CommonSpace looks at the key parts of the Autumn statement and its impact on Scotland
THE Autumn statement was delivered by the UK Chancellor Philip Hammond today [Wednesday 23 November], drawing on figures from the Office for Budget Responsibility (OBR), outlining the government’s finances and economic forecasts of the UK state.
With those forecasts suggesting a serious blow to UK finances resulting from the decision to leave the European Union (EU) we break down the key relevant points of the Chancellor’s Autumn statement for Scotland.
The cost of Brexit
Analysts have forecasted slowed economic growth as a result of Brexit and the drastic dip of the currency. UK growth is forecast down from 2.2 per cent to 1.4 per cent for 2017.
The UK Government is set to borrow an extra £110bn to meet its spending plans despite its claims of austerity and in contrast to the Chancellor’s claims of the UK having “serious fiscals challenges.”
Instead of a budget surplus in 2020, as his predecessor George Osborne had pledged, Hammond confirmed that the deficit will still be running at about £30bn by that date.
Such a dip in economic fortunes after Brexit may boost the case of the Scottish Government in its aim to get a special deal for Scotland during the negotiations and protect the economy.
Deals for Scotland’s Cities
After a long campaign by SNP MP for Stirling Steven Paterson, the Chancellor confirmed that the UK Government would support a city deal for Stirling boosting tourism, jobs and infrastructure.
Chancellor announces City Deal for Stirling-Now to make this work for everyone across the region, growing business and jobs #AutumnStatement
— Steven Paterson MP (@Steven4Stirling) November 23, 2016
Ian Murray MP for Edinburgh South for Labour also received confirmation that Edinburgh will see a special deal.
Welcome news that Edinburgh City Deal will be done. The devil always in the detail but well done @AndrewDBurns and the senior Council team.
— Ian Murray (@IanMurrayMP) November 23, 2016
Chris Law SNP MP for Dundee hailed the Tay City Deal as an example of effective oppostion.
— Chris Law MP (SNP) (@ChrisLawSNP) November 23, 2016
The Chancellor Philip Hammond will increase the minimum wage from the current £7.20 per hour to £7.50 per hour.
The National Living Wage, introduced by Hammond’s predecessor George Osborne, will rise to 7.50 pounds an hour from April. The 4.2 percent increase is more than four times the current rate of inflation.
The Scottish Government has previously stated its support for any increase but has maintained that such an increase falls well short of the living wage of £8.25.
Over 400 organisations in Scotland are paying the living wage and more than 80 per cent of Scots receive £8.25 or higher according to the Resolution Foundation.
However, UK wages collectively have also not risen, in real terms, since 2003.
The Alternative Scottish statement
The Scottish Government came out shortly before the Autumn Statement emphasising a different approach to the UK Government’s austerity.
They plan to spend £3bn to build 50,000 affordable homes with 35,000 to be for social rent, although such a policy was planned way in advance of the anticipated autumn statement.
Also touted was the plan to invest £500m in the Scottish Growth scheme to support small and new Scottish companies expanding overseas.
The Scottish Government also doubled down on its commitment to double the amount of free care for 3 to 4 years olds and disadvantaged 2 year olds.
The First Minister Nicola Sturgeon also stated that the £800m announced for infrastructure would mean the Scottish budget would be £2.9bn lower, rather than £3.3bn by 2020.
New investment can’t match austerity
The Treasury stated it would use the Autumn statement to give a “boost to benefits and housing” with benefits receiving an extra £1bn.
However, critics point to the £12bn worth of cuts that have been handed out to welfare by the previous Coalition Government and the current Conservative UK Government.
Since 2010, the year the Conservatives and Liberal Democrats formed the Coalition Government, the national debt of the UK has risen by £600bn.
The rise of the JAMs
JAMs have been finally recognised.
Unfortunately not the British fruit jams referred to by ministers as secret weapons to increased post-Brexit UK trade, but the acronym for ‘just about managing’.
According to the Institute IPPR, the pre-tax, pre-benefit incomes of the poorest half of the population have barely benefited from economic growth since 1979. Real wages have fallen by a massive 10.4 per cent since 2007.
Picture courtesy of First Minister of Scotland, Treasury, Tristan Sparkes
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