because people are noticing these things—that polling in Scotland is showing support for independence consistently above 50%. It is no wonder that people who voted no in 2014, who said, “We just can’t do it”, are now coming to me and my colleagues and saying, “You know what? It was a big mistake. We were sold a packet of goods they had no intention of delivering. If they had, we would have had some of it and we have had none of it”.

As this Government ride roughshod over our people’s rights, and ignore the needs of our communities, it is important that they think again. Let me recall the words of the Minister of State, the right hon. Member for Rossendale and Darwen (Jake Berry), during a Backbench Business Committee debate on shared prosperity that I secured in 2019. He twice made the promise that devolution would be respected. Indeed, his second clarification stated:

“To be absolutely clear and to repeat what I said in my contribution, the Government will fully respect the devolution settlement in respect of the UK shared prosperity fund and, I am sure, in all other respects.”—[Official Report, 5 September 2019; Vol. 664, c. 445.]

At that time I told him that he would be judged not on those words, but on the actions of his Government. Let me tell hon. Members, and those watching the debate, that the people of Scotland are making that judgment, and seeing that Westminster is not working for them. It is not listening to them or delivering what they need, and that is why more and more people are convinced that Scotland would be better served by taking our place as an independent nation.

There is another unique hit that we will take as a result of this Government’s actions. This is the worst of all possible times for young people across our constituencies for the economic crisis to be coupled with Brexit. That is not in Scotland alone, as it affects all nations of the UK, but it is particularly harsh in places such as the highlands and islands, where we have been working incredibly hard to turn around the demographic of losing our young people.

[Christine Jardine]

Will the hon. Gentleman give way?

[Drew Hendry]

I am going to continue. The jobs that will be lost in the coming weeks and months will predominantly be of those in the 16 to 25 age bracket. Why? It is because they are cheaper to make redundant; they are usually on zero-hours contracts, if they have a job, and they normally have a lower length of service than anyone else. Young people will be disproportionately affected, so if for no other reason than to protect the next generation who will want to deliver a lifestyle that is suitable for them and their families to which we should all aspire in this century, surely the Government should now ask for that extension. Nobody would blame them, because everybody understands that this is a unique crisis. They should ask for that extension and protect our young people.

Economic Update

Drew Hendry Excerpts

Wednesday 8th July 2020 Commons Chamber

[Rishi Sunak]

My hon. Friend is absolutely right. Just to clarify: the “eat out to help out” discount will not apply to alcohol, but 90-something per cent. of pubs serve food, so my hon. Friend can still go to the pub and enjoy that. He is absolutely right about competition policy: it is important that we have dynamic markets in this country. We need dynamic competition to create jobs and productivity in order to get the outcomes that we want. I am happy to talk to him—I know he has expertise in this policy area—to get his thoughts about things we can do to update and turbo-charge our competition policy to make sure it is fit, especially for the digital age.

[Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP) [V]]

The Chancellor said at the beginning of his statement that

“no one will be left without hope”,

so what does he say to the hundreds of thousands of businesses and sole traders excluded from support during this pandemic crisis? Many of them are in seasonal businesses facing, in effect, three winters of trading. They cannot afford extra debt, so is now not the time to convert some of the money put aside for loans into grants to support the sector?

[Rishi Sunak]

The hon. Gentleman talks about seasonal businesses and whether they have or have not had support; he may have missed the fact that we have just cut VAT for those sectors from 20% to 5% for the next six months, and we have just provided an “eat out to help out” discount for the country to enjoy discounted meals to protect those businesses and protect the employment in them. That is probably the best thing we can do for seasonal businesses.

Economic Outlook and Furlough Scheme Changes

Drew Hendry Excerpts

Tuesday 16th June 2020 Commons Chamber

[Jesse Norman]

My right hon. Friend is right. I defer to no one in my admiration for Scotland as a country and for its history and people. It is true that in this crisis, as in the crisis of 2007-08, there has been enormous benefit to Scotland from being embedded within a wider Union, where the collective security and financial strength of all can be drawn on. In the case of Scotland, the self-employment scheme alone has 146,000 claims and the job scheme some 628,000 claims, and that amounts to an enormous package of UK Government support for the people in Scotland, and I am very proud of that.

[Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)]

With more than 600,000 jobs lost between March and May, it would be nothing short of a social catastrophe to end the furlough scheme before businesses start rehiring. France and Germany are continuing their support for as long as it takes. With the right hon. Gentleman’s Government denying Scotland the borrowing powers to take her own action—powers that even councils have—can he now see why Scots are concluding that Britain is not working and why support for independence continues to rise and rise?

[Jesse Norman]

I do not think that the Scots are concluding that at all. Any rational person looking at the position would understand that Scotland had been immensely strengthened by its relationship and its position within the United Kingdom, and rightly so, because of the hundreds of thousands of people who have been supported. The hon. Gentleman is absolutely right that there is a serious concern about the economic effects of the pandemic, but it is a concern, as the OECD and others have recognised, that we are squarely meeting, and Scotland has been a huge beneficiary and I am sure that it will continue to be so.

Economy and Jobs

Drew Hendry Excerpts

Monday 20th January 2020 Commons Chamber

[Sajid Javid]

The infrastructure revolution will include significant new investment in our ambition—the statutory requirement to get to net zero by 2050, and also our ambition to make great strides towards that. If she will allow me, I will get in a few moments to the amendment in the name of the right hon. Member for Kingston and Surbiton (Sir Edward Davey), which touches on the all-important issue of climate change.

We will invest in infrastructure in every corner and nation of the United Kingdom. We will invest in roads, in railways and in broadband so that our country can boast the most formidable connectivity on the planet.

We will put significant investment into one of the most critical challenges we face, and that is climate change. Our strategy will take huge strides towards achieving our world-leading commitment to achieve net zero emissions by 2050. We will invest in new technologies and markets as we look ahead to the critical COP26 talks later this year.

[Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)]

The Chancellor talks about the investment in technology to challenge climate change. Does that mean the Conservative party will now drop its ideological opposition to onshore wind?

[Sajid Javid]

We have a review into how net zero will be achieved by 2050, and when we publish it the hon. Gentleman will see exactly how we are going to achieve that.

As well as securing our fiscal foundations, levelling up across our country and decarbonisation, our new economic plan will build on one of our more fundamental economic strengths as a country, and that is our openness. This country has always been an open, global, outward-looking country. At the heart of that openness is our belief in free trade. Free trade has raised living standards around the world, it has created jobs and it has lifted millions around the world out of poverty. It will remain a guiding principle of our economic policy.

As we leave the EU, we will have the opportunity to strike new trade deals with our friends and partners across the world. This is a huge opportunity for Britain, especially with so many of our businesses having fantastic trading relationships abroad. The trade Bill that was announced in the Queen’s Speech will help make this opportunity a reality.

When it comes to trade, our biggest exporting sector is our financial and professional services sector, which is a national asset. It employs more than 1 million people, contributes nearly £130 billion to our economy each year and adds value to every region and nation in the UK, not just the City of London. The Queen’s Speech introduces a new financial services Bill that will make sure we secure and enhance the success of that industry.

Of course, openness to the world does not mean that we give up control of our borders. The immigration Bill in the Queen’s Speech will take the necessary steps to end free movement as we leave the EU and regain control, but that does not mean that this country is closed to the best and the brightest from around the world. I am proud of living in a country as diverse as this. Diversity adds to the vibrancy of our society and the growth of our economy. Some of our greatest scientists, artists and entrepreneurs have been first and second-generation migrants. We will never forget their contribution. That is why we have dropped any arbitrary immigration targets, and we are reforming our immigration system through initiatives such as the new, highly flexible fast-track visas for scientists. I urge Members of the House to vote against amendment (b) in the name of the right hon. Member for Ross, Skye and Lochaber (Ian Blackford).

The Queen’s Speech will also support the living standards of our people. The best way to boost living standards is to support working families to earn more and to keep more of what they earn. That is why we aim to raise the national living wage to two thirds of median earnings within five years, and why we are extending its reach to those aged 21 and over. I recently announced a rise in the national living wage of more than 6%, starting on 1 April. This is its largest increase since it was introduced. That is a pay rise for 2.3 million of Britain’s lowest-paid workers.

We are cutting taxes, too. We have already increased the personal allowance to £12,500 and the higher-rate threshold to £50,000 one year earlier than planned, and we will go further when we increase the national insurance threshold next year—a tax cut for more than 30 million people. We have also set out our tax plans regarding the triple tax lock, with no increases in the rates of income tax, VAT or national insurance in this Parliament.

Let me turn briefly to the amendment in the name of the right hon. Member for Kingston and Surbiton (Sir Edward Davey). The UK is already a world leader in clean growth. Between 1990 and 2017, the UK reduced its emissions by 42% while growing the economy by two thirds. We have reduced the carbon intensity of our economy faster than any other G20 country since 2000. Our clean growth strategy sets out how we will continue to cut emissions, while keeping costs down for consumers, creating good jobs and growing our economy, but, of course, we need to go further. The Treasury is carrying out a world-leading net zero review. Our national infrastructure strategy will provide significant new investment into the decarbonisation of our economy and we are acting internationally through the COP26 talks, which will be in Glasgow later this year, so I urge hon. Members to reject the amendment.

--- Later in debate ---

[Alison Thewliss (Glasgow Central) (SNP)]

I rise to support amendment (b) in my name and the names of my hon. Friends, and I will start where the Chancellor left off—with claims of having a mandate. Well, he certainly does not have a mandate in Scotland, where his manifesto was rejected wholeheartedly and where the Tories lost more than half their MPs; he has absolutely no mandate to preach to Scotland on his austerity plans. In the last few weeks, we have had a new year, a new Prime Minister and a new UK Government. Under any normal circumstances we would be looking at some kind of fresh start, but for the people of Scotland it is the same old situation: a UK Government who they did not vote for, dragging us out of the UK against our will and sidelining the Scottish Government at every turn.

The Scottish Finance Secretary, Derek Mackay, wrote to the Chancellor looking for clarity on the Budget process on 22 December, but I raised this at Treasury questions on the first day back. I am not sure that the Chancellor even knew what I was asking about, never mind coming up with any kind of response. The Scottish Finance Secretary should not be finding out the date of the UK Budget in the media along with everybody else. It reeks of disrespect, and I think the Chancellor has yet to apologise. This comes after a November Budget that was cancelled so that the Chancellor could avoid any OBR scrutiny in the run-up to the general election.

The Scottish Government and local government in Scotland now face the prospect of writing a budget blindfold, and the stakes could not be higher. I urge the Chancellor and his team to do all they can to make amends for this and to work co-operatively to ensure that the Scottish Government can make the best of this situation. If the non-domestic rates order or the income tax resolution were not passed on time, Scotland could face having to take millions of pounds out of public services. It would be catastrophic, and the blame would lie squarely at the door of this UK Government and this Chancellor. Even if everything does go as smoothly as it can through this process, Scottish councils are being left in the unprecedented position of providing the vital services that the public rely on, without having certainty about their budgets. Should the council tax need to go up, for example, the very practicalities of issuing the necessary direct debit notifications will add time and difficulty to the process for councils across Scotland.

On funding, we welcome the Green Book review that the Chancellor is proposing, but we seek clarity on exactly what this will mean for Barnett consequentials, because in Scotland we still have not seen the £3 billion we are due as the share of the DUP’s bung from the previous Government. We still have not seen the £140 million that we were due from police and fire VAT. We need to know exactly what is going to happen with this Green Book process and how the Scottish Government will be involved in it.

The Chancellor has followed the Prime Minister’s lead in showing a total disregard for the people of Scotland. We voted against this hard Tory Brexit at every available opportunity, and again we are being sidelined. The Chancellor was keen to talk about the immigration Bill and how much that will matter, but in fact immigration is something that we need, and value, very much in Scotland. I have people at my surgery, week in, week out, complaining about this Government’s hostile environment, and all I see the Government doing is making it harder for everyone. They are not making it any better for anybody; they are making it even harder with a further hostile environment being rolled out to EU nationals.

Not only are this UK Government charging ahead with a withdrawal deal worse than the one that the previous Government and the previous Prime Minister came up with, but, as we saw in his interview with the Financial Times, the Chancellor is engaging in a race to the bottom when it comes to regulatory standards. He skated over the issue of equivalency, but we need to have a lot more detail on what he actually means by this. His predecessor knew well how important alignment was, and this Chancellor needs to explain why he has decided unilaterally to rip this up. Businesses are concerned that they are going to face tariffs, price rises and the loss of competitive advantage—particularly for Scotland losing out to Ireland. The Government are doing nothing to assuage these fears. This is particularly significant for services, which make up 81% of the UK’s total economic output.

The Chancellor needs to confirm what his statement means for equivalency in financial services. What is outcome-based equivalency and what exactly does he mean by it? Without equivalency, the UK faces losing access to European markets. For those working in services, the Chancellor must confirm that he still intends to guarantee mutual recognition of professional qualifications, without which they cannot work and move across Europe.

This withdrawal deal threatens economic growth across all the nations of the UK. For years after this Brexit, businesses will find it more attractive to take their investment moneys to other countries—to Germany, to the Netherlands, to Denmark and to Sweden. This is not my opinion; it is the opinion of David Blanchflower, the former member of the Monetary Policy Committee at the Bank of England. It is not just those nations that will benefit; we are seeing investment in Ireland booming. That is particularly clear to those of us watching in Scotland. Ireland has gained more than 4,500 jobs from international firms as a result of Brexit-related investment. IDA Ireland, the country’s foreign investment body, said that its annual results had gone up. Moreover, according to the European Commission, Ireland’s economy grew by 5.6% in 2019—the highest in the EU—while the UK’s growth dropped to its lowest since 2012. That is no coincidence.

The value of being in the EU in a partnership of equals is not lost on my constituents and those across Scotland. I am sure that it will be more pronounced as we see the increasing negative effects of Brexit—because, after all, we have not left yet. The Centre for European Reform says that Brexit has already cost £70 billion, or £440 million a week—something the Chancellor has yet to put on the side of a bus. More and more people in my constituency and elsewhere are realising that this place cannot be trusted with safeguarding Scotland’s interests. The little growth we have seen has been attributed to businesses stockpiling in case of no deal, while investment has stalled since the EU referendum and does not show any signs of recovering soon. Companies cannot be expected to sit on investment for three years; they will move it elsewhere if they can. All the investment lost since 2016 will have an impact on wage growth and job creation for years to come, even if, by some miracle, we can avoid the harshest of hard Brexits. We are already seeing effects creeping into the labour market. The Fraser of Allander Institute estimates that a hard Brexit such as the one that we might face at the end of the month could cost Scotland 100,000 jobs.

Of course, the Prime Minister and his cronies will say that this is all tosh and they are going to get Brexit done—abracadabra and off we go! I am afraid that the Chancellor knows just as well as I do that our relationship with Europe cannot be formed using a three-word magic incantation, no matter how many times it is said. There will be no getting Brexit done this month. There are still years of negotiations ahead. I cannot reassure businesses in my constituency what our relationship with Europe will look like, and I do not think the Chancellor can either.

Turning to other measures in the Queen’s Speech, the Chancellor knows that I have long criticised his pretendy living wage, which fails to meet the aspirations of young people in particular. The gap for young people who will not fall into his pretendy living wage is growing. I do not know—and he cannot explain—why a 16-year-old starting the same job on the same day as a 25-year-old is worth £4.17 an hour less. Why is that? He is extending it to 21-year-olds; can he not see the injustice in not extending it to everybody? He must make it a real living wage. The Living Wage Foundation currently sets the living wage at £9.30 an hour. The Scottish Parliament Information Centre suggests that by 2024, it will stand at £10.90—far short of what the Chancellor is suggesting. He cannot justify that age discrimination in the minimum wage, and no Chancellor has been able to justify it yet. The fact remains that women are more likely to be in part-time, low-wage work, so there is a disproportionate effect on women, who often have families to support. They deserve and are entitled to better than the Chancellor is offering.

I turn to the financial services legislation. Can the Chancellor provide a bit more clarity on the progress of the fifth anti-money laundering directive, which we have to implement, regardless of our leaving the EU at the end of the month? We in the SNP want to see reform of Companies House to uncover the beneficial ownership of Scottish limited partnerships, which were in the papers at the weekend, and other companies and trusts. We want to increase transparency, and we want to ensure that UK company information rules no longer allow illicit businesses to funnel millions of pounds of dirty money from all around the world, using British companies, and specifically SLPs. I wonder, is it any coincidence that in the first four weeks of the election campaign, the Conservatives accepted £567,000 from four companies with links to offshore tax havens in Luxembourg, Guernsey and the British Virgin Islands? I sat on the Joint Committee on the Draft Registration of Overseas Entities Bill. When will we see some progress on that Bill? It has been sitting there for some time, and we have not seen much movement.

It would be neglectful of me not to challenge the Government on their austerity agenda—on issues such as the welfare cuts, the two-child limit, the rape clause and universal credit, which is causing so much pain to so many people across the country.

[Drew Hendry]

My hon. Friend is making a powerful speech. Does she share my dismay that, more than six months after the UK Government said that they would hold a review, Marie Curie and the Motor Neurone Disease Association reckon that over 2,000 people have died before accessing the benefits they should have had through being classed as terminally ill? Is it not time that that scandal was addressed? The Government could take a simple measure to sort that out for these people and their families.

[Alison Thewliss]

I welcome my hon. Friend’s intervention and the work he has done on this issue. The Government have had their eye off the ball on universal credit and so many other welfare measures on which the courts have found against them. We are still waiting to know what they will do to remedy the situation for so many of our constituents who are waiting for their money back from the Government.

Another group of people who are waiting for their money back are the WASPI women. The Government have no plan for the WASPI women, who are entitled to their pension and should not have lost out as a result of successive Governments’ actions. The Chancellor is not even listening to this point, which is a disgrace. There are thousands of women up and down this country who deserve their money back, and this Government need to find a way of addressing that injustice, because these women cannot wait much longer.

This Government need to be a lot more ambitious in tackling climate change, investing in green infrastructure and making real changes that will last for generations to come. They need to look at the way the energy system is set up, so that those who are producing energy in rural parts of Scotland are not penalised because of geography. With the transition away from oil and gas coming up—I understand my hon. Friends will be speaking about that later—we need to be making sure that that is a fair and just transition, meaning that communities will not be left behind, as they have been in the past.

I am pleased to welcome COP26 to my constituency of Glasgow Central next year, but what has to come with that is investment from the UK Government to make sure that that event works as well as it should do: as a beacon to show what can be done and to highlight the very real achievements of the Scottish Government, who have made great strides in tackling climate change. In fact, a lot of the UK Government’s targets are actually being boosted by the actions of the UK Government, and that should absolutely be recognised.

With all of these things in the Queen’s Speech, opinion in Scotland is shifting. People are seeing the difference between what is happening at Westminster and the potential of Scotland as an independent European country—a country where the welfare state could be restored from the tattered, damaged safety net that Tory Governments have left it to a system with a safety net that is full of dignity and has respect for everybody at its core; a country where the Government have all the levers to build an inclusive economy, built on participation and making sure that everybody feels as though they have a part in the economy; a country more equal for women, disabled people and ethnic minorities, where they can play a full part and not feel as though they are being penalised and left behind; and a country where we do not have to rely on mitigating broken Westminster promises. I am determined, as are all my colleagues, that Scotland should have the choice and a right to choose its own future, and to choose it before much more damage is done by this Tory Government.

Oral Answers to Questions

Drew Hendry Excerpts

Tuesday 9th April 2019 Commons Chamber

[Mel Stride]

As the hon. Gentleman may know, £400 million went into social care just at the last Budget. It is the mission of this Government to get taxes as low as possible so that we have a strong economy. Our record is good: we have about the highest level of employment in this country’s history, more women are in work than at any time in our history, and we have halved unemployment since the mid-1970s. All of that is about creating the wealth and the money to make sure that we can afford the public services that the public expect.

[Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)]

7. What recent assessment he has made of the effect of his fiscal policy on living standards.

[The Economic Secretary to the Treasury (John Glen)]

Distributional analysis published by the Treasury at Budget 2018 shows that decisions taken by the Government on tax, welfare and spending on public services have benefited households across the income distribution, with the poorest households gaining the most as a percentage of net income.

[Drew Hendry]

The £1.7 billion announced yesterday for universal credit does not even touch the sides of the £12 billion of welfare cuts since 2015, nor does it contain provision to repay the debts that universal credit has caused for local authorities, such as the £2.5 million cost that has been borne by every highland household six years into the roll-out. Should Highland Council send the invoice for that debt for council tax payers directly to the Minister?

[John Glen]

No, it should reflect on the range of measures the Government took at Budget 2018, including the new energy price cap, the doubling of free childcare and the steps we have taken to reduce the burden on households by reducing fuel duty.

IR35 Tax Reforms

Drew Hendry Excerpts

Thursday 4th April 2019 Westminster Hall

[Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)]

It is a pleasure to serve under your chairmanship, Mr Gapes, even though it looks as though that will be brief. I congratulate the hon. Member for Rutherglen and Hamilton West (Ged Killen) on securing the debate. Those of us in the Chamber today share common ground on the problems of IR35. The hon. Gentleman said that we all wanted to see what was due to be collected in taxes being collected to pay for the services from which we all benefit. That is an important point to bear in mind, and we share that view, but that is not to take away from the difficulties that have been presented in the Chamber so eloquently today.

The hon. Gentleman referred to the Taylor review and the need to get the recommendations in play with some speed, and to the conflict between agencies and contractors. He also made a good point, on which we need to reflect, about our future relationship with the EU—the crisis that we currently face over EU membership. That should be food for thought for Ministers in relation to a possible delay to the further roll-out of IR35. The hon. Gentleman talked about his constituent and mentioned that large companies often have sophisticated tax systems and resources that are not available to those who are often affected.

[Sir David Amess in the Chair]

The hon. Member for Brentford and Isleworth (Ruth Cadbury) talked about the unintended consequences of IR35, moving on to the loan charge, which I will touch on in a few moments, and in particular the confusion in the NHS and other public bodies. She mentioned those working flexibly with the NHS to meets its needs. Another point that I agreed with was that the effect of rolling IR35 into Brexit is to increase the unattractiveness of going into such jobs and accelerate chronic staff shortages by trying to force into the PAYE system people who do not want to be in it.

The hon. Member for Clwyd South (Susan Elan Jones) also talked about public sector damage, but she reflected on it in terms of IR35 being applied to the private sector. She expressed concerns that this was the wrong time, given Brexit as well as IR35. She quoted her constituents’ worries about additional costs, shrinking talent pools, legal challenges, investment losses and the expenses incurred. She mentioned the impact on IT businesses specifically, which is to make some unviable or unable to operate at all.

The hon. Member for Glasgow North East (Mr Sweeney) talked about how, when IR35 was introduced, the issues around it became relevant and very present, showing up as a genuine concern for many people. He highlighted the real extra costs to businesses and, as was said earlier, the number of IR35 court cases lost by HMRC. The Government must reflect on that when they look at this. The hon. Gentleman also rightly talked about the lack of advice, warning or assistance from HMRC, moving on to the risk of the penalties incurred and of further extension of IR35 making it even less attractive to do business throughout the UK, especially in current circumstances.

The SNP has expressed concerns about the extension of IR35 since it was proposed in 2017. The UK Government must pay close attention to their own technical review and rule out extending IR35 rules until contractors’ concerns have been addressed. HMRC has been described as using a hammer to crack a nut, but this UK Government have had to be dragged kicking and screaming into tackling major, systematic tax avoidance and evasion. The extension was proposed through the Finance Act 2017, and since then the SNP concern has been about the key effect on contractors supplying public sector bodies. It is only right for such contractors to pay their fair share of tax, but they have been left with an unfairly high level of bureaucracy, making it even more difficult for them to play their flexible role within the economy, as those in the sector have confirmed. Experts have expressed concerns that IR35 does not even achieve its stated aim of equalising tax between those in its scope and employees.

IR35 has also made things more difficult for public sector organisations in rural communities, something I know a lot about, being a highland MP. In rural areas, we often rely on contractors to fill vacancies and to employ key staff—teachers, doctors, nurses and such key people in our communities—so we have great concerns about the further impact on contractors if IR35 is extended for the private sector in April 2020, as proposed.

We have expressed such concerns repeatedly. Indeed, my hon. Friend the Member for Aberdeen North (Kirsty Blackman) first warned the Chancellor about the risks of the expansion of IR35 during the April 2017 finance debate. The UK Government failed to listen then and, when we raised it again, later in 2017 and in 2018. Here we are in 2019, once again asking the Minister to listen. Will this be the day when ears are unblocked? I hope so. Will this be the day when the message gets through? Let us hope that as well. The UK Government should use the 2019 Budget and Finance Bill to address IR35’s negative impact on contracted staff and our public services.

Earlier today, in the main Chamber, the loan charge was being debated. That is distinct from IR35, but some tax advisers have reportedly informed clients that IR35 required them to utilise tax vehicles now being tackled by the loan charge. For tax professionals to advise clients to use such loopholes is plainly wrong. People should of course pay their fair share of tax to support public services, but the UK Government must now pursue organisations that facilitated such loans. For those caught up in loan charge issues, there is great concern that HMRC has failed to work constructively with those seeking a loan charge repayment.

[Ruth Cadbury]

I thank the hon. Gentleman for giving way, and my hon. Friend the Member for Rutherglen and Hamilton West (Ged Killen) for securing the debate—I am sorry, I should have done that earlier. I was in the loan charge debate, which has been suspended because rain is penetrating the main Chamber, so I came over to this debate. I want to add something now that I said in the other debate. Until the past three or four years, many of the early adopters of the loan charge were doing so with the strong advice of chartered accountants. In my earlier speech, I included at least two pieces of evidence to show that there was no uncertainty about the loan charge—it was legitimate. One was a memo written by an HMRC staff member in 2006 about loan arrangements being legitimate, fine and approved; the other was the Rangers case.

[Ruth Cadbury]

I hope that the hon. Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry) will have a look at some of the contributions made during the other debate. Having done so, he will be able to agree with me that there is a lot of confusion and that people were not behaving illegally.

[Drew Hendry]

I thank the hon. Lady for that intervention, which allows me to agree with her—I too attended the early part of the main Chamber debate before coming here—and to say what a pleasure it is to serve under your chairmanship as well, Sir David. It is a particular problem that the companies that gave such advice are not being pursued, and the Minister must do something. As a final comment on the hon. Lady’s intervention, given the state of politics in this place, it is hardly surprising that the roof has fallen in on Westminster.

Among those caught up in the loan charge issues, there is great and heartfelt concern that HMRC has failed. It has failed to work constructively with those seeking a loan charge repayment plan to pay the taxes demanded. Often, that is bundled up with fines and additional costs. It cannot be right that people are pushed into desperation, or face the threat of losing their family home or of bankruptcy when a more thoughtful, flexible and fair approach should and must be taken. My hon. Friend the Member for Aberdeen North tabled early-day motion 2241, and I encourage Members to sign it. We hope that the UK Government and the Minister will force HMRC to change tack and work constructively with those seeking reasonable treatment of people due to pay fair tax payments for unpaid amounts and to remove the threat of bankruptcy and homelessness.

In conclusion, IR35 is not in a state to be further expanded at the moment. That has been clear throughout, in the comments by Members in this debate and from what we have heard about those who have experienced the effects, such as contractors and the people trying to deal with IR35 in our public services. It cannot be right for the Government to steam ahead without taking that into consideration.

Exiting the European Union (Agriculture)

Drew Hendry Excerpts

Monday 18th March 2019 Commons Chamber

[Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)]

You wait ages for one Drew to come along, Madam Deputy Speaker, and then two come along together.

Agriculture is a critical industry for the rural communities throughout Scotland. It is very important to the people who elected me and many of my colleagues. The regulations are part of a process that takes away rights from people, takes away guarantees and opportunity, takes away power from the Scottish Parliament and puts business and food production at severe risk.

The agriculture sector in Scotland currently depends on 10,000 non-UK migrant workers in the soft fruit and vegetable sectors for the harvest in the summer and autumn, especially in the highlands. Tens of millions of pounds could be lost as there is no certainty about whether the LEADER programme will continue. The programme has provided £50 million from the EU with match funding of £50 million. Nor is there any certainty that funding for agri-environment schemes that support climate-change objectives will be available post-Brexit. That means a potential loss of around £40 million per year.

No rural constituency in Scotland voted for Brexit—none of them voted in favour of leaving the EU—yet Scotland is having to leave with the rest of the UK. All Brexit scenarios are bad for Scotland. We are 11 days away from leaving the EU and we still do not know whether we will leave with no deal or, if there is a deal, how that will affect rural Scotland. All sectors of the Scottish rural economy would be negatively affected by a no-deal Brexit, but the farming and food and drink sectors are particularly exposed. Brexit is bad for our EU friends, neighbours and colleagues.

A no-deal Brexit is projected to result in EU migration falling and potentially turning negative. That would create skills shortages for industries such as agriculture and food processing, which, as I said, rely on EU and seasonal workers. EU citizens who are currently working and living in the rural economy will be able to stay only if they apply for settled status. The Migration Advisory Committee’s proposals and the £30,000 salary requirement for skilled workers would mean that many sectors in Scotland’s rural economy would find it hard to recruit seasonal migrant workers.

Under the common agricultural policy, the EU provides £500 million for Scotland’s rural economy. There have been no guarantees from the UK Government on that funding after 2020. We do not know whether funding will be available to pay farmers and crofters after the scheme year 2021; the UK’s guarantee on agricultural support is to the end of this Parliament only.

The food and drink sector estimates that a no-deal Brexit could lead to a loss of £2 billion-worth of food and drink sales, with implications for the rural communities where many producers are based. We will lose the European Food Safety Authority’s expertise in the risk assessing of marketing applications for genetically modified organisms, unless the UK remains in the European economic area or European Free Trade Association after leaving the EU.

Owing to strict health rules, the EU bans the importation of seed potatoes from third countries with the exception of Switzerland. Therefore, leaving without a deal would close the EU market to around 20,000 to 30,000 tonnes of seed potatoes exported annually, which currently generates around £6 million.

There is no certainty that the alternative markets for this seed, at home and abroad, can be found, resulting potentially in price depression across the whole of the Scottish seed industry. We will no longer be part of the EU’s Community Plant Variety Office and if we leave without a deal, applications for registrations of plant varieties and intellectual property protection will have to be made in both the UK and the EU, resulting in a doubling of registration costs for plant breeders. We will also not have access to the advisory group on food chain and animal and plant health, which covers Scotland’s tree health interests.

The Scottish Government’s position is that the EU organics legislation is devolved and that functions in the proposed regulations could be exercised for a devolved purpose. The provisions in the organics legislation are observing and implementing obligations under the CAP. These should not be transferred solely to the Secretary of State. Food standards, post-Brexit, will be a critical issue and it is crucial that neither food safety nor standards are diluted or diminished. That is a commitment that should be legislated for in the forthcoming Report stage of the Agriculture Bill.

The stockpiling of food in preparation for Brexit demonstrates the drastic effect that the Brexit process has on the most basic of human needs. It is scandalous that this is even having to be considered. The UK Government must now either extend article 50 and set in motion plans to hold a second EU referendum with remain on the ballot paper or revoke article 50. Staying in the EU is the best for all. It is what Scotland and Northern Ireland voted for. It is the only way to protect jobs, living standards, our public services, economy and food standards and supply. Scotland did not vote for Brexit and we should not be dragged out of the EU against our will. The way that Scotland has been treated throughout means that the case for Scottish independence has never been stronger.

Draft Transparency of Securities Financing Transactions and of Reuse (Amendment) (EU Exit) Regulations 2019

Drew Hendry Excerpts

Wednesday 27th February 2019 General Committees

[Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)]

It is a pleasure to serve under your chairmanship, Mr Davies. This is yet another part of a poor attempt to patch up the damage to the financial services industry caused by a Brexit that my constituents, and indeed all of Scotland, did not vote for. It is just another piece of Brexit red tape. Any version of Brexit is bad for Scotland, which voted overwhelmingly to remain.

Financial services firms are already voting with their wallets and have moved a trillion dollars from the UK since the 2016 Brexit referendum. Ten years after the financial crash, in which securities played a major role, our financial services sector needs meaningful reform, not new problems stemming from Brexit. Instead of planning to minimise the damage, we should be using our time to plan a successful future inside the EU. This SI does nothing to protect our economy from Brexit and we cannot accept the UK Government’s attempt to run down the clock in an attempt to force their MPs to back Brexit motions. The UK Government must instead extend article 50.