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