The impact of last week’s UK Budget will be felt across Scottish business in the months and years to come. Today, the Scottish Parliament gets the chance to debate the measures, with a motion that “the Parliament is disappointed that the UK Chancellor’s budget is a missed opportunity…”
For me, the Budget failed its fundamental purpose – to boost economic growth. There was almost no new resources or initiatives, no green light for new, targeted capital spending and no NI holiday to help for employers take on young unemployed people – moving the Office for Budget Responsibility to note that the UK Government’s measures will only have “a limited impact on our economic forecast.”
And on fairness, the Chancellor’s moves to reduce income tax for 15,000 well off top rate Scottish taxpayers comes alongside pensions changes that will hit 330,000 older people now. The Treasury’s own figures show that since 2010, the UK Government’s measures to rebuild the public finances have placed a greater relative burden on the lowest earning 20% of households than the average.
There were measures to support. I welcomed that the UK Government accepted our case for Enhanced Capital Allowances to apply at Nigg, Irvine and Dundee to help low carbon technologies and industries breathe new life into these areas. And I supported oil and gas decommissioning changes and new field allowances west of Shetland as one step to restore the sector’s confidence.
There is evidence of a shortfall in lending to SMEs in Scotland. On access to finance, which is critical to aiding recovery, I am still seeking assurances that Scottish business will get their fair share of the dedicated lending via the National Loan Guarantee Scheme and that there are transparent monthly reports detailing how Scottish business is benefiting.
In Scotland, we are continuing to use every lever at our disposal to support households and businesses. Yet weak economic forecasts confirm that the Chancellor’s approach is not delivering growth, jobs, or deficit reduction at the rate envisaged.
Without further action from the UK Government, it is essential that the Parliament is given substantial new economic powers to ensure we can continue the Scottish recovery.