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SCC COMMENT ON THE BUDGET STATEMENT
[ 07-03-2013 ]
Commenting on today’s Budget statement from the Chancellor of the Exchequer, Liz Cameron, Chief Executive of Scottish Chambers of Commerce, said:
“The Chancellor made his position clear that this was a Budget being brought forward against a backdrop of economic growth that was much lower than expected and with higher than planned levels of borrowing. He described the Budget as fiscally neutral and on these terms it is very good news indeed that there was much in the Budget that is extremely welcome to Scottish businesses. That said, there were some significant omissions from this Budget, particularly the Chancellor’s failure to address rising levels of Air Passenger Duty.”
Mrs Cameron went on to comment on specific aspects of the Budget:
On Employer’s National Insurance:
“This is one of the major highlights of the Budget from a business perspective. The move to exempt employers from up to the first £2,000 of employer’s National Insurance payments will directly reduce the cost of taking on new members of staff for smaller businesses and this is vital if we are to foster business growth and tackle unemployment”
On Fuel Duty:
“Scottish Chambers of Commerce has consistently lobbied for the scrapping of this September’s planned rise in Fuel Duty and we are delighted that the Chancellor has listened. Businesses rely on our road network and this move will mitigate cost increases this year at a time when transportation costs are a major factor. In terms of other duties, it is disappointing that taxes on whisky have not been favoured in the same way as the planned reduction in beer tax.
On Corporation Tax:
“The UK’s headline rate of Corporation Tax sends out a strong message internationally about our attractiveness as a place to invest and to do business. This tax was already scheduled to fall to 21% by 2014 and it is welcome news that it will continue to fall further to 20% in 2015.”
On Capital Spending:
“The UK Government’s recent conversion to the need to divert spending towards capital budgets has been extremely welcome and this Budget will provide additional capital spending resources to the Scottish Government in terms of consequential funding. It is imperative that this spending is focused on the areas that will deliver most in terms of the growth of the Scottish economy, particularly in developing our transport and digital connectivity and in house building. If this is to be effective, we must also sharpen up government planning and procurement processes to get the investment as quickly as possible to the Scottish businesses that can deliver.”
On Air Passenger Duty:
“It is extremely disappointing that the Chancellor did nothing to reverse the planned increases in Air Passenger Duty planned for April this year and next. This tax is depriving Scotland of up to 2.1 million air passengers and £210 million of visitor spend each year. A report published last month by PwC revealed that abolishing this tax would deliver an immediate benefit of 0.45% GDP growth and that the government would eventually recoup lost revenues through other taxes. It defies logic that the Chancellor is persevering with this damaging tax and Scottish Chambers of Commerce will continue to fight for the removal or at least the devolution of this tax as a priority.”
On Personal Allowances:
“One of the key factors which is holding back our economic growth is a lack of demand in the economy and a big part of this is consumer demand. By reducing the personal tax burden, the Chancellor is taking the right course of action, particularly at a time when inflation is rising and few businesses can afford substantial increases in wage costs.”
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