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  • Cost of Living Committee debate 14 June 2023

  📍 We now come to the Opposition Day Motion in the name of Dr Phillipa Whitford on Cost of Living and Brexit.

Thank you very much, Madam Deputy Speaker. I rise to move the motion in my name and those of my colleagues.

The cost of living crisis is the number one issue for most of our constituents.

How to keep a roof over their heads with the rising cost of mortgages or rent. How to put food on the table when food inflation in the UK is the highest in Europe. How to pay energy bills that doubled in just a year. And how to cope with overall inflation, which is far outstripping wage growth.

It therefore deserves serious focus by this parliament to find solutions. The government are already patting themselves on the back, that inflation has eased from 10.1% to 7.8%. Of course, that doesn’t mean prices are falling, just that they are increasing at a slightly slower rate. Now, there’s no question that the Covid pandemic and the war in Ukraine have contributed to the current crisis, particularly the latter’s impact on global energy prices.

But the UK is the only G7 country not to have recovered to pre pandemic economic health. And consumers in the UK have faced the biggest energy price rises in Europe. . Despite the current easing of the inflation rate, it’s still higher than the OECD the EU, and the US. So why does the UK have the highest inflation and poorest growth projections among similar economies?

It’s simple. The disaster that dare not speak its name Brexit.

As we approach the seventh anniversary of the referendum, one of its key architects may have just left the stage, but Brexit’s disastrous legacy will impact people across the nations of the UK for years to come. I know as a doctor that the first step in dealing with any problem is to admit that you have one. But both this government and the Labour Party appear to be in complete denial about the contribution of Brexit to the cost of living crisis. And until I will, yes.

Joanna Cherry: Just on the point about the Labour Party. Labour Party are obviously keen to regain seats in Scotland from the SNP, obviously we hope they don’t. But why does she think the Labour Party are ignoring the impact of Brexit even in Scotland when the overwhelming position of the Scots is they want to remain in the European Union?

I thank my Honourable friend for her contribution. I think it’s quite clear we saw the discomfort of the Labour party on Brexit for really quite a number of years. Because their approach to Brexit had flip flopped backwards and forwards, so they simply avoid the topic. And until recently, you would also think that there’d been an omerta in the mainstream media whenever discussing the UK’s economic performance.

Despite previously campaigning against Brexit, as I said, the Labour leader is now clear that he won’t consider rejoining the EU, the Customs Union, or the single market. He claims he can somehow reduce trade friction, which has cut exports by 15% and cost 4% of G D P. But just as Brexiters claim the problems are just that the Brexit isn’t Brexity enough, we now have Labour claiming that they will make Brexit work. It can’t work. But if he wants to reduce some of the damage of Brexit, the Labour leader should support the idea of a committee to identify proposals that could be put to the EU prior to the review of the trade and cooperation agreement in 2026.

Otherwise, what’s the plan? Close his eyes, click his red heels together and make a wish. Talk about not reading the room. Just as polls show a majority across the UK recognise Brexit’s a mess and would support rejoining the EU, the supposedly official opposition have lashed themselves to the mast of the floundering Tory Brexit ship.

I’m not quite sure why they’re called the official opposition when they don’t seem to do much opposing and just go along with the policies of this Tory government. Whether it’s on Brexit, on immigration, outsourcing the NHS in England to private companies, or denying the right of the Scottish people to choose their own future. Labour may have abandoned almost all of their previous pledges, and don’t offer much real change after the next election, but the politicians who have caused the current damage to the UK economy are those with their bahookies squarely planted on the government benches.

Tory austerity may initially have made the Treasury balance sheet look better. But 13 years of benefit cuts and public sector pay freezes have sucked money out of local economies, leading to dead high streets and rising poverty, particularly among children, pensioners and disabled people.

Austerity also meant that health and care services were already struggling when Covid hit. And the workforce shortages that hamper all four UK health services have been exacerbated by the loss of freedom of movement, meaning they’re all struggling to catch up the backlog. The cost of energy is a major contributor to the cost of living crisis, but while global energy prices have risen due to the Ukraine war, the problem is also exacerbated by Tory policy over decades.

It was their poster girl, Mrs. Thatcher, who put the profits of oil, gas, and electricity into private hands. This has left the UK fully exposed to global price rises, despite the UK and Scotland’s energy potential. Also, unlike France with its nationalized power supplier, which has been able to limit price increases to 4%, the UK has been unable to do this. While the energy support payments were welcome, they had a limited impact on energy bills, which had doubled in a year. And the UK government didn’t follow other European countries such as Germany, Spain, Ireland, and the Netherlands, in substantially cutting VAT on energy bills. Even though rising prices means such a VAT cut could have been revenue neutral.

Brexiters actually promised cheaper food. Hard to believe. But that has turned out to be a complete crock with food inflation in the UK at over 19%, as I say, the highest in Europe. The cost of basic foods and supermarket brands are rising even faster, meaning that those on lower incomes are facing a dramatic surge in food costs with more people resorting to food banks or missing meals.

Almost 30% of the UK’s food comes from the EU, so there will be another surge in food prices next winter, when the UK introduces the full customs checks on food stuffs, which will be imported from the EU.

Mairi Black: Would she agree with me that it’s also an absolute scandal that during a cost of living crisis where we’re seeing prices such as she’s described, that we have produce going to waste in Scotland because we don’t have enough people to actually pick the fruit in.

I thank my Honourable friend for that point, and it’s an issue, while soft fruit is a particular issue in Scotland, this is actually an issue right across the UK cause of the lack of European staff in harvesting. And, and we are seeing, as you, she says, food rotting in the fields. But we’re also seeing it in other sectors, there’s hardly a sector that isn’t struggling for workforce.

With regards the income checks on incoming food stuffs from the EU, the former ill- named Brexit Opportunities Minister delayed the checks for the fourth time last year. At the time, he suggested that they would cost a billion pounds and described them as an act of self-harm. Duh. And I could have told them that in 2016.

On top of this, the now infamous mini budget, which tanked the pound and the stock market while the chancellor was still on his feet, sent mortgage costs spiraling.

The current relentless rise in interest rates in response to inflation is making home ownership unattainable for young families as well as pushing up rents.

Peter Grant: I’m grateful to Honourable friend for giving way, she’s rightly appoint to disastrous mini budget that was imposed on us by our previous Prime Minister. Does she think the leader of the Scottish Conservative Party Group in the Scottish Parliament can have any credibility, having initially demanded the Scottish Government implement those disastrous policies and now demanding that spend billions of pounds tighten tox too.

They’re, I, I think more appropriately getting down on their knees in the Holyrood chamber to apologize would be an appropriate response. Despite the abuse they gave the Scottish government for not following such crazy policies.

I thank the Honourable lady for giving away. I was, had the honour to be a member of the Scottish Parliament for some 12 years, and the minister opposite served in Scottish Parliament and I know a good deal about the committee system. Indeed, I chaired it. And members who were not members, members of Scottish Parliament who were not members of the committee, could come and speak at the committee in fact, or was never, never not allowed. I am not a member of any committee in this place. There are only three members of my party are members of committees, cause of the size. This means, but with the structure of this committee, the door is locked against me applying for a place on this committee, and I feel disenfranchised, and I do not see why my constituents should not be given the chance of their representative to have a voice. So I cannot vote for the structure of committees as it stands. No, look at it’s sloppy work. Very sloppy work.

In actual fact, that’s incorrect. There will be members from the three devolved nations. It will be as is described, a significantly large committee, which might indeed provide place for the Honourable member or one of his other colleagues from a devolved nation who would have space. So it’s, it’s nonsense. There is no, there is no exclusion.

David Linden: Forgive me, I wonder if she might lend me her order paper cause mines might be out of date, but the one I’ve got doesn’t show any amendment from the Honourable Gentleman or indeed from his party to try and change the composition of that committee. Am I reading the order paper wrong or is the Honourable gentleman just perhaps a little bit of touch?

I don’t think the Honourable member is reading the order paper wrong.

The combination of rising energy, food, and housing costs on top of years of benefit cuts and stagnant wages means the sums simply don’t add up for many families. The Scottish Government is trying to use the now very limited powers of devolution to mitigate the crisis, particularly for those on the lowest incomes. However, the Scottish budget for day-to-day running of services is less in real terms than in 2010 with no uplift for inflation. And as we all know, no significant borrowing powers.

Despite this, the Scottish Government has provided additional funding for the Fuel Insecurity Fund and Scottish Welfare Fund. Low income families are now supported through five childhood grants, including the Scottish Child Payment, which together provide 10,000 pounds of support during the early years and will provide over 20,000 by the age of 16.

I wonder, would she not agree with me that the way to improve the situation for everyone, not just in the devolved nation, throughout the United Kingdom as a whole, is for those who are elected in Scotland, to the Scottish Parliament, to work hands in glove with those of us who are elected here, and particularly the other government for Scotland and the United Kingdom. Rather than set up another cumbersome committee, which is a process. Would it not be better to work together for the benefit of everyone in the United Kingdom?

Well, I think the Honourable lady knows well that on things like trade deals, Brexit, we see very little consultation, genuine consultation, between the government here and the devolved government.

And the Honourable lady is also well aware of how devolution is being rolled back and hollowed down legislation undermined. And that has been passed. No, I’m sorry. I’ve just given way to the Honourable lady.

The Institute of Fiscal Studies analysis of the Scottish Tax and Benefit System showed that it was more progressive. . With almost 30% of low income families 2000 pounds a year better off in Scotland. But Scotland aspires to something more radical than just mitigating Westminster austerity, such as the two child limit or the six year benefit freeze. Our vision is to be a fairer, greener nation. Scottish government founded the Wellbeing Economy Governments Group in 2018 with Iceland and New Zealand, and Finland and Wales joined later.

A wellbeing economy doesn’t just focus on GDP, which includes the profits of damaging sectors such as the tobacco industry, but invests in the physical and mental health, social economic, and environmental wellbeing of every citizen. It’s a holistic approach, which recognizes that our society and economy depends on the success of every individual, every family, and every community.

Therefore, in addition to the targeted anti-poverty measures, the Scottish government invests in the wellbeing of all those living in Scotland. From the baby box, which welcomes the birth of a child. University tuition, which allows our young people to reach their full potential. To the free personal care, which allows older people to stay in their own homes for as long as possible.

But with the tightening limitations of devolution, the Scottish government doesn’t have power over its own economy. . Or control of taxation and social security, that are required to deliver the wellbeing economy we aspire to. We all know we need a different type of economy by the end of this decade, or we will leave our grandchildren to face climate collapse.

The pandemic brought everything to a standstill. Which gave us a unique opportunity to decide what kind of economy and society we wanted to rebuild.

Stewart Hosie: Before my Honourable friend goes on to talk about the kind of economy we want to see, I wonder if she’d make an observation. That in an important debate on the cost of living and its evil twin Brexit, the day after an urgent question on the Tory’s mortgage crisis, that here we are in this chamber with one Tory back bencher, two Labour back benchers. Does that not tell the Scottish people everything they need to know about how little unionism really cares for ordinary people?

. Well, the proposal for this economy, as I said at the beginning, is not just for the people of Scotland. It’s actually for the people of the Four Nations of the UK. The review of the TCA will come up in 2026, and while it’s not possible to make Brexit work, it is possible to mitigate some of its worst effects. But for that, you need to understand what Brexit’s doing to the UK’s society and economy, and have proposals that you can bring to the EU and ask for change.

Unfortunately, the opportunity to change to a different economy and society hasn’t been taken. We already see poverty and inequality rising. And the climate emergency being pushed off the action list, including by Labour, who have just U-turned on their pledge to invest 28 billion pounds in the transition to a green economy.

Unfortunately the climate crisis can’t wait. Scotland is blessed with extensive green energy potential. From wind and tidal power to green hydrogen and pump storage hydro. The current government has failed to support Scotland’s green energy potential. And sadly, there is now little reason to expect much change under Labour either.

Drew Hendry: Thank you. I’m grateful to my Honourable friend for giving way. She talks about Scotland’s energy opportunities and indeed green hydrogen is one of the key ones. There does she agree with me? It’s perhaps illuminating that the Foreign Secretary himself doesn’t even know about those opportunities or has taken the opportunity to engage with the US in their Inflation Reduction Act in terms of the supply pipeline for that, does she think it’s absolutely indicative of the state of the government of this place in terms of the relationship with the needs of the Scottish people?

Well, I sit on the Scottish Affairs Committee and we have done an inquiry into hydrogen and we’ve also covered some of the other issues around green energy. And it’s been clear from the UK Minister that they do not support the Scottish vision of actually being able to export green hydrogen. We know Germany is desperate for green hydrogen, particularly with the Ruhr area in North Rhine-Westphalia because it’s crucial for heavy industry, but the UK government are not interested in that, and therefore, Scotland’s potential for such a lucrative export is going to be held back.

I, I’m grateful for the honourable member giving away, particularly as she’s raised an issue that we’ve discussed at some length in the Scottish Affairs Committee, that, that of the future of hydrogen, carbon capture and storage, and such like. But does the Honourable member agree, or does she, does she believe that it’s appropriate, given that energy policy and international national trade are both reserved functions, that it is appropriate for Scottish government ministers to be having direct discussions with, and officials, with federal German government ministers and officials on that matter?

Well, obviously, obviously we’re just continuing the Scottish Affairs Committee diatribe from Monday, but the job of the Scottish government, Scottish Ministers, Scottish MSPs, and those of us who are here, is to promote Scotland in the world, to make sure we extract as much business into Scotland and as much investment. And because of that because of the efforts of Scottish ministers and MSPs, Scotland is second only to London in foreign direct investment, and that’s how we intend to keep it.

I would say that the key reasons for independence can be summarized in having the powers to tackle the problems that we have. It’s not that independence itself just sprinkles fairy dust. We could tackle things like poverty, but we don’t have the levers. But also being able to invest in our incredible natural resources for the benefit of all of our citizens. And most importantly, to be in control of our own future.

Being independent would mean that we would never again have a disaster like Brexit, forced on us against our will. . . Those living in Scotland would get to choose their own governments. And therefore drive decisions about our future. And with over 70% of Scots supporting membership of the EU, I have no doubt that our most prosperous future is as a modern, independent European country, just like many of our very successful neighbors.

About the author 

Heather Knox

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