CHANCELLOR Jeremy Hunt announced a raft of policies on Wednesday morning as he set out the first Tory Budget since 2021.
Commitments ranged from expanding free child care and keeping the Energy Price Guarantee in place for a further three months, to increasing duties on Scotch whisky while at the same time reducing the tax paid on draught beer by pubs.
While the majority of the announcements don’t apply to Scotland due to devolution, there are plenty that do.
So what parts of the Spring Budget apply to Scotland?
Funding for Scottish projects
THE Edinburgh Festivals are set to receive millions in funding, Hunt announced, as well as an infrastructure project in Moray, a Tory-controlled council area and Douglas Ross’s constituency.
Additionally, the Chancellor announced that there would be 12 new Investment Zones established across the UK, with at least one in Scotland.
We’ve pulled together a handy explainer of what an Investment Zone is, described by Hunt as a “potential Canary Wharf”.
Energy Price Guarantee (EPG)
THE EPG will remain frozen at £2500 for a typical household for a further three months until June this year.
However, bill payers still face having to find an extra £67 a month to pay their energy bills from April when the Energy Bill Support Scheme, which has seen households receive six monthly payments of £66 or £67 direct to their energy accounts, comes to an end.
In further signs of the pressure easing, from July, lower wholesale gas prices are expected to feed through further to customers.
Pre-payment meters
FOLLOWING reports that some households were being forced onto more expensive pre-payment meters by energy firms, the Chancellor has said the premium will end from July. The move will bring prices for consumers on pre-payment meters in line with those who pay via direct debit.
The Treasury says this will save more than four million households £45 a year on their energy bills.
Universal Credit
In line with Hunt’s announcement to expand free childcare provision to under 2s, changes will be made to ensure UC payments intended to cover childcare can be paid up front, for example when the provider asks for payment, and will be brought in in summer 2023.
There were changes announced to the process to receive Personal Independence Payments (PIP) for those with disabilities, and the premiums they will receive. However, as Scotland is replacing PIP with a new Adult Disability Payment through the Scottish Government, it is unclear how this will overlap.
Pensions
HUNT lifted the cap that savers can keep in their pension before being taxed from £40,000 to £60,000. Additionally, the Tories scrapped the lifetime allowance on pension savings which was previously £1.07 million.
Hunt said removing the threshold would simplify the tax system and “incentivise our most experienced and productive workers to stay in work for longer”.
Alcohol Duty
WHILE pubs saw a boost with a Brexit Pubs Guarantee and a relief on duties for draught beer, Scotch Whisky producers were not so lucky, and saw an increase of 10.1%, one of the largest tax hikes in recent decades.
The Chancellor increased duty across all four alcohol categories, with non-draught alcohol products set to see a rise of 12.6%.
The Scotch Whisky Association said it was a “historic blow” to the industry.
Fuel Duty
THE planned 11p rise in fuel duty was scrapped for the next 12 months, while the previous “temporary” 5p cut remains in place and rates will be frozen.
Corporation Tax
WITH Corporation Tax set to increase from 19% to 25% on April 1, Hunt aimed to soften the blow for big business by allowing “full capital expensing”. It means that companies can write off plant machinery or equipment that qualifies under government rules and not have to pay tax on them.
Barnett Consequentials
HUNT’S flagship policy in the Spring Budget was the expansion of free childcare for children aged over nine months old. In Scotland, where childcare is devolved, all parents can apply for the scheme, while in England both parents must be in work to receive the full 30 hours offered.
Scotland will receive Barnett Consequentials as a result of the policy decision, which Hunt said would be an additional £320 million for Scotland in 2023-24 and 2024-25.
However, the Fraser of Allander Institute, an independent research unit at Strathclyde University, said there was not much detail available on the breakdown.
They tweeted: “Unfortunately, we've not seen any more detail on Barnett Consequentials.
“There was no breakdown in any published HMT documents, other than one sentence in the main report that told us that this £320m was the total for 2023-24 and 2024-25.”
It comes as the Office for Budget Responsibility (OBR) said that the UK will avoid slipping into recession, but still faces the largest drop in living standards on record.
