Meeting of the Parliament 23 November 2022
We again find ourselves debating the cost of living crisis. It is critical to people across Scotland and it is the most important topic of conversation, bar none. It impacts on each and every one of our constituents, regardless of their financial circumstances, but there can be no doubt that the poorest and most vulnerable will be disproportionately affected.
We have an economy that has flatlined, a Government that has run out of ideas and a UK policy landscape that takes us back to George Osborne’s austerity agenda. As we look set to embark on austerity 2.0, it is important that we consider what that will mean for our economy and our people in the years to come.
The OBR estimates that the measures that were outlined in the chancellor’s budget last week will result in a 7 per cent drop in household incomes over the next two years, culminating in the biggest fall in living standards since records began, which is six decades ago. The Organisation for Economic Co-operation and Development predicts that the British economy will contract by 0.4 per cent of gross domestic product next year and that it is already in recession. It also predicts that Russia will be the only advanced economy in the world to perform worse.
The Joseph Rowntree Foundation has issued a stark warning that, next year, some people in the UK could be up to £538 worse off than they are this year. There have also been warnings that unemployment could be about to surpass half a million by the end of 2024, with the economic and social consequences that that will have for our communities.
The worst part of it all is that we have already tried austerity economics; the Tories embarked on it in 2010 only for it to deliver flatlining growth and stagnating productivity while eroding the wages and conditions of working people. We know the human impact that it had, too. We saw it first hand in Glasgow, with recent research from the University of Glasgow and the Glasgow Centre for Population Health concluding that more than 330,000 excess deaths could be linked to the austerity programme that was pursued by the British Government during its 2010 to 2017 agenda. That is a grotesque failure of public policy that cannot be allowed to be repeated.
We are also in the, frankly, perverse situation in which those who lauded the tax-cutting, high-spending mini-budget of Truss and Kwarteng are the exact same people who are triumphantly applauding the tax-raising, austerity-imposing autumn budget of Sunak and Hunt. It is politicking at its most cynical, and voters will not forget it.
Labour has proposed a series of alternatives for our economy and a policy platform that stands in direct contrast to the one that has been outlined by the current Conservative Government. We want to see a publicly owned energy generation company, which both the Tories and the SNP have failed to implement despite having more than a decade to do it. We want to see the threshold for the top rate of income tax in Scotland dropped from £150,000 a year to £120,000 a year, which the Government has yet to agree to. We want to see a return of the mortgage to shared equity scheme, to which today’s motion refers.
For all the reasons that we have discussed—many of which I think the majority of us agree on—we need tangible action in both the short and longer term. For too long, we have looked at our economy as though we are accountants, by shifting money from one portfolio to another portfolio without any real understanding of the economic impact and the economic multiplier effect that some of our decisions have.
We need a focus on public sector investment that will produce long-term growth and innovation. It is abundantly clear that more of the same economic austerity and doom loop of decline that has been handed down to our communities for too long simply will not work. It has never worked, it will not be accepted by working people and it should not be accepted by the Parliament. It is time to say that enough is enough.
16:47