Gordon Brown’s last budget slashed 2p off the main rate of income
tax, seen by many commentators as a gift to voters, but also offset by
the abandonment of the 10p rate of tax that was originally brought in
to help those on low incomes.
The Budget announcement will mean an extra £1.8bn over the next four
years for the Scottish Executive, although the greater proportion of
that money will come toward the second half of the four-year period.
The Chancellor cut Corporation Tax by 2 per cent, but increased
business rates for small companies from 20 per cent to 22 per cent, a
move that will particularly affect Scotland with its high proportion of
small businesses.
Contentiously, Brown claimed that North
Sea oil revenues – thought by some to be critical to the economic
prospects of an independent Scotland – were estimated at £12bn last
April but now stood at just £7bn as a result of loss of production in
the North Sea and rising costs.
The SNP said that in fact the fall was because the Treasury had got its forecasts wrong last year.
In other changes, fuel duty was
put up, and owners of non-green vehicles are to be charged higher rates
of road tax, a move that has angered farmers, who say they need 4x4s
for their work.
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