GEORGE Osborne’s budget will leave Scotland with a £1 billion black hole, according to John Swinney.
The Scottish Government claimed details of the real-terms reduction had been hidden away in the small print of the Treasury documents.
Swinney said the Budget would lead to a £1bn cut by 2019-20 compared to 2015-16 and a reduction of 4.7 per cent in the day-to-day budget funding for public services.
The deputy first minister said: “The chancellor has continued with ideologically driven austerity of choice. Scotland will see a billion pounds real-terms cut in the day-to-day budget that pays for public services and that is before the hidden £3.5bn further cut to public spending across the UK is applied.”
This was all part of what Osborne claimed would be a budget for the “next generation”.
For days, the Treasury has been warning that this eighth forecast of Osborne’s was likely to be very grim indeed.
The bad news: additional cuts of £3.5bn over the next four years, growth predictions revised down and an increase in debt.
In 2015, the economy expanded by 2.4 per cent and the Office of Budget Responsibility (OBR) had predicted similar growth this year.
The Chancellor said growth for this year would now be two per cent, while in 2017 it would be down to 2.2 per cent from 2.5 per cent, and then 2.1 per cent for each of the next three years.
Osborne also reaffirmed his commitment to balancing the books and being in surplus by 2020.
This, in itself, led to something of a mystery. How does the country go from a deficit of £21.4bn in 2017 to a surplus of £10.4bn in 2020?
According to the Chancellor and the OBR, the country will somehow come into £32bn in 2018 to 2019. This is in part through what the OBR call “shuffling” and cuts already planned – and the hope that things get better enough to make more cuts.
There was some relief for the the oil and gas industry: a halving of the Supplementary Charge and, effectively, an abolition of the petroleum revenue tax. It was welcomed by the industry, grateful for any help on offer, though there was disappointment that it didn’t go further.
There was genuine surprise in the House of Commons when Osborne announced the sugar tax. The new measure will, the Chancellor said, help tackle childhood obesity.
The other big surprise was the Lifetime ISA for the under-40s. Launching in April 2017, savers can put up to £4,000 a year in and will receive a 25 per cent bonus from the government.
On income tax, Osborne raised the 40p higher rate threshold from £42,385 to £45,000 by April 2017. The Scottish Government will now have to decide if it wishes to match this.
The personal allowance has been raised to £11,500 and a new tax allowance for people who sell goods or rent out rooms online; the so-called Airbnb tax break.
Fuel duty will be frozen for the sixth year in a row. There had been much pressure on the Chancellor to keep the freeze, though there were suggestions the Treasury saw the price drop at the pump as the perfect time for a small increase.
Duty on beer, cider, whisky and other spirits were all frozen and there is a two per cent increase in tax on cigarettes, and a three per cent on rolling tobacco which came into force at 6pm last night.
Corporation tax will be cut to 17 per cent.
Osborne believes he can make £12bn through closing tax avoidance loopholes. The Government has adopted the OECD’s policy of information-sharing and disclosure by multinationals of their tax position to support a crackdown on avoidance.
The Chancellor will increase small business rate relief south of the
Border from £6,000 to £15,000, as well as increase the threshold from the higher rate.
There was confirmation of the plans to reform how Personal Independence Payment plans are calculated. More than 600,000 disabled people will lose out.
Jeremy Corbyn told the Chancellor: “The price of failure is being borne by some of the most vulnerable within our society. The disabled being robbed of up to £150 a week, these aren’t the actions of a responsible statesperson, they are the actions of a cruel and callous government that sides with the wrong people.”
Finishing his speech, Osborne said: “This is our Conservative Budget.
“This is a Budget that gets the investors investing, savers saving, businesses doing business, so that we build for working people a low-tax, enterprise Britain, secure at home, strong in the world.”
SNP deputy leader Stewart Hosie said the overall Budget package had “failed to tackle the debt, the deficit and the borrowing as he promised”.
Budget 2016: Help for the oil and gas industry – but not enough
The National View: With Osborne in line to be PM, a second indyref cannot come soon enough
Budget 2016: Sugar tax is hailed but Irn-Bru bosses left with bitter taste
Budget reaction: ‘Next generation will be the poorest for decades’
Budget 2016: Only one Scottish charity to benefit from 'tampon tax' fund
Budget 2016: V&A museum bosses welcome £5m extra funding
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