Chancellor Jeremy Hunt: Budget will 'put £680 a year back into the pocket of Scottish workers'
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The UK Treasury has claimed that Chancellor Jeremy Hunt’s budget for long term growth will “put £680 a year back into the pocket of Scottish workers” as a result of the Autumn Statement.
The keynote development was a second National Insurance tax cut of 2p in April for over 2.4 million working people in Scotland as well as 2p for the self-employed, on top of the earlier cut of 2p.
According to the Chancellor that means when combined with reductions announced in the autumn 27 million people across the UK will get an average tax cut of £900 a year and two million self-employed people will get £650.
In an area of low average wages like the Highlands which has always suffered from a low average wage that change could be significant to many as it will be felt quite fast in people’s paychecks.
Also the freeze in fuel duty has also been welcomed as it had been due to rise by 13 per cent and will now hold steady with the 5p cut and freeze fuel duty for 12 months – estimated to save £50 next year and cut inflation by 0.2 per cent.
That too will likely be welcomed in the north because of the lack of public transport and the subsequent need to use private vehicles to travel to work, school and other places.
'More money in self-employed pockets'
The Federation of Small Businesses (FSB) in Scotland has welcomed the cuts to national insurance rates for the self-employed and raising of the VAT threshold announced by Chancellor Jeremy Hunt in this afternoon’s Budget.
The FSB’s Highlands & Islands Development Manager, David Richardson, said: “The cut in National Insurance rates for the self-employed builds on the reduction in Class IV contributions and abolition of Class II in the Autumn Statement.
“This will keep more money in self-employed pockets, where it can be spent on essentials within local economies.
“On the VAT threshold, it’s estimated that by 2025, some 44,000 traders across the UK will be deliberately keeping their turnover just below the threshold and I meet Highland businesses who are doing just that to avoid making themselves less competitive by adding 20 per cent VAT to their bills.
“According to the Office for Budget Responsibility, this ‘bunching’ is costing the country hundreds of millions of pounds in lost economic activity, so we’re pleased that the Chancellor has listened to our calls to raise the threshold to £90,000."
'Welcome news on the alcohol duty freeze'
Mr Richardson continued: “There was also welcome news on the alcohol duty freeze, given the pressures on the pub trade and wider retail and hospitality sectors.
"It’s also good news that the fuel duty freeze will continue – especially for those in the Highlands for whom using cars or vans to do business is frequently essential in the absence of alternatives.
“But there’s still a real gap when it comes to the crunch small firms are facing – and the growth, jobs and economic security small businesses provide is not something the country can afford to risk.
“While keeping the £5,000 Employment Allowance for the 10th year in a row is invaluable, it should have been uprated to keep pace with the National Living Wage – especially if employer tax thresholds remain frozen.
“All eyes in Scotland will now be on how the Scottish Government chooses to use the £295 million it is set to receive in Barnett consequentials. Calls from the hard-pressed retail, leisure and hospitality sectors in the Highlands and beyond for the rates reliefs enjoyed by their counterparts south of the border will become increasingly hard to discount.”
'Chancellor missed the chance to put right an ugly unfairness'
The use of those consequentials was also on the mind of Caithness, Sutherland and Easter Ross MP Jamie Stone, who said: “I sincerely hope that the Scottish Government uses this money to right the wrongs it committed in its own budget just last week, including huge cuts to the housing budget and plans to stall at least a dozen NHS projects, including revamps of Caithness General Hospital and the maternity ward at Raigmore Hospital in Inverness."
He continued "This was a budget for a demoralised Government, a Conservative Party out of ideas.
"It was a real disappointment to see that the Chancellor made no recognition of the greater cost of keeping our homes warm. Fuel poverty existed in the Highlands long before the Cost of Living crisis, and it will exist for long after if the UK Government does not acknowledge the discrepancy in energy costs in rural areas.
"The Chancellor missed the chance to put right an ugly unfairness that sees our citizens being treated unfairly depending on where in the UK they live.
"There was some welcome news, however. It is good that the Chancellor has continued an alcohol duty freeze. Whisky distilleries in my constituency will be pleased to hear this. That being said, over the past year we have seen the Scottish Government attempt and abandon the Deposit Return Scheme and the UK Government implement a very well hidden rise in alcohol duty.
"All things considered, I would hazard a guess that the whisky industry might just welcome the fresh initiatives that could come with new governments in both Edinburgh and Westminster.”
The SNP’s economy spokesperson and Inverness, Nairn, Badenoch and Strathspey MP Drew Hendry said: “This budget has very little for ordinary people struggling with the cost-of-living crisis," he said.
"The cuts to National Insurance, whilst appearing to be good news, will help almost nobody earning under £50,000 per year due to the frozen tax threshold. Nor does this measure help pensioners - where is the support for them?
"Families will, however, welcome the overdue changes to the child benefit thresholds, which have stayed the same since 2013.”
