How ‘single stupidest thing any country has ever done' is behind benefit cuts and high taxes

Westminster is looking for savings in the wrong places with the UK’s hard Brexit remaining a multi-billion-pound drain on public finances and the economy

Over the next few days, the Labour party may well continue to tie itself in knots over cuts to welfare and efforts to balance the books. Keir Starmer’s original proposals would have saved the Treasury an estimated £5 billion but also meant about 300,000 disabled and sick Scots would have lost hundreds of pounds needed simply to make ends meet.

After the plan was condemned by more than 100 charities, which warned it could push some of the most vulnerable people into “destitution”, cross-party social justice committees in the Edinburgh, Cardiff and Belfast legislatures raised “significant concerns”, and a rebellion by some 120 Labour MPs, changes by the government will see people who currently receive personal independence payments continue to do so but the cuts will still affect future claimants.

The devolved administrations are right to be worried. Here’s the rub, there may often be a focus in the media on the Scottish Government’s spending, but it is Westminster that has an outsized impact on our day-to-day lives. Decisions made in London are the overwhelming factor in how much money the Scottish Parliament can spend, and are keenly felt by Scottish citizens.

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People who supported Brexit celebrate on the day the UK formally left the European Union. Few seem quite so enthusiastic today (Picture: Jeff J Mitchell) | Getty Images

Eye-watering Westminster waste

These welfare cuts might be aimed at saving the UK Government cash but they will affect Holyrood’s ability to tackle poverty, potentially costing the Scottish Government more. The UK remains a heavily centralised state compared to many of our neighbours and it shows.

When these issues arise in the Scottish Parliament there is often, rightly, a focus on any waste and where the money could be found or saved. That is appropriate and all governments should be scrutinised for their expenditure.

However, if you are really looking for savings, expensive policy decisions and want to get into the really big bucks, you could do worse than cast your eye over Westminster waste. Given the UK is seeking to save billions with a highly damaging hit to the poorest in society, causing quite the political headache, it is worth reflecting on why Westminster could do with being more careful with our taxes.

Let’s run through a few of them, starting with the recently scrapped Rwanda scheme, that never delivered anything, and yet cost £715 million between 2022 and 2025. That’s small beer when you compare it with the costs of PPE procured during the pandemic, with an estimated £4bn of equipment being unusable and £9bn being written off by the UK Department for Health.

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High speed, high expense

Even that pales in comparison with the costs of the High-Speed Rail link. At 2019 prices, it has cost £33bn, so far, and is set to rise to £67bn (in 2024 prices) with no train due to go anywhere until 2033. That will simply connect London and Birmingham, with phase two having been scrapped, but not before it had swallowed up £2.5bn. All that money and effort to shave about half an hour off the Birmingham to London journey.

It should also tell us something of the parlous state of the UK’s infrastructure planning when the country remains one of the few in western Europe without high-speed rail. It could have been transformative for this island.

When Alex Salmond was First Minister, he gave the line planning permission from Edinburgh and Glasgow to the Border, since the business case was stronger if it included Scotland, yet that was rejected. It says something of an overly centralised UK that it was decided to start building from London, despite that being the hardest part of the line.

If you want to look at the even bigger levels of cash, the Truss budget was said to have cost UK homeowners £300bn and the government billions more due to higher borrowing costs and other costs to the Treasury. This matters with UK Government borrowing now at the second highest level since records began, and the UK’s net debt to GDP ratio sitting at 96.4 per cent.

Brexit calamity

Let’s not forget the Brexit calamity. US politician and businessman Michael Bloomberg told an audience in Dublin this week that leaving the EU is “the single stupidest thing any country has ever done”. And boy has it cost us all.

As we marked (no one celebrated) the ninth anniversary of the EU referendum earlier this week, it is estimated it has led to a £40bn hole in public finances, a 4 per cent drop in UK productivity, and a 15 per cent drop in trade, along with £100bn’s worth of tax rises – not helped by the UK Government’s decision to pursue the hardest of hard Brexit. Why Labour continue to pursue this disastrous policy is beyond me.

Government is hard, and no government gets it all wrong or all right. That said, there is an unwillingness to tackle some of the structural issues with governance in the UK. Instead of taking bold steps, Labour has decided that the simplest course of action is to cut benefits – that will cost us all in the long term.

This Labour government is seeking to save money on the backs of those who can afford it the least whilst failing to tackle deeper problems that the UK faces because of bad choices, poor governance and unnecessary waste.

The UK isn’t working, and its spending choices deserve more scrutiny. I would argue – and I would – that we should be showing Westminster and its wasteful ways the door. Mind you, the newest door that was put into the House of Parliament cost £10m (60 per cent over the original estimate) and guess what, it isn’t working either.

Stephen Gethins is the MP for Arbroath and Broughty Ferry