PBR 2009: Reaction Outside Westminster

Left Foot Forward examines the political reaction across Scotland, Wales and Northern Ireland following possibly the toughest Pre-Budget Reports since Labour came to power in 1997.

SCOTLAND

For the SNP, Treasury Spokesman, Stewart Hosie, attacked the report as “a damaging pre-election pitch” that threatened the recovery in Scotland. He continued:

“Labour keep making the wrong choices on the issues that matter. Instead of slashing the Scottish Government’s budget by £500m, the Chancellor should have announced he was scrapping Trident – saving £100m and ridding Scotland of this obscene weapon of mass destruction.

“This is exactly why Scotland needs to the full fiscal powers of an independent nation. We must be able to manage our own economy in the best interests of the people of Scotland.”

The SNP further raised their concerns that whilst they claim the UK Government was slowing down on capital spending at the wrong time, the Chancellor predicted net increases in North Sea Oil revenues of £9.5 billion over the next five years.

In other reaction from the SNP:

• Finance Committee member, Joe Fitzpatrick MSP criticised the Chancellor for ignoring pleas by the computer game’s industry in Scotland for a tax break.

• Welcomed the decision to reduce the tax on bingo as “a step in the right direction”, whilst calling for more work to bring taxes on bingo in line with the rest of the gaming industry.

In making the fiscal case for independence, SNP MP, Angus MacNeil concluded:

“Scotland’s share of UK debt will cost £34.25 million per day until the day of independence due to the percentage of inherited debt.

“Meanwhile independent Norway has an Oil Fund of £280 billion worth £134,000 per Norwegian household. The difference between that sum and UK equivalent household debt is truly eye watering sooner Scotland gets its independence the better.

“And the other countries Labour and the other unionist parties have traduced still show better forecasts for wealth per head than the ailing UK.”

In a side swipe at the SNP administration, Scottish Secretary, Jim Murphy defended the PBR:

“The Scottish government’s budget is at a record high and because of the decisions taken today, it’s going up again next year by a further £23m.

“The budget’s doubled and it continues to increase. It’s never been bigger and the Scottish government currently has more money than it’s ever had – it should probably spend it more wisely.”

WALES

In Wales, the Chancellor’s statement came as Carwyn Jones was unanimously confirmed by the Assembly as the next First Minister. In his acceptance speech, Jones alluded to the tough financial and economic challenges faced by Welsh families.

Plaid Cymru, Labour’s coalition partners at Cardiff Bay, raised their concerns over the Government’s lack of progress in implementing the recommendations of the Holtham Report into the future of financing Wales and its devolved bodies.

Plaid’s Westminster Leader, Elfyn Llwyd said:

“We need to see some evidence that the Treasury has engaged with the findings of the Holtham Commission.

“Last week, the Commission produced an alternative needs-based model of the Barnett Formula which would mean the Welsh Assembly block grant would get £400m more next year. Without addressing this reform of the Barnett formula, I am concerned that Wales will be slammed twice by these budget cuts.

“Previous estimates show that the Welsh budget is being hit by up to £2.8bn over the next four years under current expectations. It is irresponsible to impose cuts, especially in these tough economic times, without paying due attention to Wales’ funding.”

In a sign of good news, however, the Department for Business, Innovation and Skills announced the creation of a new £44 million High Performance Computing Institute for Wales. £10 million will come from the Strategic Investment Fund which the Chancellor outlined in the PBR would increase from £750 million to £950 million.

NORTHERN IRELAND

Northern Ireland’s DUP Finance Minister, Sammy Wilson, spoke of his relief that the UK block grant to Stormont would not be cut.

Wilson’s relief came after his prediction that the grant could be cut by £100 million. What is more, far from facing a cut, the PBR announced total spending increases in Northern Ireland of £28 million, £8 million of which will go to the devolved government.

Despite this, the Finance Minister expressed his disappointment at the announcement that National Insurance contributions will rise from 2011-2012.

He continued:

“This is a politician’s budget with an election in mind because many of the hard decisions are being put off until after the election.

“But there’s a huge backlog of debt to be dealt with sometime.”

Reacting to the Chancellor’s decision to cap public sector pay rises at 1% over the next two year, Wilson said:

“Although the constraints in public sector pay will also apply to Northern Ireland, a key issue for the Executive is whether we would wish to match the Whitehall efficiency targets and I will be taking forward some preparatory work with my ministerial colleagues early next year.”