:00:03. > :00:06.viewers in Scotland because it is now time to join Andrew Kerr in
:00:06. > :00:16.Politics Scotland. Welcome to our live coverage, a special extended
:00:16. > :00:18.
:00:18. > :00:26.So, what does today's Budget mean for Scotland? We will bring you a
:00:26. > :00:30.range of views and analysis from across the country. This Budget
:00:30. > :00:37.rewards work. Britain is going to earn its way in the world. There is
:00:37. > :00:41.no other road to recovery. I am Douglas Fraser. I have been looking
:00:41. > :00:45.at how the numbers will affect you and Scotland. And I am here at
:00:45. > :00:50.Holyrood, Digest and the impact of the Budget and those new devolved
:00:50. > :00:53.tax powers that are now coming this way. And, will the Budget helped
:00:53. > :00:58.thought the economy? I am at Scotland's largest indoor ski
:00:58. > :01:01.centre to get some reaction from the business world. And I am at
:01:01. > :01:04.Westminster where MPs are now digest think the fine print of the
:01:04. > :01:14.Budget. You will find out what it means for Scotland and what it will
:01:14. > :01:16.
:01:16. > :01:25.mean for Scottish politics in the days and weeks ahead.
:01:25. > :01:30.So, George Osborne is cutting the rate of tax to 45p. Here are some
:01:30. > :01:32.of the highlights. We will offer enhanced capital
:01:32. > :01:39.allowances for businesses starting up in the new Scottish Enterprise
:01:39. > :01:43.areas, in Dundee... Are also want to insure we extract of the
:01:43. > :01:46.greatest possible amount of oil and gas from our reserves in the North
:01:46. > :01:51.Sea. We are today introducing a major package of tax changes to
:01:51. > :01:56.achieve this. The film tax credit, protected in our spending review,
:01:56. > :02:00.generates over �1 billion of film investment in the UK in the last
:02:00. > :02:05.year alone. Today, we have an intention to introduce similar
:02:05. > :02:10.schemes for animation and high-end DVD production. Today we are
:02:10. > :02:15.funding ultra-fast broadband in 10 of the UK's largest cities -
:02:15. > :02:20.Belfast, Birmingham, Bradford, Bristol, Edinburgh, Cardiff, Leeds,
:02:20. > :02:24.Manchester and London. London weighting already exists across the
:02:24. > :02:29.public sector. The opposition have proposed the interesting idea of
:02:29. > :02:34.regional benefit rates. So, we should see what we can do to make
:02:34. > :02:38.our public services more responsive and help our private sector to grow
:02:38. > :02:48.and create jobs in all parts of the country. From next month, Britain
:02:48. > :02:48.
:02:48. > :02:52.will have a corporation tax rate of just 24%. We will continue with the
:02:52. > :02:58.two further cuts planned next year and the year after, so that by 2014,
:02:58. > :03:03.Britain will have a 22% rate of corporation tax. This is the
:03:03. > :03:08.biggest sustained reduction in business tax rates for a generation.
:03:08. > :03:13.The direct cost is only �100 million a year. Indeed, aged MRC
:03:13. > :03:17.calculate the loss of other tax revenues may even cancel that out
:03:17. > :03:21.of -- H MRC. In other words, it raises at most a fraction of what
:03:21. > :03:28.we were told, and may raise nothing at all. So, from April next year,
:03:28. > :03:31.the top rate of tax will be 45p. I can today confirm that, instead of
:03:31. > :03:35.withdrawing child benefit all at once when people earn more than the
:03:35. > :03:39.higher rate threshold, the benefit will only be withdrawn when someone
:03:39. > :03:43.in the household has an income of more than �50,000, and the
:03:43. > :03:49.withdrawal will be gradual - 1% of child benefit for every extra �100
:03:49. > :03:56.earned over �50,000, so there is no cliff edge, and only those with an
:03:56. > :03:58.income of more than �60,000 lose all of their benefit. I am
:03:58. > :04:03.announcing the largest ever increase in the personal allowance.
:04:03. > :04:11.That is the man that people can earn tax-free. From next table,
:04:11. > :04:16.that amount will increase �1,100. Every person on low or middle
:04:16. > :04:23.incomes will benefit. People will be able to earn up to �9,205 before
:04:23. > :04:27.they have to pay any tax. I enjoyed here in the studio by our
:04:27. > :04:31.business and economy editor Douglas Fraser and by the commentator Alf
:04:31. > :04:35.Young. Thank you for joining me. Douglas, let's look at these
:04:35. > :04:40.figures first of all. We have got growth, which was quite interesting
:04:40. > :04:46.from the Chancellor. Let's look at what he was saying. The OBR has
:04:46. > :04:50.revised the UK growth forecast for 2012 2.8%. That has gone up 0.1 of
:04:50. > :04:54.a percentage. It is heading in the right direction from a pretty
:04:54. > :04:59.dismal figure that we got at the time of the Autumn Statement. Going
:04:59. > :05:06.back a year, that figure was up 2.5% expected growth for 2012, so
:05:06. > :05:10.it is still a very subdued growth. A less to cut borrowing. He is a
:05:10. > :05:15.bit more confident - borrowing to be �1 billion less than the
:05:16. > :05:20.forecast back in the autumn. That may reflect the tax receipts that
:05:20. > :05:26.HMRC are picking up across a number of stories and they are cracking
:05:26. > :05:31.down, -- quite harshly. That is a big deficit. We have got used to
:05:31. > :05:38.the idea of deficits over �100 billion. It is still an enormous
:05:38. > :05:48.figure. Let's see what hit us in our pockets. Income tax - maybe
:05:48. > :05:50.
:05:50. > :05:58.that does not hit us. It may hit you, not me! If you were earning
:05:58. > :06:01.over �50,000, you will pay 45p on tax instead of 50p. The argument
:06:01. > :06:06.made by the Chancellor is that it is making very little money. He is
:06:06. > :06:09.bringing it down from the next financial year. I think his
:06:10. > :06:19.intention is to bring it down again to 40p, which would return it to
:06:19. > :06:23.the top rate of tax. But what does affect many people is the new
:06:23. > :06:29.threshold of child benefit which has been raised. Yes, this is the
:06:29. > :06:37.good news that they have ruled out. 9002 Hutton �5 of your earnings go
:06:37. > :06:43.untapped to start with -- �9,205. This saves everyone else above that
:06:43. > :06:50.he should save about �220. That will affect everybody right up to
:06:50. > :06:54.the 1 �50,000 level. And child benefit phase doubt on incomes of
:06:54. > :06:57.more than �50,000. That was a key political problem for George
:06:57. > :07:02.Osborne when he was going to withdraw child benefit from the
:07:02. > :07:05.higher rate tax payers. Yes, there was an anomaly in there for double
:07:05. > :07:10.or single income households, and they are trying to iron out that
:07:10. > :07:14.anomaly. They want to simplify the tax system. Just before we came on
:07:14. > :07:22.air in Scotland we were getting an explanation of what he is doing,
:07:22. > :07:27.and it was anything but simple. But it tapers away after a high earner
:07:27. > :07:34.of �50,000 in a household. corporation tax is cut to 24%. And
:07:34. > :07:37.we have also got these enterprise zones. And, that energy
:07:37. > :07:42.announcement about the North Sea to boost the oil and gas extraction
:07:42. > :07:46.there. Yes, we new corporation tax was coming down and it is coming
:07:46. > :07:50.down slightly faster than was planned in order to make the
:07:50. > :07:56.message that Britain is an attractive place to come and invest.
:07:56. > :07:59.These enterprise zones - that is aimed at the renewable industry is
:07:59. > :08:05.and perhaps pharmaceuticals. There may be a signal that of some good
:08:05. > :08:11.news to come. North Sea all and gas got a shock a year ago with a �2
:08:11. > :08:17.billion tax rates and he is now trying to make it up for -- to them.
:08:18. > :08:21.Also, all the decommissioning of the get in the North Sea. He is
:08:21. > :08:25.wanting to say that there will be some certainty to their tax
:08:25. > :08:30.planning. He is one that a lot of people worry about - fuel,
:08:30. > :08:38.cigarettes and alcohol. On that we have no change to existing plans,
:08:38. > :08:44.but duty on tobacco but that will rise by 5%. Yes, 35p on a packet of
:08:44. > :08:49.cigarettes. Fuel was the one that people were hoping for. They wanted
:08:49. > :08:53.a bit of relief there and they are not getting it. It is still on
:08:53. > :08:56.schedule for three pence extra in August per litre, so that is not
:08:56. > :09:00.going to go down very well. Interestingly, there was a huge
:09:00. > :09:03.amount of pressure last year on fuel duty to keep it down, and he
:09:03. > :09:06.responded to that. There hasn't been anything like the same
:09:06. > :09:11.pressure because there has been sidetracked with talking about
:09:11. > :09:17.income tax. Nick Clegg looked upset when the cigarette duty was going
:09:17. > :09:23.up. Alf Young, this was a well trailed Budget, lots of leaks going
:09:23. > :09:27.on, but you thought there was one quite significant a surprise?
:09:27. > :09:31.the big things that you talked about were almost all settled and
:09:31. > :09:36.announced, effectively, on the sofa on Sunday morning or whatever,
:09:36. > :09:41.before it actually happened. The one exception was the fuel duty.
:09:41. > :09:48.But there is another one, and that is in raising the capital allowance
:09:48. > :09:52.that people get before they pay tax, the 20 million people you talked
:09:52. > :09:56.about, there is an existing arrangement in a more complicated
:09:57. > :10:01.system at the moment, that anyone over 65 get a bigger allowance, and
:10:01. > :10:06.that allowance gets clawed back pound by pound and told they are
:10:06. > :10:11.earning on top of their pension up to about �23,000 at the moment. But
:10:11. > :10:15.he is scrapping all of that. He is freezing that additional pension or
:10:15. > :10:20.allowance, and then he is phasing it out altogether. Anyone who gets
:10:20. > :10:23.to 65 next year and onwards, would get it at all. If you look at the
:10:23. > :10:28.detail of the Budget, this is one of the biggest hits in the entire
:10:29. > :10:37.package. It is going to take, by the end of this forecast period of
:10:37. > :10:41.2016 - 2017, �1.25 billion out of that group, so pensioners who will
:10:41. > :10:48.be benefiting from the increase in the general personal allowance are
:10:48. > :10:51.going to lose in terms of the additional personal allowance. That
:10:51. > :10:57.compares to �3.5 billion that the 20 million of us are going to get
:10:58. > :11:04.from the increased personal allowance. When that sinks in, I
:11:04. > :11:14.suspect that one of the groups who votes often is going to be saying,
:11:14. > :11:14.
:11:14. > :11:20.what are you doing to us? It does but it does not affect those who
:11:20. > :11:24.are already retired. It will not be there at all for
:11:24. > :11:30.those who are about to retire. So, when he says he is rewarding work,
:11:30. > :11:34.he also looks to be punishing those who are retired. So, rewarding work,
:11:34. > :11:37.punishing retirement. Thank you for that analysis.
:11:38. > :11:42.There's go straight to holy writ now where a political editor Brian
:11:42. > :11:47.Taylor is standing by a -- holy writ. In the headline, you mention
:11:47. > :11:50.that other significant piece of news about the Scotland Bill. The
:11:50. > :11:54.governments have come to some arrangement on that. Yes, a deal
:11:54. > :12:00.was announced overnight between the UK and Scottish governments. Back
:12:00. > :12:07.in the mists of time we had the Calman Commission which produced a
:12:07. > :12:12.plan for 10 pence worth of income tax. Not at Westminster - there was
:12:12. > :12:17.the to and fro in arguing between whether this would benefit Scotland
:12:17. > :12:21.or cut its money. Overnight, there has been a deal on that between the
:12:21. > :12:26.two governments. The Bill will become an act and this 10 pence tax
:12:27. > :12:36.plan and some other changes, the idea of holy writ taking charge of
:12:37. > :12:38.
:12:38. > :12:43.drink-driving and so one, all that Is there any reaction from the
:12:43. > :12:47.Scottish government? They are saying that the situation
:12:47. > :12:50.benefiting those on the standard rate of income tax is perhaps
:12:50. > :13:00.mitigated by the cut in the top rate, they take the same few of
:13:00. > :13:03.that as the opposition have done at Westminster. The Barnet
:13:03. > :13:11.consequences are worth �20 million to Scotland, and in terms of those
:13:11. > :13:20.changes to tax, increasing personal allowance, benefits to 0.1 million
:13:20. > :13:26.taxpayers in Scotland. To my astonishment, we have not had the
:13:26. > :13:36.figures in the retirement sector, as was referred to.
:13:36. > :13:39.
:13:40. > :13:46.This was a Budget that was to unashamedly back business. Jamie
:13:46. > :13:52.MacIver is at Snozone at Braehead Shopping Centre. This is the UK's
:13:53. > :13:58.largest indoor ski centre. Even on a weekday afternoon it is pretty
:13:58. > :14:03.busy. You mention entrepreneurs. I have Jamie Smith, the new owner of
:14:03. > :14:08.the place. He bought it before Christmas. That suggests you have
:14:08. > :14:18.some confidence. Yes, you have to be opportunistic, and looking
:14:18. > :14:19.
:14:19. > :14:22.forward. For yourself, it was has George Osborne done for that?
:14:22. > :14:28.Very little, unfortunately. There were three things he needed to
:14:28. > :14:31.address to get the economy moving, and I do not think he has done that.
:14:31. > :14:37.What were those three things? The cut in fuel duty was something you
:14:37. > :14:42.wanted to see, so disappointment it has not happened. Yes, we are 15%
:14:42. > :14:47.more expensive than the European neighbours for fuel. Energy cost is
:14:47. > :14:52.significant to this business, 1,500 tons of real fresh snow, and we pay
:14:52. > :14:57.through the nose for energy. As an employer, what does the Budget mean
:14:57. > :15:03.for you? Will the rise and the income tax threshold make much
:15:04. > :15:13.difference? Not as an employer but it will make a difference for the
:15:14. > :15:18.
:15:18. > :15:25.people the word you. -- That Worked here. This facility must attract
:15:25. > :15:31.many people. Yes, we also have another one which attracts fewer.
:15:31. > :15:34.But they're coming from the West Midlands and West Country, and the
:15:34. > :15:41.fuel tax has had an impact on people stopping getting in their
:15:41. > :15:47.cars and coming north. Let us have a chat with a couple of members of
:15:47. > :15:52.staff. What was the best and worst bit of the Budget? The best was the
:15:52. > :15:57.rising of the tax threshold to 9,000. There is more money in there.
:15:57. > :16:04.I have to agree with Jamie. But from a selfish point of view about
:16:04. > :16:08.petrol tax, we are still paying the same price. I am using one bit of
:16:09. > :16:16.money I am saving to pay for the other. Taking with one hand and
:16:16. > :16:24.giving with the other? Exactly. the, what does it mean to you?
:16:24. > :16:29.Transport is important, and housing could have been addressed better.
:16:29. > :16:36.There is going to be a cut in corporation tax. Is that a welcome
:16:36. > :16:40.move? No, most people in business are happy to pay tax. You pay tax
:16:40. > :16:44.when you are doing well. But we need to stimulate the economy and
:16:44. > :16:48.he has not done that. Wood cutting the amount of National Insurance
:16:48. > :16:57.employers have to play be more useful than some of other help that
:16:57. > :17:01.has been available? In Ireland they cut National Insurance levels for
:17:01. > :17:10.new starts, and it made a difference. The other thing they
:17:10. > :17:15.did was cut VAT in France and Germany. They are only 5.5% there.
:17:15. > :17:22.We are 20% you. That makes a huge difference in trying any new sports
:17:22. > :17:31.or hobby. How many marks out of 10 would you give the Chancellor?
:17:31. > :17:37.Two. 3. A lukewarm reception here. Let us Pickup and a couple of the
:17:37. > :17:45.points with Douglas Fraser and Alf Young. -- pick up on a couple of
:17:45. > :17:49.points. Jamie said he welcomed the tax
:17:50. > :17:59.threshold, but where is the money coming from? If you look at the
:17:59. > :18:09.package, the impact in the year that is about to start in April of
:18:09. > :18:11.
:18:11. > :18:16.these measures, is it gives away the road, it is taking back 2
:18:16. > :18:22.billion. At the end of the period he is taking back about 1 billion.
:18:22. > :18:30.It is a bit of give-and-take. And over this five-year horizon, there
:18:30. > :18:34.is some good news on debt, but it is not all balanced. One of the
:18:34. > :18:38.interesting things he spoke about but gave no details about his he is
:18:38. > :18:43.reopening the whole spending side of things. He said in his speech
:18:43. > :18:46.that if things are left as they are, down the road a bit, welfare
:18:46. > :18:51.payments will constitute about a third of everything the Government
:18:51. > :18:59.spends. That will squeeze departmental budgets like the NHS.
:18:59. > :19:09.So he is looking there. -- looking there for a radical spending review.
:19:09. > :19:11.
:19:11. > :19:14.Lot of things that will be targeted, like child benefit, if he is going
:19:14. > :19:24.to balance the books in the longer term, are going to be on the
:19:24. > :19:25.
:19:25. > :19:29.welfare budget for. He spoke about a �10 billion... Longer term on the
:19:29. > :19:36.welfare and pensions budget, he is talking about the automatic link
:19:36. > :19:40.between the age at which you begin to get your pension and longevity.
:19:40. > :19:45.That will be reviewed over time. So when people -- so people are young,
:19:45. > :19:51.no one knows when they are going to get it. It keeps slipping away.
:19:51. > :19:55.when you finally get there, they will not get the additional
:19:55. > :20:02.allowance. There is a lot of pain in there which is only going to
:20:02. > :20:09.move through when people start analysing the numbers. There is a
:20:09. > :20:12.giveaway in the North Sea. There is some money on decommissioning.
:20:12. > :20:17.There is some money to try to get oil companies to start exploring
:20:18. > :20:27.more than developing more fuels west of Shetland. You look at the
:20:28. > :20:29.
:20:29. > :20:34.numbers, and in the first year, there is money in securing new
:20:34. > :20:38.fields off 45 million, but then he starts taking money back. It is
:20:38. > :20:41.only when you start looking at the pluses and minuses that you see
:20:41. > :20:51.that it is not as simple as he would have us believe that the
:20:51. > :20:51.
:20:51. > :20:54.dispatch box. He is making out it is going to be hunky dory, but it
:20:54. > :21:04.will only be hunky dory if he gets to the growth that Douglas spoke
:21:04. > :21:09.about earlier. Unless we get back into the trend levels the whole
:21:09. > :21:14.thing is up in the air. Douglas, do you think we will get the growth?
:21:14. > :21:22.He has targeted his message on growth to certain industries, such
:21:22. > :21:25.as pharmaceuticals and oil and gas. Investment in computer games has
:21:25. > :21:31.helped Dundee. For the whole economy, the message coming back
:21:31. > :21:39.from their industry, as well as small industries, they are somewhat
:21:39. > :21:43.underwhelmed by this. Hearing from Jamie at Snozone, the Chancellor
:21:44. > :21:50.said he would cut corporation tax, to be one of the most competitive
:21:50. > :22:00.in the world, but the director at Snozone was not impressed. They are
:22:00. > :22:02.
:22:02. > :22:07.sending signals, and there is a signal to the world to bring
:22:07. > :22:14.business in. It is not going to get the quick stimulus that they need.
:22:14. > :22:20.Thank you very much. Let us go back to Brian Taylor.
:22:20. > :22:24.I said I would digest the Budget from the Hollywood perspective. I
:22:24. > :22:34.have John Swinney with us. Let us go with the tax narrative from the
:22:34. > :22:35.
:22:35. > :22:45.Budget. The cut of the rate from 50p to 45p. It will benefit too 0.1
:22:45. > :22:47.
:22:47. > :22:51.million Scots. -- 2.1 million. good Budget was one that stands the
:22:52. > :22:56.test of time. It is clear that this one has not delivered growth or
:22:56. > :23:02.taken forward any of the agenda of investment in capital expenditure
:23:02. > :23:07.that we thought was important. What the figures demonstrate is that the
:23:07. > :23:11.20% lowest income households in the country are actually carrying more
:23:11. > :23:20.of the financial burden than the people at the higher end of the
:23:20. > :23:30.spectrum. On the fairness test, the budget does not pass muster.
:23:30. > :23:36.must welcome the higher capital and investments in three areas. Yes,
:23:36. > :23:42.enhanced capital allowances came from the Scottish government, so I
:23:42. > :23:45.am delighted the UK Government accepted her case. That will allow
:23:45. > :23:49.lost to secure Investment and a variety of sectors and the Scottish
:23:49. > :23:53.economy, whether it is in life sciences or renewables,
:23:53. > :23:57.contributing towards the economic agenda. The key test of the Budget
:23:57. > :24:01.would be whether there was a positive response to our demand for
:24:01. > :24:04.increased capital expenditure to bring forward some projects that
:24:04. > :24:12.are ready to roll. The Prime Minister asked us for a list of
:24:12. > :24:18.projects. We gave him at last, and the UK government has made no
:24:18. > :24:24.progress on it. The growth numbers suggest we need to stimulate
:24:24. > :24:29.greater levels of economic activity which is why this is so important.
:24:29. > :24:33.I remember interviewing you last year, and you were complaining
:24:33. > :24:42.about the tracks -- tax treatment of the North Sea. In his Budget,
:24:43. > :24:47.tax benefits for the North Sea. -- in this Budget. It is good when
:24:47. > :24:54.people recognise the folly of their mistakes. The Chancellor has
:24:54. > :24:57.accepted this. What damage was done to the North Sea and the production
:24:57. > :25:01.activity and to the confidence of the North Sea oil and gas sector by
:25:01. > :25:06.the changes the Chancellor made last March, they had to be
:25:06. > :25:09.rectified. I welcome the steps that have been taken today. They will
:25:09. > :25:17.undoubtedly assist in the development of the North Sea oil
:25:17. > :25:20.and gas sector which remains important for the economy, but they
:25:20. > :25:24.are coming hard on the heels of damaging decisions that the
:25:24. > :25:29.Chancellor made last March. Finally to the Scotland Bill, ideal has
:25:29. > :25:34.been done to allow the tax proposals to go ahead. You demanded
:25:34. > :25:42.more than the tax being dealt with here in Holyrood. You had six key
:25:42. > :25:49.demands. The Secretary of State has conceded the importance of arriving
:25:49. > :25:54.at an great position about all the financial changes that have to be
:25:54. > :25:58.made as part of the Scotland Bill, and that is a welcome change.
:25:58. > :26:02.it is not in statute. It is a welcome change from the original
:26:02. > :26:12.position, and in addition to that the additional borrowing powers are
:26:12. > :26:15.
:26:15. > :26:21.welcome. Crucially, it demonstrates the UK government is not serious
:26:21. > :26:25.about enhancing the powers of the parliament. Here was the ready-made
:26:25. > :26:28.opportunity for the UK Government to respond positively to strengthen
:26:28. > :26:33.the Scotland Bill, and they have not taken the opportunity. Michael
:26:33. > :26:41.Moore says further powers can come after the independence debate.
:26:41. > :26:45.here was the opportunity. They have not taken the opportunity. Why are
:26:45. > :26:49.you standing by this Bill? Why are you going ahead with this when you
:26:49. > :26:54.said previously it could be damaging to Scotland? You said it
:26:54. > :27:03.was potentially damaging to Scottish money. The UK government
:27:03. > :27:08.has changed its position. It has dumped Calman representations --
:27:08. > :27:12.recommendations. It dropped the proposition and has gone for a
:27:12. > :27:16.block grant adjustment, which is more worthy of consideration. They
:27:16. > :27:22.have also accepted there needs to be agreement between the Scottish
:27:22. > :27:25.parliament and United Kingdom Government on the implementation of
:27:25. > :27:28.the proposals. The Scottish government will give the
:27:28. > :27:33.endorsement to the Scotland Bill being enacted, but this is a missed
:27:33. > :27:38.opportunity. Many more powers could have been devolved. We will make
:27:38. > :27:48.our case for independence and the referendum. The tax proposals do
:27:48. > :27:49.
:27:49. > :27:52.not come in until 2016. Then we will be in a decision -- position
:27:52. > :28:02.that can ensure prosperity, and we will not have to wait for a UK
:28:02. > :28:07.Chancellor to come up with the More to come but now back to the
:28:07. > :28:11.studio. Thank you for that. Let's cross now to Westminster and to our
:28:11. > :28:14.correspondent there, David Porter. Ingesting hearing what the Finance
:28:14. > :28:18.said she was saying about the Scotland Bill. That deal agreed
:28:18. > :28:21.overnight, it seems. Yes, we heard from Westminster this morning and
:28:21. > :28:24.from Holyrood as well, a written statement saying that they had
:28:24. > :28:29.agreed that the Scotland Bill would go through. Hugely important
:28:29. > :28:33.because of the powers it gives the parliament, but also, controversial
:28:33. > :28:38.stuff as well. That, of course, on a day when we have got another
:28:38. > :28:42.story here at Westminster - the Budget. I am joined now by someone
:28:42. > :28:47.who is well versed in both those issues, the Secretary of State for
:28:47. > :28:50.Scotland. We will deal with the Scotland Bill in a moment. As far
:28:50. > :28:54.as the budget goes, to paraphrase Monty Python, what did the Budget
:28:54. > :28:57.ever do for Scotland? On the front ever do for Scotland? On the front
:28:57. > :29:01.page of the Liberal-Democrat manifesto we wanted to say -- help
:29:01. > :29:04.people on low and middle incomes. We got back into the coalition
:29:04. > :29:08.agreement and are working towards that. This year we want to go
:29:08. > :29:14.further and faster, and I am delighted that today this but it
:29:14. > :29:18.does exactly that. We are taking 160,000 Scots out of tax altogether,
:29:18. > :29:23.and reducing the tax burden for 2 million Scots. I think that is
:29:23. > :29:26.important news for everybody across the country. And for businesses who
:29:26. > :29:30.are looking to build on the work we are doing to get the economy back
:29:30. > :29:34.on its feet, we have got important announcements - cutting corporation
:29:35. > :29:38.tax further than we had said, getting more finance for small
:29:38. > :29:43.businesses, and four sectors like oil and gas and the computer games
:29:43. > :29:47.industry, proper new initiatives that will help them to get
:29:47. > :29:51.investment and jobs. Yet the coalition government is also
:29:51. > :29:54.proposing to reduce the top rate of tax, and to help pay for that, it
:29:54. > :29:59.would look as though you are going to be taxing pensioners more. The
:29:59. > :30:03.headline tonight may be tax cut for the rich, pensioners will help pay
:30:03. > :30:08.for it. No, we are looking to reform the pensions system. We have
:30:08. > :30:13.been open about but for a long time. The key thing is, Labour introduced
:30:13. > :30:16.this temporary tax rate and then did not deal with the tax dad --
:30:16. > :30:20.dodgers and once the richest in the country who were avoiding it. What
:30:20. > :30:23.we are doing is ensuring they will pay five times as much as that
:30:23. > :30:27.particular tax rate we are bringing into the Treasury. It is a very
:30:27. > :30:31.good deal and goes to the heart of the fairness agenda we are
:30:31. > :30:37.committed to. In regional or national terms, in terms of extra
:30:37. > :30:41.money for Scotland, it will cost pensioners a lot and this cannot be
:30:41. > :30:45.seen as a giveaway budget for Scotland. Hang on, we have invested
:30:45. > :30:50.considerably in Scotland over the mark -- last few years. It amounts
:30:50. > :30:55.to billions of pounds of extra money for Scotland since the
:30:55. > :30:58.Spending Review in autumn 2010. We are making sure we gives proper
:30:58. > :31:04.support to important sectors like oil and gas that are helping to
:31:04. > :31:08.create jobs in key Enterprise areas, and that we are ensuring that
:31:08. > :31:13.Scottish business across the piece enjoy lower rates of tax and easier
:31:13. > :31:17.access to finance. How much of a problem will it be that you are not
:31:17. > :31:21.going to be reducing fuel duty more, and that the increase planned for
:31:21. > :31:25.August of three pence will go ahead? Let's not forget that for
:31:25. > :31:30.those in the most remote parts of Scotland, we have negotiated a
:31:30. > :31:33.reduction in fuel duty, and more importantly, people are paying 10
:31:33. > :31:39.pence less on each litre of fuel at the moment than Labour would have
:31:39. > :31:42.made them play under their plans. We realise things are tough and
:31:42. > :31:47.that is why we are focused on reducing the tax burden on people
:31:47. > :31:52.with low or middle incomes. 2 million Scottish people will see
:31:52. > :31:54.the benefit of this in their pay packet. Moving on to the Scotland
:31:54. > :32:00.Bill, most people would regard the agreement they between yourselves
:32:00. > :32:03.and the Scottish parliament as important. We have just hit been
:32:03. > :32:08.hearing the Finance Secretary for Scotland they describe it as what
:32:08. > :32:12.you have proposed as a missed opportunity. I am pleased that the
:32:12. > :32:18.two governments have come to an agreement on what the Scotland Bill
:32:18. > :32:22.should look like. This is the biggest package of devolution to
:32:22. > :32:26.Scotland. More financial accountability to the Scottish
:32:26. > :32:30.parliament. Significant economic powers at their disposal. I am
:32:30. > :32:35.delighted that as part of this coalition, we have come up with the
:32:35. > :32:40.Scotland Bill and we hope that will now become an act. Both governments
:32:40. > :32:43.need to come on and make it work. The Scotland Bill is in the Lords
:32:43. > :32:47.today. When can we expect to sit on the statute book here, and when
:32:47. > :32:51.will people see real examples of the powers that you have
:32:51. > :32:54.transferred? Already, through agreement, we are letting the
:32:54. > :32:59.Scottish government get access to increased capital borrowing, which
:32:59. > :33:02.helps us get on with the 4th replacement crossing. Soon, after
:33:02. > :33:06.Royal Assent, we will see the introduction of new taxes in
:33:06. > :33:10.Scotland. We will have to work at a new stamp duty arrangement across
:33:10. > :33:15.the country. Any few years' time, half of people's income tax will be
:33:15. > :33:19.raised and set in Scotland. That is a powerful tool for the Scottish
:33:19. > :33:22.Parliament, and important for their accountability, too. As part of the
:33:22. > :33:25.politics of this, you are now saying to the Scottish parliament
:33:25. > :33:30.you have more responsibility for raising your revenue, go-ahead and
:33:30. > :33:35.show you can do it. This package ensures that there is more
:33:35. > :33:38.accountability, more responsibility, and more opportunity for people to
:33:38. > :33:43.see what the Scottish parliament is doing and to give us more power at
:33:43. > :33:46.home to decide our own fate. This was a major LibDem commitment in
:33:46. > :33:49.our manifesto and we are now delivering on that.
:33:49. > :33:53.Thank you for joining us this afternoon. So there you heard it,
:33:53. > :33:56.we have been talking about the Budget, and the important
:33:56. > :34:00.announcement about the Scotland Bill. Opportunity but
:34:00. > :34:03.responsibility are the watchwords. David Porter, we will join you
:34:03. > :34:08.again later. You're watching Politics Scotland.
:34:08. > :34:12.Still to come: the Chancellor announces a huge boost for
:34:12. > :34:17.investment in the North Sea. We will be assessing that claim.
:34:17. > :34:23.The top rate of income tax has been cut from 50p at a 45p from next
:34:23. > :34:27.year, lifting the personal tax allowance to �9,205. I am joined in
:34:27. > :34:31.the studio by Susannah since then from Price Waterhouse Coopers.
:34:31. > :34:35.Thank you for joining me. Very interesting that the threshold has
:34:35. > :34:40.been raised, but first, let's look at the top rate which has been cut.
:34:40. > :34:44.Can you tell me more about that? is good news that it has been cut.
:34:44. > :34:48.It is re-establishing the connection between business taxes,
:34:48. > :34:52.which are now very low and making the UK a good place to do business,
:34:52. > :34:55.and the collection into people behind the businesses - the talent,
:34:55. > :35:00.the entrepreneurs, having them in the UK is better for business in
:35:00. > :35:04.Scotland and for the UK generally. That 50 pence rate was meant to be
:35:04. > :35:08.a temporary measure, so I suppose the Chancellor may be always wanted
:35:08. > :35:12.to get rid of it. I think that is right, and it is almost
:35:12. > :35:15.establishing a direction of travel, which makes the UK a more
:35:15. > :35:19.attractive pos. Having the uncertainty of not knowing how long
:35:19. > :35:23.that tax rate would last was bad, and remains to some extent bad for
:35:23. > :35:33.business. Chester Cup the racing of this threshold - a key LibDem
:35:33. > :35:36.
:35:36. > :35:41.pledge. It is going from �8,000 up to �9,205. Yes, there are 24
:35:41. > :35:46.million people affected by that. It is very good use. It takes 2
:35:46. > :35:51.million taxpayers out of the tax system entirely. The question will
:35:51. > :35:54.be around how they plan to pay for that. It will cost the Government
:35:54. > :35:58.between �5 billion and �6 billion, so it is where they get the extra
:35:58. > :36:02.revenues to pay for that. And as our experts crunch the numbers, we
:36:02. > :36:06.are hearing that the higher rate has now been lowered, so that is
:36:06. > :36:10.taking another 300,000 people into the higher rate, which will help
:36:10. > :36:14.pay for it. That is one of the measures they will the cat to claw
:36:14. > :36:18.it back. Obviously, the Chancellor will hope that his growth forecast
:36:18. > :36:22.will, to some extent, pay for those tax breaks that were handed out
:36:22. > :36:29.today. Any other key things in the Budget which drew your attention
:36:29. > :36:32.when it came to tax? The Big Issue Foskett lent -- business in
:36:32. > :36:38.Scotland is dropping the corporation tax rate. It has been
:36:38. > :36:41.forecast to come to 22% by 2014, which is a big bonus for business
:36:41. > :36:46.and a break generally, added to which there is a package of
:36:46. > :36:50.corporate tax reforms which people have been talking about now for six
:36:51. > :36:56.months - spend on research and development, tax credits - all
:36:56. > :37:00.these art movements in the UK to make the UK one of the friendliest
:37:00. > :37:04.places to do business. It will be one of the lowest rates in the
:37:04. > :37:14.world. He is heading for that 20% in the future. Did he give a
:37:14. > :37:20.We had hoped that by 20% would become established sooner, but it
:37:20. > :37:24.is movement in the right direction. On a specific Scottish point, there
:37:24. > :37:29.were tax breaks for the video game industry, which is significant in
:37:29. > :37:35.Dundee, for example. The Devil will be in the detail on that, but from
:37:35. > :37:41.what we know of film credits, it is good news for Scotland. And a lot
:37:41. > :37:46.in the media as well, trying to be a creative placed in Britain - we
:37:46. > :37:49.hear that the ITV share price rose just as we came on air. It is
:37:50. > :37:54.interesting, just speaking about that, you spoke about how the
:37:54. > :37:59.Chancellor might hope to fill the gap, but it is clear, hearing from
:37:59. > :38:05.the threshold being reduced for dogs -- tops rate payers, that is a
:38:05. > :38:12.way to help us pay this. It is if the economy grows and people earn
:38:12. > :38:17.more money and pay more tax. Everything is predicated on there
:38:18. > :38:21.being renewed growth in the economy, renewed dynamism in the economy.
:38:21. > :38:26.Some of these numbers, rather than just picking on the claim that he
:38:26. > :38:32.makes at the dispatch box, when you start looking on video games, for
:38:32. > :38:36.example, he is giving away up to �50 million, and in the following
:38:36. > :38:40.year �35 million. It is significant, but not earth shattering in terms
:38:40. > :38:48.of... It is not just going to be in the games industry - it will be
:38:48. > :38:52.shared by that, animation and television production. It is
:38:52. > :38:59.relatively modest. Like all budgets, when you get down to the nitty-
:38:59. > :39:03.gritty of what the money involved is, you get little parcels here and
:39:03. > :39:11.there. Where there is a collective whole coming together, do have that
:39:11. > :39:14.real big stimulus behind them, I think... Let's bring in David from
:39:14. > :39:20.the Institute of Directors he is in our Edinburgh studio at the moment.
:39:20. > :39:24.Thank you for joining us. We are just hearing from us is another
:39:24. > :39:28.about the corporation tax. You must welcome that, the Chancellor
:39:28. > :39:33.pledging to reduce that, and have a much lower figure in the future as
:39:33. > :39:38.well. Yes, very well, and something we were hoping for. He has kept his
:39:38. > :39:42.direction of travel going in that way as well. As Suzannah said, by
:39:42. > :39:47.2014 it will be down to 22%, and we would be happy to see it continue
:39:47. > :39:51.to go in that direction. In general, in other Scottish terms, what else
:39:51. > :39:55.have you welcomed in this Budget? think the overall budget is sound.
:39:55. > :39:59.It is not changing the general direction but it is about cutting
:39:59. > :40:04.the debt, which is welcome for all of us in the UK. There are
:40:04. > :40:08.particular Scottish Highlands. We have talked about video games, and
:40:08. > :40:15.a better tax regime for developing the oil offshore is important as
:40:15. > :40:19.well and something we are genuinely concerned about. That is very
:40:20. > :40:25.helpful. Also, ultra-fast broadband - Edinburgh is great, of the it
:40:25. > :40:29.would be nice it for its -- if it was the whole of Scotland. On the
:40:29. > :40:33.whole it is quite a sound Budget. He was talking about trying to
:40:33. > :40:37.simplify tax for business, but you must think it is still a pretty
:40:37. > :40:43.complicated system. I did wonder whether his and the treasure's
:40:43. > :40:48.definition of simple would go with most pensioner's. Even businesses
:40:49. > :40:52.to struggle with it. The point he made about the relationship between
:40:52. > :40:55.PAYE and VAT and National Insurance that businesses have to collect is
:40:55. > :40:59.quite complicated, and a fair amount of work that people
:40:59. > :41:03.underestimate that businesses have to do, and really do on behalf of
:41:03. > :41:07.the Treasury in collecting tax. It is complicated and difficult and it
:41:07. > :41:11.takes a lot of time to do that. issue of national pay rates was
:41:11. > :41:15.well trailed at the weekend. The unions were very upset, but you
:41:15. > :41:18.must be pretty pleased to have more local pay arrangements because it
:41:18. > :41:22.means that you can complete a little more effectively with the
:41:22. > :41:29.public sector. There is no question that in certain areas of Scotland
:41:29. > :41:32.it is difficult in certain aspects of employment to compete. In
:41:32. > :41:35.administrative support and IT support and so on, it is tough to
:41:35. > :41:40.compete. In specialist areas like engineering it does not come into
:41:40. > :41:43.play, but there was no question that some of the industry's find it
:41:43. > :41:47.a major challenge in parts of Scotland where the public sector is
:41:47. > :41:52.the biggest employer. I think it has got to be treated with some
:41:52. > :41:55.caution, and I am not sure it will happen across the board. Have they
:41:55. > :41:58.will implement it is something we will be happy to get involved with
:41:58. > :42:02.discussion, and there are some dangers to it. We're not talking
:42:03. > :42:08.about lowering wages, but there has got to be a pain level in local
:42:08. > :42:13.authorities and other public bodies locally -- a pay level. It has to
:42:13. > :42:17.reflect the economy and not set artificial levels. Thank you all
:42:17. > :42:25.for joining me. Let's get some more political
:42:25. > :42:31.reaction to the Budget now from Brian Taylor. A bank you. We had a
:42:31. > :42:41.John Swinney earlier. Now, three of his counterparts join me from other
:42:41. > :42:44.
:42:44. > :42:49.What do you make of the Budget? Let us talk about personal taxation,
:42:49. > :42:55.will be have a cut-off 50p to 45p. And more people will be taken out
:42:55. > :42:58.of the tax bank by increasing personal allowance. Millions of
:42:58. > :43:03.people are going to wake up tomorrow worse off because of
:43:03. > :43:08.increases in place because of VAT, rises in fuel duty, and the
:43:08. > :43:16.millionaires will be better off. It fails the test of fairness, and it
:43:16. > :43:22.is not getting the economy going,... The Chancellor said the 50 pence
:43:22. > :43:26.increase was not doing what it promised to do. It was always
:43:26. > :43:34.anticipated the race would not be high in the first year. You have to
:43:34. > :43:43.give it a fair wind. If you give this higher-rate a chance, we could
:43:43. > :43:47.see what it would bring in. I cannot see it is -- why it is high
:43:47. > :43:53.priority to help the millionaires. Nick Clegg said almost those exact
:43:53. > :44:03.words, it is not the priority of the UK government to cut the 50
:44:03. > :44:07.
:44:07. > :44:13.pence rate. The priority was to cut those on middle incomes. 2.1
:44:13. > :44:23.million Scots will have a cut. That is progress. Surely you have got to
:44:23. > :44:24.
:44:24. > :44:28.welcome mat. I do not agree with that. We're freezing allowances for
:44:28. > :44:31.pensioners. Clearly those out of work do not gain anything, and it
:44:31. > :44:36.does nothing for the economy and jobs, which is my biggest concern.
:44:36. > :44:40.If you think of the measures he could have taken, he could have got
:44:40. > :44:44.money into the economy with VAT, but this way we are getting a lot
:44:44. > :44:48.of help for those at the top end, some help for those in the middle,
:44:48. > :44:52.and tax credits being taken off people with children. I think he is
:44:52. > :44:56.being a little bit negative about this. It has been the largest
:44:56. > :45:02.increase in the threshold for over 30 years, so from April next year,
:45:02. > :45:08.anyone earning under �9,100 will not pay any income tax at all. That
:45:08. > :45:18.is an enormous amount. Driven by your Liberal Democrat colleagues,
:45:18. > :45:23.surely. We are a coalition government. This is the biggest
:45:23. > :45:27.increase in over 30 years. The 50 pence tax rate was always meant to
:45:27. > :45:31.be temporary when it was set up, that is what Labour said. It was
:45:31. > :45:37.not collecting an enormous amount of money, and it was driving away
:45:37. > :45:44.business and harming the economy. As I understand it it was HMRC who
:45:44. > :45:51.did the paper that was approved and rubber-stamped, so I think they
:45:51. > :45:56.have taken that into account. about the fuel duty on cars, excise
:45:56. > :46:02.duty is going up by inflation. He has done nothing to cut fuel duty,
:46:02. > :46:07.so the price at the pumps still going to be high. If you cast your
:46:07. > :46:15.mind back a couple of months, a lot of fun was in the Autumn Statement
:46:15. > :46:20.to counteract rise in fuel prices. There is no rise happening in
:46:20. > :46:25.August, and ultimately we will be paying a lot less at the pumps and
:46:25. > :46:31.we would have been. Let us turn to the impact on the wider economy.
:46:31. > :46:34.Where are the growth drivers in the Budget? In the big cut in
:46:34. > :46:40.corporation tax, much more than expected, will be a big boost to
:46:40. > :46:46.Scotland. Especially in the video game -- video games industry.
:46:46. > :46:50.that was taken away last year. It is kind of an apology to Dundee.
:46:50. > :46:59.The oil tax, reversing some of the stuff they have done before. But it
:46:59. > :47:09.is good for business. There are some special allowances for
:47:09. > :47:10.
:47:10. > :47:13.businesses in Dundee under von. and Irvine.
:47:13. > :47:20.The few nuggets the industry are just reversing what they did last
:47:20. > :47:24.year. And corporation tax was planned for a couple of years ago,
:47:24. > :47:28.so it is implementing changes that had been predicted. I do not think
:47:29. > :47:38.we should take it any law because the evidence of increased growth is
:47:39. > :47:42.
:47:42. > :47:47.not there. We're seeing that a series of decisions...
:47:47. > :47:52.Chancellor said he had no alternative but to reduce the
:47:52. > :48:00.deficit. Why has it that President Obama has got the economy going on
:48:00. > :48:04.a basis of fiscal stimulus, putting money into the economy.
:48:04. > :48:09.unemployment in America is higher than in the UK. The corporation tax
:48:09. > :48:14.cut is double what it was meant to be coming up next month, by 2014 it
:48:14. > :48:20.will be 22%. Far lower than the United States, and almost all other
:48:20. > :48:23.competitors. Something else that has to be touched upon as the
:48:23. > :48:27.enterprise areas where there are capital allowances are for
:48:27. > :48:30.machinery. I did a quick calculation, and it looks around
:48:30. > :48:38.�60 million over the next couple of years, including Yorkshire and
:48:38. > :48:41.London. It is a substantial sum. I might be wrong, but this should
:48:42. > :48:48.help with in the region of around 4,000 jobs in the region across
:48:48. > :48:52.those areas. Thank you very much indeed. Gavin Brown did those
:48:52. > :48:59.calculations on the back of a fag packet, so that will cost 37 pence
:48:59. > :49:02.more. You're watching a Politics Scotland
:49:02. > :49:06.Budget Special. If you have just joined us, here is what the
:49:06. > :49:12.Chancellor laid out a couple of hours ago, and what Ed Miliband had
:49:12. > :49:15.to say. As a result of the budget, people
:49:15. > :49:20.working full-time on the minimum wage will have seen their income
:49:21. > :49:30.tax bill cut in half, and this coalition government will have
:49:31. > :49:32.
:49:32. > :49:41.taken 2 million people, the lowest paid people, out of tax altogether.
:49:41. > :49:47.Mr Deputy Speaker, in the middle of difficult economic times, we have
:49:47. > :49:51.not settled for a do-nothing Budget. We have taken difficult choices
:49:51. > :49:57.head-on, a competitive top rate of tax, more revenue from those best
:49:57. > :50:05.able to pay. Attacks cut for working people, support for
:50:05. > :50:09.families. Low-income earners, taking out of tax altogether. One
:50:09. > :50:18.of the lowest rates of income tax and the world. Last year, the
:50:19. > :50:25.Chancellor said, now would be the wrong time to remove the 50 pence
:50:26. > :50:30.rate. Did he say he did not say that? He did say that. He said we
:50:30. > :50:35.are asking others in the society on a lower income to make sacrifices.
:50:35. > :50:40.That is exactly what he has done. Tax credits cut, child benefit
:50:41. > :50:47.taken away, fuel duty rising. What has he chosen to make his priority?
:50:47. > :50:51.For Britain's millionaires, a massive income tax cut every year.
:50:51. > :50:55.The fairness test for this budget was whether the Chancellor used
:50:55. > :51:00.every penny he could to help middle-income families that are
:51:00. > :51:05.squeezed. He has failed that test. Anyone who listened to the
:51:05. > :51:09.Chancellor will be asking the same question, what planet are he and
:51:09. > :51:16.the Prime Minister living on? One million young people out of work,
:51:16. > :51:20.50 businesses going bust every day, a cost of living crisis for
:51:20. > :51:26.families. They promised change, but things have got worse, not better.
:51:26. > :51:31.We have more political reaction at Westminster.
:51:31. > :51:36.Thank you. We heard some reaction from the Commons. Let us get some
:51:36. > :51:45.reaction from the MPs, particularly the opposition parties. Joining me
:51:45. > :51:55.is Willie been from Labour-run done this Robertson from the SNP. --
:51:55. > :51:56.
:51:56. > :52:00.from Labour, and Angus Robertson. think everyone would support things
:52:00. > :52:08.that discourage tax avoidance. Andy help and support to the oil and
:52:08. > :52:17.games industry in Scotland. But the one thing that must concern
:52:17. > :52:21.everyone is that we are seeing squeezes for pensioners, and on
:52:21. > :52:24.growth, the London Government has not been prepared to work with the
:52:24. > :52:33.Scottish government on shovel ready products. This is disappointing,
:52:33. > :52:37.and it will be damaging for many people. The fact that the lowest
:52:37. > :52:42.earners are being taken out of the tax net for some -- to some extent,
:52:42. > :52:49.surely that is something to welcome. But 70% of the tax credit cuts
:52:49. > :52:53.affect people in the lower half of the income scale. We will find out
:52:53. > :52:59.that this has been a highly regressive budget to join those of
:52:59. > :53:04.2010 and 2011. We needed measures to boost growth. He has downgraded
:53:04. > :53:14.growth from last year, we have unemployment going up, borrowing
:53:14. > :53:15.
:53:15. > :53:20.billions more than expected. Under the Tories and Liberal Democrats,
:53:20. > :53:26.the cost of fuel is going to go up. And the extra tax that will be
:53:26. > :53:31.charged the pensioners, or the benefit they receive, will be
:53:31. > :53:41.reduced. We remember the 10 pence tax fiasco. Do you think that
:53:41. > :53:50.
:53:50. > :53:54.measure has a certain Eddie -- certaon echo? Yes, we have many
:53:54. > :53:58.people who are millionaires having a tax cut, and people must wonder
:53:58. > :54:01.what planet the Chancellor is on. There are certain sectors of the
:54:01. > :54:08.Scottish economy that are going to benefit, certain geographical
:54:08. > :54:14.sectors. It does appear as though some of the lobby that has gone on
:54:14. > :54:17.and part of Scotland has at least paid off. It is always the case
:54:17. > :54:22.that budgets are a mixed bag, there are always something she will
:54:22. > :54:26.welcome and a budget. I have yet to meet someone who thinks this is
:54:26. > :54:31.tremendous news. Most people in Scotland will be saying, hold on,
:54:31. > :54:37.we did not vote for the Tories, now we have a Tory Budget that takes us
:54:37. > :54:47.back to the 1980s, and we have to ask ourselves why do we allow
:54:47. > :54:47.
:54:47. > :54:50.decisions that are harmful to us in Scotland? We need to decide these
:54:50. > :54:58.decisions and Scotland, and we would not hit the weakest in
:54:58. > :55:01.society, and give the best tax rates to the richest. We need power
:55:01. > :55:08.in Scotland to make better decisions and not leave it to
:55:08. > :55:11.Tories who we did not elect. question to you both, is this going
:55:11. > :55:17.to be a Budget which you will criticise at the moment, but a few
:55:17. > :55:22.weeks you will perhaps be saying, I can see the logic in this?
:55:22. > :55:27.because it fails the test of growth and of jobs. We have one and four
:55:27. > :55:33.people in Scotland out of work. We need more help from the Scottish
:55:33. > :55:43.government, but the Chancellor had an opportunity to changed course
:55:43. > :55:44.
:55:44. > :55:49.away from the cuts. People used to say that Gordon Brown's budgets
:55:49. > :55:53.used to fall apart, after people had looked at the small print. But
:55:53. > :55:57.this is falling apart after a number of hours. People deserve
:55:57. > :56:03.more than they're getting, and we should never allow ourselves to
:56:03. > :56:10.have these bad decisions taken by people we did not elect.
:56:10. > :56:13.Thank you very much for joining me. Back to you.
:56:13. > :56:23.Let us pick up on one of Scotland's critical industries, the oil and
:56:23. > :56:25.
:56:25. > :56:35.gas sector. Joining me from Aberdeen is a loyal Economist, Alec
:56:35. > :56:41.
:56:41. > :56:45.What is your assessment of the Budget for the oil and gas sector?
:56:45. > :56:52.I would describe the new allowances for nuclear development as being
:56:52. > :56:57.very targeted, in other words, for those that qualify, the benefits
:56:57. > :57:05.will be substantial, but there will be others that do not qualify. The
:57:05. > :57:14.billion allowance for the west of Shetland fields, but when you look
:57:14. > :57:21.at the print, there are a lot of qualifications before you get it.
:57:21. > :57:28.Recoverable reserves have got to be �5 million, and no more than 40.
:57:28. > :57:32.For qualifying field, that is a bigger loans, and the 3 billion
:57:32. > :57:36.would be spent over five years, but that is a bigger loans nevertheless.
:57:36. > :57:46.Extending the small fields allowance, broadly speaking
:57:46. > :57:48.
:57:48. > :57:58.doubling it, will bring in to the allowance necked quite a few more
:57:58. > :57:58.
:57:58. > :58:03.fields, so that one should help to promote some development. And the
:58:03. > :58:09.third noteworthy element is the announcement and that in the future,
:58:09. > :58:15.the field allowance would also be available to incremental projects
:58:15. > :58:24.in fields which have already been sanctioned. That opens a new area
:58:24. > :58:28.Just picking up on the decommissioning tax relief, which
:58:29. > :58:35.had been expected in this Budget, hadn't it? Yes, on decommissioning,
:58:35. > :58:40.the promise that there will be contractual certainty over
:58:40. > :58:43.decommissioning relief is certainly to be welcomed, and that should
:58:43. > :58:48.encourage transactions and incremental investments in mature
:58:48. > :58:53.fields. We will need to see more of the details, but investor
:58:53. > :59:00.confidence should be helped by the announcement in itself, that there
:59:00. > :59:03.will be some contractual promise about relief. And fuel duty was not
:59:03. > :59:07.changed in this Budget - the Chancellor had taken steps
:59:07. > :59:11.previously, but how do you see that the price of oil in the future will
:59:11. > :59:16.go - do you think motorists will still be hard hit at the Poms?
:59:16. > :59:26.price has gone up significantly in recent weeks because of problems on
:59:26. > :59:29.
:59:29. > :59:33.the supply side. The South Sudan is no longer producing oil and there
:59:34. > :59:39.are problems in Nigeria, and Libya is not yet back to full production.
:59:39. > :59:43.That pushes the price up. If these uncertainties were removed, the
:59:43. > :59:47.price would come down a bit. But it is likely that these supply
:59:47. > :59:52.constraints will stay with us. Thank you very much for joining us.
:59:52. > :59:58.We have run out of time. That was the oil and gas sector.
:59:58. > :00:03.Now let's find out if this is a Budget for families. I am joined in
:00:03. > :00:08.the studio by a representative from the Child poverty Action Group. Is
:00:08. > :00:12.this a Budget for families? We have seen that new threshold raised for
:00:13. > :00:17.the withdrawal of child benefit - would that ensured that children
:00:18. > :00:22.are well served in this Budget? That is one piece of relatively
:00:22. > :00:27.good news. It still seems an extraordinarily complicated way to
:00:27. > :00:34.claw back some money from better- off households. Far better to
:00:34. > :00:40.maintain child benefit as a universal benefit. Overall, this
:00:40. > :00:43.does not look like a Budget for families at all. The coalition
:00:44. > :00:47.policies over the last two years have absolutely hammered families,
:00:47. > :00:51.particularly the poorest families who have been suffering the most as
:00:51. > :00:55.a result of tax and benefit changes. There isn't anything we can see in
:00:55. > :00:58.this Budget that changes that. your submission to the Chancellor
:00:58. > :01:01.before the Budget, you pointed out that some families are actually
:01:01. > :01:06.better off out of work, which is not what the Chancellor want to
:01:06. > :01:09.hear. What we are seeing is just next month we will see �2 billion
:01:10. > :01:15.worth of cuts to support for working families, with working tax
:01:15. > :01:19.credits being removed from those working between 16 and 24 hours.
:01:19. > :01:25.Nothing to reverse that. If we are serious about a Budget that rewards
:01:25. > :01:29.were, we need to see a rethink of those cuts to benefits that support
:01:29. > :01:36.families in work - housing benefit, working tax credit, childcare
:01:36. > :01:40.support. We hoped to see some additional investment to ensure
:01:40. > :01:45.that work is rewarded and makes work pay. That is not happening,
:01:45. > :01:49.and actually we are seeing over wall but the Government's own
:01:49. > :01:53.analysis within the budget shows that it is the bottom 50% to are
:01:53. > :01:57.being hit the hardest, and the bottom 20% to are being hit hardest
:01:57. > :02:01.of all. The income tax threshold has been raised, which you would
:02:01. > :02:05.think is good news for people like us, but you think it is bad news
:02:05. > :02:08.for poorer families? It is not particularly good news, and forgery.
:02:08. > :02:12.The poorest families are not paying income tax anyway because they are
:02:12. > :02:20.not earning enough to do so, and those who are earning enough to pay
:02:20. > :02:23.income tax will lose 85% of the game of raising this threshold
:02:23. > :02:31.through lost council tax benefit and loss housing benefit, because
:02:31. > :02:35.that needs to be clawed back. We hoped that the poorest family would
:02:35. > :02:39.gain at least as much as the middle income families by raising VAT
:02:39. > :02:43.threshold, but at the moment they won't. So you are thinking that the
:02:43. > :02:49.number of children in poverty may rise by 2015? Absolutely, across
:02:49. > :02:57.the UK we are looking at a rise of 100,000 children a year. In
:02:57. > :03:01.Scotland alone, studies have forecast a rise of 100,000 more
:03:01. > :03:08.children living in poverty by 2020. There is nothing in this Budget
:03:08. > :03:13.that reverses this trend. This clearly is not a Budget for
:03:13. > :03:18.Scotland's poorest families. Thank you very much for joining us.
:03:18. > :03:22.Now, David Porter has some reaction down at Westminster. Thank you,
:03:22. > :03:27.Andrew. Part of every budget deals with things like fuel duty and
:03:27. > :03:31.excise duty. Today, the Chancellor said as far as fuel duty was
:03:31. > :03:35.concerned, there would be no change, which means they will be a three
:03:35. > :03:40.pence increase in August. As far as alcohol duty is concerned, he said
:03:40. > :03:45.there would be no change. So, what does that mean in practice? Joining
:03:45. > :03:49.me to answer that is a representative from the Scots
:03:49. > :03:54.Whisky Association. So, no increase on the duties in alcohol, but it
:03:54. > :03:59.will go up anyway, won't it? When he said no change, he meant no
:03:59. > :04:06.change to his established policies, so there will be 45p on a bottle
:04:06. > :04:09.from next week. So, we see an ever rising price and ever-rising tax.
:04:09. > :04:14.His whisky one of those projects where if you put the price up, it
:04:14. > :04:18.does directly affect the market and it will reduce demand? In the last
:04:18. > :04:22.five budgets we have seen a 40% rise in excise duty on Scotch
:04:22. > :04:29.whisky, so we are seeing the market slipping away quite dramatically at
:04:29. > :04:36.home. Today, the Chancellor said he wanted to increase exports, but by
:04:36. > :04:39.setting a bad example at home, be does not help us over seas.
:04:39. > :04:43.other countries will say if they do that to their own market, why
:04:43. > :04:50.should we help? We want examples from the finance ministry in Japan,
:04:50. > :04:55.the Commerce Secretary in India, you have given us the lead. The
:04:55. > :04:57.Chancellor looks -- need to look abroad as well as at home.
:04:57. > :05:00.Chancellor of cement and that's in the government will be publishing
:05:00. > :05:10.its alcohol strategy. That is thought that the Government will
:05:10. > :05:13.now go in favour -- favour of a unit price in Algol. The Government
:05:13. > :05:18.in a pre- announcement said the expense -- expect this to be
:05:18. > :05:22.challenged on a legal bases in Europe. Past of the announcement is
:05:22. > :05:26.that they could bring any tax-based floor price if they wished, and
:05:26. > :05:30.that might be where they are heading with escalator. We will be
:05:30. > :05:34.opposed to it. Is there something you would anticipate going to law
:05:34. > :05:37.on to protect your industry? Scottish governments that they
:05:37. > :05:42.expect to go to law. The UK government have said minimum
:05:42. > :05:48.pricing is illegal, so we expect the same outcome. Thank you for
:05:48. > :05:52.joining us. They you have it. No increase in duties on alcohol, but
:05:52. > :05:57.I think the story of alcohol in the next few weeks and could be a
:05:57. > :06:02.fairly rocky one. David, thank you for your contributions today. Now,
:06:02. > :06:05.the programme is drawing to a close, so let's have some final thoughts
:06:05. > :06:10.from Alf Young. It was interesting to hear about the corporation tax
:06:10. > :06:13.rate going down. The Chancellor has got that long slide down for it. Of
:06:13. > :06:18.course, that was one of the important arguments for Scottish
:06:18. > :06:24.independence, wasn't it, to have a low corporation tax? It is one of
:06:24. > :06:27.the few things we know about the SNP programme for independence. One
:06:27. > :06:34.of the things we do know is that they want more corporation tax to
:06:34. > :06:41.get more investment into Scotland. If the UK rate gets to 22%, or even
:06:41. > :06:43.the aspiration of 20%, you are into territory then where it gets much
:06:43. > :06:48.harder for any other government, certainly one that would be trying
:06:48. > :06:51.to stay in the EU, to argue that they should go even lower. It will
:06:51. > :06:56.be an interesting dynamic there in terms of whether there could be
:06:56. > :06:59.that kind of tax complication. There was also a tax competition in
:06:59. > :07:04.Northern Ireland and Wales who were pitching in as well, wanting their
:07:04. > :07:08.share of it. But I think the big story of all of this is how is it
:07:08. > :07:14.going... Dinner, we have heard how people will find out whether they
:07:14. > :07:18.are better or worse off, it is a complicated picture, the answer to
:07:18. > :07:23.which will only come out in the wash as people live through these
:07:23. > :07:27.changes and experiences. The big risk for the Chancellor - he said
:07:27. > :07:32.in his speech he was not prepared to give more money to the rich by
:07:32. > :07:36.cutting the top rate of tax as long as there were people in the public
:07:36. > :07:41.sector who were having to accept a pay freeze, and he says he sticks
:07:42. > :07:46.to that pledge. Well, it will be interesting to see how that big
:07:46. > :07:52.dynamic place. You know, Labour has already pitched in with the view
:07:52. > :07:56.that they are going to fight hard on the unfairness dimension of it.
:07:56. > :08:01.That is going to be the big story of this Budget, I think - who wins
:08:01. > :08:07.the public opinion battle over cutting that rate at the top, and
:08:07. > :08:11.raising allowances for everyone else. But for some people, like the
:08:12. > :08:15.retired, drawing it back in other ways, and how that all players out
:08:15. > :08:18.and whether people think this is fair, and we are still all in this
:08:18. > :08:22.together, all we are not and some people are getting a pretty good
:08:22. > :08:32.deal. Let's look at some of the politics of this. This Budget has
:08:32. > :08:35.been worked out by the court, so it was probably a budget of compromise
:08:35. > :08:44.between the two parties, do you think? I think the fact that you
:08:44. > :08:48.had these two elements to it - the relaxation of taxes at the top,
:08:48. > :08:52.although countervailing forces on how people were buying houses and
:08:52. > :08:55.avoiding stamp duty, and at the bottom, everyone getting more money
:08:55. > :08:59.in their pockets because they don't start paying tax so easily. They
:08:59. > :09:03.have done the classic compromise deal. But as this coalition
:09:03. > :09:06.Government goes on towards the election in 2015, these two sides
:09:06. > :09:12.of the coalition are going to have to differentiate themselves in the
:09:12. > :09:17.eyes of the electorate. It will be interesting to see how, despite
:09:17. > :09:20.this budget, how these two sides of the coalition hold together going
:09:20. > :09:25.forward to 2015, or whether there is enough discontent in the
:09:25. > :09:31.background, not just over the budget but over NHS reforms in
:09:31. > :09:35.England, or whether at some point, they really have to begin to move
:09:35. > :09:38.apart. I used to think this thing would fall apart in the middle of
:09:38. > :09:42.the parliament and it has not done so. But we will see how well it
:09:42. > :09:45.coheres around what has been a compromise in this Budget. Thank
:09:45. > :09:50.you for your company here this afternoon. That is all we have got
:09:50. > :09:55.time for this afternoon. Our extended Budget programme. We are