The Wrong Choices

Without doubt the biggest talking point in politics in recent days has been the UK Government’s budget and the fallout that has accompanied it. In the run up to it, the Scottish Government made clear that we believed the priority should be on encouraging economic growth through capital investment. We illustrated how quickly work could begin by providing details of shovel ready projects totalling £300 million that could have boosted the Scottish economy immediately if funding was provided.

In the event, this was completely ignored by the UK Government who instead embarked upon a set of priorities that are completely incomprehensible in these difficult times. The latest figures show how much weaker economic recovery has been here compared to the USA and that is almost entirely down to the UK Government’s decision not follow America’s example and stimulate economic growth through investment.

It would be wrong to say there were absolutely no positives from the budget. Since the Chancellor’s enormously damaging £2 billion tax raid on the North Sea industry, the SNP has been at the forefront of calls for guaranteeing tax relief on decommissioning and creating a greater incentive for oil field exploration through broadening the field allowance for such projects. We have also consistently called for tax relief for the video games sector which is increasingly important to the Scottish economy but was at risk of relocating to other countries with more favourable tax systems. Enhanced capital allowances for the enterprise zones that we have established in Dundee, Irvine and Nigg are also positive.

But those positive measures are completely overshadowed by the enormous damage that other parts of the budget will do. The reduction in the top rate of income tax from 50% to 45% will hand a substantial tax cut to 15,000 of the most well off people in the Scotland while 330,000 pensioners in Scotland will now see their taxes rise in real terms to pay for it. That is not fair by any measure of the word and will rightly cause real outrage to communities up and down the country.

As if that wasn’t enough, the UK Government is also pressing ahead with plans to further hike fuel duties by 3p later this year. Prices at the pump are already eye-wateringly high as people in Banffshire & Buchan Coast know only too well. To put up the price again at a time when household budgets are stretched to the limit simply demonstrates how out of touch the UK Government is with life in this part of Scotland.

For people in areas like Banffshire & Buchan Coast, a car is quite simply a necessity rather than a lifestyle choice. People in rural areas do not have the choice to use their car less, so price hikes at the pump hand higher bills to households that they have no way of avoiding. On top of that, higher fuel prices also affect the cost of everything we buy as businesses have no choice but to pass on the increased haulage costs they face to consumers.

Taken together, the Institute of Fiscal Studies estimates that the measures in the budget will cost an average household £790 a year. This budget was quite simply not a budget for Scotland and demonstrated, if any more proof was needed, how little Scotland features in the thoughts of the UK Government. These kinds of decisions that have such a dramatic effect on our day to day lives should be made in Scotland and show just why Scotland needs the normal powers of an independent country.