Ministers call for Spring Budget to heed IMF advice
against tax cuts.
The Chancellor’s Spring Budget must provide Scotland with the
increased funding needed for public services, infrastructure and
cost of living support, Ministers have urged.
The UK Government should also heed the recent advice from the
International Monetary Fund (IMF) against further tax cuts,
Ministers added.
Deputy First Minister has written to the Chancellor
ahead of the Spring Budget on 6 March, urging him to:
- provide increased funding for public services and capital
investment
- increase cost of living support, including by ending the
two-child limit, benefits cap, young parent penalty in Universal
Credit, bedroom tax and Local Housing Allowance freeze
- legislate for an essentials guarantee giving basic
necessities and a social tariff for energy bills for those who
need them most
- transfer National Insurance powers so the Scottish Government
can design a tax system fully suited to Scotland’s needs
- urgently review the support needed for businesses that are
continuing to struggle with bills which are too high, including
through use of VAT powers
- support measures to reduce carbon emissions, including by
making it easier for existing buildings to be retrofitted with
energy-saving materials
Separately, Public Finance Minister wrote to Chief Secretary to the
Treasury arguing that tax cuts funded by
cuts to public spending would “further damage the services our
most vulnerable rely on”.
The Deputy First Minister said:
“When I presented our draft Budget for 2024-25 in December, I set
out that the UK Government’s Autumn Statement had been a worst
case scenario for Scotland’s finances. Our Block Grant has fallen
by 1.2% in real terms since 2022-23 and the UK Treasury is
slashing our capital funding by almost 10% in real terms between
2023-24 and 2027-28. Similar pressures are faced by the other
devolved governments in Wales and Northern Ireland.
“With the UK Government’s Spring Budget it is vital that they
change course. There is a clear need for increased investment by
the UK Government in public services and infrastructure, as has
been recognised by the IMF. I would urge the Chancellor to use
whatever headroom may be available to prioritise investment in
public services and infrastructure over tax cuts.
“The Scottish Budget has prioritised funding for social security
and public services in line with our three missions. Yet our
spending remains constrained by the decisions of the UK
Government.
“The UK Spring Budget is a key opportunity to increase funding
for our vital public services and the infrastructure that
supports our economy and communities, as well as supporting
people with the cost of living and investing in our net zero
future. I urge the UKG to rise to this challenge.”
Background
IMF warns UK government against
further tax cuts - BBC News
