21/03/2012 Politics Scotland

viewers in Scotland because it is now time to join Andrew Kerr in

Politics Scotland. Welcome to our live coverage, a special extended

So, what does today's Budget mean for Scotland? We will bring you a

range of views and analysis from across the country. This Budget

rewards work. Britain is going to earn its way in the world. There is

no other road to recovery. I am Douglas Fraser. I have been looking

at how the numbers will affect you and Scotland. And I am here at

Holyrood, Digest and the impact of the Budget and those new devolved

tax powers that are now coming this way. And, will the Budget helped

thought the economy? I am at Scotland's largest indoor ski

centre to get some reaction from the business world. And I am at

Westminster where MPs are now digest think the fine print of the

Budget. You will find out what it means for Scotland and what it will

mean for Scottish politics in the days and weeks ahead.

So, George Osborne is cutting the rate of tax to 45p. Here are some

of the highlights. We will offer enhanced capital

allowances for businesses starting up in the new Scottish Enterprise

areas, in Dundee... Are also want to insure we extract of the

greatest possible amount of oil and gas from our reserves in the North

Sea. We are today introducing a major package of tax changes to

achieve this. The film tax credit, protected in our spending review,

generates over �1 billion of film investment in the UK in the last

year alone. Today, we have an intention to introduce similar

schemes for animation and high-end DVD production. Today we are

funding ultra-fast broadband in 10 of the UK's largest cities -

Belfast, Birmingham, Bradford, Bristol, Edinburgh, Cardiff, Leeds,

Manchester and London. London weighting already exists across the

public sector. The opposition have proposed the interesting idea of

regional benefit rates. So, we should see what we can do to make

our public services more responsive and help our private sector to grow

and create jobs in all parts of the country. From next month, Britain

will have a corporation tax rate of just 24%. We will continue with the

two further cuts planned next year and the year after, so that by 2014,

Britain will have a 22% rate of corporation tax. This is the

biggest sustained reduction in business tax rates for a generation.

The direct cost is only �100 million a year. Indeed, aged MRC

calculate the loss of other tax revenues may even cancel that out

of -- H MRC. In other words, it raises at most a fraction of what

we were told, and may raise nothing at all. So, from April next year,

the top rate of tax will be 45p. I can today confirm that, instead of

withdrawing child benefit all at once when people earn more than the

higher rate threshold, the benefit will only be withdrawn when someone

in the household has an income of more than �50,000, and the

withdrawal will be gradual - 1% of child benefit for every extra �100

earned over �50,000, so there is no cliff edge, and only those with an

income of more than �60,000 lose all of their benefit. I am

announcing the largest ever increase in the personal allowance.

That is the man that people can earn tax-free. From next table,

that amount will increase �1,100. Every person on low or middle

incomes will benefit. People will be able to earn up to �9,205 before

they have to pay any tax. I enjoyed here in the studio by our

business and economy editor Douglas Fraser and by the commentator Alf

Young. Thank you for joining me. Douglas, let's look at these

figures first of all. We have got growth, which was quite interesting

from the Chancellor. Let's look at what he was saying. The OBR has

revised the UK growth forecast for 2012 2.8%. That has gone up 0.1 of

a percentage. It is heading in the right direction from a pretty

dismal figure that we got at the time of the Autumn Statement. Going

back a year, that figure was up 2.5% expected growth for 2012, so

it is still a very subdued growth. A less to cut borrowing. He is a

bit more confident - borrowing to be �1 billion less than the

forecast back in the autumn. That may reflect the tax receipts that

HMRC are picking up across a number of stories and they are cracking

down, -- quite harshly. That is a big deficit. We have got used to

the idea of deficits over �100 billion. It is still an enormous

figure. Let's see what hit us in our pockets. Income tax - maybe

that does not hit us. It may hit you, not me! If you were earning

over �50,000, you will pay 45p on tax instead of 50p. The argument

made by the Chancellor is that it is making very little money. He is

bringing it down from the next financial year. I think his

intention is to bring it down again to 40p, which would return it to

the top rate of tax. But what does affect many people is the new

threshold of child benefit which has been raised. Yes, this is the

good news that they have ruled out. 9002 Hutton �5 of your earnings go

untapped to start with -- �9,205. This saves everyone else above that

he should save about �220. That will affect everybody right up to

the 1 �50,000 level. And child benefit phase doubt on incomes of

more than �50,000. That was a key political problem for George

Osborne when he was going to withdraw child benefit from the

higher rate tax payers. Yes, there was an anomaly in there for double

or single income households, and they are trying to iron out that

anomaly. They want to simplify the tax system. Just before we came on

air in Scotland we were getting an explanation of what he is doing,

and it was anything but simple. But it tapers away after a high earner

of �50,000 in a household. corporation tax is cut to 24%. And

we have also got these enterprise zones. And, that energy

announcement about the North Sea to boost the oil and gas extraction

there. Yes, we new corporation tax was coming down and it is coming

down slightly faster than was planned in order to make the

message that Britain is an attractive place to come and invest.

These enterprise zones - that is aimed at the renewable industry is

and perhaps pharmaceuticals. There may be a signal that of some good

news to come. North Sea all and gas got a shock a year ago with a �2

billion tax rates and he is now trying to make it up for -- to them.

Also, all the decommissioning of the get in the North Sea. He is

wanting to say that there will be some certainty to their tax

planning. He is one that a lot of people worry about - fuel,

cigarettes and alcohol. On that we have no change to existing plans,

but duty on tobacco but that will rise by 5%. Yes, 35p on a packet of

cigarettes. Fuel was the one that people were hoping for. They wanted

a bit of relief there and they are not getting it. It is still on

schedule for three pence extra in August per litre, so that is not

going to go down very well. Interestingly, there was a huge

amount of pressure last year on fuel duty to keep it down, and he

responded to that. There hasn't been anything like the same

pressure because there has been sidetracked with talking about

income tax. Nick Clegg looked upset when the cigarette duty was going

up. Alf Young, this was a well trailed Budget, lots of leaks going

on, but you thought there was one quite significant a surprise?

the big things that you talked about were almost all settled and

announced, effectively, on the sofa on Sunday morning or whatever,

before it actually happened. The one exception was the fuel duty.

But there is another one, and that is in raising the capital allowance

that people get before they pay tax, the 20 million people you talked

about, there is an existing arrangement in a more complicated

system at the moment, that anyone over 65 get a bigger allowance, and

that allowance gets clawed back pound by pound and told they are

earning on top of their pension up to about �23,000 at the moment. But

he is scrapping all of that. He is freezing that additional pension or

allowance, and then he is phasing it out altogether. Anyone who gets

to 65 next year and onwards, would get it at all. If you look at the

detail of the Budget, this is one of the biggest hits in the entire

package. It is going to take, by the end of this forecast period of

2016 - 2017, �1.25 billion out of that group, so pensioners who will

be benefiting from the increase in the general personal allowance are

going to lose in terms of the additional personal allowance. That

compares to �3.5 billion that the 20 million of us are going to get

from the increased personal allowance. When that sinks in, I

suspect that one of the groups who votes often is going to be saying,

what are you doing to us? It does but it does not affect those who

are already retired. It will not be there at all for

those who are about to retire. So, when he says he is rewarding work,

he also looks to be punishing those who are retired. So, rewarding work,

punishing retirement. Thank you for that analysis.

There's go straight to holy writ now where a political editor Brian

Taylor is standing by a -- holy writ. In the headline, you mention

that other significant piece of news about the Scotland Bill. The

governments have come to some arrangement on that. Yes, a deal

was announced overnight between the UK and Scottish governments. Back

in the mists of time we had the Calman Commission which produced a

plan for 10 pence worth of income tax. Not at Westminster - there was

the to and fro in arguing between whether this would benefit Scotland

or cut its money. Overnight, there has been a deal on that between the

two governments. The Bill will become an act and this 10 pence tax

plan and some other changes, the idea of holy writ taking charge of

drink-driving and so one, all that Is there any reaction from the

Scottish government? They are saying that the situation

benefiting those on the standard rate of income tax is perhaps

mitigated by the cut in the top rate, they take the same few of

that as the opposition have done at Westminster. The Barnet

consequences are worth �20 million to Scotland, and in terms of those

changes to tax, increasing personal allowance, benefits to 0.1 million

taxpayers in Scotland. To my astonishment, we have not had the

figures in the retirement sector, as was referred to.

This was a Budget that was to unashamedly back business. Jamie

MacIver is at Snozone at Braehead Shopping Centre. This is the UK's

largest indoor ski centre. Even on a weekday afternoon it is pretty

busy. You mention entrepreneurs. I have Jamie Smith, the new owner of

the place. He bought it before Christmas. That suggests you have

some confidence. Yes, you have to be opportunistic, and looking

forward. For yourself, it was has George Osborne done for that?

Very little, unfortunately. There were three things he needed to

address to get the economy moving, and I do not think he has done that.

What were those three things? The cut in fuel duty was something you

wanted to see, so disappointment it has not happened. Yes, we are 15%

more expensive than the European neighbours for fuel. Energy cost is

significant to this business, 1,500 tons of real fresh snow, and we pay

through the nose for energy. As an employer, what does the Budget mean

for you? Will the rise and the income tax threshold make much

difference? Not as an employer but it will make a difference for the

people the word you. -- That Worked here. This facility must attract

many people. Yes, we also have another one which attracts fewer.

But they're coming from the West Midlands and West Country, and the

fuel tax has had an impact on people stopping getting in their

cars and coming north. Let us have a chat with a couple of members of

staff. What was the best and worst bit of the Budget? The best was the

rising of the tax threshold to 9,000. There is more money in there.

I have to agree with Jamie. But from a selfish point of view about

petrol tax, we are still paying the same price. I am using one bit of

money I am saving to pay for the other. Taking with one hand and

giving with the other? Exactly. the, what does it mean to you?

Transport is important, and housing could have been addressed better.

There is going to be a cut in corporation tax. Is that a welcome

move? No, most people in business are happy to pay tax. You pay tax

when you are doing well. But we need to stimulate the economy and

he has not done that. Wood cutting the amount of National Insurance

employers have to play be more useful than some of other help that

has been available? In Ireland they cut National Insurance levels for

new starts, and it made a difference. The other thing they

did was cut VAT in France and Germany. They are only 5.5% there.

We are 20% you. That makes a huge difference in trying any new sports

or hobby. How many marks out of 10 would you give the Chancellor?

Two. 3. A lukewarm reception here. Let us Pickup and a couple of the

points with Douglas Fraser and Alf Young. -- pick up on a couple of

points. Jamie said he welcomed the tax

threshold, but where is the money coming from? If you look at the

package, the impact in the year that is about to start in April of

these measures, is it gives away the road, it is taking back 2

billion. At the end of the period he is taking back about 1 billion.

It is a bit of give-and-take. And over this five-year horizon, there

is some good news on debt, but it is not all balanced. One of the

interesting things he spoke about but gave no details about his he is

reopening the whole spending side of things. He said in his speech

that if things are left as they are, down the road a bit, welfare

payments will constitute about a third of everything the Government

spends. That will squeeze departmental budgets like the NHS.

So he is looking there. -- looking there for a radical spending review.

Lot of things that will be targeted, like child benefit, if he is going

to balance the books in the longer term, are going to be on the

welfare budget for. He spoke about a �10 billion... Longer term on the

welfare and pensions budget, he is talking about the automatic link

between the age at which you begin to get your pension and longevity.

That will be reviewed over time. So when people -- so people are young,

no one knows when they are going to get it. It keeps slipping away.

when you finally get there, they will not get the additional

allowance. There is a lot of pain in there which is only going to

move through when people start analysing the numbers. There is a

giveaway in the North Sea. There is some money on decommissioning.

There is some money to try to get oil companies to start exploring

more than developing more fuels west of Shetland. You look at the

numbers, and in the first year, there is money in securing new

fields off 45 million, but then he starts taking money back. It is

only when you start looking at the pluses and minuses that you see

that it is not as simple as he would have us believe that the

dispatch box. He is making out it is going to be hunky dory, but it

will only be hunky dory if he gets to the growth that Douglas spoke

about earlier. Unless we get back into the trend levels the whole

thing is up in the air. Douglas, do you think we will get the growth?

He has targeted his message on growth to certain industries, such

as pharmaceuticals and oil and gas. Investment in computer games has

helped Dundee. For the whole economy, the message coming back

from their industry, as well as small industries, they are somewhat

underwhelmed by this. Hearing from Jamie at Snozone, the Chancellor

said he would cut corporation tax, to be one of the most competitive

in the world, but the director at Snozone was not impressed. They are

sending signals, and there is a signal to the world to bring

business in. It is not going to get the quick stimulus that they need.

Thank you very much. Let us go back to Brian Taylor.

I said I would digest the Budget from the Hollywood perspective. I

have John Swinney with us. Let us go with the tax narrative from the

Budget. The cut of the rate from 50p to 45p. It will benefit too 0.1

million Scots. -- 2.1 million. good Budget was one that stands the

test of time. It is clear that this one has not delivered growth or

taken forward any of the agenda of investment in capital expenditure

that we thought was important. What the figures demonstrate is that the

20% lowest income households in the country are actually carrying more

of the financial burden than the people at the higher end of the

spectrum. On the fairness test, the budget does not pass muster.

must welcome the higher capital and investments in three areas. Yes,

enhanced capital allowances came from the Scottish government, so I

am delighted the UK Government accepted her case. That will allow

lost to secure Investment and a variety of sectors and the Scottish

economy, whether it is in life sciences or renewables,

contributing towards the economic agenda. The key test of the Budget

would be whether there was a positive response to our demand for

increased capital expenditure to bring forward some projects that

are ready to roll. The Prime Minister asked us for a list of

projects. We gave him at last, and the UK government has made no

progress on it. The growth numbers suggest we need to stimulate

greater levels of economic activity which is why this is so important.

I remember interviewing you last year, and you were complaining

about the tracks -- tax treatment of the North Sea. In his Budget,

tax benefits for the North Sea. -- in this Budget. It is good when

people recognise the folly of their mistakes. The Chancellor has

accepted this. What damage was done to the North Sea and the production

activity and to the confidence of the North Sea oil and gas sector by

the changes the Chancellor made last March, they had to be

rectified. I welcome the steps that have been taken today. They will

undoubtedly assist in the development of the North Sea oil

and gas sector which remains important for the economy, but they

are coming hard on the heels of damaging decisions that the

Chancellor made last March. Finally to the Scotland Bill, ideal has

been done to allow the tax proposals to go ahead. You demanded

more than the tax being dealt with here in Holyrood. You had six key

demands. The Secretary of State has conceded the importance of arriving

at an great position about all the financial changes that have to be

made as part of the Scotland Bill, and that is a welcome change.

it is not in statute. It is a welcome change from the original

position, and in addition to that the additional borrowing powers are

welcome. Crucially, it demonstrates the UK government is not serious

about enhancing the powers of the parliament. Here was the ready-made

opportunity for the UK Government to respond positively to strengthen

the Scotland Bill, and they have not taken the opportunity. Michael

Moore says further powers can come after the independence debate.

here was the opportunity. They have not taken the opportunity. Why are

you standing by this Bill? Why are you going ahead with this when you

said previously it could be damaging to Scotland? You said it

was potentially damaging to Scottish money. The UK government

has changed its position. It has dumped Calman representations --

recommendations. It dropped the proposition and has gone for a

block grant adjustment, which is more worthy of consideration. They

have also accepted there needs to be agreement between the Scottish

parliament and United Kingdom Government on the implementation of

the proposals. The Scottish government will give the

endorsement to the Scotland Bill being enacted, but this is a missed

opportunity. Many more powers could have been devolved. We will make

our case for independence and the referendum. The tax proposals do

not come in until 2016. Then we will be in a decision -- position

that can ensure prosperity, and we will not have to wait for a UK

Chancellor to come up with the More to come but now back to the

studio. Thank you for that. Let's cross now to Westminster and to our

correspondent there, David Porter. Ingesting hearing what the Finance

said she was saying about the Scotland Bill. That deal agreed

overnight, it seems. Yes, we heard from Westminster this morning and

from Holyrood as well, a written statement saying that they had

agreed that the Scotland Bill would go through. Hugely important

because of the powers it gives the parliament, but also, controversial

stuff as well. That, of course, on a day when we have got another

story here at Westminster - the Budget. I am joined now by someone

who is well versed in both those issues, the Secretary of State for

Scotland. We will deal with the Scotland Bill in a moment. As far

as the budget goes, to paraphrase Monty Python, what did the Budget

ever do for Scotland? On the front ever do for Scotland? On the front

page of the Liberal-Democrat manifesto we wanted to say -- help

people on low and middle incomes. We got back into the coalition

agreement and are working towards that. This year we want to go

further and faster, and I am delighted that today this but it

does exactly that. We are taking 160,000 Scots out of tax altogether,

and reducing the tax burden for 2 million Scots. I think that is

important news for everybody across the country. And for businesses who

are looking to build on the work we are doing to get the economy back

on its feet, we have got important announcements - cutting corporation

tax further than we had said, getting more finance for small

businesses, and four sectors like oil and gas and the computer games

industry, proper new initiatives that will help them to get

investment and jobs. Yet the coalition government is also

proposing to reduce the top rate of tax, and to help pay for that, it

would look as though you are going to be taxing pensioners more. The

headline tonight may be tax cut for the rich, pensioners will help pay

for it. No, we are looking to reform the pensions system. We have

been open about but for a long time. The key thing is, Labour introduced

this temporary tax rate and then did not deal with the tax dad --

dodgers and once the richest in the country who were avoiding it. What

we are doing is ensuring they will pay five times as much as that

particular tax rate we are bringing into the Treasury. It is a very

good deal and goes to the heart of the fairness agenda we are

committed to. In regional or national terms, in terms of extra

money for Scotland, it will cost pensioners a lot and this cannot be

seen as a giveaway budget for Scotland. Hang on, we have invested

considerably in Scotland over the mark -- last few years. It amounts

to billions of pounds of extra money for Scotland since the

Spending Review in autumn 2010. We are making sure we gives proper

support to important sectors like oil and gas that are helping to

create jobs in key Enterprise areas, and that we are ensuring that

Scottish business across the piece enjoy lower rates of tax and easier

access to finance. How much of a problem will it be that you are not

going to be reducing fuel duty more, and that the increase planned for

August of three pence will go ahead? Let's not forget that for

those in the most remote parts of Scotland, we have negotiated a

reduction in fuel duty, and more importantly, people are paying 10

pence less on each litre of fuel at the moment than Labour would have

made them play under their plans. We realise things are tough and

that is why we are focused on reducing the tax burden on people

with low or middle incomes. 2 million Scottish people will see

the benefit of this in their pay packet. Moving on to the Scotland

Bill, most people would regard the agreement they between yourselves

and the Scottish parliament as important. We have just hit been

hearing the Finance Secretary for Scotland they describe it as what

you have proposed as a missed opportunity. I am pleased that the

two governments have come to an agreement on what the Scotland Bill

should look like. This is the biggest package of devolution to

Scotland. More financial accountability to the Scottish

parliament. Significant economic powers at their disposal. I am

delighted that as part of this coalition, we have come up with the

Scotland Bill and we hope that will now become an act. Both governments

need to come on and make it work. The Scotland Bill is in the Lords

today. When can we expect to sit on the statute book here, and when

will people see real examples of the powers that you have

transferred? Already, through agreement, we are letting the

Scottish government get access to increased capital borrowing, which

helps us get on with the 4th replacement crossing. Soon, after

Royal Assent, we will see the introduction of new taxes in

Scotland. We will have to work at a new stamp duty arrangement across

the country. Any few years' time, half of people's income tax will be

raised and set in Scotland. That is a powerful tool for the Scottish

Parliament, and important for their accountability, too. As part of the

politics of this, you are now saying to the Scottish parliament

you have more responsibility for raising your revenue, go-ahead and

show you can do it. This package ensures that there is more

accountability, more responsibility, and more opportunity for people to

see what the Scottish parliament is doing and to give us more power at

home to decide our own fate. This was a major LibDem commitment in

our manifesto and we are now delivering on that.

Thank you for joining us this afternoon. So there you heard it,

we have been talking about the Budget, and the important

announcement about the Scotland Bill. Opportunity but

responsibility are the watchwords. David Porter, we will join you

again later. You're watching Politics Scotland.

Still to come: the Chancellor announces a huge boost for

investment in the North Sea. We will be assessing that claim.

The top rate of income tax has been cut from 50p at a 45p from next

year, lifting the personal tax allowance to �9,205. I am joined in

the studio by Susannah since then from Price Waterhouse Coopers.

Thank you for joining me. Very interesting that the threshold has

been raised, but first, let's look at the top rate which has been cut.

Can you tell me more about that? is good news that it has been cut.

It is re-establishing the connection between business taxes,

which are now very low and making the UK a good place to do business,

and the collection into people behind the businesses - the talent,

the entrepreneurs, having them in the UK is better for business in

Scotland and for the UK generally. That 50 pence rate was meant to be

a temporary measure, so I suppose the Chancellor may be always wanted

to get rid of it. I think that is right, and it is almost

establishing a direction of travel, which makes the UK a more

attractive pos. Having the uncertainty of not knowing how long

that tax rate would last was bad, and remains to some extent bad for

business. Chester Cup the racing of this threshold - a key LibDem

pledge. It is going from �8,000 up to �9,205. Yes, there are 24

million people affected by that. It is very good use. It takes 2

million taxpayers out of the tax system entirely. The question will

be around how they plan to pay for that. It will cost the Government

between �5 billion and �6 billion, so it is where they get the extra

revenues to pay for that. And as our experts crunch the numbers, we

are hearing that the higher rate has now been lowered, so that is

taking another 300,000 people into the higher rate, which will help

pay for it. That is one of the measures they will the cat to claw

it back. Obviously, the Chancellor will hope that his growth forecast

will, to some extent, pay for those tax breaks that were handed out

today. Any other key things in the Budget which drew your attention

when it came to tax? The Big Issue Foskett lent -- business in

Scotland is dropping the corporation tax rate. It has been

forecast to come to 22% by 2014, which is a big bonus for business

and a break generally, added to which there is a package of

corporate tax reforms which people have been talking about now for six

months - spend on research and development, tax credits - all

these art movements in the UK to make the UK one of the friendliest

places to do business. It will be one of the lowest rates in the

world. He is heading for that 20% in the future. Did he give a

We had hoped that by 20% would become established sooner, but it

is movement in the right direction. On a specific Scottish point, there

were tax breaks for the video game industry, which is significant in

Dundee, for example. The Devil will be in the detail on that, but from

what we know of film credits, it is good news for Scotland. And a lot

in the media as well, trying to be a creative placed in Britain - we

hear that the ITV share price rose just as we came on air. It is

interesting, just speaking about that, you spoke about how the

Chancellor might hope to fill the gap, but it is clear, hearing from

the threshold being reduced for dogs -- tops rate payers, that is a

way to help us pay this. It is if the economy grows and people earn

more money and pay more tax. Everything is predicated on there

being renewed growth in the economy, renewed dynamism in the economy.

Some of these numbers, rather than just picking on the claim that he

makes at the dispatch box, when you start looking on video games, for

example, he is giving away up to �50 million, and in the following

year �35 million. It is significant, but not earth shattering in terms

of... It is not just going to be in the games industry - it will be

shared by that, animation and television production. It is

relatively modest. Like all budgets, when you get down to the nitty-

gritty of what the money involved is, you get little parcels here and

there. Where there is a collective whole coming together, do have that

real big stimulus behind them, I think... Let's bring in David from

the Institute of Directors he is in our Edinburgh studio at the moment.

Thank you for joining us. We are just hearing from us is another

about the corporation tax. You must welcome that, the Chancellor

pledging to reduce that, and have a much lower figure in the future as

well. Yes, very well, and something we were hoping for. He has kept his

direction of travel going in that way as well. As Suzannah said, by

2014 it will be down to 22%, and we would be happy to see it continue

to go in that direction. In general, in other Scottish terms, what else

have you welcomed in this Budget? think the overall budget is sound.

It is not changing the general direction but it is about cutting

the debt, which is welcome for all of us in the UK. There are

particular Scottish Highlands. We have talked about video games, and

a better tax regime for developing the oil offshore is important as

well and something we are genuinely concerned about. That is very

helpful. Also, ultra-fast broadband - Edinburgh is great, of the it

would be nice it for its -- if it was the whole of Scotland. On the

whole it is quite a sound Budget. He was talking about trying to

simplify tax for business, but you must think it is still a pretty

complicated system. I did wonder whether his and the treasure's

definition of simple would go with most pensioner's. Even businesses

to struggle with it. The point he made about the relationship between

PAYE and VAT and National Insurance that businesses have to collect is

quite complicated, and a fair amount of work that people

underestimate that businesses have to do, and really do on behalf of

the Treasury in collecting tax. It is complicated and difficult and it

takes a lot of time to do that. issue of national pay rates was

well trailed at the weekend. The unions were very upset, but you

must be pretty pleased to have more local pay arrangements because it

means that you can complete a little more effectively with the

public sector. There is no question that in certain areas of Scotland

it is difficult in certain aspects of employment to compete. In

administrative support and IT support and so on, it is tough to

compete. In specialist areas like engineering it does not come into

play, but there was no question that some of the industry's find it

a major challenge in parts of Scotland where the public sector is

the biggest employer. I think it has got to be treated with some

caution, and I am not sure it will happen across the board. Have they

will implement it is something we will be happy to get involved with

discussion, and there are some dangers to it. We're not talking

about lowering wages, but there has got to be a pain level in local

authorities and other public bodies locally -- a pay level. It has to

reflect the economy and not set artificial levels. Thank you all

for joining me. Let's get some more political

reaction to the Budget now from Brian Taylor. A bank you. We had a

John Swinney earlier. Now, three of his counterparts join me from other

What do you make of the Budget? Let us talk about personal taxation,

will be have a cut-off 50p to 45p. And more people will be taken out

of the tax bank by increasing personal allowance. Millions of

people are going to wake up tomorrow worse off because of

increases in place because of VAT, rises in fuel duty, and the

millionaires will be better off. It fails the test of fairness, and it

is not getting the economy going,... The Chancellor said the 50 pence

increase was not doing what it promised to do. It was always

anticipated the race would not be high in the first year. You have to

give it a fair wind. If you give this higher-rate a chance, we could

see what it would bring in. I cannot see it is -- why it is high

priority to help the millionaires. Nick Clegg said almost those exact

words, it is not the priority of the UK government to cut the 50

pence rate. The priority was to cut those on middle incomes. 2.1

million Scots will have a cut. That is progress. Surely you have got to

welcome mat. I do not agree with that. We're freezing allowances for

pensioners. Clearly those out of work do not gain anything, and it

does nothing for the economy and jobs, which is my biggest concern.

If you think of the measures he could have taken, he could have got

money into the economy with VAT, but this way we are getting a lot

of help for those at the top end, some help for those in the middle,

and tax credits being taken off people with children. I think he is

being a little bit negative about this. It has been the largest

increase in the threshold for over 30 years, so from April next year,

anyone earning under �9,100 will not pay any income tax at all. That

is an enormous amount. Driven by your Liberal Democrat colleagues,

surely. We are a coalition government. This is the biggest

increase in over 30 years. The 50 pence tax rate was always meant to

be temporary when it was set up, that is what Labour said. It was

not collecting an enormous amount of money, and it was driving away

business and harming the economy. As I understand it it was HMRC who

did the paper that was approved and rubber-stamped, so I think they

have taken that into account. about the fuel duty on cars, excise

duty is going up by inflation. He has done nothing to cut fuel duty,

so the price at the pumps still going to be high. If you cast your

mind back a couple of months, a lot of fun was in the Autumn Statement

to counteract rise in fuel prices. There is no rise happening in

August, and ultimately we will be paying a lot less at the pumps and

we would have been. Let us turn to the impact on the wider economy.

Where are the growth drivers in the Budget? In the big cut in

corporation tax, much more than expected, will be a big boost to

Scotland. Especially in the video game -- video games industry.

that was taken away last year. It is kind of an apology to Dundee.

The oil tax, reversing some of the stuff they have done before. But it

is good for business. There are some special allowances for

businesses in Dundee under von. and Irvine.

The few nuggets the industry are just reversing what they did last

year. And corporation tax was planned for a couple of years ago,

so it is implementing changes that had been predicted. I do not think

we should take it any law because the evidence of increased growth is

not there. We're seeing that a series of decisions...

Chancellor said he had no alternative but to reduce the

deficit. Why has it that President Obama has got the economy going on

a basis of fiscal stimulus, putting money into the economy.

unemployment in America is higher than in the UK. The corporation tax

cut is double what it was meant to be coming up next month, by 2014 it

will be 22%. Far lower than the United States, and almost all other

competitors. Something else that has to be touched upon as the

enterprise areas where there are capital allowances are for

machinery. I did a quick calculation, and it looks around

�60 million over the next couple of years, including Yorkshire and

London. It is a substantial sum. I might be wrong, but this should

help with in the region of around 4,000 jobs in the region across

those areas. Thank you very much indeed. Gavin Brown did those

calculations on the back of a fag packet, so that will cost 37 pence

more. You're watching a Politics Scotland

Budget Special. If you have just joined us, here is what the

Chancellor laid out a couple of hours ago, and what Ed Miliband had

to say. As a result of the budget, people

working full-time on the minimum wage will have seen their income

tax bill cut in half, and this coalition government will have

taken 2 million people, the lowest paid people, out of tax altogether.

Mr Deputy Speaker, in the middle of difficult economic times, we have

not settled for a do-nothing Budget. We have taken difficult choices

head-on, a competitive top rate of tax, more revenue from those best

able to pay. Attacks cut for working people, support for

families. Low-income earners, taking out of tax altogether. One

of the lowest rates of income tax and the world. Last year, the

Chancellor said, now would be the wrong time to remove the 50 pence

rate. Did he say he did not say that? He did say that. He said we

are asking others in the society on a lower income to make sacrifices.

That is exactly what he has done. Tax credits cut, child benefit

taken away, fuel duty rising. What has he chosen to make his priority?

For Britain's millionaires, a massive income tax cut every year.

The fairness test for this budget was whether the Chancellor used

every penny he could to help middle-income families that are

squeezed. He has failed that test. Anyone who listened to the

Chancellor will be asking the same question, what planet are he and

the Prime Minister living on? One million young people out of work,

50 businesses going bust every day, a cost of living crisis for

families. They promised change, but things have got worse, not better.

We have more political reaction at Westminster.

Thank you. We heard some reaction from the Commons. Let us get some

reaction from the MPs, particularly the opposition parties. Joining me

is Willie been from Labour-run done this Robertson from the SNP. --

from Labour, and Angus Robertson. think everyone would support things

that discourage tax avoidance. Andy help and support to the oil and

games industry in Scotland. But the one thing that must concern

everyone is that we are seeing squeezes for pensioners, and on

growth, the London Government has not been prepared to work with the

Scottish government on shovel ready products. This is disappointing,

and it will be damaging for many people. The fact that the lowest

earners are being taken out of the tax net for some -- to some extent,

surely that is something to welcome. But 70% of the tax credit cuts

affect people in the lower half of the income scale. We will find out

that this has been a highly regressive budget to join those of

2010 and 2011. We needed measures to boost growth. He has downgraded

growth from last year, we have unemployment going up, borrowing

billions more than expected. Under the Tories and Liberal Democrats,

the cost of fuel is going to go up. And the extra tax that will be

charged the pensioners, or the benefit they receive, will be

reduced. We remember the 10 pence tax fiasco. Do you think that

measure has a certain Eddie -- certaon echo? Yes, we have many

people who are millionaires having a tax cut, and people must wonder

what planet the Chancellor is on. There are certain sectors of the

Scottish economy that are going to benefit, certain geographical

sectors. It does appear as though some of the lobby that has gone on

and part of Scotland has at least paid off. It is always the case

that budgets are a mixed bag, there are always something she will

welcome and a budget. I have yet to meet someone who thinks this is

tremendous news. Most people in Scotland will be saying, hold on,

we did not vote for the Tories, now we have a Tory Budget that takes us

back to the 1980s, and we have to ask ourselves why do we allow

decisions that are harmful to us in Scotland? We need to decide these

decisions and Scotland, and we would not hit the weakest in

society, and give the best tax rates to the richest. We need power

in Scotland to make better decisions and not leave it to

Tories who we did not elect. question to you both, is this going

to be a Budget which you will criticise at the moment, but a few

weeks you will perhaps be saying, I can see the logic in this?

because it fails the test of growth and of jobs. We have one and four

people in Scotland out of work. We need more help from the Scottish

government, but the Chancellor had an opportunity to changed course

away from the cuts. People used to say that Gordon Brown's budgets

used to fall apart, after people had looked at the small print. But

this is falling apart after a number of hours. People deserve

more than they're getting, and we should never allow ourselves to

have these bad decisions taken by people we did not elect.

Thank you very much for joining me. Back to you.

Let us pick up on one of Scotland's critical industries, the oil and

gas sector. Joining me from Aberdeen is a loyal Economist, Alec

What is your assessment of the Budget for the oil and gas sector?

I would describe the new allowances for nuclear development as being

very targeted, in other words, for those that qualify, the benefits

will be substantial, but there will be others that do not qualify. The

billion allowance for the west of Shetland fields, but when you look

at the print, there are a lot of qualifications before you get it.

Recoverable reserves have got to be �5 million, and no more than 40.

For qualifying field, that is a bigger loans, and the 3 billion

would be spent over five years, but that is a bigger loans nevertheless.

Extending the small fields allowance, broadly speaking

doubling it, will bring in to the allowance necked quite a few more

fields, so that one should help to promote some development. And the

third noteworthy element is the announcement and that in the future,

the field allowance would also be available to incremental projects

in fields which have already been sanctioned. That opens a new area

Just picking up on the decommissioning tax relief, which

had been expected in this Budget, hadn't it? Yes, on decommissioning,

the promise that there will be contractual certainty over

decommissioning relief is certainly to be welcomed, and that should

encourage transactions and incremental investments in mature

fields. We will need to see more of the details, but investor

confidence should be helped by the announcement in itself, that there

will be some contractual promise about relief. And fuel duty was not

changed in this Budget - the Chancellor had taken steps

previously, but how do you see that the price of oil in the future will

go - do you think motorists will still be hard hit at the Poms?

price has gone up significantly in recent weeks because of problems on

the supply side. The South Sudan is no longer producing oil and there

are problems in Nigeria, and Libya is not yet back to full production.

That pushes the price up. If these uncertainties were removed, the

price would come down a bit. But it is likely that these supply

constraints will stay with us. Thank you very much for joining us.

We have run out of time. That was the oil and gas sector.

Now let's find out if this is a Budget for families. I am joined in

the studio by a representative from the Child poverty Action Group. Is

this a Budget for families? We have seen that new threshold raised for

the withdrawal of child benefit - would that ensured that children

are well served in this Budget? That is one piece of relatively

good news. It still seems an extraordinarily complicated way to

claw back some money from better- off households. Far better to

maintain child benefit as a universal benefit. Overall, this

does not look like a Budget for families at all. The coalition

policies over the last two years have absolutely hammered families,

particularly the poorest families who have been suffering the most as

a result of tax and benefit changes. There isn't anything we can see in

this Budget that changes that. your submission to the Chancellor

before the Budget, you pointed out that some families are actually

better off out of work, which is not what the Chancellor want to

hear. What we are seeing is just next month we will see �2 billion

worth of cuts to support for working families, with working tax

credits being removed from those working between 16 and 24 hours.

Nothing to reverse that. If we are serious about a Budget that rewards

were, we need to see a rethink of those cuts to benefits that support

families in work - housing benefit, working tax credit, childcare

support. We hoped to see some additional investment to ensure

that work is rewarded and makes work pay. That is not happening,

and actually we are seeing over wall but the Government's own

analysis within the budget shows that it is the bottom 50% to are

being hit the hardest, and the bottom 20% to are being hit hardest

of all. The income tax threshold has been raised, which you would

think is good news for people like us, but you think it is bad news

for poorer families? It is not particularly good news, and forgery.

The poorest families are not paying income tax anyway because they are

not earning enough to do so, and those who are earning enough to pay

income tax will lose 85% of the game of raising this threshold

through lost council tax benefit and loss housing benefit, because

that needs to be clawed back. We hoped that the poorest family would

gain at least as much as the middle income families by raising VAT

threshold, but at the moment they won't. So you are thinking that the

number of children in poverty may rise by 2015? Absolutely, across

the UK we are looking at a rise of 100,000 children a year. In

Scotland alone, studies have forecast a rise of 100,000 more

children living in poverty by 2020. There is nothing in this Budget

that reverses this trend. This clearly is not a Budget for

Scotland's poorest families. Thank you very much for joining us.

Now, David Porter has some reaction down at Westminster. Thank you,

Andrew. Part of every budget deals with things like fuel duty and

excise duty. Today, the Chancellor said as far as fuel duty was

concerned, there would be no change, which means they will be a three

pence increase in August. As far as alcohol duty is concerned, he said

there would be no change. So, what does that mean in practice? Joining

me to answer that is a representative from the Scots

Whisky Association. So, no increase on the duties in alcohol, but it

will go up anyway, won't it? When he said no change, he meant no

change to his established policies, so there will be 45p on a bottle

from next week. So, we see an ever rising price and ever-rising tax.

His whisky one of those projects where if you put the price up, it

does directly affect the market and it will reduce demand? In the last

five budgets we have seen a 40% rise in excise duty on Scotch

whisky, so we are seeing the market slipping away quite dramatically at

home. Today, the Chancellor said he wanted to increase exports, but by

setting a bad example at home, be does not help us over seas.

other countries will say if they do that to their own market, why

should we help? We want examples from the finance ministry in Japan,

the Commerce Secretary in India, you have given us the lead. The

Chancellor looks -- need to look abroad as well as at home.

Chancellor of cement and that's in the government will be publishing

its alcohol strategy. That is thought that the Government will

now go in favour -- favour of a unit price in Algol. The Government

in a pre- announcement said the expense -- expect this to be

challenged on a legal bases in Europe. Past of the announcement is

that they could bring any tax-based floor price if they wished, and

that might be where they are heading with escalator. We will be

opposed to it. Is there something you would anticipate going to law

on to protect your industry? Scottish governments that they

expect to go to law. The UK government have said minimum

pricing is illegal, so we expect the same outcome. Thank you for

joining us. They you have it. No increase in duties on alcohol, but

I think the story of alcohol in the next few weeks and could be a

fairly rocky one. David, thank you for your contributions today. Now,

the programme is drawing to a close, so let's have some final thoughts

from Alf Young. It was interesting to hear about the corporation tax

rate going down. The Chancellor has got that long slide down for it. Of

course, that was one of the important arguments for Scottish

independence, wasn't it, to have a low corporation tax? It is one of

the few things we know about the SNP programme for independence. One

of the things we do know is that they want more corporation tax to

get more investment into Scotland. If the UK rate gets to 22%, or even

the aspiration of 20%, you are into territory then where it gets much

harder for any other government, certainly one that would be trying

to stay in the EU, to argue that they should go even lower. It will

be an interesting dynamic there in terms of whether there could be

that kind of tax complication. There was also a tax competition in

Northern Ireland and Wales who were pitching in as well, wanting their

share of it. But I think the big story of all of this is how is it

going... Dinner, we have heard how people will find out whether they

are better or worse off, it is a complicated picture, the answer to

which will only come out in the wash as people live through these

changes and experiences. The big risk for the Chancellor - he said

in his speech he was not prepared to give more money to the rich by

cutting the top rate of tax as long as there were people in the public

sector who were having to accept a pay freeze, and he says he sticks

to that pledge. Well, it will be interesting to see how that big

dynamic place. You know, Labour has already pitched in with the view

that they are going to fight hard on the unfairness dimension of it.

That is going to be the big story of this Budget, I think - who wins

the public opinion battle over cutting that rate at the top, and

raising allowances for everyone else. But for some people, like the

retired, drawing it back in other ways, and how that all players out

and whether people think this is fair, and we are still all in this

together, all we are not and some people are getting a pretty good

deal. Let's look at some of the politics of this. This Budget has

been worked out by the court, so it was probably a budget of compromise

between the two parties, do you think? I think the fact that you

had these two elements to it - the relaxation of taxes at the top,

although countervailing forces on how people were buying houses and

avoiding stamp duty, and at the bottom, everyone getting more money

in their pockets because they don't start paying tax so easily. They

have done the classic compromise deal. But as this coalition

Government goes on towards the election in 2015, these two sides

of the coalition are going to have to differentiate themselves in the

eyes of the electorate. It will be interesting to see how, despite

this budget, how these two sides of the coalition hold together going

forward to 2015, or whether there is enough discontent in the

background, not just over the budget but over NHS reforms in

England, or whether at some point, they really have to begin to move

apart. I used to think this thing would fall apart in the middle of

the parliament and it has not done so. But we will see how well it

coheres around what has been a compromise in this Budget. Thank

you for your company here this afternoon. That is all we have got

time for this afternoon. Our extended Budget programme. We are