Mixed reaction in Scotland to Chancellor’s summer statment

Speaking yesterday (July 8), Rishi Sunak outlined how he would focus on protecting, supporting and creating jobs as the UK enters the next phase in its recovery following the outbreak.

However, Scotland’s Finance Secretary Kate Forbes said the plan was “a huge opportunity missed” and that “most of it bypasses devolution”.

Delivering his summer economic update, Mr Sunak said: “Our plan has a clear goal: to protect, support and create jobs. It will give businesses the confidence to retain and hire. To create jobs in every part of our country. To give young people a better start. To give people everywhere the opportunity of a fresh start.”

Commenting about the impact for Scotland, he said: “Since this crisis started, our wide-ranging package of support for Scotland has protected more than 620,000 jobs, thousands of businesses and paid £425 million to self-employed people.

“Today I’ve set out our plan to protect, create and support jobs across Scotland – to level up opportunity, safely reopen our economy and strengthen the Union.

“With a massive funding boost for Jobcentre Plus, doubling the number of work coaches, more people will now benefit from personalised and tailored job support. We’re investing £800m through the Barnett formula, giving Scotland the funds to create green news jobs. And we’re protecting the thousands of existing jobs in the hospitality sector with a cut to VAT and the Eat Out to Help Out scheme.”

Scottish Secretary Alister Jack said: “The measures announced by the Chancellor to support the country’s post-coronavirus economic recovery delivers for all parts of the UK.

“The UK Government’s ambitious plan for jobs, with its strong emphasis on our young people, is great news for young Scots.

“The VAT cut for tourism and hospitality will be a huge boost for Scotland. It is now absolutely essential that Scotland’s world-class tourism and hospitality industry can properly open for business.

“The stamp duty cut gives a helping hand to the housing market and building trades in England. I urge the devolved administration to use their powers to do the same in Scotland.

“And, thanks to UK Government spending decisions in the rest of the UK, Holyrood will get a £800m cash boost, bringing their total addition coronavirus support funding to £4.6 billion.

“The Chancellor has set out a fantastic package of support. The devolved administration now need to play its part and show they are serious about Scotland’s economic recovery.”

In response, Ms Forbes said: ““We called for an £80bn stimulus package to build a strong, green and inclusive economic recovery and while there are elements in this announcement to be welcomed, in particular the measures on VAT for tourism and hospitality, overall this package is a huge opportunity missed. It falls well short of delivering what is needed to boost the economy and protect jobs.

“There is no new capital spend, no extension to the furlough scheme for hard-hit sectors and no further support for households in financial difficulty. A half price meal out does not help those struggling to put food on the table.

“Many of the initiatives are short-lived and do not provide long term certainty for business or households. Instead they will simply push the problems back to the end of the year when we will also have to deal with the end of the transition period with the EU.

“Despite announcing new funding measures worth up to £30bn, most of it bypasses devolution and does not provide the Scottish Government with the funding we need to enable us to tailor an economic response that meets Scotland’s needs.

“Like all governments, we are facing huge spending pressures but we do not have the tools that others have to meet them. Along with the Governments of Wales and Northern Ireland, we set out a reasonable, proportionate set of new financial powers that would enable the Scottish Government to respond effectively. Regrettably, the UK Government has turned a deaf ear to those needs.”

The Chancellor’s Summer Economic Update also confirmed an additional £800m of Covid-19 funding for the Scottish Government through the Barnett formula.

The UK Government is providing £4.6bn through the Barnett formula to help the Scottish Government support individuals, businesses and public services through Covid-19.

Mr Sunak said the plan for jobs was the second phase of a three-phase plan to secure the UK’s economic recovery from coronavirus.

The first phase, beginning in March, focused on protection with a £160bn package of support. In Scotland this package has so far protected more than 620,000 jobs, helped thousands of businesses and paid £425m to 146,000 self-employed people.

The Chancellor outlined that following the second phase focusing on jobs, there would come a third phase focusing on rebuilding, with a Budget and Spending Review in the autumn.