£350 million more for Scotland, proving that ‘we are stronger together in this great United Kingdom’, cried a triumphant Chancellor. No, we’re £2.9 billion POORER, said the Scottish Government’s finance spokesman. Confused? You will be.
The background: UK’s debt currently stands at an eye-watering £1.7 TRILLION, on which we pay £500 billion a year in debt interest – that’s £62,000 for every single household in the UK.
Phillip Hammond’s first Budget – and Westminster’s final pre-Brexit Budget – contained few surprises, and as always the devil will be in the detail. Those old favourites – easy targets like tobacco and alcohol were hit again, and there was a surprise hike in National Insurance rates for the self-employed.
The Scottish government will receive a £350m funding boost. This, Mr Hammond told MPs, showed “we are stronger together in this great United Kingdom.”
Labour said this was a Budget of ‘utter complacency’. Labour leader Jeremy Corbyn said the Budget ignored the “crisis facing our public services and the reality of daily life for millions of people in this country”.Mr Corbyn accused the government of ‘cutting living standards for the many and raising taxes for the few’, and predicted a £70bn tax giveaway for ‘those who need it the least.’
The reaction from Holyrood was also predictable. Finance Secretary Derek Mackay said that despite limited increases in Barnett consequentials the Chancellors’ spring budget plans confirm £2.9 billion of cuts to the Scottish budget over ten years.
Mr Mackay said it will hit Scottish families and provides absolutely no detail of how he plans to steady the economy in the wake of the UK Government’s plans for Brexit.
The Chancellor also failed to alleviate the welfare cuts that the UK Government is directing at some of the most vulnerable in our society or to lift the prospect of a further £3.5 billion of cuts to public spending in the years to come.
Mr Mackay said: “The Chancellor has today confirmed a real terms cut to the Scottish budget of 9.2 per cent between 2010/11 and 2019/20. While I welcome the additional Barnett consequentials that were announced today, no one should think that this budget provides an end to austerity from the UK Government – in fact there is still a further £3.5 billion of cuts to come.
“On top of that the Chancellor continued with the UK Government’s damaging welfare cuts that will make many vulnerable and low income households worse off.
“The real elephant in the room in this budget was Brexit. There was no mention of the UK Government’s plans to protect and grow the UK economy as the Prime Minister gets ready to trigger Article 50. This is simply not acceptable. Brexit is a real threat to people across Scotland in so many ways. The Chancellor must tell us his plans.
Commenting on some of the proposals in the budget, Mr Mackay added:“We have repeatedly called on the UK Government to take action to support the Oil and Gas sector. While welcome, today’s announcement on a ‘discussion paper’ is long overdue and is not the urgent action that the industry needs.
“The Scottish Government will continue to do everything it can to boost the economy, tackle inequality and provide high quality public services but today’s UK budget does little to support those aims.”
The TUC said the Budget was a ‘missed opportunity’.
Responding to the Budget Statement, TUC General Secretary Frances O’Grady said: “Today the Chancellor missed the opportunity to get Britain match-fit for Brexit by investing in jobs and infrastructure.
“The government promised an economy that works for everyone. But millions of low-income workers face cuts to in-work support, while big business is handed a huge tax cut. Workers will be no better off at the end of the Parliament than they were set to be at the time of the last Autumn Statement.
“The acid test for the Chancellor’s self-employment tax changes is whether they crack down on employers who force low-paid workers into bogus self-employment.
“Today’s extra funding for social care is desperately needed. But at a time when waiting times are soaring, it’s astonishing that the government has left a huge hole in NHS funding. And there’s still no real pay rise for Britain’s dedicated nurses, teachers and public service workers.”
Employers organisation the CBI gave the Budget a warm welcome. Carolyn Fairbairn, CBI Director-General, said: “This is a breakthrough Budget for skills. There has never been a more important time for the UK to sit at the global top table of technical education for young people.
“Firms will be looking for ongoing partnership with the Government as they try to make the Apprenticeship Levy work.
“However, with inflation rising and the cumulative burden weighing on businesses’ shoulders, limited relief for firms hit hard by business rates falls short.
“Firms are wholly committed to the health and wellbeing of their people, and are pleased to see an increase in spending on social care.
“Businesses will be pleased to see the Chancellor’s continued watchful eye on getting the deficit down and avoiding surprises.”
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