1. ITV Report

Blog: Reaction to Budget statement north of the Border

Peter MacMahon is ITV Border's Political Editor in Scotland Photo: ITV Border

On the face of it Budgets are about numbers: the debt, the deficit the growth predictions, the tax rates.

But Budgets have always been political too and there are few more political Chancellors than George Osborne.

And what is the big political story here in Scotland? It’s the forthcoming independence referendum in September, of course.

So here’s my analysis of the politics north of the Border as we digest the details of Mr Osborne’s statement.

The UK government, and its supporters here, the Tories and the Liberal Democrats, say the budget shows the UK works.

Freezing the duty on whisky, reforming oil taxation, and help for pensioner with their savings - among other measures - show the benefits of being in the UK, they say.

Lib Dem Scottish Secretary Alistair Carmichael MP puts it this way: “The Budget means the consequences of our referendum decision are becoming clearer. Do we want to gamble our place in a UK that is working well for Scotland in return for a go-it-alone option with no UK Pound and falling oil revenues?

“We can decide to remain part of a strong United Kingdom. Scotland would be staying part of a fast growing UK economy. We would be sticking with a UK that is creating more jobs, increasing spending in Scotland and keeping our UK Pound in our pocket. A Scotland where we share opportunities and risk with all other parts of the UK.”

Scottish Conservative leader, MSP Ruth Davidson, highlights the freezing of whisky duty, which she lobbied Mr Osborne on.

She says: "I don't believe any product should be taxed at 80% and if the Chancellor hadn't acted, that's what we would have seen for a bottle of Scotch.

"Taking this action shows the government is prepared to take on board legitimate concerns from across the UK.

"That's a constructive Conservative approach, in stark contrast to the damaging politics of grudge and grievance practiced by the SNP."

It’s a bit more difficult for Labour, in opposition here and at Westminster but also opposing independence.

Their view is,to put words in their mouth, a plague on both your houses. The governments at Holyrood and Westminster have the wrong priorities, Labour say.

Labour finance spokesman Iain Gray MSP points to the warning on a decline in tax revenue from oil in the Chancellor’s statement.

Mr Gray’s case is this: “Scotland has two governments and neither has the right priorities. The Scottish Government is obsessed with independence and the coalition government has today produced a Budget which fails to help most Scottish families who have seen their living standards fall month on month.

“However, the Office for Budget Responsibility oil revenue estimates, which predict another fall of £3 billion in oil revenues demonstrate that those same families would pay a high price in cuts and taxes if Scotland were to become independent, and dependent on a single, declining, volatile commodity."

And for the SNP, they have pounced on the clear statement from Mr Osborne that there are more public spending cuts to come into the next Westminster parliament.

That, the SNP believe, is their trump card to play in the referendum. Only through independence can austerity be ended, they will argue.

Finance Secretary in the SNP Holyrood government, John Swinney MSP makes this point: “Independence is the only way Scotland can properly create opportunity and secure the investment in public services and the economy Scotland needs.

“Once again Westminster has failed to deliver for Scotland. Scotland is a wealthy country and we can more than afford to be independent. In each of the last 33 years Scotland has paid more in tax per head than the UK and in the last five years Scotland would be £1,600 per head better off than the UK – money that could have been invested in the economy, in public services and reducing debts."

He adds: “This budget confirms that remaining with Westminster will mean more austerity with £37 billion worth of cuts still to come over this Parliament and tens of billions to come afterwards. In addition Scotland’s budget could be subjected to additional cuts if Scotland doesn’t vote for independence and Westminster takes the knife to the Barnett formula. It is only with independence that Scotland will be able to make the decisions on tax and spending that Scotland needs.”

We may soon forget the detailed budget figures, but George Osborne has today played a further part in the battle for Scotland.

We will have to await the judgment of Scotland’s voters on September 18 to see whether it was an intervention which helped keep Scotland in the United Kingdom or helped the SNP win the argument for independence.

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