War of words over Scottish economy (Part 28)

Posted on 27/03/2014 by

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money

 Swinney: ‘Stark reality of UK budget cuts revealed’

Alexander: ‘being part of the United Kingdom brings true benefits’  

Westminster and Holyrood finance spokesmen yesterday offered very different views on what last week’s Budget will mean for Scotland:

Speaking ahead of yesterday’s Conservative finance debate, Finance Secretary John Swinney expressed concern over the impact the UK Government’s Budget changes are having on the most vulnerable in society.

Mr Swinney said: “Treasury analysis shows that as a result of Westminster’s tax rises and benefit and public service cuts, the poorest 20% of households will be on average the equivalent of £814 worse off in 2015-16.

“Analysis of the current UK Government’s Budget changes to date, including Budget 2014, also shows that on average households will be worse off by the equivalent of £757 a year in 2015-16 as a result of changes to taxation, benefits and public services brought in by Westminster, while, when it comes to changes made to taxes, tax credit and benefits alone, those in the bottom 10% of income distribution are expected to see some of the largest losses as a percentage of their income.

“These figures are extremely concerning and impact on the most vulnerable in our society. Such drastic cuts to incomes and to services put the progress that has been made in tackling poverty at risk. As the Child Poverty Action Group has warned, these cuts coming from Westminster risk pushing a further 100,000 children into poverty by 2020.

“Those arguing for the status quo should consider the harm being done to households across the country as a result of Westminster budgets.

“The Scottish Government is committed to mitigating the harmful effects of Westminster welfare reforms and our social wage helps households during difficult times. However to respond to the key challenges of building a sustainable and secure economy, creating jobs and growing the working population, protecting public services, maintaining a decent social security system and closing the gap between rich and poor we need the powers of independence.”

Money_and_economy_pack

With fewer than 200 days to go until the Scottish referendum, the UK Government yesterday produced the latest edition in a series of information packs – focussing on money and the economy in the context of the independence debate.

Visit the Scottish referendum page for more information

Danny Alexander, Chief Secretary to the Treasury, said: “As part of the UK the Scottish economy is growing, inflation is down and more people are in work. By remaining part of the UK, Scottish industry and jobs will be protected by the generous freeze on duties on spirits and the £3bn tax break for oil and gas industries we announced at the Budget, as well as the big cuts in income tax helping 2 million Scottish workers.

“This new pack sets out some key facts people in Scotland need to know before the referendum in September. I urge everyone to read up on the facts and understand the true benefits being part of the United Kingdom brings to Scotland.” 

The UK Government Money & Economy pack highlights the following key facts, demonstrating that a United Kingdom makes for a stronger economy benefitting us all:

  1. United means shared economic success. Following the financial crisis both the UK and Scottish economies are growing again and employment is at its highest ever level.
  2. United means we benefit from a single, domestic market, and a truly borderless economy. This means people and businesses in Scotland can buy and sell goods and services freely with the rest of the UK. Creating a border would reduce trade and cost jobs.
  3. United means we pool resources and share risks, which helps us prosper. Being part of the UK’s broader tax base means the peaks and troughs in oil and gas receipts are evened out so public spending remains stable.
  4. United means our finances are more secure. During the financial crisis, the banking system received extraordinary support, which was only possible due to the scale of the UK. If Scotland were an independent country, its banking sector would over 12 times the size of its economy. Not even the Icelandic, Irish or Cypriot banking sectors were that big at the height of the financial crisis.
  5. Going it alone could be costly: The National Institute of Economic and Social Research has assessed that Scottish interest rates could be up to 1.7% higher than the continuing UK, which could cost homeowners in Scotland an extra £1,700 to an annual mortgage payment.
  6. Spending matters: Last year Scotland received around £1,300 more public spending per person than the UK average.

For more information and to access the material go to: www.gov.uk/scottishreferendum 

The Money & Economy Pack is the second in a series of packs produced b the UK Government highlighting the benefits of Scotland remaining in the UK. The aim is to provide voters with clear and accurate information to help them make an informed decision ahead of the Scottish independence referendum in September 2014. 

The material comes in a factsheet-style format and complements the more detailed Scotland Analysis series, which contains in-depth analysis of the benefits of a United Kingdom.

 

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