Scotland politics

John Swinney says Osborne budget 'cannot deliver for Scotland'

Finance Secretary John Swinney has lead a parliamentary debate on the chancellor's Budget, which he believes cannot deliver for Scotland.

Mr Swinney's motion said Scotland would only benefit if Holyrood had the "full range of economic levers".

However, the SNP minister welcomed the UK government's package of support for the oil and gas sector.

Ahead of the debate, Tory MSP Gavin Brown said the Budget was helping low income families.

Mr Swinney highlighted Treasury analysis which he said "shows that those on the lowest incomes have been hit disproportionately hard by the deficit-reduction plans and that over 300,000 pensioners in Scotland will be adversely affected by the decision to abolish age-related income tax allowances in order to pay for tax breaks for the wealthy".

He said Chancellor George Osborne had introduced some measures that were welcome, including:

  • a package of measures to support the oil and gas sector
  • the provision of enhanced capital allowances for three of Scotland's enterprise zones
  • funding for Edinburgh to become a super-connected city
  • and the introduction of tax relief for the video games industry

However, Mr Swinney told MSPs: "The chancellor's determination to cut the top rate of income tax will be of benefit to the richest 1% of the country [15,000 in Scotland]. But it is being paid for by a £1bn a year tax raid on the elderly.

"The withdrawal of the more generous personal allowances for the over 65s will affect 330,000 existing pensioners in Scotland. By 2016-17 the number of pensioners affected will have risen to 500,000 - each paying up to £220 extra annually in income tax.

"I am sure that few in the chamber, or indeed outside it, would consider cutting the tax paid by the wealthiest in society, whilst simultaneously increasing the tax paid by pensioners, to be fair or equitable."

Mr Swinney's motion stated: "The chancellor's failure to deliver for Scotland demonstrates the importance of the Scottish Parliament having the full range of economic levers to deliver jobs, growth and fairness for the people of Scotland."

Tory finance spokesman Mr Brown insisted the budget "focuses firmly on sustainable economic growth and helping low and middle income families".

He said: "The record raising of the income tax threshold will help millions of people across the UK and lift many out of income tax altogether.

"The reduction in corporation tax will encourage companies to invest and sends out a signal to the world that we are open for business.

"A number of other measures help Scotland specifically, such as capital allowances for enterprise zones, tax relief for the video games industry and incentives for the oil and gas industry.

"The budget achieves all of this while also reducing the deficit and restoring our economic credibility across the world."

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