The UK budget will be worth an additional £320m to the Scottish government over the next two years, the chancellor has said. Jeremy Hunt said the money would be on top of £1.5m of funding for the Cloddach Bridge in Moray and £8.6m for Edinburgh’s festivals. Mr. Hunt said one of the UK’s 12 new Investment Zones would be in Scotland. He did not announce any funding for the Acorn carbon capture project in Aberdeenshire. But he did confirm that alcohol duty would “go up in line with inflation in the usual way” in a move the Scotch Whisky Association described as a “hammer blow” to the industry as it would raise duty on a bottle of Scotch by 10.1%.
The only exception to the hike in alcohol will be for drinks sold on draught in pubs, where from August the duty charged will be up to 11p lower than it is on products sold in supermarkets. Many of the chancellor’s budget measures, including the expansion of free childcare in England to one and two-year-olds, do not apply in Scotland but the Scottish government receives additional money through the Barnett formula.
The Scottish Conservatives have urged the Scottish government to match the childcare expansion, saying it would be a “huge boost for families and the economy”. Children aged three and four in Scotland currently get 1,140 hours of free childcare a year. Deputy First Minister John Swinney described the the spring Budget statement as “another missed opportunity” to help households, businesses and public services through the cost-of-living crisis. He added that the additional money for the Scottish government’s budget was welcome but will “not go far enough and in the long-term our capital funding will fall in real-terms”.
Which measures affect Scotland?
Among the measures that will apply UK-wide are an extension of the Energy Price Guarantee until June, which the government says will save the average family £160 a year and give certainty over their bills. The chancellor announced the government will also pay the childcare costs of parents on universal credit moving into work or increasing their hours upfront, rather than in arrears – removing a major barrier to work for those who are on benefits.
The maximum they can claim will also be boosted to £951 for one child and £1,630 for two children – an increase of around 50%. The planned 11p rise in fuel duty will be cancelled and the 5p cut will be maintained for another twelve months, saving a typical driver another £100 on top of the £100 saved so far since last year’s cut, the Chancellor said. He also set out a plan to remove the barriers to work facing those on benefits, those with health conditions and older workers. Scottish Secretary Alister Jack Alister said he had tried to lobby against the increase in alcohol duty but had not been successful. He added that it was a “matter of regret that whisky duty, spirits duty is going up, it’s not what I wanted for the Scottish industry.”
‘Fall in living standards’
Mr Swinney said Mr Hunt had failed to deploy the full range of powers available to him to mitigate the impact of soaring energy prices and high inflation. He said: “While reversal of the planned increase in the energy price guarantee is welcome, with the end of the energy bills support payments, average household monthly bills will still rise by almost a third in April, at a time when wholesale energy costs are falling. “Rising interest rates combined with reduced support means some people are expected to experience a larger fall in living standards this coming year than they have over the last 12 months. “An uplift on universal credit and extending this to legacy benefits would have made a meaningful difference to households struggling to make ends meet.”
