Left Foot Forward’s devolution correspondent Ed Jacobs rounds up the Budget 2012 reaction from Scotland, Wales and Northern Ireland.
Ahead of yesterday’s budget, the spin doctors in the bowels of the Treasury had been busy declaring the chancellor’s announcements would have within them a “tartan streak” and sure enough, as George Osborne sat down in the Commons, Scottish secretary Michael Moore argued it provided “greater fairness to individuals” and “help to Scottish Business”.
It was not, however, an assessment shared by ministers at Holyrood.
Whilst welcoming measures such as the introduction of a Scottish Enterprise Area and tax relief for the video games industry, finance secretary, John Swinney, could not have been clearer in his critique of the announcements made.
Having concluded the budget “fails the growth and fairness test”, Swinney said:
“At a time when growth is very low in the economy, and significant stimulus is required, the chancellor has allocated next to no new resources and taken no major initiatives to support this effort.
“At the prime minister’s request we gave the UK government a list of shovel ready projects in Scotland worth £300 million which could start in the next financial year. There was no green light today and efforts to build economic recovery have not been given the boost we called for.
“We needed to see a sustained, targeted programme of capital investment to act as an economic stimulus. Unfortunately the chancellor failed to deliver. The budget delivers only £4 million a year for Scotland, mere tinkering at the edges of what was required.
“The chancellor talks about fairness, yet he’s fixated on reducing the top rate of income tax and driving down public sector pay in areas outside London, which will only serve to exacerbate regional inequalities, take money out of the pockets of ordinary families and undermine recovery in the most fragile areas.
“The Treasury’s own figures show that since 2010 the UK government’s measures have placed a greater relative burden on the lowest earning 20% of households than the average to rebuild the public finances.”
At the Herald, meanwhile, blogger Kate Higgins argued Osborne’s budget was simply a missed opportunity.
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Outlining her concerns at the impact it would have on families, she observed:
“If you got bored with the Chancellor of the Exchequer’s budget speech and decided to opt out at 55 minutes, then you will have missed the main announcement affecting families.
“Despite George Osborne claiming that the “central goal of this budget is to support working families”, measures which benefit them directly were thin on the ground. And most attention was given to the better off ones.
“Talking about dancing on pinheads, the chancellor spent so long building up to his announcement about needing to “avoid a cliff edge” in relation to the proposed cut off for child benefit, I thought he was going to renege on it altogether.
“But no, families with the highest incomes above £60,000 will still go without from next year, those earning over £40,000 have been given a reprieve and anyone earning over £50,000 will see their child benefit reduced on a taper.
“I suspect there will be some rejoicing in Newton Mearns and Morningside, but little anywhere else.”
“Still, if it was dismal for low income families, measures that benefit all of us here in Scotland were even thinner on the ground. The fuel duty freeze will of course potentially help rural areas which regularly pay most; and the enterprise measures for certain areas will help, especially as Irvine is in one of our unemployment black spots.
“But the failure to do anything at all on alcohol – despite false trails in this weekend’s press – leaves our own vanguard measures to address our appalling relationship with alcohol – and its impact on children – rather isolated.
“A big opportunity missed – which sums up this budget perfectly.”
Peter Duncan, meanwhile, the one-time Conservative MP for Galloway and former chair of the Scottish Conservatives, could hardly hide his delight at how little influence his party’s coalition allies had had over the budget, noting:
“Nick Clegg’s face said it all. Distant, pale and sullen.
“This was a budget when George Osborne re-asserted control over the economic and political direction of the coalition. Despite all the pre-briefing, the leaked letters and the noises off, the Lib Dems have had a very poor Budget 2012.
“The 50p tax rate, so dearly held close by so many senior Lib Dems in government, has bitten the dust. I encouraged its binning in my HeraldScotland blog last week, and it is a sign of the chancellor’s growing optimism that what was a radical suggestion weeks ago has been delivered to cheers today.
“The deputy prime minister will point to increases in stamp duty as a sign that the rich are still paying more, five times more according to Treasury estimates, but of course increases in stamp duty could have been brought in in any case – as Labour will point out. The fact is that penal tax rates for those who are very successful have been canned.
“Nick will point to the further significant progress in raising personal allowances, now to over £9200, but the effortless zeal with which George has claimed the coming prize of £10k earnings before anyone pays any tax would indicate that there is little prospect for any electoral benefit for the junior coalition partner.”
As welsh secretary, Cheryl Gillan, was busy declaring the budget would have a “fair and positive impact on Wales”, ministers in Cardiff Bay concentrated their fire on the chancellor’s proposals over regional pay.
“Public service workers across the UK work hard, often in difficult circumstances. Nurses, teachers and police officers should not be penalised because of where they live.”
“This is a disappointing budget and not one which will support economic growth in Wales or the UK as a whole. What we wanted to see today was a budget for jobs and growth, with significantly increased or at least, brought forward, capital expenditure. The chancellor did neither.
“We had provided the UK government with details of a number of schemes across Wales which are “shovel-ready”, but following this budget they will have to wait – remembering that we face a 40% plus cut in our capital grants between 2010-2015 from the UK government.
“Not only will this impact on the construction industry and local supply chains but it will also delay key projects like road improvements and hospital improvements. Key public services for all people across Wales.
“Last year the OBR forecast growth at 2.5%, this is now revised down to 0.8% and cuts to spending deepen over the next seven years. This will take money out of the economy and reduce living standards further.”
Meanwhile Leanne Wood, Plaid Cymru’s newly installed leader, called on Wales’s political parties to unite in opposition to regional pay, the party’s Treasury spokesman in Westminster Jonathan Edwards declaring:
“Regional pay proposals will mean real term cuts for public sector workers in Wales and institutionalise low pay and low ambition.”
And for Oxfam Cymru, its head, Stephen Doughty, warned:
“While a rise in the income tax threshold will offer welcome help to many, those already earning less than £8,105 won’t feel any benefit at all. Research by Oxfam and Cuts Watch Cymru already estimate that one in four people across Wales will be directly or indirectly affected by the changes to the welfare system that have already been announced.
“We therefore have grave concerns about the impact of an additional £10 billion of cuts to the welfare budget.’’
With Northern Ireland secretary, Owen Paterson, arguing the measures announced by the chancellor provided “significant help to hard working families in Northern Ireland”, the province’s politicians were united in expressing concerns about just how true these words will prove to be.
Speaking for the executive, DUP finance minister Sammy Wilson was forthright in his views, declaring:
“The size of the public sector in Northern Ireland is similar to many other UK regions. The problem we face is that our private sector is too small. Therefore seeking to suppress the public sector pay here – something that is a key stimulus in local economic activity – will only impose greater differences in economic growth rates across the UK.
“I am also outraged that the chancellor has not done more to provide assistance to those on low incomes and bring families out of poverty including a reduction in fuel duty.”
Elsewhere, SDLP finance spokesman, Dominic Bradley, said:
“There is little or nothing in the budget which will help those who are worse off in society especially those who are dependent on benefits and little to mitigate the effects of planned welfare cuts – cuts of up to £10bn – whilst higher earners have largely been untouched.
“The proposals to regional pay agreements are still in there and that is something which is very unwelcome and which will have a detrimental effect on our economy here.
“We welcome the rise in the personal income tax allowance to £9,205 but we believe this should have been higher, at least £10,000, particularly when set against the reduction of the top tax rate.
“The reduction in corporation tax to 24% from next month and to 22% by 2014 whilst welcome does not go far enough – we need to see how this is to be applied to our situation here.
“The chancellor has only talked about it in the context of whole of the UK and neglected to mention the work of the ministerial working group on lowering corporation tax in NI and I hope that this does not indicate he is rethinking this or that the Sinn Fein/DUP group at Stormont has failed to progress this issue.
“We are also extremely concerned at the impact which the new tax relief could have on charities, as it is likely to discourage big donors, at a time when more people need help from charities.
“As with all budgets the devil is often in the detail and we will ensure that we interrogate this over the coming weeks.”
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