Budget 2021
Throughout the pandemic, the UK Government has taken swift and decisive action to protect nearly a million jobs and tens of thousands of businesses across Scotland – it’s time for Scotland’s government to work together to recover from the pandemic and rebuild Scotland.
Now Rishi Sunak is going further extending the furlough scheme by five months, providing £1.2 billion more for the Scottish budget, enhancing the North East’s transition to a low carbon economy, helping those on low incomes get onto the housing ladder, and funding the recovery of our communities through the Levelling Up Fund. These are the actions of a Government focused on recovery.
More funding for the Scottish budget
- Rishi Sunak has delivered £13.3 billion for the Scottish budget since the pandemic began, including £1.2 billion announced in today’s budget. This includes £11 billion to fight COVID-19 and £2.3 billion in general funding. (UK Government, 25 November 2020, link; UK Government, 15 February 2021, link; UK Government, Budget 2021, p.65, 3 March 2021, link
The UK Government is protecting jobs and businesses across Scotland
- The furlough scheme will be extended until the end of September 2021. The UK Government will continue to pay 80 per cent of furloughed employee’s wages until the end of July. Employers will then be asked to make a 10 per cent contribution towards wages in August and a 20 per cent contribution in September. So far the scheme, along with the Self-Employed Income Support Scheme has protected almost a million jobs in Scotland. (BBC News, 3 March 2021, link)
- Two further grants for the self-employed. The UK Government will introduce a fourth grant covering the period February to April, worth 80 per cent of people’s average monthly revenues. From May, a fifth grant will be available which is more targeted towards those most affected by the pandemic: people whose revenues have fallen by more than 30 per cent will receive the 80 per cent grant, while those whose revenues have fallen by less than 30 per cent will receive a 30 per cent grant. And we will ensure that the more than 600,000 people who became self-employed last year, and filed their 19-20 tax return by 2 March, will now be eligible for both grants. (UK Government, Budget 2021, p.45, 3 March 2021, link)
- Extending the VAT cut for hospitality and leisure businesses until the end of September 2021. VAT will remain at 5 per cent for hospitality and leisure businesses until the end of September 2021, at that point the rate will increase to 12.5 per cent and will remain at that level until April 2022. (UK Government, Budget 2021, p.67, 3 March 2021, link)
- Extended the increase of the standard rate of Universal Credit by £20 a week for another six months. The standard rate of Universal Credit was increased by £20 a week for an initial one year period from 6 April 2020, meaning claimants will be up to £1,040 better off during the year. Today, Rishi Sunak has announced that this uplift will continue to financially support those who need it most for another six months. (UK Government, 20 March 2020, link; The Sun, 3 March 2021, link; UK Government, Budget 2021, p.45, 3 March 2021, link)
- Cancelling the planned increase in duty on all alcohol, including Scotch whisky. Tax on spirts, wine, cider and beer will be frozen for another year. (UK Government, Budget 2021, p.54, 3 March 2021, link)
- Cancelling the planned increase in fuel duty. Tax on the sale of fuel will be frozen for the whole of 2021-22 will be frozen for the 11th consecutive year, saving motorists £1,600 since 2010. (UK Government, Budget 2021, p.53, 3 March 2021, link)
The UK Government is helping to rebuild Scotland from the pandemic
- Allocated more than £25 million in extra funding for three of Scotland’s growth deals. The Ayrshire, Argyll and Bute, and Falkirk Growth Deals will get a funding boost of £25.8 million over the next five years. And the reprofiling of the deals to be delivered over 10 years instead of 15 mean the Ayrshire deal will get an extra £3.4 million per year for the next ten years of the deal from 2021-22, with the Argyll and Bute Deal getting and extra £800,000 per year from 2022-23 and the Falkirk deal will get an extra £1.3 million per year from 2022-23. (STV News, 2 March 2021, link)
- Committed £34 million for Aberdeen and the North East. £27 million has been allocated to transform north-east Scotland into a globally competitive hub for cleaner energies such as offshore wind and hydrogen as the industry decarbonises and diversifies. £2 million has been allocated to continue the development of the deal and a further £5 million has been allocated to the Global Underwater Hub in Aberdeen, on top of the £1.3 million in funding announced last year. (STV News, 2 March 2021, link)
- Launching a new loan scheme backed by the UK Government to help businesses recover from the pandemic. The Chancellor’s Recovery Loan Scheme will offer loans of between £25,000 and £10 million to businesses of all sizes. These loans will be backed by an 80 per cent guarantee from the UK Government. (UK Government, Budget 2021, p.48, 3 March 2021, link)
- Announced a new mortgage guarantee scheme for home buyers. The cost of a deposit can be one of the biggest barriers to people getting on the property ladder. That is why, from April, lenders who commit to providing loan-to-value ratios of between 91 to 95 per cent can get a UK Government guarantee on the full value of those mortgages. (UK Government, Budget 2021, p.46, 3 March 2021, link)
- Extending the stamp duty cut in England until the end of June. The UK Government has announced the £500,000 nil rate band will end on 30 June, before tapering down to £250,000 until the end of September, meaning 60 per cent of buyers in England will pay no stamp duty, before returning to its normal level of £125,000 from 1 October. In Scotland this is a devolved decision, buyers will pay Land and Building Transactions Tax on purchases over £145,000 from 31 March unless the SNP can be convinced to follow the British Governments lead. (The Scotsman, 27 February 2021, link; UK Government, Budget 2021, p.46, 3 March 2021, link)
Q&A
Q: The SNP say the Shared Prosperity Fund is a power grab?
The UK Government are delivering on their promise to replace EU structural funds. This is vital investment in Scotland’s communities that will create jobs and improve infrastructure – we don’t see why the SNP would turn it down.
Q: The SNP say the UK Government aren’t doing enough for Scotland?
The UK Government has delivered billions in extra funding since the pandemic began and Rishi Sunak’s furlough scheme has protected almost a million jobs and will now run until the end of September.
Q: Do Scottish Conservatives still want to cut taxes?
Thankfully the SNP listened to the Scottish Conservatives and decided not to raise income tax in Scotland, and while we would like see Scotland’s tax rates come into line with the rest of the UK in future, we recognise that now is not the time while we are recovering from the pandemic.
Q: The UK Government should give Scotland more borrowing powers to deal with COVID-19?
The SNP Government already have borrowing powers and they have failed to get cash they do have out the door to support businesses. The UK Government has provided more than £11 billion extra for our budget since the start of the crisis.
Q: The SNP say the National Living Wage is still short of real living wage?
The UK Government has accepted the recommendations of the low pay commission in full and increased the National Living Wage by 2.2 per cent to £8.91.
