As many will be aware, the DWP recently announced the closure of a number of back and front-facing offices throughout Scotland.
This includes the DWP back office in Coatbridge, which employs 250 people.
The closure itself does not involve any job losses; the DWP are moving these jobs to alternative locations in the city centre of Glasgow and Motherwell.
A number of constituents have been in touch raising their concerns about the closure, and in particular, the impact it will have on those who will be required to travel further for work. In addition, concerns have been raised about the impact of this closure on local businesses on the high street, several of whom cater to employees on their lunch breaks.
I have already been in contact with union representatives at the Public and Commercial Services Union to offer my full support to the union and the workers in Coatbridge who will be affected. I was particularly concerned when union representatives informed me that there was absolutely no consultation on the part of the DWP with either employees or union representatives prior to the announcement.
On a broader scale, SNP MPs from around Scotland who have DWP offices in their constituencies facing closure have launched a joint campaign opposing the closures.
I have also arranged further meetings with the PCS to ensure I do all I can to support the affected workers.
Showing posts with label Economy. Show all posts
Showing posts with label Economy. Show all posts
Monday, 6 February 2017
Thursday, 24 November 2016
Autumn Statement
Yesterday, the Chancellor of the Exchequer gave the first Autumn Statement since the UK’s vote to leave the EU.
The Autumn statement has revealed the very beginnings of the devastating impact withdrawing from the EU single market will have on the economy. Economic growth will be slower, there will be higher inflation, higher borrowing, and higher debt.
The Office for Budget Responsibility (OBR) has predicted that Brexit could hit public finances by £58.7 billion. The OBR has further forecast a fall in GDP growth by 2.4% due to the uncertainty created by Brexit. Inflation is predicted be 2.8% in 2018, which will cause the cost of basic goods to rise.
While the Chancellor made several positive announcements, including a rise in the National Living Wage to £7.50 per hour and a cancellation in the planned fuel duty rise, the measures introduced in the wake of Brexit are completely insufficient.
Years of Tory austerity since 2010 have decimated the UK economy- UK GDP is close to 20% lower than it would have been if the UK had achieved a paltry 2% growth rate since 2008. Wage growth has been weak due to low productivity, and the OBR has predicted that wages will not return to their 2009 level until 2021.
On top of the difficulties created by Tory austerity, the prospect of Scotland being forced out of the EU single market against its sovereign will has the potential to further harm the economy. Membership of the single market contributes £11.6 billion to the Scottish economy. The independent Fraser of Allander Institute has predicted that a hard Tory Brexit threatens to cost 80,000 Scottish jobs, and cost Scotland’s economy up to £11 billion a year by 2030.
These figures, however, are based upon what we currently know about Brexit, which is still very little. The Chancellor and the UK Government have failed to define exactly what Brexit means, more than 5 months after the referendum.
The Prime Minister, Theresa May, has stated that she will not provide a “running commentary” on the Brexit negotiations. However, the utter lack of information provided by the UK Government on what Brexit actually entails will only serve to create further uncertainty.
The Autumn statement has revealed the very beginnings of the devastating impact withdrawing from the EU single market will have on the economy. Economic growth will be slower, there will be higher inflation, higher borrowing, and higher debt.
The Office for Budget Responsibility (OBR) has predicted that Brexit could hit public finances by £58.7 billion. The OBR has further forecast a fall in GDP growth by 2.4% due to the uncertainty created by Brexit. Inflation is predicted be 2.8% in 2018, which will cause the cost of basic goods to rise.
While the Chancellor made several positive announcements, including a rise in the National Living Wage to £7.50 per hour and a cancellation in the planned fuel duty rise, the measures introduced in the wake of Brexit are completely insufficient.
Years of Tory austerity since 2010 have decimated the UK economy- UK GDP is close to 20% lower than it would have been if the UK had achieved a paltry 2% growth rate since 2008. Wage growth has been weak due to low productivity, and the OBR has predicted that wages will not return to their 2009 level until 2021.
On top of the difficulties created by Tory austerity, the prospect of Scotland being forced out of the EU single market against its sovereign will has the potential to further harm the economy. Membership of the single market contributes £11.6 billion to the Scottish economy. The independent Fraser of Allander Institute has predicted that a hard Tory Brexit threatens to cost 80,000 Scottish jobs, and cost Scotland’s economy up to £11 billion a year by 2030.
These figures, however, are based upon what we currently know about Brexit, which is still very little. The Chancellor and the UK Government have failed to define exactly what Brexit means, more than 5 months after the referendum.
The Prime Minister, Theresa May, has stated that she will not provide a “running commentary” on the Brexit negotiations. However, the utter lack of information provided by the UK Government on what Brexit actually entails will only serve to create further uncertainty.
Wednesday, 7 September 2016
Finance Bill 2016 Update
This week Parliament has returned to session after the summer recess. My SNP colleagues and I have already been incredibly busy upon our return, particularly given the lack of clarity provided by the Tory UK Government over what Brexit will actually entail.
Over the past few days, as a member of the Finance Bill 2016 Committee, I have been in the Chamber debating the final stages of the Bill, the Amendment stage and Third Reading. It is worth noting that the Bill itself was written based upon economic figures calculated prior to the EU Referendum, and based upon the assumption of a Remain vote by the Tories.
I was pleased to lead the SNP in the afternoon session of yesterday’s debate. As such, I was given the opportunity to highlight a number of issues which we felt would have an adverse effect on Scotland.
Housing Affordability
Last year’s Finance Bill included a new measure targeting large-scale, primarily London-based landlords and rental agencies.
However, given that the measure applies to all landlords across the UK, we have serious concerns that the measure may adversely affect the availability of affordable housing in Scotland. Unlike other parts of the UK, Scotland has a disproportionate number of small-scale landlords who are more willing to rent properties at affordable prices, and to those who depend on social security as a safety net.
The London-centric measure introduced last year by the Tories may force these small-scale Scottish landlords to either raise rent on their affordable properties, or sell to less sympathetic agencies or landlords. This could significantly affect housing affordability in Scotland.
Given these concerns, we introduced New Clause 18, which calls for a review on the impact of the measure on the availability of affordable housing. Unfortunately, the clause was not accepted by the UK Government and was therefore not included in the bill.
VAT on Scottish Police and Fire Service
Since they were formed three years ago, the UK Government has charged the Scottish Police Authority and Scottish Fire and Rescue Services VAT, with the bill for the police force alone totalling £76.5 million over this time period.
It is absolutely disgraceful that this Tory UK Government charges Scottish emergency services VAT, yet it does not charge English, Welsh, and Northern Irish emergency services any VAT at all, forcing the Scottish Government to cover the difference while simultaneously cutting funding to Scotland.
We therefore submitted New Clause 6 to the Finance Bill 2016, which called for a review by the Treasury of the financial impact of this VAT charge on Scottish emergency services. The cause was not accepted by the Government.
Microbusinesses
81 percent of the businesses in Scotland are microbusinesses, a category of small business which employs between one and nine people. They are a vital part of both local economies, and the Scottish economy as a whole.
The bill proposed a new measure, altering the way in which HMRC treats dividend income. While this was intended to target the wealthy few, we have concerns that it may seriously adversely impact these vital microbusinesses, particularly those where the owners are already on modest incomes. The changes could mean that the owners of these businesses may not be able to continue to employ their small workforces, or even cause these businesses to fail completely.
In previous stages of this bill, the Tory Government has argued that the new measure was not expected to have any significant macroeconomic impacts. However, in an evidence session to the House of Lords, an HMRC representative stated that the changes will, in fact, affect many of these microbusinesses.
As such, we introduced New Clause 8, which called for a review into the impact of these changes on microbusinesses, including the failure rate. Unfortunately, the New Clause was voted down by the Tories.
The Bill ultimately passed through the House of Commons with the support of the Tories, and without any of these new clauses accepted by the UK Government or included in the bill. It now goes to the House of Lords before formally receiving Royal Ascent.
You can watch my full speech below:
Over the past few days, as a member of the Finance Bill 2016 Committee, I have been in the Chamber debating the final stages of the Bill, the Amendment stage and Third Reading. It is worth noting that the Bill itself was written based upon economic figures calculated prior to the EU Referendum, and based upon the assumption of a Remain vote by the Tories.
I was pleased to lead the SNP in the afternoon session of yesterday’s debate. As such, I was given the opportunity to highlight a number of issues which we felt would have an adverse effect on Scotland.
Housing Affordability
Last year’s Finance Bill included a new measure targeting large-scale, primarily London-based landlords and rental agencies.
However, given that the measure applies to all landlords across the UK, we have serious concerns that the measure may adversely affect the availability of affordable housing in Scotland. Unlike other parts of the UK, Scotland has a disproportionate number of small-scale landlords who are more willing to rent properties at affordable prices, and to those who depend on social security as a safety net.
The London-centric measure introduced last year by the Tories may force these small-scale Scottish landlords to either raise rent on their affordable properties, or sell to less sympathetic agencies or landlords. This could significantly affect housing affordability in Scotland.
Given these concerns, we introduced New Clause 18, which calls for a review on the impact of the measure on the availability of affordable housing. Unfortunately, the clause was not accepted by the UK Government and was therefore not included in the bill.
VAT on Scottish Police and Fire Service
Since they were formed three years ago, the UK Government has charged the Scottish Police Authority and Scottish Fire and Rescue Services VAT, with the bill for the police force alone totalling £76.5 million over this time period.
It is absolutely disgraceful that this Tory UK Government charges Scottish emergency services VAT, yet it does not charge English, Welsh, and Northern Irish emergency services any VAT at all, forcing the Scottish Government to cover the difference while simultaneously cutting funding to Scotland.
We therefore submitted New Clause 6 to the Finance Bill 2016, which called for a review by the Treasury of the financial impact of this VAT charge on Scottish emergency services. The cause was not accepted by the Government.
Microbusinesses
81 percent of the businesses in Scotland are microbusinesses, a category of small business which employs between one and nine people. They are a vital part of both local economies, and the Scottish economy as a whole.
The bill proposed a new measure, altering the way in which HMRC treats dividend income. While this was intended to target the wealthy few, we have concerns that it may seriously adversely impact these vital microbusinesses, particularly those where the owners are already on modest incomes. The changes could mean that the owners of these businesses may not be able to continue to employ their small workforces, or even cause these businesses to fail completely.
In previous stages of this bill, the Tory Government has argued that the new measure was not expected to have any significant macroeconomic impacts. However, in an evidence session to the House of Lords, an HMRC representative stated that the changes will, in fact, affect many of these microbusinesses.
As such, we introduced New Clause 8, which called for a review into the impact of these changes on microbusinesses, including the failure rate. Unfortunately, the New Clause was voted down by the Tories.
The Bill ultimately passed through the House of Commons with the support of the Tories, and without any of these new clauses accepted by the UK Government or included in the bill. It now goes to the House of Lords before formally receiving Royal Ascent.
You can watch my full speech below:
Tuesday, 2 August 2016
Tory Austerity and Economic “Recovery”: “A Lost Decade of Income”
Last week, the TUC released a damning report on the drastic decline in real wages in the UK in the wake of the financial crisis. The findings, to me, are staggering.
The report, which compared real wage change and employment rate change across OECD countries, found that real wages in the UK fell by 10.4% between 2007 and 2015, a decline only matched by Greece.
Comparatively, the average change in wages across OECD countries was an increase of 6.7%. The UK, Greece, and Portugal were the only countries to see a fall in real wages eight years after the financial crisis.
While a Treasury spokesperson said that the analysis ignored the UK’s growth in employment, a number of OECD countries, including Poland, Germany, Estonia, and Hungary saw real wages grow while also increasing employment at a higher rate than in the UK. Germany, a country with an economy of comparable size to the UK, saw wages rise by 13.9% since the financial crisis, while also increasing employment by more than eight times that of the UK.
This report provides clear evidence that the Tory agenda of austerity has failed. Real wages have declined at a shocking rate, while employment has barely crept up. Meanwhile, the most vulnerable in society have paid the highest price for the greed of the banks.
The full statistics used in the report can be found here: https://www.tuc.org.uk/economic-issues/labour-market/uk-workers-experienced-sharpest-wage-fall-any-leading-economy-tuc
Monday, 11 July 2016
Finance Bill 2016: Committee Stage
As a member of the Finance Bill Committee, I’ve spent the last few weeks in committee meetings scrutinising the bill, line by line. The Finance Bill puts the Budget into law, and at a whopping 580 pages, the Bill is a substantial piece of legislation. I have focused on several aspects of the legislation, and overview of which can be found below:
1. Cuts to the Climate Change Levy- The Finance Bill, as proposed by the Tories, removed the climate change levy exemption for electricity generated from renewable sources. I raised concerns during the committee of the whole house that the removal of this exemption would seriously undermine the development of the UK’s renewable energy sector. The removal of this exemption has the potential to disproportionately affect Scottish businesses, as Scotland has a significant portion of Europe’s renewable energy potential, including 25% of Europe’s wind and tidal potential, and 10% of Europe’s wave potential. I consider the removal of this exemption to be yet another Tory cut to progressive energy policy. You can read my full comments here: http://goo.gl/UbNZus
2. The Apprenticeship Levy- The Bill introduced a new levy, the Apprenticeship Levy, to help fund apprenticeship programmes. As you may be aware, skills policy, including the Scottish apprenticeship programme, is devolved to Holyrood. However, the new levy would apply to all businesses in the UK, including Scottish businesses. The UK Government had announced that it would allocate £500 million from apprenticeship levy receipts to the devolved administrations, and that Scotland would receive a portion of this via the Barnett formula. However, I had particular concerns that Scottish businesses may end up paying in more to the programme than the Scottish Government receives via Barnett, given that the Government admitted that it had not made any assessment of how much Scottish businesses were projected to pay under the new Apprenticeship Levy, in a response to a written question I had submitted. In addition to my concerns, the SNP proposed New Clause 2, which called for a review of the implementation of the levy, with particular focus on the equitable treatment of the different regions in the UK. You can read my full comments here: http://goo.gl/pS6gqf
3. Support for the Oil and Gas Sector- The Bill further introduced changes to levy rates for businesses in the oil and gas sector. While some of these changes were welcome, I do not believe that the UK Government has done enough to support the oil and gas industry. The alternations made to the financing of the oil and gas sector fall significantly short of the fiscal and regulatory reforms necessary to ensure a steady recovery in the ongoing North Sea crisis. Furthermore, I raised concerns that the UK Government isn’t doing enough to encourage the growth UK businesses involved in decommissioning oil rigs. With oil fields reaching maturity for the first time ever, decommissioning provides a huge opportunity for business in both UK oil fields and further afield, but the industry needs more support. As such, the SNP proposed New Clause 3 and New Clause 6, which called for a comprehensive review of the regime in the North Sea, and a review into the ways in which the Treasury could support growth in the decommissioning sector. You can read my full comments here: http://goo.gl/XewzcZ
4. Fuel Duty- Over the past few years, the cost of fuel has fluctuated significantly, with oil reaching $125 per barrel in 2012, and dipping to just under $30 per barrel earlier this year. These fluctuations have had a massive impact on producers as well as consumers, such as road haulage companies, private road users, and domestic fuel users. The SNP introduced New Clause 4, which sought to establish a fuel duty regulator regime to help stabilise pricing. You can read my full comments here: http://goo.gl/tcYTI1
Following the committee stage of the Bill, it now moves to the Report stage, and will be returned to the floor of the House.
Friday, 15 April 2016
Budget 2016
Below is the speech I gave on the 2016 Budget on 22 March 2016:
Philip Boswell (Coatbridge, Chryston and Bellshill) (SNP): The Chancellor of the Exchequer’s Budget and the figures reported by the Office for Budget Responsibility—considered by many to be a contradiction in terms—demonstrate yet again the Chancellor’s inability adequately to manage the economy. He has failed on several key economic indicators and missed the targets the Tories have set for themselves. Notably, debt, deficit and borrowing levels are even worse than he promised last autumn.
Given time constraints, I shall summarily mention a few of the problems with the Budget, before focusing on a concern that has not been adequately covered by others. Page 136 of the OBR forecast shows that inflation is set to rise significantly from its current close-to-zero rate.
John Mc Nally (Falkirk) (SNP): Does my hon. Friend agree that a sharp rise in inflation can have a negative impact on working households?
Philip Boswell: Yes, I completely agree. With the sterling depreciation, thanks in part to the uncertainty created by the UK Government’s EU referendum, consumer inflation has started to rise. The OBR has predicted that CPI will rise from 0.7% this year to 1.6% next year. Likewise, RPI is set to rise from 1.7% this year to 3.2% in 2017. Such a spike in inflation can have a negative impact across the economy, as my hon. Friend mentioned, because it means that many households around the country that are already struggling, including in my constituency, will find that the price of necessities rise at a time when they can least afford it.
Exports, which are already weak, will likely see further decline. Total export sales fell from £521 billion in 2013 to £513 billion in 2014, yet the Chancellor has declared an export target of £1 trillion by 2020. It is no surprise, then, that he is already likely to fall short of the target by over £300 billion, as was touched on by the hon. Member for Hartlepool (Mr Wright), who is no longer in the Chamber.
On business investment, which was mentioned by my hon. Friend the Member for East Lothian (George Kerevan) and the hon. Member for Hartlepool, there is more bad news with regard to productivity, and research and development. Page 12 of the OBR’s “Economic and fiscal outlook” states that business investment will grow by only 2.6% this year, which is substantially less than the 7.4% predicted just three months ago in the autumn statement. Furthermore, the level of investment in 2019 is predicted to be a staggering 10% lower than predicted in December. So far, not so good.
I move now to an area of concern to myself. Page 27 of the Red Book states that the Government expect to raise £25 billion from the sale of the Royal Bank of Scotland. Given several factors, however, including the current price of oil, I fear that this price might be exaggerated. In focusing on this issue, which I have grave concerns about, I would point out that between 2011 and 2014, RBS arranged £14.3 billion in leveraged loans to the oil and gas industry. In fact, RBS has been a leader among UK banks in arranging these high-risk loans. The falling price of oil has resulted in an increase in the default rates of these loans, however, and many of them have been repackaged into derivatives for sale to investors in the form of collateralised loan obligations—a derivative product starkly similar to the collateralised debt obligations that contributed to the 2007-08 financial crisis. How many of these risky loans RBS still has on its books remains uncertain, hence my concern for that particular £25 billion.
Let me take a minute to highlight what I view as a failure on the part of the Government to address the systemic risk inherent in the financial system and the wider economy in relation to the price of oil and leveraged investment. Alongside RBS, a number of US lenders with a large and active presence in UK markets have a high exposure on energy, due to leveraged lending in the oil and gas sector. For example, JP Morgan currently has $13.8 billion in outstanding debt relating to loans out of the roughly $100 billion in leveraged loans it issued to the oil and gas sector between 2011 and 2014. Wells Fargo arranged $98 billion in leveraged loans to the sector in that same time period, many of which are non-investment grade, and $17.4 billion of which is already outstanding. Alarm bells should be ringing somewhere.
On 15 December 2014, when the price of Brent was at $60 a barrel, the Financial Times predicted that if the price of oil were to continue to fall,
Yet the systemic risk inherent to the financial system due to these high-yield loans and the “slice and dice” nature of derivative products relating to these loans that have been sold to investors were not even mentioned in the most recent Bank of England stress test result.
Finally, in the years since the 2007-08 financial maelstrom and ensuing recession, the Tory Government have demonstrated their expectation that the most vulnerable in society should pay the price for the mistakes of the financial institutions. In 2011, the Bureau of Investigative Journalism found that over 50% of Conservative funding came from the City. We know whose interests the Conservatives have at heart. The Budget clearly highlights the fact that this attitude has not changed, as evidenced in the £3.5 billion of new cuts that it introduces. This Budget is not good enough, and if the Chancellor really wants to be head boy, he should heed his report card, which should read “Must do better”.
Philip Boswell (Coatbridge, Chryston and Bellshill) (SNP): The Chancellor of the Exchequer’s Budget and the figures reported by the Office for Budget Responsibility—considered by many to be a contradiction in terms—demonstrate yet again the Chancellor’s inability adequately to manage the economy. He has failed on several key economic indicators and missed the targets the Tories have set for themselves. Notably, debt, deficit and borrowing levels are even worse than he promised last autumn.
Given time constraints, I shall summarily mention a few of the problems with the Budget, before focusing on a concern that has not been adequately covered by others. Page 136 of the OBR forecast shows that inflation is set to rise significantly from its current close-to-zero rate.
John Mc Nally (Falkirk) (SNP): Does my hon. Friend agree that a sharp rise in inflation can have a negative impact on working households?
Philip Boswell: Yes, I completely agree. With the sterling depreciation, thanks in part to the uncertainty created by the UK Government’s EU referendum, consumer inflation has started to rise. The OBR has predicted that CPI will rise from 0.7% this year to 1.6% next year. Likewise, RPI is set to rise from 1.7% this year to 3.2% in 2017. Such a spike in inflation can have a negative impact across the economy, as my hon. Friend mentioned, because it means that many households around the country that are already struggling, including in my constituency, will find that the price of necessities rise at a time when they can least afford it.
Exports, which are already weak, will likely see further decline. Total export sales fell from £521 billion in 2013 to £513 billion in 2014, yet the Chancellor has declared an export target of £1 trillion by 2020. It is no surprise, then, that he is already likely to fall short of the target by over £300 billion, as was touched on by the hon. Member for Hartlepool (Mr Wright), who is no longer in the Chamber.
On business investment, which was mentioned by my hon. Friend the Member for East Lothian (George Kerevan) and the hon. Member for Hartlepool, there is more bad news with regard to productivity, and research and development. Page 12 of the OBR’s “Economic and fiscal outlook” states that business investment will grow by only 2.6% this year, which is substantially less than the 7.4% predicted just three months ago in the autumn statement. Furthermore, the level of investment in 2019 is predicted to be a staggering 10% lower than predicted in December. So far, not so good.
I move now to an area of concern to myself. Page 27 of the Red Book states that the Government expect to raise £25 billion from the sale of the Royal Bank of Scotland. Given several factors, however, including the current price of oil, I fear that this price might be exaggerated. In focusing on this issue, which I have grave concerns about, I would point out that between 2011 and 2014, RBS arranged £14.3 billion in leveraged loans to the oil and gas industry. In fact, RBS has been a leader among UK banks in arranging these high-risk loans. The falling price of oil has resulted in an increase in the default rates of these loans, however, and many of them have been repackaged into derivatives for sale to investors in the form of collateralised loan obligations—a derivative product starkly similar to the collateralised debt obligations that contributed to the 2007-08 financial crisis. How many of these risky loans RBS still has on its books remains uncertain, hence my concern for that particular £25 billion.
Let me take a minute to highlight what I view as a failure on the part of the Government to address the systemic risk inherent in the financial system and the wider economy in relation to the price of oil and leveraged investment. Alongside RBS, a number of US lenders with a large and active presence in UK markets have a high exposure on energy, due to leveraged lending in the oil and gas sector. For example, JP Morgan currently has $13.8 billion in outstanding debt relating to loans out of the roughly $100 billion in leveraged loans it issued to the oil and gas sector between 2011 and 2014. Wells Fargo arranged $98 billion in leveraged loans to the sector in that same time period, many of which are non-investment grade, and $17.4 billion of which is already outstanding. Alarm bells should be ringing somewhere.
On 15 December 2014, when the price of Brent was at $60 a barrel, the Financial Times predicted that if the price of oil were to continue to fall,
“there
is a stark parallel with the US property market collapse that heralded the
start of the 2008 global financial crisis—and upended banks along the way.”
Yet the systemic risk inherent to the financial system due to these high-yield loans and the “slice and dice” nature of derivative products relating to these loans that have been sold to investors were not even mentioned in the most recent Bank of England stress test result.
Finally, in the years since the 2007-08 financial maelstrom and ensuing recession, the Tory Government have demonstrated their expectation that the most vulnerable in society should pay the price for the mistakes of the financial institutions. In 2011, the Bureau of Investigative Journalism found that over 50% of Conservative funding came from the City. We know whose interests the Conservatives have at heart. The Budget clearly highlights the fact that this attitude has not changed, as evidenced in the £3.5 billion of new cuts that it introduces. This Budget is not good enough, and if the Chancellor really wants to be head boy, he should heed his report card, which should read “Must do better”.