Hansard

I heard what the stance was before the budget and I heard about it during the debate on the budget but, when it came to the vote—the point at which they could do something about it—the Labour members were posted absent. Where were they all?

Of course, courtesy of Guido Fawkes, we get the marvellous e-mail trail that shows the level of transparency that the Labour Party presides over. We read:

“We should probably hold off releasing line in Scotland just yet, in the hope that it is ignored, but will probably have to do it later.”

That is the first time that the Labour Party has been shy about putting out its press lines to the media, but there we are. It is better than any freedom of information request that I have ever had to authorise, and it did not even cost us any money.

The Chief Secretary to the Treasury has been keen to take the credit for the increase in personal allowances for working-age adults but—this is the point that I would make to Mr Rennie and Mr Brown—he must also take responsibility for the impact of the tax rises and benefit cuts that have already been implemented by the coalition. Over the past two years, we have seen increases in VAT, national insurance and fuel duty. We have also seen cuts to tax credits, child benefit and housing benefit. The Institute for Fiscal Studies estimates that, taken as a whole, the tax and benefit reforms of the coalition will cost the average Scottish household almost £800 in 2012-13.

It is the very poorest in society who are being affected the most. The Treasury’s own analysis shows that the bottom two income deciles—that is, the poorest 20 per cent of households—will experience some of the largest reductions as a proportion of their income as a result of the coalition Government’s benefit cuts and tax increases. They will undergo a fall in net income of close to 2 per cent, compared with falls of around 1 per cent for the population as a whole.

The chancellor has repeatedly said that we are all in this together, but I am sure that few households in Scotland would see it that way.

In Scotland, we have taken a different approach. The Scottish Government has taken all the measures at its disposal to support households. By extending the council tax freeze for the lifetime of this Parliament, we have ensured that the average band D household will benefit by around £1,200 in total. It is households in the bottom half of the income distribution scale that are estimated to see the greatest benefit as a proportion of household income. By maintaining free university education in Scotland, we are saving students around £23,000, compared with the cost of studying in England. By scrapping prescription fees, freezing water charges and abolishing toll charges, we are providing support for households throughout Scotland. That support stands in stark contrast to the reforms of the UK Government.

The key priority for the budget was to get the economy moving. At a time when growth is fragile, short-term support is urgently required. However, the chancellor allocated next to no additional resources to support the economy; indeed, the OBR has stated that the measures that were announced in the budget would have only

“a limited impact on our economic forecast”.

For Scotland, the consequentials from the chancellor’s statement amount to £4 million in each of the next three years. That will do little to offset the 33 per cent real-terms cut to our capital budget during the current spending review period. Nevertheless, we are pleased that the UK Government has listened to the Scottish Government’s proposals on the economy.

First, on the oil and gas industry, which is a key component of the Scottish economy, we have argued that the correct support needs to be in place for decades to come. That is why we have repeatedly called for the UK Government to provide long-term certainty on decommissioning tax relief and to introduce more generous field allowances. The measures that were announced last week should go some way to mitigating the damage that was caused by the chancellor’s £2 billion tax raid on the industry last year.

Secondly, I welcome the fact that the UK Government has accepted our case for the provision of enhanced capital allowances in three of the Scottish enterprise areas that we created, at Irvine, Nigg and Dundee. In that regard, I am delighted that, in recent days, GlaxoSmithKline has announced the expansion of its sites in Irvine and Montrose, and that Gamesa has announced a £125 million investment in offshore wind farm manufacturing in the port of Leith, which will create 800 permanent jobs.

Thirdly, the chancellor’s decision to reverse his opposition to providing tax breaks for the computer games industry is a welcome conversion. That is a measure that we have long pressed the UK Government to adopt. The games sector is a growing and dynamic industry. Figures that were released last week show that UK sales of computer games, which were worth close to £2 billion, surpassed those of DVDs last year. The games industry in Scotland is a global success and employs 1,500 people. The budget measure should help to level the playing field and let Scotland’s computer games industry compete internationally to reach its full potential.