There can be no doubt in anyone’s mind that times are tough, but times are much, much tougher for some people than they are for others. I am not often given to quoting David Cameron, but this will not be the first time that I have done so and I am sure that it will not be the last. I remind all members that at a previous Tory conference he said, while talking about the recession and the United Kingdom plan for recovery,
“it’s fair that those with broader shoulders should bear a greater load.”
What a shame it is that he did not believe his own rhetoric. It took him less than a month to forget his promise and embark on swingeing public sector cuts of £81 billion, including £18 billion of cuts to benefits—all that while the most affluent avoid paying taxes to the tune of £120 billion.
The reality of the Tory-Lib Dem coalition Government is tax cuts for millionaires—of which at least eight sit around the Cabinet table—and hedge funds and the ultimate scandal of Tory ministers scurrying to Brussels to protect bankers’ bonuses.
Thank you, Presiding Officer.
The last time I looked, it was millionaires and bankers who had the broadest shoulders, but members should not kid themselves that those people are feeling the pinch or bearing a greater load. It is families in my constituency and throughout Scotland who are bearing the burden and struggling to make ends meet. Those are the people who are increasingly out of pocket, while David Cameron is increasingly out of touch.
People who are paid weekly do not have enough money to get them through the final couple of days. People who are paid monthly struggle to have enough money to make it through the final week. I am talking not just about people who are unemployed and families who are on benefits but about working families. Many people who work hard but are on low wages are appearing at food banks so that they can feed their children, seeking out payday lenders, which they cannot afford to pay back, and running up rent arrears and defaulting on mortgages as they make decisions about priorities for their families.
The reason why the problem is so acute is that the cost of living is rising at the same time as income is declining in real terms, and people cannot afford to make ends meet. Let me illustrate that. Since 2010, wages in Scotland have fallen in real terms by £27.30 a week. That is £1,420 a year, which is a lot of money for someone who is low paid. In fact, wages have fallen in 36 of the 37 months in which David Cameron has been Prime Minister.
The Low Pay Commission has noted that the minimum wage has not kept up with inflation and the real value is lower than the increase in the consumer prices index and the retail prices index. The commission suggested that the value of the national minimum wage at October 2012 was at a level that had not been experienced since 2004, some eight years ago.
That was an interesting intervention from John Wilson. Aside from the fact that Labour ensured that the minimum wage was uprated adequately, I recall that the Scottish National Party slept through the debate and the vote on bringing in the national minimum wage. I will take no lessons from John Wilson now.
The Tories have squeezed the minimum wage and reduced its value in real terms. In contrast, Labour would strengthen the minimum wage and end the scandal of the abuse of zero-hours contracts.
The real-terms reduction in public sector pay is in its fourth year, which is taking its toll on staff and their families. There is no doubt that there is a real squeeze on incomes among people who are low paid—never mind the cuts to benefits, which I will come on to.
That is bad enough, but people who are struggling to make ends meet face a double whammy, because prices are rising at the same time as incomes stagnate.
The Joseph Rowntree Foundation report “A minimum income standard for the UK in 2013” highlighted the fact that the cost of a basket of essential goods and services has increased by nearly 25 per cent in the past five years. That is staggering. The cost of bread is up, the cost of milk is up and the costs of electricity and gas are up. Over the past three years, since the Tories came to office, prices have risen faster in the United Kingdom than in any other G7 country. We face a cost of living crisis of enormous proportions with really harsh consequences for people and families on low incomes.
I appreciate what the member says and believe that she and I would be in agreement on a lot of things. However, how does she square that circle with her desire and her party’s desire for those same low-income families to pay more in council tax?
That is just ridiculous. If we examine the SNP’s record, we can see that it is the SNP that is taking money away from low-income families by not targeting their needs.
We have also seen cuts in benefits including the bedroom tax and the shift from disability living allowance to personal independence payments, assuming a reduction of 20 per cent in the budget at the outset. Perhaps the most concerning cut is the reduction in children’s benefits. There is a freeze on child benefit and tax credits are soon to be rolled up as the universal credit, but children’s benefits are, overall, falling in real terms because the cost of bringing up a child is increasing. A decade of progress on reducing child poverty and family deprivation is being steadily reversed.
Donald Hirsch, a director of the centre for research in social policy at Loughborough University, who leads the work on the minimum income standard, had this to say:
“This trend differs from anything seen in my lifetime—including in the 1980s, when the poor were standing still as the rich progressed. Now, absolute living standards have declined over a sustained period, including for those who started out with least, for the first time since the 1930s. It’s the first time since that decade that basic safety-net benefits have been cut in real terms.”
If we have to go back more than 80 years to experience anything as bad, that must surely be a wake-up call for all of us.
Let me turn to the Scottish Government. I know that the SNP’s take on this will be that it is Westminster’s fault and that the only way out of the situation is to vote for independence, but that is lazy and sloppy thinking. It is not the fault of an institution; it is the fault of the Tories. If the people disagree with what the Tories are doing, there is a clear choice: they can vote Labour at the general election. There are things that the SNP Government can do if it so chooses—things that are well within the Government’s and the Scottish Parliament’s powers. However, instead of focusing on what matters to hard-pressed families and communities, SNP members have only one focus, one obsession and one thing that commands all their attention: independence. The SNP is guilty of putting Scotland on pause and doing little to tackle the most acute cost of living crisis in more than 80 years.
I have not got time.
I campaigned for a Scottish Parliament because I realised the Parliament’s potential to help people at times such as this. Just as the late, lamented Strathclyde Regional Council had a social policy that prioritised and targeted support at many of those struggling in our communities, so a Scottish Parliament could take action. I am, therefore, disappointed and ashamed that little is being done.
The SNP stands accused of being so cynical and shameless that it will prey on people’s misery to get them to vote yes in the referendum rather than take action to help now. Let us look at some of the areas that the SNP could tackle, starting with childcare. The most recent Scottish childcare report by Children in Scotland reported that nursery costs for a child under two are now more than £100 a week, which is a lot of money for someone on a low income. Childcare costs for the over-fives see parents paying an average of £50 a week for an after-school club, and those costs are rising by more than the rate of inflation. Childcare in Scotland is the least affordable in the UK aside from that in the south-east of England.
Save the Children is also clear in its belief that childcare has a key role to play in tackling early inequalities between children and reducing child poverty. Quality, affordable childcare is key to helping parents to access and sustain employment and training. However, Save the Children had this to say about the provisions of the Children and Young People (Scotland) Bill, which seek to extend childcare:
“they represent baby steps compared to what needs to change to ensure that every child and family can access suitable childcare.”
Last week, Ed Miliband pledged that childcare would be extended to 25 hours a week for every three and four-year-old of working parents and that childcare would be guaranteed for all primary school children from 8 am to 6 pm. That is what Labour would also deliver in Scotland. Will the SNP match that or is it content to leave Scotland on pause?
I genuinely do not have enough time.
What about food banks? The Trussell Trust reported in April this year that the number of people in Scotland using food banks has risen by 150 per cent to a staggering 14,318, of whom one third are children and one fifth are in full-time employment. The latest research from Debt Advisory Services (Scotland) shows that one in 10 Scots—500,000 Scots—borrowed money to pay for food in July. If members need any more evidence of a cost of living crisis, there it is.
We are all grateful for the work of the volunteers in communities across Scotland, but what a damning indictment it is of us all that food banks even exist. It appears from anecdotal evidence that some local authorities have sent people to food banks rather than provide a crisis grant. Crisis grants and community care grants are part of the Scottish welfare fund, which is hugely underspent. Only half of what could have been allocated has gone out the door at a time when the need is self-evident. It is astonishing that after a direct transfer of power to the SNP, which it wanted, it cannot even spend the money. That is another example of Scotland on pause when ministers are not interested in getting their day jobs right.
The pledge made by Labour and agreed by the Parliament was that we would abolish fuel poverty by 2016, yet when I ask ministers whether we are on track to do so I do not even get an answer. Let me try again: will the Scottish Government succeed in realising our collective ambition to end fuel poverty in three years’ time? The ministers’ heads are down and there is no response.
Using the Government’s own measures, Energy Action Scotland estimates that the number in fuel poverty stands at some 900,000 people. Over the past five years, energy costs have increased by 39 per cent and average household spend on fuel has reached a high of 14 per cent. If members need any further idea of the scale of the cost of living crisis they need look no further. What does the Government do? It has a £79 million budget and relies on £120 million coming from energy company obligations to make that up. That budget is underspent this year—yet another example of the SNP not getting the money out the door to the people who need it the most.
Last week, Ed Miliband proposed to tackle rising energy bills by pledging that the next Labour Government will freeze gas and electricity prices until the start of 2017. That will provide real relief for hard-pressed families and older people, and it is time that the Tories stopped laughing and took action to protect people. Does the SNP support that proposal? I listened to SNP MP Mike Weir a few nights ago when he said that it does not. Is the SNP really not prepared to stand shoulder-to-shoulder with families who are struggling? The SNP should not blame somebody else. Its own fuel poverty forum has told it that it needs to do more. That is another case of Scotland on pause while the SNP plays constitutional politics.
I can see that I am rapidly running out of time.
Members: Hear, hear.
It is depressing the SNP chooses to play constitutional politics instead of thinking about the real issues affecting people in Scotland.
I have already said enough to this SNP Government about the bedroom tax. I hope that it does not make a deliberate decision not to use the powers it has to protect people from the bedroom tax now.
I will conclude on child poverty. I am very proud of the progress that the Parliament made. We saw lowest level of relative and absolute poverty in the first years of the Parliament, up to 2007. Sadly, under the SNP, progress has stalled.
The SNP needs to wake up. Many families in communities across Scotland have a real cost of living crisis. Those families need and deserve our help now, but the SNP puts Scotland on pause. It is guilty of the most shameless politics that puts the referendum first, before the interests of the people of this country.
That the Parliament notes the decline in real wages for people in Scotland at a time when living costs are rising; understands that the cost of essentials such as food, childcare and energy has risen and the report by the Joseph Rowntree Foundation, A Minimum Income Standard for the UK in 2013, shows that, over the last five years, the cost of essential goods and services has increased by nearly 25%; is concerned at the increases in the number of people in fuel poverty and using food banks; notes that, in 2011-12, there were 950,000 people living in absolute poverty in Scotland, 220,000 of whom were children, and believes that both the UK and Scottish governments must act urgently to tackle these issues.
I very much welcome the debate, which gives the Parliament an important opportunity to continue to make its distinctive voice heard on such vital matters.
I begin by making it clear that, as a Scottish Government, we are absolutely determined to address the root causes of poverty. Scotland is a wealthy nation. We would be the eighth-richest nation in the Organisation for Economic Co-operation and Development by gross domestic product per head. We are energy rich, our workforce is highly skilled and our reputation for innovation is long established. We have world-class universities and Scottish businesses are competing at the highest level worldwide. It is therefore a social, economic and moral disgrace that, in a resource-rich nation such as ours, tens of thousands of children live in poverty. It is also a disgrace that tens of thousands of older people live in poverty. Perhaps more than anything, it is a disgrace that that has been true for generation after generation.
It is time to change all that, and I believe that Scotland has what it takes to make that change. That is why, as a Government, we have invested so much in supporting household incomes and tackling poverty. Others in this Parliament may call that “something for nothing”; we call it our social wage. It is our contract with the people of Scotland.
Our amendment picks out just a few of the initiatives of this Government and, indeed, previous Administrations. I am proud to say that we have frozen the council tax, which will have saved the average band D household in Fife more than £1,600 by 2016-17.
In a minute.
The bus pass for Scotland’s older citizens saves cardholders around £250 a year and the scrapping of bridge tolls saves a regular commuter £233 a year.
Unlike David Cameron, I believe in a Scotland in which those with the broadest shoulders bear the biggest burden, but to allow that to happen we need to have a social contract that benefits everyone. Knowing that everyone gets something makes our society more cohesive. I understand why people might want to debate how many universal services we can afford when we are in the grips of Westminster austerity, but what I object to most is the attack on the principle of universal benefits and the notion of a social contract. We are a cohesive society. Through the powers of independence, we want to protect and develop the social wage. We do not want it to be knocked down as a result of Labour’s regressive party politics or Westminster austerity.
Let us not forget that we have free prescriptions that save the sick and infirm £104 per year and free university tuition that saves students £9,000 a year, or that free personal care for the elderly, which was introduced under a previous Administration, is funded and maintained by us. Those and other initiatives form our social wage. We are protecting incomes, delivering services and mitigating Westminster’s misguided austerity. We are doing so not simply because we believe that those are the right things to do for the benefit of everyone in Scotland, but because they are the fair things to do, and because international evidence shows that countries with greater equality perform better in economic terms.
However, we are doing so in the teeth of Westminster cuts, which will take hundreds of millions of pounds from households on low incomes. The cumulative reductions in Scotland will total an estimated £4.5 billion by 2015, around £1 billion of which will impact directly on children. We will not be able to mitigate the impact of all the changes, but we must continue to act when and where we can.
We have therefore pledged £23 million to mitigate the cut in council tax benefit funding and have established in partnership with councils the Scottish welfare fund, which amounts to £33 million for crisis grants and community care grants. We are also spending nearly a quarter of a billion pounds over the spending review period on fuel poverty and energy efficiency.
I think that Ed Miliband’s energy price freeze is very well intended. It is a scandal that in a resource-rich country such as Scotland we have fuel poverty. However, I would like Ed Miliband to publish the full analysis of the research that underpins the policy. I also note that we have a very important energy commission that is looking at fuel poverty and pricing as well as the sustainability and supply of energy in an independent Scotland.
I want to see the details. However, I have to say that I would have had more confidence in Ed Miliband had I not looked at his record in government as energy minister, during which time energy company profits rocketed and household bills went up by more than 33 per cent.
This Government has pledged to find £20 million to help those struggling most with the costs of the bedroom tax. However, although that help is absolutely vital and has been widely welcomed, it does not hide the harsh truth that mitigation will not and cannot be enough. That is the very point that the Scottish Council for Voluntary Organisations made forcefully this week in its report, “A better state: inclusive principles for Scottish welfare”, which makes it clear that what we need are the powers to deliver Scotland’s own welfare and taxation systems.
I agree with Jackie Baillie when she criticises Westminster cuts, and I share her concerns about the most vulnerable in our society. However, I cannot agree with her comment on 3 September that
“I am not saying that ... we cannot develop our own welfare system. I am saying we should not develop our own welfare system.”
It seems to me that Labour is willing to do no more than criticise Westminster cuts to welfare when what Scotland needs is to do is cut Westminster out of welfare.
Does the member not agree that it is actually quite progressive to share the risks and rewards across the country and redistribute some of the wealth in the south-east up to Scotland?
It is a moot point. Sometimes when I speak to the most vulnerable people in my constituency it feels as if we take all the risk and see very little of the reward.
I also note that earlier this year, in response to the UK Government’s Welfare Benefits Up-rating Bill, the chief executive of the Children’s Society, Matthew Reed, said that
“a nurse with two children could lose £424 a year by 2015 and an army second lieutenant with three children £552 a year.”
He went on to say:
“Many more will struggle to pay for food, heat their homes, and provide other basics for their children as they find it increasingly difficult to keep up with rising prices.”
That is not the Scotland we seek on these benches; we want a different Scotland. We want the powers to achieve that vision of a more prosperous and fairer Scotland. However, the Labour Party—the so-called party of equality—with its colleagues on the other side of the chamber wishes to relinquish and abandon powers of welfare and taxation.
In my final minute, I want to make it clear that we very much need the ability to ensure that decisions affecting the day-to-day lives and living standards of people in Scotland—decisions around tax and welfare—are taken here in Scotland by the people of Scotland. With those powers—the powers of an independent nation—we can put an end to welfare cuts and abolish the bedroom tax; we can protect household incomes and maintain the social wage; we can build a taxation and welfare system that is a progressive beacon; and we can end the generations of shame that have been caused by child poverty and which have existed under the Labour union as well as the Tory union. More than ever, what we need is the full powers of an independent nation.
I move amendment S4M-07872.3, to leave out from “and believes,” to end and insert:
“welcomes the action taken by the Scottish Government to support household incomes including the council tax freeze, the maintenance of free bus travel for older people, the extension of free nursery provision, the introduction of free personal care for older people, free university tuition and abolition of bridge tolls, and believes that, with independence, including control of taxation and welfare, Scotland can be a beacon of progressive action to tackle poverty and maintain household incomes.”
“With an economy that now seems to be gathering momentum, one of the key arguments that Labour have been making for the last two years—the government got this wrong, their economic prescription failed—is no longer as powerful a message as it was six months or a year ago.
Which is why we are hearing a lot today about living standards.”
The Conservatives welcome the debate, but it is particularly disappointing that Jackie Baillie’s motion and her speech were heavy on rhetoric but extremely light on solutions, ideas or suggestions for how we might tackle the problems that she has identified. What does Labour want the UK Government to do? Something. What does it want the Scottish Government to do? Something. Labour members want the Scottish and UK Governments to do something; they do not know what that is and have no idea what they want to be done, but they want it to be done urgently.
It was interesting that Jackie Baillie spent several minutes talking about how it is wrong not to target resources. When she was in Strathclyde Regional Council, she believed in targeting resources. When she was in the then Scottish Executive, it believed in targeting resources. She says that it is wrong not to target resources. However, she praises Ed Miliband’s so-called energy policy, which I think—unless I missed a memo—does not target resources at all. It is a blanket freeze across the board.
The point is clear. We believe that the use of scarce public money should be targeted. As for energy companies that are making outrageous profits, we believe that we should target all of them.
Mark McDonald was right to make the point in an intervention that the council tax freeze is extremely important. We have enthusiastically backed the Government on that since 2008 and the Joseph Rowntree Foundation’s minimum income standard report says that the council tax freeze is important.
I do not know the Labour Party’s current policy on the council tax freeze. First it was against the freeze and then it was for the freeze. Perhaps it is in favour on Tuesdays and Thursdays but against on Mondays, Wednesdays and Fridays.
I do not think that any Conservative member is complacent about the challenges that we face, but the challenges that we in this country face are harder than those in many other countries because the previous UK Government built up a deficit and an enormous debt in times of plenty. We do not blame everything on the previous Government, but it must take at least a share of the responsibility.
I have given way several times already and I want to make some progress, so I will not give way right now.
The coalition Government has raised the income tax threshold, which will be £10,000 in April of next year. The Joseph Rowntree Foundation says that although that does not entirely offset increases to living costs, it partially offsets them. It has made a difference to millions in Scotland and taken more than 200,000 people out of income tax altogether. The Joseph Rowntree Foundation report talks about childcare costs being particularly difficult, having risen twice as fast as CPI inflation in the past five years, but in its conclusion it says this:
“plans for more generous support of childcare costs from 2016 will, if implemented in their proposed form, greatly reduce the earnings required by families with children to reach the Minimum Income Standard.”
The UK Government cancelled the rise in fuel duty that was projected. It has been frozen for three and a half years and we heard this week that it will be frozen again up until the general election. That of course impacts on the cost of motoring and has a particular significance in rural areas, but it affects public transport costs too and the cost of goods more generally.
We have the pensions triple lock, which has helped pensioners right across the country, and we now have the council tax freeze south of the border, which will make a difference in the years ahead. The UK Government is not complacent; there is a huge challenge to be faced and it has taken a number of specific measures to tackle it.
I move amendment S4M-07872.4, to leave out from first “notes” to end and insert:
“recognises that, as a result of the economic crisis and the consequent need to cut the deficit, there has been a squeeze on living standards, and supports the positive action that the UK Government has taken to ameliorate this squeeze, including increasing the personal allowance to £10,000 by April 2014, which will benefit 2.2 million taxpayers in Scotland and take 224,000 out of tax altogether, keeping mortgage rates low, cutting fuel duty and freezing the current level of fuel duty until 2015, announcing a new scheme to help families with childcare costs and delivering the biggest ever cash rise in the basic state pension in 2012 of £5.30 thanks to the so-called triple lock guarantee.”
Jackie Baillie’s motion—if not her speech—legitimately illustrates the challenges to us all as policymakers, and particularly to those who are in office north and south of the border.
It is perhaps worth recalling for Jackie Baillie’s benefit that the gap between rich and poor went up under Labour and that the highest earners pay more and will pay more every year under this Government than they did in any year under the previous Labour Government. I will address the Scottish Government’s approach shortly, but my amendment identifies important steps taken by the coalition Government in response to those challenges. Gavin Brown’s amendment highlights many of the same points but, in deleting the original motion, it perhaps risks glossing over the extent of the problems that we are witnessing.
Gavin Brown rightly identifies, of course, the source of many of the problems, which was an economic crash unlike any since the 1930s. That brutal shock to our economic system, combined with unsustainable levels of debt that had been allowed to build up, required addressing. The consequences of not doing so—of ducking those hard choices—should not be underestimated or ignored, as Jackie Baillie and Angela Constance seemed happy to do earlier. The alternative was to find ourselves facing many of the same painful problems that have been endured by European partners such as Greece, Spain, Italy and even Ireland.
Although the need for decisive action to rebalance our economy was, I believe, essential, I welcome the steps that have been taken to mitigate some of the impacts. Low and medium-rate taxpayers, those in receipt of basic state pension and those struggling to meet childcare or fuel costs have all benefited from additional support from the coalition Government.
Of course, the Liberal Democrat commitment during the last UK election campaign to raise the threshold at which people would begin to pay tax to £10,000 was not supported by everyone. I recall David Cameron insisting during the leaders’ debate that it was a laudable aspiration but an unaffordable one and yet, by April 2014, thanks to the Liberal Democrats in Government, 224,000 lower paid taxpayers in Scotland will be taken out of paying income tax altogether. Overall, 2.2 million taxpayers in Scotland will benefit from that significant, progressive change to our tax system.
It is an interesting point—it is a familiar theme from the SNP and perhaps during Mark McDonald’s own speech he will set out what of the £2.5 billion-worth of welfare spending he is committed to seeing reinstated post-independence, should that come to pass.
On pensions too, the coalition Government has introduced progressive reform. The so-called triple lock, which links pension increases to inflation, wages or 2.5 per cent, whichever is highest, has already delivered the highest cash increase to the state pension—a far cry from the 75p increase offered by Gordon Brown, which caused such fury not so long ago. It is a far cry too from the extravagant promises made by the SNP about pensions in a separate Scotland. Backed by no evidence, those assertions offer no response to the concerns raised by many independent experts, including the Institute of Chartered Accountants.
As on pensions and income tax, so too on childcare the coalition Government has acted to provide much-needed support. The package south of the border now includes free provision for 20 per cent of two-year-olds from the most deprived backgrounds—that is, for 130,000 children—and that will rise to 40 per cent next year. From 2015, the UK Government will meet 20 per cent of childcare costs for working families, with the amount that can be claimed per child under 12 rising to £1,200 per year once the scheme has been fully implemented. That will go some way towards meeting the demands that Save the Children and others have made.
There has been welcome confirmation of a further freeze in fuel duty over the next two years.
Sorry, I cannot.
Of course, with every price hike efforts by both Scotland’s Governments to combat fuel poverty are set back, but the only long-term solution is to step up work to improve energy efficiency, notably across our existing housing stock, and to ensure that we meet our renewables target.
That is why Ed Miliband’s proposed price cap is a concern. The price cap would be a costly temporary fix that would draw vital investment away from the sort of measures that are essential as part of a long-term solution to reduce fuel poverty and to achieve emissions reductions. It should also be recalled that, when Ed Miliband became Secretary of State for Energy and Climate Change in 2008, he said that he would
“press energy firms for price cuts”.
As well as building fairness into the tax and pensions system and providing support to hard-pressed families and individuals struggling with childcare or fuel costs, we also need to prepare the ground for building a stronger economy. That is why my amendment highlights the coalition Government’s work on extending apprenticeship opportunities, supporting science and research and ensuring that investment is made in the new green economy. Of course more needs to be done, but those measures demonstrate a willingness by the Government to address structural problems in our economy in a way that also locks in fairness.
The Scottish Government will argue that it is also taking steps to mitigate the impact of rising costs—I do not disagree with that—but, bizarrely, SNP ministers seem to believe that they are wholly responsible for any money that is spent in Scotland but entirely blameless for any money that is not provided. That is simply not credible, as Government is about choices. If SNP ministers choose to spend in one area, that restricts what they can do in other areas. I note that Alex Neil’s amendment mentions a number of policy areas, including the introduction of free personal care that was delivered by the previous Lib Dem-Labour Executive—we see history being rewritten before our very eyes. Predictably, he goes on to argue that it would all be different with independence, but the contortions that the SNP wishes to perform with what economic levers would be left after ceding control of the currency would defy even the most esteemed of Nobel laureates.
In trying to persuade increasingly sceptical voters of the case for separation, the SNP has racked up an impressive and growing list of costly commitments—
But the only tax commitment that the SNP has made is to reduce corporation tax. The Greens at least have the intellectual honesty to acknowledge that, if we want to spend more, we need to tax and borrow more.
For a further response, we need to look to the long term. However, too often the SNP’s obsession with next year’s referendum has encouraged it to opt for short-term fixes.
I move amendment S4M-07872.1, to insert at end:
“; supports the UK Government’s determination to cut the income tax bills of people on low and middle incomes by raising the threshold for paying tax to £10,000; supports the UK Government’s decision to apply a so-called triple-lock to pensions to ensure that they increase by the highest of inflation, wages or 2.5% and endorses new support for childcare; believes that these steps, combined with support for apprenticeships and young workers, the Green Investment Bank and investment in science and research, will help create a stronger economy and a fairer society, enabling every person in Scotland to get on in life, and, noting that UN International Day for the Eradication of Poverty is on 17 October 2013, supports the commitment of the UK Government to spend 0.7% of national income on overseas aid to help tackle global poverty.”
I welcome the opportunity to debate the Labour Party motion on the cost of living. I realise that today’s debate follows on from a well-developed theme that was unveiled to the public and Labour Party members at the Labour Party conference in Brighton last week. However, today’s debate also comes a day after the latest increase in the national minimum wage, which has increased by 12p an hour—in percentage terms an increase of 1.9 per cent.
This is an important debate because it shows that the crisis centred on the cost of living leads to a wider discussion about economic growth and what type of society we want to live in. The growing inequality in our society that has been encouraged over recent decades has had a particular impact on those families and individuals who are on the lowest incomes and who suffer the worst effects of poverty.
I had to pinch myself last week when I realised how times have changed. I remember as part of my previous employment attending meetings of the Trades Union Congress national minimum wage enforcement group, where we discussed with officers from the Inland Revenue and the Department for Work and Pensions how the minimum wage might impact on people’s lives.
I also remember being phoned in 2006 by consultants who asked me who I thought would be the best person as incoming chair of the Low Pay Commission. I suggested Rodney Bickerstaffe—in 2006, the Labour Party was still in power—because I felt that it would be better to have someone with a real commitment to both low-paid families and the national minimum wage. Unfortunately, the then Labour Government decided that Rodney Bickerstaffe was not the person to lead the Low Pay Commission. Instead, the Government once again appointed someone from the private sector to take on the role. The Low Pay Commission has an important role in setting the national minimum wage, but that role has been hampered by business interests, with their dead hand, ensuring that the minimum wage does not rise in line with the commitments that have been given by the Scottish Government to introduce the living wage for every worker in the government service.
I made a genuine intervention during Jackie Baillie’s speech about the setting of the minimum wage. The minimum wage was £3.60 an hour when it was introduced. The trade union movement at the time asked for a rate of £5 an hour, but that was rejected. If we do the calculations using the higher figure, we can see that, if the increases had had the same impact since the minimum wage was introduced, we would now be discussing a minimum wage in excess of £7 an hour. That would have a real impact on people on low incomes.
I find myself more surprised that, according to well-informed commentators, even the present number 10 policy unit realises that any economic growth will not make an impact on all sectors and areas of the economy, particularly for those in low-paid employment. There is even talk of number 10 seriously wanting to examine the possibility of increasing the national minimum wage. As is always the case in British politics, however, the dead hand of the Treasury is apparently resisting such an attempt.
As some members will know, I had a members’ business debate at the start of September on the Oxfam report, “Our Economy”. One of the many striking statistics in that report referred to the past 25 years, when the incomes of the top 1 per cent of earners in the UK increased by up to 117 per cent in real terms, compared with an increase of just 47 per cent for the poorest 10 per cent.
On the issue of energy prices, I have previously stated in the chamber that ordinary consumers have not so far been best served by the current marketplace for energy, particularly electricity. In the period since 2004, there has been an increase of more than 60 per cent in electricity bills. Along with others, I recognised back in May 2011 that the big six energy companies needed to be held to account by the public for their continual price hikes, particularly in light of the impact that they have on low-income households and on tackling fuel poverty. It was important for the Economy, Energy and Tourism Committee, of which I was a member at the time, to scrutinise that issue and the pricing behaviour of the energy companies.
At present, the Office of Gas and Electricity Markets does not have the power to peg energy prices. I welcome Ed Miliband’s commitment to peg those prices if he gets into power, but we have a real opportunity to make changes next year and to set the agenda for the future of Scotland, tackling the real issues of deprivation and poverty and ending once and for all the situation that we have encountered as part of this better together great union that is the United Kingdom. The policies of the past 20 to 30 years have not had a real impact on people living in poverty. When we see fuel poverty increasing today, we must question whether or not there is another way. That other way is a choice for the people of Scotland next year to take real powers into their own hands and get a Government that is prepared to deliver on policies that benefit everyone in society, not just the 1 per cent of top earners.
The background to the debate is the fact that, in 38 of the past 39 months since the coalition Government was elected, prices have been rising faster than wages. Clearly, some of those factors are beyond the UK Government’s or the Scottish Government’s control, but the background is that the UK Government’s economic policy has failed. That was well summed up by Mark Carney, the new governor of the Bank of England, who obviously is politically independent, when he said:
“fiscal adjustment has been a drag on growth.”
Economic failure is really what underlies the problem and the crisis in the cost of living.
Labour and the SNP have responded differently to the situation. Although many of our policy prescriptions might be similar, the SNP has used the issue as part of its constitutional argument, and we had that again in Angela Constance’s speech. Another thing that the SNP says as part of its referendum strategy is that, really, there is no alternative at UK level because Labour and the Tories are basically the same. Again, that theme came through in Angela Constance’s speech when she said that there was no difference in child poverty under the previous UK Government and the current one. However, that is simply untrue, because child poverty levels fell significantly under the previous Labour Government, as the issue was a priority for it.
If anyone doubted the significant policy differences between Labour and the Conservatives, they were highlighted in the speeches last week by Ed Miliband, Ed Balls and others. The people of the UK will have a clear choice at the next UK election. Angela Constance said that at least she believes that the energy freeze proposal is well intentioned. I welcome that, because it is not what Mike Weir or any other SNP MP or MSP has said in the past few days. Ms Constance said that it would be better if Ed Miliband had had a better record as energy minister, although I point out that, when he was minister, energy bills fell on average by £100. However, he would of course admit that, at that time, he did not make the fundamental changes that he wants to make and that it is through his experience of the operation of the energy market that he realises that he has to reset that market, which is the other key ingredient of the policy, apart from the price freeze.
That example shows something wider, which is that Ed Miliband is willing to challenge vested interests and to take on and question the neo-liberal consensus. He is making a significant break with that consensus on economic policy. SNP members should look at Labour’s economic policy stance at UK level. I would argue that, although it is not traditional socialism, it is radical and it is a left-wing policy that is far to the left of the SNP’s economic policy. In general, the SNP is far more comfortable about cosying up to big business. For example, it proposes big cuts in corporation tax.
The exciting announcements that we had last week were not just on energy. The Scottish Government could look closely at childcare. Of course I support the proposal for 600 hours a year of childcare, but that is put in the shade by the proposals of Labour at UK level—which we have said that we would implement if we were the Government in Scotland—for 25 hours a week for any three or four-year-old whose parent is working, and a massive extension of after-school care.
A third example is housing. At UK level, we have been saying that we have to deal with supply, yet housing supply is a red light in the Scottish Government’s indicators. The SNP should look carefully at what Labour at UK level is proposing and stop spreading the myth that somehow any Government at Westminster will be the same.
I turn my attention to what the Scottish Government is or should be doing. In general, we want to help the many at the expense of the few. That can be seen in the taxation of the ultra-rich that would be part of the energy and childcare policies. My doubt about the SNP’s council tax freeze is that, although it supports the many, it is at the expense of council services, which benefit disproportionately those on lower incomes. That is why the energy policy is fundamentally different from the council tax freeze policy.
Jackie Baillie and others have talked about how the Scottish Government could do more on fuel poverty, food banks and the bedroom tax, which at present is to the fore in public concerns. At the Finance Committee this morning, in a discussion on the Scottish Government’s poverty policy, Jim McCormick of the Joseph Rowntree Foundation said that Scotland does not appear to have a delivery plan for its child poverty strategy.
Studying the 50 indicators that the Scottish Government has, we find that only two are focused on poverty. We know that growth is not the only factor but that the distribution of wealth is also significant, so why is there not an indicator targeting median household disposable income? That would show a concern for the cost of living for the majority of people.
Why is there nothing about poverty in the guidance on single outcome agreements for community planning partnerships? Again, the poverty strategy is not joined up with what is demanded of local authorities. There is a great deal more that the Government could do to focus on poverty in its policy priorities and in its guidance to local authorities.
I am pleased to have been called to speak in this afternoon’s debate on the cost of living and the impact that it has on hard-pressed families and individuals in Scotland.
I start, as the minister did, with the key issue of child poverty. It is absolutely unacceptable that nearly one child in five in Scotland is being brought up in poverty—one in five children in oil-rich Scotland. What a disgrace, and how inexcusable it is for the no parties—Labour and Tories—to campaign happily together to stop Scotland getting the powers that we need to tackle such inequality in our country.
It is quite clear that in order to create the prosperous and socially just country that Scotland can be, we need control over all our resources to ensure that they are put to work for all our people. It is also quite clear that we need the full toolkit of powers that other independent countries take for granted to tackle inequality, and it is worth noting—
I would like to make a wee bit more progress, but I will bear in mind that Ms Baillie wants to intervene.
Countries such as Denmark and Norway—both independent countries with similar populations to Scotland—have child poverty levels of less than 10 per cent. That is not 0 per cent, which is where I would like to go, but it is certainly much better than being subject to the policies of Westminster, where we see the UK being the fourth most unequal country in the developed world.
I shall take Ms Baillie’s intervention now, if she still wishes to speak.
I thank Ms Baillie for her intervention. Ultimately, it is all to do with power and who controls the resources, which affects the decisions that we are able to make. Of course, it is interesting to note that the Institute for Fiscal Studies report, “Poverty and Inequality in the UK: 2011” found that income inequality rose during the 13 years of Labour Government in Westminster across a range of potential measures, so we should remember history and not seek to rewrite the facts.
With a yes vote in September 2014, ending child poverty is truly one of the big prizes of independence for Scotland. In the meantime, the SNP Scottish Government is doing all that it can within the limited powers currently available to help people through these tough economic times. That can be seen in the continuing commitment to the social wage, which is helping folk who are striving to keep one step ahead, to juggle the household finances and to come out on top week in, week out. That is the challenge that faces them.
We have heard this afternoon about the council tax freeze, which has been in place for the past six years in a row and which makes a big difference to people because it is the one bill that they know will not go up when they look at all their other household bills. It is also a big relief compared with what went before, because when we had Labour and the Liberals in power we saw a staggering 60 per cent-plus increase in council tax bills.
No, thank you.
It is certainly clear to folk that the massive council tax hike under Labour did nothing whatever to help people deal with the increasing costs of living.
Another key aspect of the social wage commitment that the SNP Government has made to the people of Scotland is the abolition of the tax on ill health that was prescription charges. The SNP was proud to go back to the founding principles of our national health service and to make the NHS truly free at the point of need. I have to ask the critics of that help—it is difficult to believe that there are critics of that help for hard-pressed individuals and families who are struggling with the increasing costs of living—what kind of world they live in, where they think that helping people with conditions that require constant prescriptions and who are earning less than £16,000 a year is somehow providing immense subsidy and largesse. What utter nonsense. It shows a lack of real understanding of the challenges that individuals are facing.
Many other aspects of the social wage will be touched on this afternoon, such as free personal nursing care, free NHS eye examinations, education based on the ability to learn not the ability to pay, concessionary bus travel and the abolition of bridge tolls. I could go on. All those measures are in place now and are making an impact on people’s lives. They allow people to keep more of their own money in their pockets. We should not, of course, forget the SNP Government’s commitment to introduce the living wage wherever possible, the no compulsory redundancies policy or the efforts that we are making to mitigate the Westminster Government’s welfare reforms.
It is clear that, although the Government is straining every sinew to help people through difficult times with the powers that it has, we need the powers that every other country takes for granted. Who would be content simply to mitigate the decisions of others? Rather, we should take those decisions ourselves. Since 1945, 140 countries have chosen independence and not one of them has ever asked to give it up again. That is the way forward for Scotland. It is the way to create a prosperous and fair society. It is the better future for Scotland, and all we have to do is to say yes.
I will make a few remarks about child poverty and childcare.
The key to decent childcare is the fact that it addresses child poverty. It is key to economic growth and gender equality. I say to Angela Constance and Annabelle Ewing that they need to go back and look at the independent statistics. Child poverty fell under Labour between 1999 and 2005. It then stabilised, and then the SNP came into power and child poverty went up. Child poverty has only ever gone down under Labour and up under the SNP. I am afraid that that is a fact that they cannot deny.
I encourage the Government to take a moment to look at Save the Children’s recent report “Give Us a Hand with Childcare”, which contains 10 key messages from parents throughout Scotland about what childcare means to them and how it must be best delivered to benefit their lives. Four key points from that report stood out for me: the cost of childcare is too high, particularly for low-income parents; parents have a strong desire to work but feel trapped by the cost of childcare; flexibility is key; and childcare is a particular challenge for parents who wish to study.
I will take those clear messages to the scrutiny of the Children and Young People (Scotland) Bill. There are 100 voices in the Save the Children report, all clearly stating what they want from the childcare provision that the Government is introducing. The Government has, of course, said that it will extend childcare to 600 hours for looked-after two-year-olds and for all three and four-year-olds. The Scottish Labour Party supports that move, presuming that it is properly funded.
The SNP made that promise in 2007. Six years on, we are still waiting for that to happen. The Government tells us that we now need a bill to make it happen, which is why we are legislating, so I was a bit surprised to see the SNP tweeting this morning an infographic, no doubt connected to the Dunfermline by-election, in which it says that it has saved families £701 a year—the minister used the same figure in her opening speech—by delivering 600 hours of free childcare. I would love to hear from the minister how come, six years on, with the bill to deliver 600 hours still going through the Parliament, she is putting out leaflets saying that it has already happened.
Just for the record, I note that there is no response.
I am afraid that Kenneth Gibson is incorrect. If he goes back to his office and looks up his party’s 2007 manifesto, he will see a clear commitment to the 600 hours. It will be seven years on—August 2014—before his Government delivers the 600 hour commitment, so I do not know quite why the SNP is putting out leaflets and tweeting all over Twitter that it has already happened. It is the type of deeply cynical politics about which I talked in the chamber last week.
In that same speech, I brought up the issue of payday loans, and I will do so again today. I make no apology for that, and I will do it again and again until the Government listens and decides to do something about the issue. A recent survey of what people use payday loans for showed that the vast majority of people—more than for any other purpose—used payday loans to buy food and pay bills. That is a shocking statistic. I have thrown hundreds of statistics at the Government on the problem of payday loans and all the things that it could do about it, and they have fallen on deaf ears.
I want to tell the Government briefly a story about one of my constituents, who is a guy called James. If members want to see the full story of James’s experiences, they can go on to my website and see a full 10-minute interview. A year and a half ago, James borrowed £200 to buy extra Christmas presents. He could not keep up with repaying the £200 debt, so he took out another payday loan to pay off the first one. Within a matter of months, he had £5,000-worth of debt to five different payday lenders. Every single penny of his wage—I remind the Government that his wage was not insubstantial—went out to pay payday loan debt. It all disappeared from his bank account through continuous payment authorities. The guy was on the edge of bankruptcy, but the Government has absolutely nothing to say to him. I have put forward dozens of ideas to the Government.
I would be delighted to send Mr Mason every speech that I have made on the topic in the chamber. Perhaps he might then listen.
Glasgow City Council’s action is a fantastic example of action that can be taken on payday loans. It has 20 different recommendations on the issue, one of which was released three weeks ago. That recommendation was to slash the rents and business rates of payday loan companies’ alternatives of credit unions. That is just one of 20 things that Glasgow City Council is doing.
No, thank you.
I ask the Government to do one thing. I see the Cabinet Secretary for Health and Wellbeing in his place. He spends millions of pounds every year on health warnings. Through the social advertising budget, he tells people, “Don’t drink too much. Don’t eat fatty foods. Eat five fruit and veg a day.” On several occasions, I have put to the Government an idea for wealth warnings. I want to see leadership from the Government. I want it to stand up and say, “Payday loans are bad for you. There are alternatives, and there are debt advice services that you can access.” [Interruption.]
The cabinet secretary can do that with the powers that he has, but time and again, the Government is not willing to act. For far too many families around the country, there is far too much month left at the end of the money, and the Government has nothing to say to them. That is an absolute scandal.
If the Government does one thing in the run-up to Christmas, it should speak out against payday loan companies and give people a chance of a better future that is not built on the debt that the cabinet secretary is quite happy to sit back and watch build up.
SNP members know, of course, that the powers to really deal with the payday loan companies are reserved to Westminster, and Kezia Dugdale and her colleagues do not want us to have them. In 2010, I lodged a motion that called for the then Labour Government to deal with those high interest charges, and not a single Labour MSP dealt with it. There is nothing but cynical hypocrisy from the Labour member.
Kezia Dugdale talked about child poverty. We have 10.9 per cent less in resources to deal with child poverty than we inherited.
The cost of living is a pressing issue for families and individuals. Unemployment is too high; benefits are under attack from the coalition; the UK state pension is one of the worst in Europe relative to wages; fuel costs are among the highest in the world; and many who are in work face real-terms wage cuts and reduced working hours. No one would deny that, since the recession, people across these islands have had to make a lot less go a lot further.
Even before the recession struck, household incomes were under threat from the then UK Labour Government. The “Why do we feel so broke?” report, which was published on 4 February 2008, showed that the average UK disposable family income after tax and housing costs, having declined from £16,544 in 2003 to £16,305 in 2006, plummeted to £15,231 in 2007. The fall of 6.6 per cent in a single year at a time of strong worldwide economic growth shows the economic incompetence of Labour in power. By contrast, despite increasingly difficult Westminster budget settlements, the SNP Government has achieved much since 2007.
The Labour motion rightly points to areas in which costs have soared, of which energy and childcare are two examples. It also says:
“both the UK and Scottish governments must act urgently to tackle these issues.”
Again, there is little to argue with there, but the track records of both Governments are markedly different.
Restrictions that are imposed on the Scottish Government severely limit what we are able to do—a situation that those on the no benches are reluctant to change. Nevertheless, the council tax freeze has saved average households up to £1,600, whereas in England council tax bills have risen year on year. In North Ayrshire, where I am an MSP, Labour raised the council tax by 75 per cent in the decade to 2007, while water and sewerage bills soared by an astonishing 592 per cent.
Lest we forget, fuel duty in the first three years of the Blair Government was increased by 6 per cent each year above the rate of inflation, making our economy increasingly uncompetitive, which is no doubt one of the reasons why Scotland lost 37 per cent of its manufacturing employment while Labour was in power.
Scotland would undoubtedly be hit by further tax hikes were Labour in power, but no one really knows. Indeed, I doubt that many Labour members have a clue as to what their council tax policy is—this week. In 2010, the then Labour leader, lain Gray, said that the council tax freeze was “unsustainable”, but he reversed his position prior to the election, saying that
“now is not the time to increase the burden on household budgets.”
That of course begs the question: when is the right time?
The SNP policy is indeed to introduce, when the time is right, a local income tax—of course it is. We have frozen council tax, but Labour is a yo-yo party on the issue. For example, Glasgow City Council has pledged to freeze the council tax for a year longer than this Government will be in office.
Labour introduced tuition fees, forcing many young people who wanted to go to university to save or go into debt, but the SNP Government reintroduced the proud tradition of access to education based on the ability to learn and not the ability to pay. Our commitment to free school meals, a living wage, maintaining the bus pass for older people and the abolition of prescription charges has helped to ease the strain on household budgets at this difficult time. In Johann Lamont’s view, those services are part of a “something for nothing” culture—a phrase used at the Tory conference yesterday by lain Duncan Smith—and all are under the scrutiny of her cuts commission. For Labour to demand that the SNP Government do more to reduce the cost of living, when Labour consistently attacks or threatens to reverse the very measures helping so many Scots, beggars belief.
The real power to reduce the cost of living lies at Westminster. Control over energy policy is key to reducing fuel costs; radical benefit reform would help those struggling to find work; and a decent pension would allow our older people to enjoy later life without worrying about heating their homes or eating properly. If they are serious about addressing the cost of living, why do Opposition MSPs not want the tools for us to do the job here, instead of tinkering around the edges to try to mitigate the impact of UK Governments?
Labour tells us that it will deliver change, but it never does. On Labour’s watch, the UK became one of the most unequal countries in the developed world. Labour’s claim to be progressive is a myth debunked many years ago, as the Iraq war, Trident, retention of the House of Lords, tuition fees and trickle-down economics attest.
Last week, Ed Miliband promised to take action on energy companies. One wonders what his plan is, how effective it will be and, importantly, why he did not address those matters when in power. Ed Miliband was, of course, Secretary of State for Energy and Climate Change for two years, but to say that it was ineffective does not begin to describe his tenure in office—although on taking up his post, he did, very politely, ask the big six energy companies to take voluntary action to ensure that prices were fair.
Age Concern and National Energy Action slated Labour for failing to protect the poorest and most vulnerable from high energy bills. Ed Miliband’s own department’s figures show that fuel poverty continued to rise, and Westminster’s Energy and Climate Change Committee reported that the Labour Government would miss its own fuel poverty reduction targets. What a record!
Figures from the Office of Gas and Electricity Markets show that, during the 13 years of the Labour UK Government, average prices rose by 48 per cent but gas bills increased by 67 per cent and electricity increased by a whopping 139 per cent. It is astonishing that Labour demands action to reduce the cost of living, given its abysmal record in government and opposition.
The SNP Government is doing what it can within the powers that we have, but Scots should vote yes to change that situation. I say to Labour that it is not what its members say in the chamber now that matters but what it did in government. Unless Labour plans to reverse Tory cuts, its words are meaningless; and unless Labour tells us how it will fund that, its rhetoric is empty.
We have Labour speeches, but what about action rather than speeches?
I notice that Lewis Macdonald wanted to come in after my six minutes were up. [Interruption.]
The action that the previous Labour Government took was to reduce child poverty. It is nonsensical of SNP members to pretend that that somehow did not happen.
In recent weeks and months, a number of people have said to me that Scottish politics is dominated by the on-going referendum debate. Indeed, the Scottish Government has used time in the chamber in recent weeks to debate the one-year-to-go point until Scots have their say on that question. No one on the Labour side underestimates the importance of the referendum, but I think that, across the chamber, we would all regret any impression that the Parliament is not focused on the day-to-day issues that affect the lives of people whom we represent. I hope that this Labour debate goes some way towards redressing the balance.
The cost of living crisis that is hitting households across Scotland and the UK is the issue that dominated my surgeries this summer. Lynn is a woman who came to a surgery that I held in Partick, and her story is fairly typical of many people I have met. She was forced to give up her work as a supervisor in a busy shop to care for her elderly mother. Lynn’s mum unfortunately died in January, and since then Lynn has been unable to find another job—and I mean any other job. Lynn did the right thing by caring for her mum herself—she saved the state money—but now she feels that she is being punished, and life is getting harder for her each and every month.
We know that the impact of the global financial crash and recession has been felt the hardest and longest by those who are furthest removed from the questions of financial regulation. It has been bank workers and not bank executives who have felt the most pain. Those who have lost their jobs in banking, manufacturing and retail and the 49,000 people who have lost their jobs in public services have suffered. Those who were already furthest from the labour market have been penalised heavily, and even for those who are in work, exploitation has been the hallmark of the recovery, such as it is. Zero-hours contracts, reduced hours and pay freezes have been the reward for many of those who are in work, while those who are looking for a job have been encouraged or in some cases compelled to provide their labour without pay.
At best, that means people having less money in their purses and wallets, putting off home moves or improvements and missing out on holidays, but at worst it means people struggling to clothe their children for the new school term and to put food on the table. At the same time, we have seen childcare become less and less affordable, and it is now less affordable in Scotland than in any other part of the United Kingdom.
Prices have risen in the shops and on our household bills. Despite falls in wholesale energy prices, the cost of heating a home this winter will take up a larger and larger proportion of incomes. When it comes to a basket of essentials in the supermarket, the JRF has put the rise in what is paid at the till at some 25 per cent over just five years, as I think Jackie Baillie said. Demand for food banks has risen by 35 per cent in the same period, and a fifth of those who access them are in work.
Since 2010, average wages in Scotland have fallen by £27.30 a week. Public sector workers are emerging from a pay freeze with a 1 per cent increase, or 2 per cent for those who already earn the least, and yet the CPI is at 2.8 per cent and the RPI is at 3.3 per cent. Declining incomes and rising costs add up to a cost-of-living crisis for real people and not just a problem or an opportunity for politicians.
The question for the Scottish Parliament is how we respond and how we use the powers that the people have entrusted to us to act in their interests. All the political parties are thinking about how we will respond to those problems after the referendum or after the next election, but the crisis is not a challenge of tomorrow. It is one for today, and our response should be an urgent one.
That is where I take issue with the Scottish Government’s amendment, because the truth is that the Scottish Government has nothing new to say. What we have heard is a restatement of polices that were debated during the 2007 election or policies that were introduced by the previous Labour-led Government before 2007.
We need to evaluate what is already being done in terms of the regulation of costs, and spending to help people. We must consider whether those things are working or whether some effects of the policies are unintended or contrary to our objectives and whether reprioritisation is possible or needed. We also need to set out what more could and should be done. There are plenty of things that we should be doing, including extending the living wage, taking action on zero-hours contracts and making the case for training that leads to better quality work. Those steps are all vital and I agree with what has already been said about them.
An answer to a parliamentary question that I received, which was published in yesterday’s written answers report, states that no assessment has been made of how extensively zero-hours contracts are being used in colleges and universities, which are some of the biggest employers in the city that I represent. There has been no assessment of whether they are primarily used for teaching and academic staff or whether it is cleaners, technicians, maintenance workers and cooks in canteens who are on them. If we do not even know how many people are being asked to work in a university without knowing how many hours they might get next week, what hope do we have of creating decent employment in other sectors of the economy?
Fuel poverty, which others have mentioned, is significantly the responsibility of the Scottish Government, and its commitment to tackling the issue is regularly extolled. I welcome every penny that is spent on helping the one in three Scots who live in fuel poverty. However, one of the first decisions to be taken after the election that brought me here was to cut the fuel poverty budget and to remove universal provision of the central heating programme—universal provision which SNP members have praised in other areas.
I finish by mentioning a policy that was announced at the Labour conference last week—Labour’s proposal to freeze energy bills. Would the SNP support the next Labour Government on that or would it implement a similar plan in an independent Scotland? That is the key question in this debate.
Members know my views and those of other Labour members on the SNP’s plans to cut corporation tax for big businesses. Will the minister tell us, in closing, how the SNP can justify cutting tax for energy companies while taking no action on the bills that they demand of their customers? If the question cannot be answered in this debate, I am afraid that it will become a big issue in the run-up to the referendum on 18 September next year.
I thank the Labour Party for bringing this important subject for debate.
Members received a number of briefings, including one from the Child Poverty Action Group—an organisation that I think very highly of. I agree with the direction of travel in CPAG’s briefing, which talks about the need to maximise income and minimise essential outgoings for families in Scotland.
I was particularly disappointed to read in the briefing that 20 per cent of children still live in poverty and that the number is forecast to rise by 65,000 by 2020. The Child Poverty Act 2010, which I think that all members supported—in the Scottish Parliament and at Westminster—was meant to cut child poverty to 10 per cent by 2020. Even that target was unambitious, given that the rate in other European countries is well below 10 per cent. At the time, people warned that Westminster legislation without resources would not eradicate child poverty. That has, I am sad to say, proven to be the case.
On maximising income, the living wage is good but a statutory minimum wage is better. We struggle to get people to sign up to a voluntary living wage, whereas a statutory minimum wage is compulsory in the private and public sectors. People need a minimum to live on—we give that to prisoners and we should give that to everyone else. Part of someone’s income should be unconditional; only income on top of the unconditional element should be conditional. That is why it is so wrong to take money off people who have an extra bedroom, taking their income below the level that they need to live on. It is similarly wrong to make someone attend a job centre five days a week before they can get their benefits.
To members who say that independence is a distraction from the main issues, such as poverty and the cost of living, I respond that I want independence so that we can stop struggling to impose a voluntary living wage and instead increase the statutory minimum wage to a proper level, on which people can actually live.
I am happy to argue that the statutory minimum wage should be £7.45, in line with the living wage. I do not think that anyone has fixed a figure for the minimum wage, but when I was at Westminster we repeatedly spoke in favour of a higher statutory minimum wage.
We can hardly talk about reducing people’s outgoings without considering where the extra money is to come from—the issue has already come up. Is a free healthy lunch for rich kids the best use of resources? Where is the money to come from for more childcare?
Let us not forget that good things are happening in relation to energy, albeit sometimes on a small scale. The Commonwealth games village has a district heating system and the new homes have higher insulation levels—members who go to see the new homes will see that they have tiny radiators. That will be the case for some 700 homes, a number of which will be socially rented. That is good news, but on a relatively small scale. It is not yet economically viable to build such homes, which are subsidised by the public purse.
Energy costs are not helped by the profit element. It would have been better if gas and electricity had not been privatised—I did not take any shares when they were privatised. I have reservations about whether Labour can deliver an energy price freeze. There is a fear that a freeze would stifle investment in our future energy requirements and that companies would dramatically raise prices before the freeze came into effect.
The Scottish Government, in partnership with local government, has delivered a council tax freeze. Of course if council tax were raised there would be more money for services, but we should remember that the tax is regressive, as Drew Smith said. Council tax increases hit hardest the people who are on a limited income, such as pensioners, so freezing council tax helps people who are on a fixed income.
I have already given way to the member.
In the longer term, we want to replace the council tax with something fairer that is based on the ability to pay; nonetheless, in the meantime, a freeze is very welcome.
There are some good points in some of the amendments. For example, the Greens demand waste reduction, and we should definitely go down that route. The Lib Dem amendment mentions overseas aid, which may be slightly off the point of the motion, but every time we talk about poverty we should remember those around the world who are in a much poorer state than we are.
I will make a few comments on the exchange rate. One of the reasons for costs going up is that the value of the pound has been falling, and the value of the pound has fallen because the economy has been badly managed over a number of years. There was much rejoicing when the pound fell from around 70p to the euro to more like 80p as that was meant to boost exports—although I do not think that we have seen much growth in practice, at least at a UK level. However, the falling exchange rate has meant that anything imported now costs more, and for this country that means that quite a lot of things cost more. Although we may accept that some aspects of the increased cost of living are outwith the control of all Governments, we must be clear that the mismanagement of the economy by successive Westminster Governments is a major factor.
Let us make dealing with poverty a key focus in the Parliament, but if we are to hear new proposals from other parties let us have clear and costed alternatives as we move through the budget process.
Labour is due credit for bringing this debate on the cost of living to the Parliament. It seems that during this conference season the political parties have been tripping over each other to send the message, “In tough economic times, we’re on your side.”
Labour’s policy of the energy price cap is intriguing. It is probably popular and perhaps even achievable, but it will certainly be a short-term measure. The Labour Party is not proposing national ownership; therefore, in a free market competitive arrangement price caps would be a short-term measure only. However, I do not know whether I support that measure yet because I have not seen any of the detail. Even after spending some time searching for an explanation, I still do not know whether it is a retail or wholesale cap. If it is a retail cap, it will freeze out suppliers such as the Co-op, which the Labour Party welcomed when it entered the energy market.
For Patrick Harvie’s information, I say that it would be a retail freeze, but included in the proposal is major reform of the wholesale market, too. It is, indeed, a temporary measure that will allow time to legislate to replace Ofgem with a regulator that has the power to regulate prices. It is a short-term measure until we can introduce a long-term policy.
I will be interested to learn about the long-term policy when the detail is available. I still wonder, however, what will happen to the retailers that are not also energy generators if a price cap is in place on the retail side and the wholesale price goes up.
The Liberal Democrat amendment talks about increasing tax thresholds, but I am afraid that I cannot agree that that is progressive. Every member of this Parliament is in the top 2 per cent of society by income and will benefit from that.
There was nothing to prevent the Conservatives from taking more from higher earners and approving that measure as well. Only £1 billion of the £17 billion that that policy raised has been spent on removing low earners from tax, and nothing has been gained by the poorest people in society.
SNP members have talked about the social wage, and I welcome many of the measures under that banner heading. Nevertheless, I do not welcome the council tax freeze because, as with other examples of freezing a regressive tax, every member in the chamber has saved money through the council tax freeze. All of us who are well paid and who are in the top fraction of society by income have saved money. That is the problem.
I do not have time.
The SNP should acknowledge that the many positive policies under the social wage headline need to be paid for. I would be willing to pay more tax. Every member in the chamber and anybody on a comparable income can afford to pay substantially more tax. I want Scandinavian public services and Scandinavian levels of taxation to pay for them.
The Conservatives seem to be obsessed with the marriage tax break, which will save the handsome sum of £4 a week for around a third of married and civil-partnered couples, but will exclude many of those who are most in need. Its real intention is clearly to underline a mean-spirited and judgmental moral hierarchy rather than to help those who are most in need.
Even where those policies are well-intentioned they all risk achieving only marginal effect. The problem is one of chronic inequality, which has, as other members have mentioned, been growing since the late 1970s. This inequality matters more than GDP because far more people benefit if we share the wealth of our country than if we grow that wealth overall. The problem is also about our having a culture of waste and overconsumption, even by those who can afford it the least but who are left with little choice.
The solutions will often be found in demand reduction, the creation of capacity for self-reliance, and in a change in economic relationships in order to break the stranglehold of multinational companies. I offer food as one example. The dominance of the retail giants may well mean that a few loss leaders are offered, but only when people are bombarded with advertising that tells them to buy overpriced, overprocessed and unhealthy products as well. The decline in food skills in our society, coupled with the decline in the time that many people have available to grow, prepare and cook their own food is another element that results in the change in people’s relationship with food, from its being a form of nourishment and a natural product to a commercial product on which they rely.
Similar dominance by a handful of multinationals and big businesses can be seen in energy, banking and many other sectors of our economy. Often the solutions will be found in government action. I do not have time to talk about the many benefits of land value taxation in reducing housing costs, or about the role that private rented sector rent controls, allied to social housing supply, could and should play.
I suspect that some people will recognise the description; it is clear that James Dornan does. Other younger parents might view that with a slight sense of foreboding, although I say in mitigation that it is not that bad because it is sometimes the only chance I get to catch up with some members of the family. The big downside is cost; it cost me £98 to fill up the car this weekend. It is a seven-seater—I have a lot of kids. It does not seem so long since I was horrified when a full tank went above £50, but it is now double that.
Families across Scotland are feeling the pinch in this recession. The Joseph Rowntree Foundation report, research from Shelter and government statistics all tell the same story. I want, however, to highlight another report—the “Asda Income Tracker”—because it is impossible not to notice the rise in the weekly cost of shopping, of heating the house and of getting to work by bus, train or car. As I said in the debate on the economy last week, the Asda study reveals that the average Scottish household is £990 a year worse off than it was five years ago. That is bad enough, but we are considerably poorer than the UK average where the average household is approximately £870 a year worse off.
It is worth highlighting a few of the other findings in the Asda report: transport costs are up £654 a year, compared with 2008, and housing and utility bills are up 25 per cent since 2008. The under-30s have been hardest hit, with discretionary income going down approximately 5 per cent over the past five years. Since 2010, wages have, on average, been growing at half the rate of inflation. Even more worrying is that the study forecasts that the cost of living will continue to rise, and will reach almost 18 per cent higher over the next five years. That means that by 2018, the average UK household could be £1,300 a year worse off.
What can we do about that? The party conferences laid out pretty starkly the political choices that face. We could accept the reality that unregulated free markets do not serve any of us very well. We could intervene on the side of the consumers, the workers and the citizens of this country with, for example, a price freeze on our home heating bills, a new approach to public transport ownership or regulation, and a decisive statement of intent to support small indigenous businesses over large unaccountable corporations.
Alternatively, we could, of course, listen to what is being said at this week’s Tory conference and try to find some scapegoats—some people to turn on and to blame for our communal misfortunes. We could blame immigrants and send round vans to tell them all to go home. We could blame criminals and threaten to punish them further if they dare to muck up their prison cells. Better still, why not blame the unemployed and treat them like criminals? Let us make them pick up litter or do community service for the misfortune of not being able find a job. In fact, given that it is all their fault, let us just go the whole hog and take away their human rights. It is, of course, impossible to believe that we would ever need human rights to protect any of us.
Unfortunately, we do not have to wait until the next Conservative election manifesto—the damage is already being done. Child benefit has been frozen and other benefits for families and children are rising by just 1 per cent. The Child Poverty Action Group has pointed out that
“currently, one in five, that’s 200,000 of Scotland’s children, are officially recognised as living in poverty”.
The Institute for Fiscal Studies forecasts further massive increases in child poverty—it is estimated that 65,000 more children in Scotland will be living in poverty by 2020.
I have talked previously about how devolution has given Scotland the opportunity to become a beacon for progressive policies. It has allowed us to resist market-driven reforms to our health service, to maintain equity in our education system and to support independence in retirement through free travel and free personal care. Although we spend much of our time disagreeing, we need look only at the most recent Labour and SNP election manifestos to see that there is a lot of common ground, too. I appeal to the Scottish Government to join us on policies that will deliver real and immediate benefits to the Scottish people and which will make a difference to our cost of living today—not in some hypothetical post-2016 world. For example, bus regulation and the awarding of the rail franchise are areas in which ministers have powers at their disposal right now. We could take decisions that would help to keep services running in the interests of passengers, not of shareholders, and which would keep prices down.
I simply say to Mr Macintosh that, given that he lost the finance brief on the basis that he went against the rhetoric of his leader and supported our social wage policies, perhaps he should join us.
I will take that as an olive branch from the SNP. It gives me optimism, so I will make another suggestion to Mr McDonald and his colleagues, which relates to community ownership of renewables. Why are there so few examples of community-owned wind farms when on paper, at least, we all support an extension of the policy? Instead of just subsidising a few community initiatives, we have an opportunity to address fuel poverty directly and to take ownership of energy generation, which is responsible for one of the largest cost-of-living increases in recent years. I ask the minister to look at the role that housing associations can play in that area.
What worries me is that, despite our common ground, we seem to be unable to reach common solutions. Just yesterday, the Welfare Reform Committee discussed the bedroom tax.
I will, Presiding Officer.
The majority of members on the committee and the members of the expert group were united in our condemnation of the policy. My question is this: why do not we do something about it now? We have the powers, and we have the vehicle in my colleague Jackie Baillie’s proposed bill, which would make a real difference to the cost of living of some of our most vulnerable citizens.
I have been intrigued by the debate so far. I never realised that there were so many closet nationalists on the other side of the chamber; every argument I have heard has been an argument for independence. Members have talked about the evils of welfare reform, the low level of child benefit and the issue of energy controls, which are all things that are outwith our control. It is because Westminster controls those things that we are in the situation that we are in. Despite that, Jackie Baillie and her colleagues say, “Come on, Alex and Angela. Get your act together and get this sorted.”
Let us get real. We will get the powers that we seek next year. The reality is that we are not obsessed with the referendum; we are obsessed with Scotland getting the powers that it requires so that it can be the country that it should be.
I will move on to what Kezia Dugdale said, because if I do not she will never forgive me or Kenny Gibson, who did not manage to get to her. Everyone knows the work that Kezia Dugdale has done on payday loans and how passionate and caring she is on the matter—I also note the cross-party work that is being carried out on it—but I have to be honest and say that she was making the case for independence. I accept that there are some things that the Scottish Government can and will try to do, but the only way we can get rid of payday loans is to have the powers to do so.
The SNP and the Labour Party agree that capping the cost of credit is the single thing that could be done to address the payday loan industry. In last week’s debate, I asked the SNP how it would do that in an independent country if we had the same currency, the Bank of England as the bank of last resort and the same financial regulation system, which it has said we would have. If we had the same financial regulation system as the UK, how would the SNP cut down on payday loan companies?
I am sorry, but that is not an argument for anything. Kezia Dugdale is saying that things are bad at the moment, but let us just keep them that way. What we are saying is this: let us get the powers and then change things. We do not have the powers to change payday loan regulation just now, but we will have them after next September. [Interruption.]
The motion asks the UK Government and the Scottish Government to do what they can urgently to tackle the underlying issues that increase the cost of living, so I want to focus on specific measures that the Scottish Government is taking in reaction to the rise in cost of living. Although the costs of childcare, which have been mentioned a number of times, are rising far above the increase in inflation, the Scottish Government has already increased free nursery provision by 20 per cent since 2007, and our Children and Young People (Scotland) Bill will ensure a minimum of 600 hours of free flexible learning and childcare for all three and four-year-olds and all looked-after two-year-olds. It will be the best nursery care package in the UK; it will benefit about 120,000 children in Scotland and will on average save families £700 a year. Where this Scottish Government has the power to make changes to ease the cost of living through changes to childcare, it is already doing so.
I also want to touch on the introduction of the living wage. As my colleagues have mentioned, the Joseph Rowntree report notes that it is impossible to achieve a minimum standard of living on benefits other than pension credit, and that it is nigh on impossible to achieve that on the minimum wage and that a living wage would provide just the amount that would be needed to meet the minimum living standard. The Scottish Government cannot compel either the private sector or all the public sector to introduce a living wage—that power still rests with Westminster—but where it can, this Government has seen to it that a living wage is paid as a minimum. The SNP is committed to a living wage, although I note that no similar commitment was forthcoming from Ed Miliband in last week’s conference speech.
As my colleagues have pointed out, the Rowntree report also touches on council tax rises across the rest of the UK as being one of the core reasons for the soaring cost of living. That is not applicable to Scotland, where the council tax has been frozen since 2007—since 2005 in Glasgow—and will continue to be frozen for the lifetime of this Parliament. The policy continues to benefit those who are in the lowest income bracket who are, because they have much less financial security and freedom, most affected by the soaring cost of living. Scottish Labour’s position on the council tax freeze—a policy that is having demonstrable benefits in the purses of ordinary working Scots—is, like most of its other policies, muddled. In fact, Drew Smith has this afternoon showed Labour’s confusion over the issue. Was he saying that council tax should rise?
To be fair, such flip-flopping can be seen not only in relation to the council tax. One day, Labour clearly supports the bedroom tax—after all, it originally introduced it for the private sector—and the next it does not. Labour members were told that they could not say whether or not they support it, but now they have been told that they can say that they are against it. Who knows how long the current position will stick? I suppose that that will depend on Ed.
As with the bedroom tax, many of the foundations on which the Conservative and Liberal Democrat coalition has built its harmful policies, which in turn are contributing to the astronomical rise in the cost of living, were laid by the Labour Party at Westminster between 1997 and 2010. That is why under Labour the gap between rich and poor increased more than it had ever increased before. Members do not have to take my word for it; they just need to look at Liam Byrne’s comments about the Tories’ latest bash the poor scheme, which Ken Macintosh alluded to when he was trying to attack the Tories in his speech. Mr Byrne quite rightly claimed that it is just a rehash of Labour’s jobs guarantee policy. We can see that we could get hardly a fag paper between the two main unionist parties.
The coalition’s expansion of those policies is having a huge impact not only on the cost of living for people across the UK, but on their standards of living. We cannot look at one without looking at the other, and the Rowntree report makes it clear that standards of living will continue to fall for many people because of the proposals that have been outlined by the Conservative and Lib Dem Government.
When we get told by the rich Conservative minister Lord Freud that he cannot say whether the rise in people presenting at food banks is because of failures by the Department for Work and Pensions or because food banks provide an opportunity to get free food, we realise just how far removed from reality those who make the decisions about welfare are.
The Scottish Government is clearly making changes to help people.
The Scottish Government cannot, however, continue to mitigate the situation indefinitely. I believe that the time is coming when the people of Scotland will look for change, and that they will vote yes to independence next year to ensure that Parliament has the power to make the policy changes that are needed to ameliorate the worst effects.
I was not expecting to be called so quickly. I will try to get through my speech in four and a half minutes.
In his report “Constitutional change and inequality in Scotland”, Professor David Bell noted that
“raising Council Taxes actually raises inequality”.
We have it there that the council tax freeze is helping the people who are at the lower end, because the proportion of their income that they spend on council tax is greater than the proportion that those at the higher end of the income scale spend. The council tax freeze prevents people who are at the lower end from facing a greater burden as a result of rising council taxes, which benefits them.
I was interested in Ken Macintosh’s point about community ownership of renewables, on which we probably find common cause. When I was a list MSP, I visited the community wind turbine in the parish of Udny, which is just outside Aberdeen. That turbine is being used to generate income for the community, which is being distributed via local groups. Community renewables can also be used in other ways—for example, to reduce energy costs rather than to generate income. That needs to be looked at. Good work is being done on community renewables, but we might need to look at how to expand that.
I represent a constituency in a city that is, on the face of it, very wealthy. Aberdeen has a high employment rate, a low unemployment rate and a low long-term unemployment rate. However, that masks some of the poverty in the city. Members who came to campaign in the Donside by-election will be aware of some of the deprived communities in my constituency. Those areas feel the sharp end of some of the cost-of-living issues that we are discussing.
Good work is done in my constituency by a range of organisations that are dedicating effort to assisting people who are at the sharp end. For example, Woodside learning centre hosts a mini-market that prices goods at an affordable rate for people in the community, who can shop there rather than use the supermarkets, where many goods are priced out of their reach. The Printfield Community Project has a charity shop in which no items are priced and people are asked what they can afford to pay rather than priced out of purchasing items. Such approaches are helping my constituents in difficult times.
I cannot help but think that we would be better served if we looked carefully at cause and effect. The point was rightly made that—as Jackie Baillie highlighted in her speech—the genesis of the problems that have been identified as affecting people in Scotland is in policy decisions that are made south of the border in reserved areas. We can take at face value the points that Labour members make—I do not doubt for one second that members like Kezia Dugdale are passionate about the issues that they bring to the chamber—but what gets my goat is the notion that the Labour Party somehow has a monopoly on compassion and that SNP members are a bunch of uncaring, soulless individuals who focus only on the referendum.
I have made the point several times that I am not in this just to get powers for Scotland and say, “Job done.” I am in this to get powers for Scotland and to use them to shape a fairer and more equal society for the people who live here. That is what the referendum is about.
No—I have only 45 seconds left.
Labour members say that we are “putting Scotland on pause” and that we are telling people to wait until after 2014. However, the Labour Party essentially says that people will have to put up with the Tories until 2015 and then cross their fingers and hope not only that it gets its act together as a Westminster party and gets into power, but that it does what it has said it would do.
I hope that we have learned our lesson from 1997, when the first thing the Labour Party did when it inherited power was to continue Tory spending policies and Tory benefit cuts. I see Malcolm Chisholm in the chamber; he resigned as a minister because the Labour Government of 1997 continued the benefit cuts that the Conservatives envisaged. We should have learned our lesson from 1997; the Labour Party will tell the people of Scotland that all would be fixed by a Labour Government, but all that we have seen in evidence is the opposite.
Predictably, it has been a passionate debate—often with more heat than light, although I draw particular attention to the speeches of Kezia Dugdale, Drew Smith and John Mason, which were passionate but constructive. John Mason politely inquired whether the reference in my amendment to the UK Government’s commitment
“to spend 0.7% of national income on overseas aid” was slightly out of place. Perhaps, in writing it, I had half an eye on Jackie Baillie’s other debate this week, on challenging poverty.
As for today’s speech from Jackie Baillie, I was left wondering what it is that she is looking for. She may be right that the Scottish Government is on pause ahead of next year’s referendum, but what specific action she wanted from either Scottish or UK ministers was rather unclear. That is not to diminish the seriousness of the challenges facing those we represent: increased food, childcare and energy costs all play their part and no one can be anything other than appalled at the high levels of fuel poverty or the growing numbers of our citizens who are using food banks. Those issues demand an urgent response from both Scotland’s Governments.
In my opening speech, I set out some of the important steps that are being taken at a UK level. They include a fundamental shift in the tax system that will result in 240,000 low-paid Scots being taken out of paying any income tax at all. That is a lasting, progressive and fair reform of our tax system. On pensions, too, I set out the effect of the so-called triple lock, which ensures that the state pension rises in line with inflation, with wages or by 2.5 per cent, whichever is highest, and which in 2012 delivered the highest ever cash increase in the state pension. That is a lasting, progressive and fair reform of our pensions.
On childcare and fuel costs, the coalition Government has also taken action to help hard-pressed families and individuals. Already in England, 20 per cent of two-year-olds from the poorest backgrounds are receiving free nursery provision. That will rise to 40 per cent by next year. From 2015, the UK Government will meet 20 per cent of childcare costs for working families, building up to £1,200 per child under 12 per year—a scheme that is worth £750 million. Meanwhile, in the face of rising fuel costs, the UK Government has confirmed a further freeze in the duty for the next two years.
Not surprisingly, most, if not all, members chose to focus much of their speeches on the impact of welfare reform. I can certainly understand that. Indeed, I probably should have addressed it in more detail in my own opening speech. From listening to the debate, however, one would assume that neither the SNP nor Labour accept the need for welfare reform, which is simply not true. We know that the previous Labour Government was preparing very similar proposals to those that are now being taken forward by the coalition. Last December, Ed Balls promised
“a tougher approach to conditionality” for benefit claimants. Meanwhile, Nicola Sturgeon has talked previously about the need to “simplify” welfare, although without sharing with us the details of what that entailed. That lack of detail may be convenient for the SNP ahead of next September, but it leaves the SNP having to explain what, if any, reduction in the £2.5 billion welfare bill it would expect to achieve.
Indeed, John Wilson, John Mason, Kenny Gibson and other SNP back benchers seemed intent this afternoon on hiking those costs still further. Given that the nationalists’ own fiscal commission conceded today—albeit that it was hidden in the footnotes—that an oil fund by 2017-18 would require £3.4 billion to be taken out of public spending, it is even more unclear how they propose to pay for their promises on welfare. Unlike Patrick Harvie, all of them appear to want Scandinavian levels of spending without committing to Scandinavian levels of taxation.
I entirely accept that implementing reforms to our welfare system has been hugely difficult for many of those who have been directly affected. I know that from my own casework. Where changes need to be made to mitigate the impacts, they have been made and that absolutely must continue. However, denying the need for reform, or insisting that it can somehow be achieved without controversy, is disingenuous. The notion that, as Nicola Sturgeon implies, we can simplify the system without creating winners and losers is simply ridiculous. The reality is that the current system too often provides the wrong incentives. For too many people, it acts as a real obstacle to work. As much as anything else, that is unfair to the claimants themselves.
Over a period when our economy experienced almost uninterrupted growth, the welfare budget ballooned by more than 40 per cent in real terms, so a strategy for job creation is essential, but it is not the whole answer. In the UK, we have 5 million people who are trapped on out-of-work benefits, one of the highest rates of workless households in Europe, and almost 2 million children who are living in homes where no one has a job. For Scotland, the picture is no less grim.
I agree with Kenny Gibson that tinkering around the edges will not cut it, but promising to maintain or even increase current levels of spend on welfare is neither honest nor affordable. Trapping people on benefits, rather than providing incentives and support into work, is also not desirable. It is right that we continue to press for appropriate changes and safeguards beyond those that have already been given, but claiming to be in favour of reform while holding the view that any benefit cuts or any tinkering of demands placed on recipients is automatically unfair is just not credible.
Let me conclude by making a more parochial point. Nowhere is the cost of living higher than in the islands, where fuel, food and travel—and childcare, too, where that is available—are all more expensive than on the mainland. Thanks to the Liberal Democrats, fuel duty on all our islands has been cut by 5p so, although fuel is still more expensive than on the mainland, the price differential is now less. By contrast, the SNP Government has chosen to increase costs to businesses in our island communities by cutting the air discount scheme and has excluded Orkney and Shetland from a cheap ferry fare scheme that is focused solely on the west coast routes.
This has been an interesting debate, in which we have managed, at least for part of the time, to turn away from the strange notion that everything would be better in an independent Scotland. Today we have actually debated something that is important: we have discussed the cost of living and discussed it in terms of what has changed within the economy in recent years. However, we have made the old mistake of making the radical assumption that the world began on 6 May 2010. The Labour Party chose to characterise matters as if 6 May 2010 represented year zero and as if nothing happened before that date.
No. The member will get the opportunity to respond in a minute.
What happened before 6 May 2010 was that we had a Labour Government that demonstrated its level of fiscal responsibility. We had a Labour Chancellor of the Exchequer who decided to take millions of people at the bottom end into the tax system by introducing a 10p tax band, which was then doubled to 20p. We had a Labour Government that, far from being determined to freeze fuel prices, caused road fuel prices to rocket due to the fuel price escalator. During today’s debate, Ken Macintosh complained about the price of fuel and how much it costs him to fill his car, but he failed to acknowledge that the current UK Government has taken actions that have made fuel 13p a litre cheaper at the pump than it would otherwise have been.
High road fuel prices affect not only those who have cars. We should remember that Scotland’s road connections are longer and our communities are spread further apart, so the higher costs to business and the higher costs of transporting goods to supermarkets mean that prices are even higher in Scotland. The UK Government has delivered a substantial cut in what road fuel prices would otherwise have been.
Let us look at some other things that the Conservatives have done that contrast with what the previous Labour Government chose to do. All those millions of people on basic incomes who were dragged back into tax have been released from that bondage. The Conservatives, with their Liberal Democrat allies, have taken the opportunity to raise the tax threshold to ensure that, by 1 April next year, low-income families will have £700 a year more in income than they would otherwise have had.
I am afraid that I have a limited amount of time, so I will continue.
What else have we done? Before I mention the other opportunities that we have taken, there is another point that I need to get in before I move on. The Labour Party has gone on at some length today about what I like to call the underoccupancy charge, although other members might have a different name for it. Can Labour members remember what they called that charge back in 2008, when the Labour Party invented it? One mystery surrounding the issue is that the underoccupancy charge was an invention of the previous Labour Government, which decided back in 2008 to enforce an underoccupancy charge on anyone claiming housing benefit for a private sector rent. I cannot understand how it is that Labour can make proposals for legislation that are designed to save all those people who were caught out by the policy of a Conservative Government but not save those people who were originally dragged into that tax loophole by the previous Labour Government.
There are other things that have been said in the debate that must be addressed. There is the idea that wages have fallen in Scotland. Of course we know that wages have fallen in Scotland in real terms, and we know that that has happened in both the public and private sectors. However, we must remember that action has been taken in the public sector and in some areas of the private sector to ensure that those on the lowest pay have been protected from that fall. We have taken the opportunity to ensure that, when wages were frozen at the height of the crisis, the low paid were made an exception to that.
During the course of the debate, we have heard repeatedly how Labour would do things differently. The truth is that we have plenty of examples of how Labour has chosen to do things in the past. The minute I hear Ed Miliband talk about the idea of fixing the price of fuel, I immediately have a race of word association. The last time Labour talked about price fixing was back in the 1970s. That led to wage fixing, then to an International Monetary Fund bailout and then to the winter of discontent.
It seems as though it is becoming bitter together, rather than better together.
There have been one or two good speeches in the debate. Kezia Dugdale, Mark McDonald and John Wilson made good speeches, but the key point was made by James Dornan. Whether we are talking about poverty and deprivation in recent years, over the past decade or over the past 20, 30 or 40 years, the fact of life is that, irrespective of which Government has been in power in London, the union has failed to deliver for the Scottish people, and far too many of our people, generation after generation, have been forced to live in poverty and deprivation. As James Dornan rightly said, achieving independence is a prerequisite to solving the problems of poverty and deprivation in Scotland.
While we are on that point, one or two Labour speakers alleged that childcare in Scotland is the most expensive in the UK. That is not true. The Daycare Trust’s report of March 2013 made it clear that Scotland has cheaper nursery places and childcare overall compared with south of the border. At least let us get our facts right about the achievements of the SNP Government over the past six years.
I find Labour’s position lacking credibility, for three reasons. First, during Labour’s 13 wasted years, it made practically no impact on the measures that we are talking about today. Members should consider the facts, as opposed to what Labour alleges. Let us consider Labour’s record during those 13 wasted years. There has been a report out in the past two weeks showing that there are 1.5 million more children in the UK living in poverty now than there were 40 years ago—and Labour was in power for 18 of the past 40 years.
I want to talk about the SNP’s wasted years. Will the cabinet secretary acknowledge that, in the first eight years of the Parliament, relative child poverty fell by a third and absolute child poverty fell by two thirds? Under his Government, the figures are flatlining and progress has stalled.
The member always misses the point, which is that, when we get a yes vote next year, child poverty in Scotland will not be dropping, it will be eliminated. What an ambition for a Labour Party that tries to call itself socialist to want to reduce child poverty by a few percentage points. We should be talking about the elimination of child poverty in Scotland. The real poverty is the poverty of ambition of the Labour Party in Scotland. It is a disgrace.
I hate to agree with the Tories, but Alex Johnstone is correct to say that the Labour Party introduced the bedroom tax. Quite frankly, Labour members should be ashamed of themselves because, as with privatisation and many other policies, Labour paved the way for the most right-wing Government since Mrs Thatcher’s.
Actually, the member should listen to Caroline Flint, Labour’s housing spokesman at Westminster, because she specifically ruled it in and said that a Labour Government would keep the bedroom tax. Labour members are all over the place. One week they are for it, the next they are against it. It is like the old music hall song that goes:
“She wouldn’t say yes, she wouldn’t say no, she wouldn’t say yes”—[Laughter.]
“She wouldn’t say yes, she wouldn’t say no, she wouldn’t say stay, she wouldn’t say go.”
I am better at singing it than saying it, but the reality is that Labour is all over the place. My friend Malcolm Chisholm is all over the place—totally muddled. The logic of Malcolm Chisholm’s position is to vote yes next year, because that is how we avoid the kind of policies that he has fought against all his days.
On the theme of being all over the place, I understood that the SNP was against evictions on the basis of arrears arising from the bedroom tax. That was last week. This week, Jackie Baillie has lodged a proposal for a member’s bill that would prevent such evictions. Will he sign it this week, or is he in fact all over the place?
I gave way because I thought that the intervention was going to be original. I am fighting against Labour-controlled North Lanarkshire Council, which is evicting disabled people as we speak. We will not take the two-faced approach from the Labour Party on evictions as a result of the bedroom tax.
I started by saying that the Labour Party has no credibility. On the one hand, Labour members talk about tackling poverty but, on the other hand, they are planning the cuts commission. They cannot have both. Either they believe in the social wage, concessionary fares for the elderly and disabled, free personal care, free prescriptions and all the other things that this Government has introduced, or they believe in the cuts commission. It is a little ironic that the phraseology that George Osborne and Iain Duncan Smith used at the Tory conference this week was about a something for nothing culture, while Johann Lamont has talked about a something for nothing culture. The Labour Party speaks with a Tory voice in Scotland.
Two weeks ago, when we debated the Scottish economy, the Cabinet Secretary for Finance, Employment and Sustainable Growth painted a rosy picture of recovery, with GDP and employment up over the year, and surveys showing that purchasing managers, the Bank of Scotland and small businesses are more confident than they were.
Today’s debate is deliberately designed to look beyond those carefully selected headlines of recovery to the hard, sometimes even harsh, world of reality, and generally that is what members on all sides of the chamber have done. The exceptions, perhaps, were the final contributions from Alex Johnstone and Alex Neil, which had a passing relationship with reality and, indeed, with the truth.
Most Scots would not recognise the recovery that Mr Swinney was at such pains to describe a couple of weeks ago any more than they would recognise the recovery described by George Osborne this week. Jackie Baillie made clear our view that responsibility for the structural weakness in the recovery lies with George Osborne and the coalition Government, because a recovery that is built on jobs that are increasingly part time or temporary, and on zero-hour contracts without job security or even a guarantee of work, feels like no recovery at all. A recovery that is built on declining wages that no longer stretch to pay the gas and electricity bills or cover childcare costs, with welfare changes that are already leaving 80,000 Scottish households struggling to pay rent that has been augmented by the bedroom tax, is a recovery for the rich, while most face a struggle to survive.
It is not getting better. In fact, it is getting worse, as many speakers on all sides of the chamber have demonstrated, using sources as diverse as the IFS and Asda’s mumdex to show that the real value of wages is falling. The proportion of Scottish families earning below the living wage is rising. Zero-hour contracts have soared in Britain; there are 1 million in Britain, so there must be perhaps 100,000 in Scotland. Energy Action Scotland tells us that 900,000 Scottish households live in fuel poverty. Two hundred and twenty thousand Scottish children live in absolute poverty—and the figure is not improving. Kezia Dugdale and Jackie Baillie are right to point out that, when we had a Labour Government in Westminster and a Labour-led Government here, the child poverty figure plummeted, but that progress has stopped. Twice as many Scots are now resorting to food banks, many more are resorting to payday loans, and one in three council tenants affected by the bedroom tax is already in arrears. That is not recovery; it is a reversal of living standards, and it demands urgent action now.
In response, the SNP amendment and most SNP speakers have gloriously missed the point. The fact is that if someone is struggling in a minimum wage job on a zero-hours contract in a property deemed too big for them, they do not pay council tax. The chances are that their children will not go to university, given the Government’s woeful record on widening access. They cannot afford a car to cross the Forth bridge for free, and if they can still find a bus service running, the fare that they pay will have been pushed up by the cut in concessionary travel recompense to the bus companies, so although it will be free when they are 60, right now they cannot afford it. The truth is that people in those circumstances worry about getting through to the end of the week—not about getting to 65, when they will get free personal care.
I am sorry; my time has been cut.
As for extended childcare, Kezia Dugdale has made it clear that we have waited seven years on that promise and it still falls short of what is proposed everywhere else in the country.
Whatever the merit or otherwise of those policies—and we introduced several of them and supported others—they do not add up to a strategy to raise living standards or eradicate poverty; quite the reverse.
Annabelle Ewing said that her Government was “straining every sinew” to help hard-pressed families. Why, then, does it refuse to find the full £50 million this year and next year to banish the effects of the bedroom tax from Scotland?
No, I am sorry.
John Wilson made an eloquent case that the national minimum wage is not enough. Why, then, does the Government that he supports refuse to use its own procurement contracts to demand that companies pay the living wage?
Whatever else it might be guilty of, last week, Scotland’s biggest company, SSE, announced that it will become a living-wage employer. That will apply not only to direct employees but to the whole supply chain of subcontractors. If it can do that, why can the Scottish Government not follow its example?
Why does the Scottish Government refuse to use its contracts to outlaw exploitative zero-hours jobs? We agree that a contract such as the one for the Borders railway should boost jobs and the economy, but it should not give succour to firms that leave workers sitting at home on zero-hours contracts. How can it be that universities—recipients of all that taxpayer funding for tuition fees—are the worst offenders when it comes to zero-hours contracts and the Government just shrugs its shoulders?
Those are all things that the Government could do but chooses not to because the SNP’s core argument is that if people want it to help and support them, they must first vote for separation.
What does the SNP promise to do if it gets independence? Will it match Labour’s energy price freeze commitment and introduce a regulator to control energy prices in future? No. I tell members what it will do instead: it will give those energy companies a huge corporation tax windfall paid for by service cuts and taxes for the people who are paying through the nose for those companies’ bills.
Will the SNP match Labour’s promise to end exploitative zero-hours contracts? No. An independent Scotland will be a zero-hours haven as well as a tax haven.
Will the SNP match Labour’s commitment on nurseries for three and four-year-olds and wraparound childcare for all primary pupils? It does not even need a yes vote for that. It could do it right now. [Interruption.]
I know that most members were not here when Angela Constance spoke, but she said—I think that she was sincere—that she was
“determined” to tackle
“the root causes of poverty.”
The best way to find out what really matters to a Government is to follow the money, so let us look at poverty.
Back in 2007, the SNP had £1.5 billion-worth of programmes that were easily identifiable and clearly designed to address poverty, such as the community regeneration fund, the fairer Scotland fund and the supporting people fund. Now, six years on, how is that going? What do we have in this year’s budget? The community regeneration fund was £132 million; now, it is nothing. The antisocial behaviour fund was £37 million; now, it is nothing. The fairer Scotland fund—how many SNP members said that they wanted a fairer Scotland?—was £163 million in 2007. How much is it now? It is nothing—zero, zilch.
He will say that it has all been rolled into the local authorities’ money. Here is the truth: those poverty programmes are how the Government paid for the council tax freeze and getting rid of the tolls on the Forth bridge.
Kenny Gibson said that we had to understand that the SNP had 10 per cent less resource to fight poverty. No—I say to him that it has 75 per cent less resource, which the Government he supports cut out of poverty programmes in the past six years.
Has that happened because poverty has gone? No. Is it because Scotland is already a paragon of fairness? No. Those programmes have gone because that is the cost of living in a country with a Government that puts party first and the people of Scotland second. That is the price of a Scotland on pause.