Whatever the content, a Budget announcement is never going to please everyone. And this year, Chancellor George Osborne’s Autumn Statement was no different.
Alongside positive messages around the UK showing the fastest growth for an advanced economy in the world, falling unemployment and the rate of inflation, there was bad news about public borrowing and deficit.
Osborne revealed that public borrowing in 2013/2014 was £50 billion higher than predicted, reaching £97.5bn – but that it’s set to fall to £91.3bn in 2014/15.
To temper the bad news, the Chancellor announced plans for stamp duty reform, a fuel duty freeze, major changes to savings and pensions, the scrapping of Air Passenger Duty, a two-year freeze in working-age benefits, and an increase in the support provided to small businesses.
That’s all well and good – but what does it all mean for Scotland?
In the wake of the independence referendum result, regardless of whether it had been a resounding Yes or No, the 2014 Autumn Statement was always going to be a particularly interesting one for Scots.
After all that was pledged to encourage people to vote to stay as part of the UK in the run up to September 18, there was an expectation that Scotland was going to get a good deal.
And now the statement is out in the open, everyone has an opinion.
John Swinney MSP, Cabinet Secretary for Finance & Sustainable Growth, said the statement clearly demonstrated that the UK Government’s austerity policy had failed – and that Scotland would be paying the price for it.
Mr Swinney reckons the Chancellor has had to come clean and admit that targets on economic recovery have been missed. And he fears that the lowest earning households will be worst hit.
But he’s pleased about the approach from Westminster on the subject of stamp duty. The Statement revealed that it’s due to be replaced with a tax similar to the Land and Buildings Transaction Tax in Scotland, which will come into force in April 2015.
The Scottish Government has pledged to focus on securing economic growth, tackle inequality and protect public services.
I noticed Labour’s Shadow Scottish secretary, Margaret Curran, echoed some of John Swinney’s thoughts. She reckons the Conservatives have failed on all the tests they set themselves in 2010, as borrowing is higher than had been planned, growth is set to slow again, and wages are falling, with people £1,600 worse off.
She also reckons that the statement should have detailed plans to deliver a plan for recovery that works for many and not the few – but says that’s not what’s happened. I’m sure she’s not the only one with that view.
At present, Scotland gets £30bn through the Barnett Formula – the mechanism used by the UK treasury to adjust the amount of money that’s allocated to Scotland, Northern Ireland and Wales. A total of £20bn is due to be cut when new tax powers are devolved to Holyrood leaving a predicted block grant of around £10bn.
Let’s face it, it’s not great news for Scotland in black and white financial terms. But the fact that £125m of the total will be channelled straight into the frontline NHS should definitely be welcomed.
The NHS is a vital service that we – literally – could not live without. I have such admiration for NHS staff who work incredibly hard in positions of extreme responsibility so it’s right that a decent amount of cash is channelled into the service.
Regardless of your thoughts on the statement, there’s no doubt that it got people talking. I definitely think there has been much more political engagement since the referendum and I’m pleased that people are taking more of an interest in the financial future of the UK and of Scotland.
Help at Hand on Debts
At this time of year, it seems all we do is spend money – there are Christmas gifts to be purchased, parties to attend and food to buy for the big day.
So it doesn’t surprise me that a poll has found the British spend more on Christmas presents than any nation in Europe, and are also the most likely to get into debt in the process.
The average person in the UK plans to spend an average of £350 on gifts, which is £110 higher than those in France.
While it’s lovely we are all so generous, the downside of mounting debts is a worrying trend.
It’s important to budget your money but it’s not always an easy task – for some they simply don’t know where to start. That’s why I was pleased to see the Government launch a new money advice service just in time for Christmas.
The Financial Health Service portal provides is a one-stop website for people, providing links to organisations offering information and advice on debt, managing money, housing, homelessness and ethical lending.
This new initiative comes on the back of the Bankruptcy and Debt Advice (Scotland) Bill that was passed earlier this year. Come April 2015, compulsory financial education for those in need is at the centre of the legislation which will have a positive impact.
It’s important that we all have an enjoyable and happy festive period with our family and friends, which doesn’t need to cost the world. There’s no room at the inn for worrying about debt and money troubles.
It Made Me Laugh: Council is Kid’s Stuff
As a champion of young people, I always like to hear about the next generation taking the initiative.
Recently I read about a fascinating 10-year-old girl in Finland who has applied to become the council leader in her town.
Mili Kasurinen wants to head up the council in Kemijarvi, the country’s northernmost town.
She is up against 18 adults for the job and her application details ideas to revitalise the finances of the town, including creating an online teaching system to educate children from home.
But rest assured, the youngster won’t be appointing any of her classmates – as she thinks the whole thing would go a bit loopy if the town was run by 10-15 year olds!
I have to say I’m not entirely convinced that kids running councils is the best way forward. But I will say that, with that kind of attitude, Mili will definitely go far.
It Made Me Weep: Business Needs to Build Up
I was concerned to learn that the number of business start-ups in Scotland has fallen sharply in 2014.
The Committee of Scottish Bankers has revealed that 2,728 new businesses were recorded between July and September which is down by almost 12 per cent on the same period last year.
It can’t be an easy decision to start your own business in this climate. Although we are seeing steady economic improvements, breaking out on your own is not a decision to be taken lightly.
Perhaps this could partly explain the reason behind the decline but having businesses of my own, I am always an advocate for going after what you want. We hold the keys to our success and I hope we see an increase in these figures in the next quarter.
