Hammond’s Budget shows Scots Tory influence

Hammond’s Budget shows Scots Tory influence

by Murdo Fraser
article from Saturday 25, November, 2017

IF THERE WERE ever any doubts as to the value of having 13 new Scottish Conservative MPs at Westminster, then the detail of Philip Hammond’s Budget this week made it clear. A whole raft of benefits to Scotland were delivered, which he acknowledged were directly the result of the influence of this new group of Parliamentarians speaking for Scotland.

The budget included £2 billion in Barnett consequentials for the Scottish budget, the scrapping of VAT on Police and Fire Services, worth nearly £40 million a year, the freezing of duty on whisky, and a range of tax breaks to help North Sea oil and gas decommissioning. There was also further progress on City and Region Deals confirmed, including for the Tay Cities and the Borderlands.

The VAT on Police and Fire Services issue is a perfect illustration of the difference that 13 Conservative MPs have made. When the SNP Government at Holyrood merged the Police and Fire Services, they did so in the full knowledge that VAT would be chargeable, but proceeded nonetheless. The problem that was subsequently created with the charging of VAT was one entirely of the SNP’s making.

It was only with the effective lobbying of Conservative MPs at Westminster, speaking up for their constituents in Scotland, that the Chancellor was persuaded to resolve this VAT issue as from next year.

Any hopes that the SNP would actually welcome the measures in the Budget were quickly dashed, when Finance Secretary Derek Mackay described the £2 billion worth of new investment as a “con”, on the basis that around half of the total money comes in the form of 'Financial Transactions'. This stance was backed by the First Minister Nicola Sturgeon at First Minister’s Questions in Holyrood on Thursday.

And yet, as Ruth Davidson made clear in the same session, the SNP themselves have used hundreds of millions of pounds of Financial Transactions in their own budgets. In the 2017-18 budget alone, the SNP used Financial Transactions to invest over £250 million in communities, social security and equalities, £59 million in the economy, jobs and fair work, and nearly £12 million in education and skills.

What the SNP then described as a “half a billion vote of confidence in Scottish business, Scottish workers and Scottish economy”, is translated by the SNP into a “con” when it is a Conservative government delivering rather than an SNP government.

We have all come to expect the gripe and grievance from the SNP whenever Westminster comes up with anything good for Scotland. On this occasion, though, they look like they have egg on their faces after their previous utterances on Financial Transaction cash.

And, despite SNP claims to the contrary, independent analysis by Scottish Parliament researchers shows that the block grant from Westminster is up in real terms next year (albeit by a modest 0.1%). So any SNP cries about ‘Tory cuts’ are simply untrue.

The ball is now firmly in Derek Mackay’s court as we prepare for the Scottish Government’s own budget in three weeks’ time. And here he faces a real challenge.

Because we are seeing a growing gap in taxation between Scotland and the rest of the UK. Income tax is already higher for higher rate payers, LBTT rates on larger properties were already higher, and now with stamp duty being cut in England for first time buyers, the tax gap is widening.

For the SNP’s Finance Secretary to make matters worse by increasing Income Tax in Scotland more would be deeply damaging to the Scottish economy, as business organisations have already made clear. And, with more money at his disposal than he was expecting, Derek Mackay’s case for raiding the pockets of hard-working Scots families has surely collapsed.

The Scottish Conservatives will be pressing the SNP government to tackle waste, to cut vanity projects, and to concentrate on growing the economy to deliver higher tax revenues. That is the way to fund our public services, not by ever-increasing tax demands.

Photo: Labour Chief Secretary to the Treasury 1974-79, Joel Barnett MP, after whom the Barnett formula is named and the 'consequentials' that come from it.

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