A bleak budget for the nations

George Osborne's 2013 budget has received a tepid response in Scotland, Wales and Northern Ireland.

In opening his budget statement yesterday, the chancellor declared it to be “a budget for people who aspire to work hard and get on”.

While a worthy cause, what was needed was a budget for growth which he simply could not use to describe the grim news he had to deliver. Across the nations the verdict on yesterday’s announcements has been less than positive.

North of the border, ministers have  pointed to the Budget removing £107 million of resources from the Scottish government budget planned for running services over 2013-14 and 2014-15. Attacking the “straight jacket” of loans and equity facilities offered by George Osborne, Scottish finance secretary, John Swinney, argued:

The chancellor should have offered a decisive injection of new capital to fuel economic recovery. He has, however, cut the hard cash the Scottish government has available to spend and applied a “straight-jacket” of loan and equity facilities over which the Scottish government will have no discretion and which will have to be repaid at a later date.

The chancellor set out a number of measures which will not come into force until 2014 or later. Some of these steps are welcome but decisive action to stimulate economic growth is needed now.

He continued:

We are doing everything we can to support the people of Scotland but the chancellor needs to realise that more needs to be done, and more quickly.

People in Scotland have a choice with a Yes vote in 2014. Instead of having to wait for the end of UK austerity and remaining trapped in Westminster’s economic straight jacket the people of Scotland can choose to bring home the powers needed to take our own decisions to grow the economy, invest in public services and support rather than attack vulnerable Scots.

Dubbing the chancellor “the man without a plan”, the Herald concluded that the statement was a surreal experience. In its editorial it explained:

Watching George Osborne delivering his fourth Budget was a rather surreal experience, akin to seeing a chirpy weather man exclaiming that ‘Spring is just around the corner!’ when the map behind him shows the UK being battered by gales, snow and ice, with a series of deep depressions marching in from the west.

Over in Wales, the mood is just as grim. Noting that additional reductions in the Welsh government’s revenue budget will  in total mean it has to find savings of £32 milling in 2013/14 and £81 m in 2014/15, finance minister, Jane Hutt said of the budget:

The price for additional capital investment is high and will be paid for by cuts to our revenue for the next two years. This is a real blow and will place our crucial public services under further pressure.

“The UK government has given  us  back  some capital  allocations,  which we welcome.  However there are many strings attached  – the capital can only be used for loans or equity investment and a proportion will have to be repaid.  Although we are committed to boosting the housing sector in Wales,  this falls far short of what we called for and urgently require.

At a time when we are trying to support the Welsh economy and boost growth, this level of cuts is unacceptable.

Arguing that the time is now right to capitalise on the government’s low borrowing costs to boost growth now, Hutt concluded that the far from bringing the Welsh economy back to full strgnteth, the budget ‘will not make that task  easier’.

Her concerns were echoed by Plaid Cymru, who have dubbed the chancellor’s announcement as simply “bland”. Its Treasury spokesperson, Jonathan Edwards MP, argued:

This was a bland Budget by a chancellor trying to convince himself that his policies are working, despite a further growth downgrade by the OBR.

It is disappointing that the chancellor failed to adopt a range of progressive policies advocated by Plaid Cymru such as reversing the tax cut for those earning over £3,000 a week due to be implemented in April and scrapping the Trident renewal that is set to cost £100bn over the lifetime of a new system.

He also failed to make progress on introducing a Financial Transaction (Robin Hood) Tax that would raise £20bn a year and help curb the speculative behaviour in the financial sector which caused the crash in the first place. The decision to scrap the stamp duty on shares trading is a regressive move as it’s the only thing in the UK currently resembling this tax.

He continued:

Most importantly for Wales, what the chancellor should have announced is the implementation of the recommendations made by the Silk Commission so that Wales has control over the levers that would allow investment in major infrastructure projects, creating jobs and boosting demand in the economy.

Ordinary families in Wales should not have to pay the price for the failings of the banks and the self-defeating policies of the Treasury.

In Northern Ireland, the measures announced have received a somewhat mixed response. Noting that the government in Stormont will see it’s resources budget cut by £20.7million and £17.5million for 2013-14 and 2014-15, finance minister, Sammy Wilson, welcomed a number of measures including exempting Northern Ireland from the Carbon Price Floor as well as the freeze in fuel duty.

However, speaking in the Commons’ yesterday, Wilson concluded:

I acknowledge the way in which the chancellor and the Treasury have responded to some of the points that we have made from Northern Ireland, for the country as a whole there are things that could have been done that have not been done, which we will live to regret and which will probably result in the chancellor standing at the Dispatch Box next year saying, ‘I forecast this, and unfortunately I’m downgrading those forecasts again’.

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