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Finance Secretary responds to Budget statement
12/03/2008
On the day that the Scottish Government's Budget Bill, which delivers real benefits to the Scottish public and a boost to the Scottish economy, received Royal Assent the UK's Budget will have a very different effect, John Swinney said today.
While Scotland's oil revenues "prop up" the UK's finances, today's budget will inflict a savage blow on one of Scotland's premium industries, the Finance Secretary said.
Revenue from Scotland's North Sea oil is expected to contribute over £56 billion to UK finances over the next six years (2007-08 to 2012-13) - compared to £38 billion over the previous six.
The Cabinet Secretary for Finance and Sustainable Growth said:
"This Budget statement by a Scottish Chancellor not only failed to mention Scotland once, but it actually damages our economic interests at a time when oil revenues are propping up the UK's finances.
The Scotch whisky industry, one of our premium industries now faces savage increases in duty. This runs the risk of encouraging international competitors to introduce punitive tariffs, and threatens our ability to export as well as the jobs this industry sustains.
"When the task was to introduce a fair alcohol tax regime, combat the discriminatory tax on Scotch whisky, and take proper measures to tackle alcohol misuse, this punitive tax increase across the board will damage Scotland's whisky industry and give licence to international competitors to raise tariffs on Scotch whisky.
"The reality of this 9 per cent tax rise is that the price of a bottle of Scotch will increase not by the 55p for white spirits - but by 59p.
"The Chancellor's approach to alcohol duty is a money-making scheme that just increases duty on everything from the cheapest cider to the highest quality malts. It does nothing to get to the heart of the problem of binge drinking.
"Where Scotland leads on climate change, it is encouraging to see the UK follow - with the Chancellor now considering matching our target of reducing emissions by 80 per cent by 2050. But the concessions the budget makes to real environmental threats also has consequences for our rural communities.
"Instead of further unwelcome increases in fuel duty, with the pain simply deferred, the Chancellor should be introducing a fuel duty regulator to balance the impact of fuel duty and soaring fuel prices.
"The Budget also signals that public spending will continue to be tight over the next Comprehensive Spending Review period beginning in 2011. With public spending increases significantly constrained, it is clear that Scotland must expect a tight spending settlement for the next six years, at a time when our North Sea revenues are making a massive contribution to UK finances."
Revenue projections for 2007-08 and 2008-09 have been revised upward by over £1 billion in total (£0.2b in 2007-08 and £0.9b in 2008-09). The projected oil revenue figure for 2008-09 is £9.9 billion. This is the highest nominal level of revenue from the North Sea since 1985-86. Over the next six years, North Sea Revenue will contribute over £56 billion to the Treasury. Calculations based on average oil price of 83 dollars.
The Scottish Government received £26.3 million consequentials to spend over the next three years as a result of today's budget.