Letter from Westminster
Wednesday last week was budget day. The budget is no longer the jewel in the parliamentary calendar that it used to be but it is still important and rarely more so than when the country is under the economic cosh as it is today.
From the perspective of the Northern Isles there was plenty to welcome. In particular the ending of the fuel duty escalator which the government inherited from the last administration and which would have added approximately another five pence per litre to the cost of petrol and diesel. On one view the decision to cut duty by one pence per litre had the effect of making it six pence per litre cheaper than it would otherwise have been.
There was, however, a lot more to the budget than that. The real imperative for the government right now is to get the economy growing again. In that respect the setting up and capitalisation of the green investment bank, which will fund some of the research and development in new low-carbon technology which private finance alone would not undertake, was welcome.
Likewise the setting up of enterprise zones to stimulate growth in the regions of England will bring with it extra money for the next Scottish government which I hope will also be given over to stimulating economic growth.
Making sure that it pays people to work when the jobs are there for them is also an important part of the strategy and while it would be impossible and inappropriate to cut the rates of income tax, the raising of the tax free allowance for the second year in a row is something which will give more money to the lowest paid workers and will remove many more from paying tax completely.
If Wednesday’s budget was an exercise in dealing with the economic difficulties facing the country then Saturday’s speech by Ed Miliband to the TUC march and rally was an exercise in denying them. I confess I do not understand how the unions can organise a march demanding an end to public spending cuts while at the same time bankrolling a Labour Party which set in train a process of cutting public spending for the next seven years starting with a 20 per cent cut now.
Likewise, if tackling tax avoidance were the silver bullet that so many on Saturday were telling us it was, then I am bound to think that some government would have done so by now. Tackling tax avoidance is in fact a priority for the Treasury but we have to be realistic in accepting that it does not provide the certainty that financial markets demand. It is cruel to the people whose jobs are at risk to try and present this as some sort of easy solution.
For Ed (or Edward as he now styles himself in the House of Commons) to compare Saturday’s march to the civil rights movement in America of the 1960s or the anti-apartheid struggle in South Africa told you more about Mr Miliband and his judgment than it did about public spending cuts.
Alistair Carmichael MP
