23 November 2010

Budgeting for difficult times

In these difficult economic times, many families have faced the challenge of restructuring their household budgets to cope with a reduction in finances. Difficult choices must be faced up to and sacrifices made to make sure that money is available for essential things.

In many ways, the process of setting the Scottish Budget for next year has been similar in nature. Faced with a budget that will fall by £1.3 billion in cash terms next year - or £1.8 billion in real terms - as a result of Westminster’s spending decisions, hard decisions have had to be made.

Without the full fiscal powers of a normal independent country, the Scottish Government has no choice but to accept the reduced finances handed to it and budget accordingly. Where other Governments can borrow, alter the full range of taxes used in their territory and balance their economy to meet their needs, Scotland is forced to confront these spending cuts with one hand tied behind its back.

Yet despite this, the SNP Government has faced up to the difficult choices it has had to make and produced a budget that puts the priorities of people across Scotland first. The Scottish Government recognises there is a social contract with people in Scotland who are enduring difficult financial times, and we are determined to do what we can to assist them.

Funding has been put in place for local authorities to continue to deliver a freeze in the council tax, ensuring that family incomes are not put under further pressure as a result of increased taxation. The abolition of prescription charges will go ahead in April as planned, ending the unfair tax on ill health and reaffirming the principle that the NHS should be free at the point of delivery. Additionally, the Scottish Government will work with local councils to ensure the provision of free personal care for the elderly continues.

These decisions are positive and I believe are the right ones, despite these difficult times. However, we have no choice but to cut Government expenditure and as a result the decision has also been taken that public sector pay should be frozen at current levels for everyone earning over £21,000 in order to protect jobs and try to ensure that no compulsory redundancies are necessary. Furthermore Scottish Government departments and agencies will be asked to find significant savings in order to balance the budget.

Yet what is key from this budget is the need to ensure that economic growth in Scotland continues. With the limited financial powers the Scottish Government has, infrastructure spending is perhaps the key way in which the Scottish Government can boost the economy and encourage that growth. That is why the decision was taken to transfer £100 million from revenue to capital expenditure and ensure that key projects go ahead.

This will be particularly welcome for people in Banff & Buchan given that both the AWPR and a replacement prison in Peterhead will proceed as a result of decisions made in this budget. This is good news for people in the area and acts as a further demonstration that the SNP Government understands the needs of the North East.

These are difficult times and as a result this budget has forced difficult choices on the Scottish Government. Yet within the scope available to us, I believe the right decisions have been taken to encourage economic growth and maintain the social contract that exists between this Government and hard pressed households across Scotland. This is a sensible budget for the circumstances we face.

9 November 2010

Investing in our future

The economic potential that exists off Scotland’s shores thanks to the renewables industry is something that I have written about in several previous columns. The scale of the resources that can be harnessed make it a compelling topic and one with real opportunities for people in Banff & Buchan.

The offshore renewables industry will require significant infrastructure to support it and it is ports like Peterhead which are set to benefit from the manufacturing and maintenance businesses that will be created. Some months ago, the National Renewables Infrastructure Plan identified Peterhead as one of 11 key sites for Scotland’s offshore renewables future and highlighted both the investment needed and the potential economic returns for Scotland.

That investment came closer recently with an announcement from the First Minister that a £70 million fund would be opened for applications from ports seeking to develop infrastructure necessary for the renewables industry. This fund compares with a similar scheme in England and Wales which totals just £60 million. That extra investment for Scotland is intended to give us a competitive advantage and underlines our commitment to the future of this industry.

There are still significant barriers that must be overcome before we can achieve our potential in this area, not least of which is the UK’s transmission charging system which unfairly penalises electricity generators in Scotland. The case for change is overwhelming if the UK Government is serious about meeting its climate change obligations and further obstruction would be inexcusable.

The UK Government should also end its obstruction on Scotland accessing the £191 million Fossil Fuel Levy which is currently idling in a Treasury bank account. This is money which by law can only be spent on renewables projects in Scotland, but which Treasury rules block the Scottish Government from accessing without penalty. Rather than attempting to con Scotland out of this cash as they recently tried, the UK Government should accept that it should be put to work investing in our future and release the money to help grow Scotland’s renewables sector.

Ending the wait for new homes

Recent days have seen the completion of the final stages of the Housing (Scotland) Bill in the Scottish Parliament, a measure which will be of enormous significance to many people across Scotland. The new legislation brings an end to the right-to-buy council homes for new tenants and will help to increase the availability of social housing.

One of the most common issues that constituents bring to all MSPs is the problems they face with the waiting lists for council homes. With the right-to-buy meaning that people are able to snap up new council homes, there is little incentive for local authorities to construct new properties.

This has led to poor conditions and massive waiting lists, a situation that was certainly not helped by the fact that the previous administration only oversaw the construction of 6 council homes across the whole of Scotland during its last four year term. The SNP Government has invested a significant amount of money in sparking a new generation of council house construction, but the end of the right-to-buy for new tenants will be the real catalyst for change.

Although the rights of existing tenants to purchase their property will be unaffected by the measure, it will untie the hands of local authorities and let them address the chronic availability problems that have been allowed to build up. In time it will make a real difference to people who are stuck on interminable waiting lists, and is a positive step for Scotland.

Stewart Stevenson
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