UK Budget: SNP and Labour see big holes in Rishi Sunak's recovery plan

Chancellor Rishi Sunak unveiled his 2021 Budget in an address to the House of Commons today with big announcements on coronavirus support, the economy and taxation.

Key points from the announcement included an extension to the furlough scheme until the end of September, a new restart grant to businesses re-open after pandemic restrictions have been lifted and an increase of corporation tax on company profits to 25% in April 2023 but this will stay at 19% for businesses with profits of £50,000 or less.

READ MORE: Covid furlough scheme to be extended until the end of September

On the economy, the Chancellor borrowing is forecast to be £234 billion next year, which amounts to 10.3% of gross domestic product (GDP), but this will fall to 4.5% of GDP in 2022-23, 3.5% in 2023-24, then 2.9% and 2.8% in the following two years.

The SNP's Westminster, leader Ian Blackford, said in the Commons: “The Chancellor doesn’t understand what it’s like to be poor in Boris Johnson’s Brexit Britain.

“Chancellor, do the right thing, this should never be temporary, it should be permanent … making the £20 Universal Credit (UC) uplift permanent has also got to extend to legacy benefits.”

A commitment was made in the Budget to continue the £20 UC uplift for a further six months, but the SNP have long called for it to be made permanent.

Following the Budget, Blackford said Sunak "failed to deliver the meaningful change and investment needed to build a fairer society" and had imposed damaging Tory cuts including a public sector pay freeze, cliff edge cuts to Universal Credit, and tax rises for millions of workers.

Blackford said: "The Tories are threatening Scotland's recovery with a return to austerity cuts, an extreme Brexit, and a Budget that completely failed to deliver the meaningful change and investment needed to build a fairer society.

"The UK has suffered the worst economic slump of any major economy, UK unemployment is rising, and millions of families have seen their incomes slashed - but the Chancellor has added to this misery by imposing a public sector pay freeze, cliff edge cuts to Universal Credit, and tax rises for millions of workers.

READ MORE: Ian Blackford calls for £100bn Budget boost to avoid 'repeat of Thatcher years'

"Covid has exposed the deep inequalities that exist under the broken Westminster system but the Tory Budget failed to address them. A decade of Westminster cuts have pushed 4.2million children into poverty but there were no measures to reverse the growing Tory child poverty crisis, no plan to raise statutory sick pay or introduce a Real Living Wage."

The Chancellor announced that the UK Living Wage will increase to £8.91 an hour from April for those aged 23 and over, up from £8.72 an hour for people aged 25 and over.

The Living Wage in Scotland is £9.50 an hour for everyone, available from Living Wage employers.

Blackford added that millions had been "left behind" by the Tory government throughout the coronavirus pandemic and the Budget failed to commit to the 80% furlough scheme being available for as long as devolved nations need it.

He also said that Brexit has already cost Scotland's economy almost £4bn and is projected to cost every person the equivalent of £1600 in "added costs, red tape and barriers to trade with Europe".

​READ MORE: SNP say Rishi Sunak is ‘threatening recovery’ with return to Tory austerity cuts

He said: "It is clear that Scotland faces a choice of two futures - the long-term damage of Brexit and Tory austerity cuts at Westminster, or the opportunity to protect our place in Europe and build a strong, fair and green recovery as an independent country."

In the 51-minute speech, Sunak dwelt only briefly on environmental measures including changes to the remit of the Bank of England so it reflects the importance of environmental sustainability and the shift to net-zero emissions, and plans to allow UK savers to invest in a green National Savings and Investment product.

There was also new funding to upgrade ports to support offshore wind, £20m for a UK-wide competition to develop floating offshore wind demonstrators and £68m for a UK-wide competition on long-duration energy storage technology.

Responding to the speech, Labour leader Sir Keir Starmer said: “The biggest challenge for this country is the climate emergency.

“The Chancellor talks up his green credentials but his Budget stops way short of what is needed or what is happening in other countries.

“This Budget should have included a major green stimulus, bringing forward billions of pounds of investment to create new jobs and new green infrastructure.”

READ MORE: Ivan McKee: Our green ports will be built on Scottish values and help to grow our exports

Crispin Truman, chief executive of CPRE, the countryside charity, said the Budget was disappointing for climate action and rural communities.

“What we need is for the Government to help create green and sustainable jobs up and down the country that help real people, while also making the UK economy greener,” he said.

But he warned there was “nothing green” about jobs created by a new coal mine.

“He should be stimulating jobs in areas like Cumbria with renewable energy and energy efficiency, rather than through a coal mine that will be disastrous for carbon emissions and disastrous for our international reputation on climate in equal measure,” he said.