"Trouble Ahead": Experts and opponents pull apart the autumn budget

CommonSpace rounds up the essential perspectives on the latest UK Budget

CHANCELLOR OF THE EXCHEQUER PHILIP HAMMOND’S autumn budget has already unleashed a torrent of commentary and criticism following its unveiling in the House of Commons on Wednesday afternoon.

Hammond’s announcement that Police Scotland and the Scottish Fire and Rescue Service will have their VAT bills refunded in future, putting them in line with emergency services throughout the UK, was broadly welcomed, but met with some controversy due to the lack of backdating, as well as Hammond crediting his decision to Scottish Tory MPs.

“Taking account of today’s announced changes, next year’s (2018/19) @scotgov revenue budget still facing real terms CUT of £239 million.” First Minister Nicola Sturgeon

The introduction of transferable tax history for the North Sea oil and gas sector also met with a mixed response, with First Minister Nicola Sturgeon and SNP economy spokesperson Kirsty Blackman welcoming the decision, while environmentalists criticised “tax breaks” for the fossil fuel industry.

The overall effect on Scotland’s budget may prove to be a source of further anger and disagreement, with Sturgeon arguing on Twitter: “Taking account of today’s announced changes, next year’s (2018/19) @scotgov revenue budget still facing real terms CUT of £239 million – imposed by the UK government.”

Below, CommonSpace rounds up a range of opinions and perspectives on the budget from across Scottish politics and civil society.

Richard Leonard, Scottish Labour leader

“Today the Chancellor delivered a failing budget, on a failing economy from a failing government. They are rudderless and without a plan to grow our economy, help our industries and create the work of the future. This Tory government is a driverless vehicle. This budget is insufficient, inadequate and insincere.

“This budget reminds us how years of Tory failure have damaged our economy.  We urgently need a long-term industrial strategy which will invest in Scotland's future and investment in our public services.

“Any changes which try to lessen the brutal impact of the disaster that has been the Tory Universal Credit roll out will be too little too late.” Scottish Labour leader Richard Leonard

“Scotland’s economy is stagnating; growing three times slower than the rest of the UK. Behind every downgraded economic forecast delivered by the Tories, there are more families suffering, having to get by on insecure work and pensioners unable to heat their homes.  This budget offers no solutions to help the far too many people who are struggling to make ends meet.

“Any changes which try to lessen the brutal impact of the disaster that has been the Tory Universal Credit roll out will be too little too late.  It is simply unacceptable that thousands of people will continue to suffer from callous and cruel Tory welfare cuts. 

“We cannot continue with an economy where the richest one per cent own more than the poorest 50 per cent put together.  We cannot continue with an economy where people in work struggle to make ends meet, to put food on their table and pay the rent. We cannot continue with an economy that sees 260,000 children in Scotland growing up in poverty. 

“This broken system needs real and radical change that benefits the many and not only the few at the top - not just for now but for the long term."

Patrick Harvie, co-convener and Finance and Economy spokesperson for the Scottish Greens

“The Chancellor expects applause for graciously agreeing to treat Scotland’s emergency services no worse than elsewhere in the UK, while pressing ahead with the most reckless and destructive economic course of action any UK Government has ever undertaken.

“In his claim that Brexit is a great opportunity for the economy, the first words from the Chancellor’s mouth were lies. Nobody believes that he is sincere in this claim, and we know very well that our economy, and our society, are already being damaged by the UK Government’s ‘hard Brexit’ obsession. The OBR’s downgrading of economic prospects cannot be seen as separate from that context.

“It is shameful that any government should target women and their families in this way." Scottish Green co-convener Patrick Harvie

“He has thrown money at his allies in the DUP, and is now committing billions more to preparing for Brexit, while cutting our public services. 70% to 85% of cuts to public spending on benefits, taxation, pay and pensions between 2010 and 2015 come from women's incomes - it is shameful that any government should target women and their families in this way."

“He’s giving even more tax cuts to high earners while failing to increase public sector pay, and his fake living wage is still set to be nearly £1 an hour below the level of the real thing. The poorest families have lost the most thanks to nearly a decade of austerity - analysis by the Women's Budget Group shows that low income black and Asian women are paying the highest price for austerity. Carers and households where one or more family members has a disability have also been unfairly affected by cuts to support.

“Continued obsession with reducing the public debt, while productivity remains stubbornly low and private debt is a far bigger problem, will cause even deeper harm as a result of austerity.

“For every £2 billion of public sector deficit reduction, the annual rate at which households have taken on new debt has increased by £1 billion.” Scottish Green co-convener Patrick Harvie

“The cruel irony is that while the Chancellor gloats that government borrowing is set to fall over the coming years, this is at the expense of huge numbers of people who are struggling to make ends meet: for every £2 billion of public sector deficit reduction, the annual rate at which households have taken on new debt has increased by £1 billion.

“Yet another round of tax breaks for the fossil fuel industry will undermine any effort the UK Government intends to make on cutting plastic pollution, while support for self-driving cars is likely to benefit the wealthiest people while public transport fares keep rising.

“The Chancellor claims there will be more capital spending for Scotland, but the impact on Scottish public services will only emerge over the coming weeks, as the Fiscal Commission produces its forecasts, and the SNP will have to decide whether to set fairer tax rates to raise the revenue that’s needed.”

Alison Thewliss, SNP MP for Glasgow Central

“I am sorely disappointed and exasperated that the Chancellor has missed yet another opportunity to do the right thing and scrap the UK Government’s pernicious two child policy and rape clause, which will push 200,000 children into poverty.

“I have been pursuing the UK Government on this abhorrent policy for over two years now, and its sickening impact on women and families across the country is becoming clearer by the day.

“On top of this, the government is continuing to fail women in Northern Ireland who – along with third party referrers – could face prosecution under existing laws in Northern Ireland if they apply for an exemption, as I highlighted recently in parliament. The fact that these women are being forced to choose between struggling to put food on the table or going through the criminal justice system is unthinkable.

“Clearly the Chancellor does not think the plight of women and families is an important enough issue to receive the attention it deserves. I, and my colleagues in the SNP, could not disagree more, and I will continue to urge the Government to reconsider their approach.”

Liam McArthur, Scottish Liberal Democrat justice spokesperson

“The Chancellor has listened to cross party calls to end what has become a VAT anomaly. For our emergency services operating under huge strain this will be a welcome decision.

“This situation could have been avoided altogether if it wasn’t for the SNP’s obsession with centralisation.” Scottish Liberal Democrat justice spokesperson Liam McArthur

“However this situation could have been avoided altogether if it wasn’t for the SNP’s obsession with centralisation. SNP ministers were warned but just not to listen.  It is our police and fire services that have paid the price of that arrogance to the tune of £140 million.

“The Tories will seek to claim the credit but instead should shoulder some of the blame. They failed to oppose centralisation of policing and fire and rescue services, and even actively campaigned to see it happen.  They also made no commitment to end the VAT charges at the recent Scottish or UK elections, unlike the Liberal Democrats. The truth is they have been forced into this u-turn, and thankfully so.”

Colin Fox, Scottish Socialist Party national joint spokesperson

“Hammond’s budget underlines that austerity remains in force and put his opponents in Labour and the SNP calling for its end on the spot.

“If the crisis of poverty pay, insecure work, chronic housing shortages and attacks on people on benefits is to end then action, not words, is essential.

“The Scottish Government and Labour councils now face the acid test of turning words against austerity into action.” SSP national joint spokesperson Colin Fox

“That’s why we have called on both the SNP and Labour to adopt a fighting response to austerity by using the powers at their disposal.

“The Scottish Government and Labour councils now face the acid test of turning words against austerity into action which can challenge it.”

Rory Steel, SNP Socialists convener

“While pressure from the SNP has resulted in some U-turns – such as scrapping Scottish Police & Fire VAT and small changes to the shambolic Universal Credit system – the fact remains that these are mere scraps from the table being used to hail Scottish Tory MPs who are nothing more than London lackeys, while austerity is forced on Scotland.

“We must look seriously at the limited tax powers we have but, in the long run, we in Scotland have to ask ourselves what type of nation we want to be.” SNP Socialists convener Rory Steel

“There will be more cuts ahead: more economic catastrophe; more unemployment; more people pushed into poverty; more communities going without. We are going backwards.

“We must look seriously at the limited tax powers we have but, in the long run, we in Scotland have to ask ourselves what type of nation we want to be: one chained by Tory governments we do not elect, or one that will act in Scotland’s best interests.”

Ben Wray, Head of Policy at Common Weal

"You can find the truth of the Budget by turning Phillip Hammond's rhetoric and flipping it on its head. His theme was that the future is bright, but the OBR has finally woken up to Britain being in permanent stagnation and has massively downgraded its growth and productivity forecasts, meaning the future looks utterly grim.

“The obvious reality for those on low incomes is that the future looks worse than the present, and the present is no better than the recent past. We are going backwards as a society.

“Nothing in the Budget today changes this, because to change it would require confronting the interests of financial elites.” Ben Wray, Common Weal Head of Policy

"Once you get past the noise, it is clear why the UK is in a state of permanent economic stagnation since the financial crash - it is a debt zombie, not because of public debt, which is perfectly sustainable, but because of private debt.

“At over 160 per cent of GDP and rising, household and corporate debt in the UK is feeding Britain's bankrupt banks but suffocating investment and therefore productivity. This is also the source of financial instability, is driving inequality and, combined with austerity, is pushing many households to the brink of defaults.

“Nothing in the Budget today changes this, because to change it would require confronting the interests of financial elites which the Tories are there to protect."

Richard Murphy, tax economist

“The cost of Brexit is apparent: we are now going to have growth a lot lower than most of the EU. Growth is going to fall to 1.3 per cent in two years time. And the investment in Brexit will, at an astonishingly small £3 bn, still be greater than the funding available for the NHS. 

“Included in that NHS funding was another interesting number: instead of the £350m a week the NHS in England will get £350m extra to see it through the whole winter.

“But let's ignore the small numbers that proliferated throughout the budget statement. What they actually evidenced was three things. The first was a Chancellor out of ideas. His biggest cheers were probably for announcing that there will be no in change in VAT rules and that there will be some tweaks to stamp duty in England and Wales which all the evidence shows (because the move has been tried before) do not help first time buyers.

“Instead of the £350 million a week the NHS in England will get £350 million extra to see it through the whole winter.” Tax economist Richard Murphy

“Second, they evidenced a Chancellor who cannot do anything radical even though so much within the economy (including the growth figures) demands it. That's because this government has no political capital to spend on taking risk on behalf of the people of the UK when all the political capital it has is being expended on Brexit and keeping the Democratric Unionists happy.

“And third, the small numbers were there to disguise the fact that the big numbers were never mentioned.

“And what are the big numbers? They are the cost of a Brexit divorce settlement; the cost of a hard Brexit; and the cost to growth of being outside the biggest free trade group of nations we can ever be a member of. None of those were mentioned precisely because Philip Hammond, like the rest of the government, still pretends that Brexit is a cost free, risk free exercise when everyone knows that is not true, from the Office for Budget Responsibility onwards, despite which they also ignored it.

“Today's budget was probably the most inconsequential of those I have listened to for forty years, but there is trouble ahead.” Tax economist Richard Murphy

“The result is that this whole budget really was an exercise in padding. It pretended something was happening for an hour or so in the parliamentary timetable when in truth Philip Hammond is sitting waiting for the economic time-bomb of Brexit to go off. That has not happened yet, but when it does almost nothing mentioned today will be of any consequence and every number that was spouted will prove to be spectacularly wrong.

“Today's budget was probably the most inconsequential of those I have listened to for forty years, but there is trouble ahead, and we will have to face the music. Whether we'll dance is the question that's open to doubt.” 

Grahame Smith, STUC General Secretary

“It is clear that the UK Government’s economic strategy lies in ruins. Austerity is a failed policy that is heaping undue misery on people across the UK. It is economic illiteracy in the extreme and yet the Chancellor has rejected another opportunity to change course.

“This budget is bad news for public services. Despite raising expectations, to the contrary Phillip Hammond has washed his hands of funding a pay rise for public service workers.

“The Chancellor must not pick and choose particular uniforms and sectors to favour.

“The Chancellor would prefer to hand out tax cuts to the highest earners rather than use the tax system to support investment in the economy.” STUC General Secretary Grahame Smith

“Leaving it at the discretion of individual ministers and departments, which are already underfunded and facing further cuts, will provide no relief for the millions of public workers suffering due to declining living standards.

 “Announcements around changes in tax thresholds show where his priorities lie.  The Chancellor would prefer to hand out tax cuts to the highest earners rather than use the tax system to support investment in the economy.  It is not the richest who need relief but the services and public workers that we all rely on. His moves to ease pressures as a result of universal credit are welcome, but are unlikely to go far enough to protect the poorest in our society.

“We call on Derek Mackay to use the Scottish Parliament’s tax and borrowing powers, including ensuring that the tax breaks offered to the rich this afternoon are not replicated in Scotland.” STUC General Secretary Grahame Smith

“The economy is facing a difficult period ahead and there is little in this budget to suggest that the Chancellor has recognised the scale of the challenge.  We now look to the Scottish Government to see if their approach to the economy can undo some of this damage.

“We call on Derek Mackay to use the Scottish Parliament’s tax and borrowing powers, including ensuring that the tax breaks offered to the rich this afternoon are not replicated in Scotland. This is necessary to provide the support and investment that the economy and working people so desperately need.” 

John Dickie, Director of Child Poverty Action Group (CPAG) in Scotland

“We have long been sounding the alarm over the impact of waiting days for Universal Credit on children and families, so we’re pleased the Chancellor has acted to remove them and put in place new arrangements for receiving advances as part of an emergency rescue package, but there wasn’t the structural reform needed to revive the central promise that universal credit would strengthen rewards from work.   

“Big falls in family income caused by cuts and changes to Universal Credit have left many worse off overall.” Child Poverty Action Group Scotland director John Dickie

“Our new analysis finds while effective tax rates may have improved for some families, big falls in family income caused by cuts and changes to Universal Credit have left many worse off overall, overwhelming any gains from increases in the ‘national living wage’, personal tax allowances and help for childcare. Families on Universal Credit who want to get better off through earnings gained little from today’s Budget.

“What happens to Universal Credit will shape the future for children in low-income families. The budgets of ordinary families will not be fit for the future until the work allowances in Universal Credit have been restored to support parents who want to bring home higher wages.”

NUS Scotland President Luke Humberstone

“Graduates in Scotland should see the benefits of their education in their payslip before they start paying back student loans. But right now graduates in Scotland are getting a raw deal.

“While it’s welcome that the Scottish Government has committed to increasing the student loan repayment threshold, we need to see action when the Scottish budget is unveiled next month. Earlier this week the independent Review into student support called for the threshold in Scotland to be upped, and the UK Government’s budget announcement makes this all the more urgent.

“Right now graduates in Scotland are getting a raw deal.” NUS Scotland President Luke Humberstone

“While Scottish students enjoy lower average debt, we must avoid a situation where Scottish graduates have to start repaying this debt significantly earlier than counterparts elsewhere in the UK. This simple measure could have a significant, positive, impact on the lives of graduates across Scotland.”

Russell Gunson, director of IPPR Scotland

"Scotland is facing really significant cuts to day-to-day spending over the next few years amounting to around £700m by 2019/20.

“The cuts facing Scotland are significant.” IPPR Scotland director Russell Gunson

“With pre-existing commitments to protect health and policing budgets in Scotland, this could see public spending on everything else fall by around £1.3bn or 10.4% over just three years. This comes on the back of seven years, and counting, of austerity with no let-up in sight.

“The UK Chancellor’s budget will see increases to money Scotland has available through capital spending, borrowing and other financial transactions, but this can’t be used to fund things like hospitals and schools and some of this type of funding will need to be repaid in the future.

“The cuts facing Scotland are significant and the Scottish Parliament will need to consider carefully how it responds to limit the damage from cuts on this scale to Scotland.”

Director of Friends of the Earth Scotland Dr Richard Dixon

“The UK Government’s budget continues to encourage people to drive, fly and waste energy, and this budget will increase oil production and therefore climate emissions.  Apart from some extra cash for electric vehicles and a small increase in cost for the most polluting diesel cars there is little green about this budget.

“Air pollution from traffic is causing a public health crisis in Scotland. The Budget measures to discourage sales of the most polluting diesel cars are a small step in the right direction but are not enough to get to the grips with the the scale of the problem.

”The tax break for sales of oil fields is another subsidy aimed at extending the life of North Sea oil and gas production and will increase our climate emissions at a time when we need to rapidly moving away from fossil fuels.” Friends of the Earth Scotland director Dr Richard Dixon

"It makes sense that the tax regime for diesels should reflect the extra financial and health harm that these vehicles have on society. The Chancellor cannot ignore the climate impact of petrol cars and should also increase VED for new petrol cars. Combined with the extra cash for charging points, the signal on diesel vehicles measures could encourage people to make the transition to hybrid and electric vehicles but the freeze on fuel duty sends a very mixed message about when to switch to electric.

”The tax break for sales of oil fields is another subsidy aimed at extending the life of North Sea oil and gas production and will increase our climate emissions at a time when we need to rapidly moving away from fossil fuels.  If the Chancellor was serious about supporting workers currently dependent on the North Sea, he’d be planning to ensure that the transition to the new low carbon economy was inclusive of these people and their communities.

“It is particularly disappointing that there were no measures in the Budget to help encourage the renewables industry.” Friends of the Earth Scotland director Dr Richard Dixon

“The UK Government has promised to explore ways to reduce plastic pollution but there are no specific proposals to actually do anything yet. They have merely kicked the plastic bottle down the road, hoping someone else will deal with this enormous problem.

“It is particularly disappointing that there were no measures in the Budget to help encourage the renewables industry, with the UK Government’s energy policy still focused on the twin dead ends of nuclear power and fracking.”

Dr Sam Gardner, Acting Head of Policy at WWF Scotland

“It seems strikingly contradictory that only days after attending the UN climate conference in Bonn, the UK Government has announced a new way to encourage the exploration of more fossil fuels from the North Sea. 

“To reduce the risk of dangerous global climate change, the vast majority of known fossil fuel reserves need to be left in the ground and not exploited.” WWF Scotland acting Head of Policy Dr Sam Gardner

“While it's true that the oil and gas industry will continue to be a major contributor to our economy for some time, now is the time to be setting out a clear plan to sensibly transition away from dirty fossil fuels. We need to see a just transition that enables us to harness the engineering skills currently deployed in the North Sea and apply them to supporting a range of cleaner forms of energy production.

“To reduce the risk of dangerous global climate change, the vast majority of known fossil fuel reserves need to be left in the ground and not exploited.”

Picture courtesy of HM Treasury

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