Budget hits the pause button on Scotland

Scotland’s finance secretary John Swinney yesterday published the Scottish government’s budget for 2014/15 and 2015/16.

Scotland’s finance secretary John Swinney yesterday published the Scottish government’s budget for 2014/15 and 2015/16 with a declaration that the choices being made by ministers at Holyrood “demonstrates the benefits of decisions being made in Scotland, by those who care most about its future.”.

In what was at it’s very heart another sales pitch for independence, Swinney told MSPs that he was doing his best to allocate the spending of the block grant provided by Westminster against the backdrop of the ConDem coalition cutting the budget for Holyrood by around 11 per cent in real terms over five years and the capital spending by over 26 per cent.

The £20 million provided to mitigate the effect of the bedroom tax was a case in point, with Swinney hinting, not too subtly, that he would want to do more but lacked the financial or legal powers to do so. Independence, he argued, provided the best hope of scrapping such an unpopular policy.

Among the budget’s other key features were:

  • Investment in affordable housing of over £1.35 billion over 4 years

  • £24m for a National Performance Centre for Sport

  • £8bn of infrastructure investment over the next two years

  • Maintaining the council tax freeze

  • Investment of £522m in colleges next year rising to £526m in 2015-16.

Painting the all too familiar picture of Westminster being the nasty bogey man, Swinney yesterday declared:

“Westminster’s programme of welfare cuts is taking money out of the Scottish economy, adding to the burden on our public services and hitting household budgets. Despite this, the decisive and distinctive measures we have taken in Scotland are delivering results.

“Scotland’s recovery is not happening because of austerity, as the chancellor claims. Recovery is taking place in spite of austerity. We cannot, however, take recovery for granted and must be focused on addressing real challenges in the economy.”

He continued:

“With the full fiscal and economic powers of independence the Scottish government could do yet more to strengthen our economy and create more jobs. This budget makes clear the benefits of decisions being made in Scotland by those who care most about its future. That is the opportunity on offer to the people of Scotland in 2014.”

Responding to the budget, Labour’s shadow finance secretary, Iain Gray accused the SNP of publishing a “standstill budget” designed to keep them ticking over until next year’s referendum:

“This was their opportunity to support Scottish people, but they have failed to do that because Scotland is on pause while they focus on their obsession with independence.”

For the Scottish Conservatives, meanwhile, the decision by John Swinney to increase business rate collection from £2.4 billion this year to almost £2.9 billion in 2015/16 was, Conservative finance spokesperson, Gavin Brown argued, another “whammy” faced by businesses. Commenting on the budget as a whole he continued by labelling it “a budget from a zombie government which now has both eyes fixed firmly on the referendum.”

In its editorial, the Herald this morning concludes that “a budget should have prosperity and social justice at its heart, not the political ambition of independence.” The paper explains:

“If finance secretary John Swinney really was considering calling his budget a “budget for independence”, as was widely rumoured, he realised his mistake in time and there was no trace of the phrase in his speech yesterday.

“The words “budget for independence” would raise an awkward question: what is the aim of these spending plans – to help Scotland’s economy or to help the SNP win a Yes vote next year? A budget should have prosperity and social justice at its heart, not the political ambition of independence.”

The Scotsman, meanwhile, in its leader has accused Swinney of making the poorest people in Scotland face shouldering the weight of cuts to come.  Arguing that “there was no disguising the bigger picture” the paper argues:

The crunch is about to arrive in Scottish public spending, and not even Mr Swinney’s considerable political skills are going to be sufficient to keep its true scale from the public’s eyes.

“Faced with this dilemma, the finance secretary has made the same key judgment he has made in previous years. He has shuffled most of the cuts burden on to Scotland’s local authorities. It is they who will have to do the dirty work in the coming year – closing more schools, shutting more libraries, cutting back on social care services for the elderly and vulnerable, locking the doors on local swimming pools.

“The political benefit for the Scottish government is, of course, that it is councillors rather than ministers who take most of the flak. But it does mean that the burden of public spending cuts is borne by the poorest Scots, who rely most on the kind of front-line services local authorities provide. It also means a real terms cut for a further education sector already reeling from a massive reduction in student places. Scotland’s colleges have long been the Cinderella sector in education, and they have borne the brunt of spending cuts, while the more politically sensitive university sector has – relatively speaking – been protected. The damage done to Scotland’s skills base, and the life opportunities offered to tens of thousands of young Scots, is incalculable.”

Outlining the alternative it continues:

“Mr Swinney could have made a different calculation. He could have looked anew at his council tax freeze, which every year hands the wealthiest Scots a tax break at a time when the poorest Scots are being hit hardest.

“He could have looked at how he is structuring payments in the new Scottish replacement for stamp duty, and produced a mansion tax to ensure the wealthiest Scots shouldered their share of the burden of austerity. In doing neither, Mr Swinney undermines the SNP’s egalitarian rhetoric and suggests his motives are more.”

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