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Chancellor urged to focus on investment rather than cuts in Autumn Statement

Published 20/11/2016

Scottish Finance Secretary Derek Mackay said it is more essential than ever that we invest in our economy and stimulate growth
Scottish Finance Secretary Derek Mackay said it is more essential than ever that we invest in our economy and stimulate growth

Labour and the Scottish Government are both calling on the Chancellor to end austerity, boost support for the North Sea oil and gas industry and stop welfare cuts, ahead of the Autumn Statement.

Scottish Finance Secretary Derek Mackay and Scottish Labour leader Kezia Dugdale have written separately to Philip Hammond urging investment rather than cuts in his budget update on Wednesday.

Mr Mackay called for him to commit to continued membership of the EU single market, increase North Sea support, reverse the benefits freeze and the reduction of the benefits cap, and bring the Scottish emergency services in line with others in the UK by allowing them to reclaim VAT.

He said: "The Chancellor has taken no action to ease the uncertainty felt in the wake of Brexit - it is now more essential than ever that we invest in our economy and stimulate growth.

"I have written to the Chancellor to urge him to end the damaging austerity agenda and set out key measures he should take such as providing support for the North Sea industry, which continues to be impacted by low oil prices, and ensuring continued access to the single market for our businesses and consumers."

He added: "This Government is already facing real-terms cuts from the UK Government every year until at least 2019-20 - further reducing funding for our public services and undermining our work to build a fairer country. Our discretionary budget will have been cut by £3.3 billion in real terms, or 10.6%, since 2010-11 and within this, our capital budget will have fallen by £600 million or 15.7% - this is unacceptable."

Ms Dugdale urged Mr Hammond to end austerity by increasing investment, stop cutting Scotland's block grant, reverse cuts to Employment Support Allowance and Universal Credit and increase support for oil and gas.

She wrote: "With austerity having failed and Brexit a profound threat to the Scottish and UK economies, a change of course on the economy is both necessary and highly desirable.

"I hope you will give due consideration to Scottish Labour's proposals, with a view to ensuring that services in Scotland are adequately funded, and that disabled people and those on low incomes are spared further cuts to their incomes."

A UK Government spokeswoman said: " The UK Government has increased the personal tax allowance so people keep more of the money they earn, given the lowest paid a pay rise through the National Living Wage, increased the state pension to give people greater security in retirement, and is helping parents with the cost of childcare. We've done more than any other government to support our oil and gas industry in the face of falling prices, with a radical £1 billion package of tax reforms.

"The Scottish Government are also taking on landmark new powers over tax and welfare - and there is nothing stopping them setting out their plans on how they will use them to shape the welfare system and economy in Scotland.

"The truth is Scotland trades four times more with the UK than the EU, which shows the importance of the broad shoulders of the UK. The UK is the vital union for Scotland, but the Scottish Government would break up this union at any cost. For the good of families across Scotland, the Scottish Government need to stop this empty posturing and focus on the day job."

But environmental campaigners said it would be "perverse" for the Chancellor to give more help to the oil and gas industry just after the UK had pledged to cut emissions.

WWF Scotland director Lang Banks stated: " Having only just ratified the Paris climate agreement committing the UK to curb emissions from fossil fuels, it would be somewhat perverse for the Chancellor to hand another round of subsidies to the oil and gas industry.

"The climate science is clear - the vast majority of known fossil fuel reserves must remain untapped. In the interests of tackling climate change, we need to see a sensible transition away from fossil fuels, harnessing the skills of those currently employed in the sector in clean energy technologies as well as decommissioning.

"Instead of providing more tax breaks that will increase carbon emissions, the Chancellor should use his Autumn Statement to help put the UK on a pathway to a more prosperous, clean-energy future."

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