In its Interim Economic Assessment the OECD forecasts the UK to grow faster than any other G7 economy in the first half of the year. The Scottish economy has grown for the last 6 quarters and employment is rising, as confirmed in today’s ONS Labour Market statistics.
The Secretary of State for Scotland Alistair Carmichael said:
The Budget means the consequences of our referendum decision are becoming clearer. Do we want to gamble our place in a UK that is working well for Scotland in return for a go-it-alone option with no UK Pound and falling oil revenues?
We can decide to remain part of a strong United Kingdom. Scotland would be staying part of a fast growing UK economy. We would be sticking with a UK that is creating more jobs, increasing spending in Scotland and keeping our UK Pound in our pocket. A Scotland where we share opportunities and risk with all other parts of the UK.
Or we could choose to walk away from the UK. We could stop sharing with the rest of the UK and gamble on a Scotland that goes it alone. This would be a Scotland without the UK Pound. A Scotland with volatile and falling oil revenues, with higher costs and with our big companies looking to leave. We would be turning the rest of the UK into our biggest competitor. We would be turning to 28 different EU governments for negotiations on Scotland’s future.
The consequences are clearer. The decision is ours.
Budget 2014 - Key announcements for Scotland
As a result of spending decisions in this Budget, the Scottish Government will receive positive Barnett consequentials of over £63 million.
This means since the Spending Review 2010, the UK Government will have increased Scottish Government budgets by £2.2 billion.
The Government is taking action to support some of Scotland’s key industries:
A freeze on duties on spirits will help support the Scotch Whisky industry, employing 10,000 people directly and supporting 35,000 jobs across the UK.
The Budget package on oil and gas will help maximise the benefit of the North Sea – supporting exploration, development projects and the supply chain. The Government will consult on a new, ultra-high pressure, high temperature cluster allowance; review the fiscal regime for the UKCS, and task the new oil and gas body with reporting at Budget 2015 on how we can encourage exploration and reduce decommissioning costs. This could create and sustain 8,500 jobs and generate over £6 billion of capital investment.
Business Energy Package
The Government will compensate Energy Intensive Industries (EIIs) for higher electricity process resulting from government energy policies, worth around £2 billion by 2018-19.
It will cap the Carbon Price Support rate at £18.00/tCO2 from 2016-17 to the end of the decade
It will introduce an exemption to the CPF for fuels used to produce good quality electricity in combined heat and power (CHP) plants for use onsite.
By 2018-19 the Budget package on business energy costs will save Scottish business £500 million.
- The Government has announced a package of measures to help 326,000 SMEs in Scotland.
- It includes consulting to understand how to match SMEs rejected for a loan with alternative credit providers and a Business Bank pilot for a wholesale guarantees programme to incentivise banks to lend more to SMEs.
- The Government will extend the period in which Enhanced Capital Allowances are available to companies investing in Enterprise Zones by three years until 31 March 2020. This will benefit investors in qualifying sites in Irvine, Nigg and Dundee.
Air Passenger Duty
- Budget 2014 announced the Government will reform air passenger duty by merging bands B, C and D from 1 April 2015. This will lower costs for UK businesses travelling to China, India, Brazil and many other emerging markets and make it cheaper for businesses and tourists to visit the UK.
Regional Air Connectivity Fund
- Start-up aid will be added to the scope of the regional air connectivity fund, which could help airports including Prestwick and Dundee.
- The personal allowance will be raised to £10,500 in 2015/16 – this will take another 25,000 low earners in Scotland out of income tax altogether and will see 2,220,000 people see an average real terms gain of £62.
- Overall, this government’s Personal Allowance increases will have lifted 263,000 people taken out of income tax altogether, with 2,310,000 people in Scotland benefitting from changes since 2010.
- From Autumn 2015, Tax-Free Childcare will cover 20% of working families’ childcare costs up to a limit of £10,000 per year. There are 450,000 working families in Scotland, currently paying an average of £106 a week for childcare
Voluntary National Insurance Contributions
- From October 2015, over 1 million State Pensioners in Scotland will be eligible to top up their additional State Pension by up to £25 per week.
- The starting rate of savings income tax is being cut from 10% to 0% and the band to which it applies will be extended from £2,790 to £5,000. These changes could benefit up to 116,000 savers in Scotland.
Glasgow City Deal
- The Government is in detailed discussion with Glasgow to develop a City Deal that will drive employment and economic development across the city region.
Vehicle Excise Duty
- From 1 April 2014 VED rates for cars, motorcycles and the main rates for vans will increase in line with RPI, a real terms freeze helping the 2.3 million car owners in Scotland
Changes to ISA
- The Government will set the overall and cash ISA limits at £15,000 which could benefit up to 463,000 ISA holders in Scotland.
- The Government will cut the tax on beer by 1p a pint, freeze spirit and most cider duties, and end the wine duty escalator. This will benefit 5,035 pubs in Scotland, including the 35,960 people employed directly in them and their customers.
Support for individual Scottish projects
Blanefield contaminated land: the Government will provide a ring-fenced grant of up to £255k to ensure residents in Stirling will not bear the costs of remediating contaminated land in Blanefield
Lockerbie-Syracuse Trust: The Government will contribute £100k to the Lockerbie-Syracuse Trust, supporting the scholarship programme.
Glasgow Athletics Grand Prix: The Finance Bill will confirm that Government will exempt from tax the relevant income of non-UK resident competitors. The Grand Prix is a major athletics preparation event in advance of the Commonwealth Games.