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by Louise Wilson
06 March 2024
Chancellor to announce tax cuts as Scottish Government calls for infrastructure investment

Jeremy Hunt will deliver the Spring Budget on Wednesday afternoon | Alamy

Chancellor to announce tax cuts as Scottish Government calls for infrastructure investment

Chancellor Jeremy Hunt has pledged to bring in “permanent cuts in taxation” as part of his Spring Budget.

But what form those tax cuts will take remains under wraps, with the possibility of a reduction in National Insurance contributions and income tax being floated.

While the former will impact the pay packet of Scots, the latter will not as income tax is devolved to the Scottish Government – which has just raised it for those earning over £75,000.

Hunt will set out his spending plans for the year ahead on Wednesday afternoon, likely the last major fiscal event ahead of the 2024 general election.

He is expected to say: “Because of the progress we’ve made because we are delivering on the prime minister’s economic priorities, we can now help families with permanent cuts in taxation.

“We do this not just to give help where it is needed in challenging times, but because Conservatives know lower tax means higher growth – and higher growth means more opportunity and more prosperity.”

Dubbing it a “budget for long-term growth”, Hunt will urge voters to stick with his party to ensure inflation can be brought down further.

And warning that a Labour victory at the election would result in the party turning on the “spending taps,” he will add: “We must once again be responsible and increase our resilience to future shocks. That means bringing down borrowing so we can start to reduce our debt.”

Scottish finance secretary Shona Robison has urged the chancellor to increase capital funding to enable the building of new homes and other major infrastructure projects.

She called on Hunt to “use any headroom available” for this purpose rather than cutting taxes.

She said: “With the UK now in recession, capital investment to kickstart economic activity is needed now more than ever. Infrastructure is vital for jobs, economic growth and the path to net zero. That’s why I am urging the chancellor to deliver the capital funding Scotland needs.”

Scottish Labour has said that “ordinary people” are “being made to pay” for SNP and Conservative mistakes.

Shadow Scottish secretary Ian Murray said: “Scots face the highest tax burden anywhere in the UK and the slowest growth in disposable income, while at the same time the SNP and Tories oppose a windfall tax on the oil and gas giants who are raking in billions of pounds of profits every month.”

The chancellor is reportedly considering extending the energy profits levy – also known as the windfall tax – to fund tax cuts.

But Scottish Tory leader Douglas Ross has urged Hunt to resist such a move, telling BBC Scotland that doing so would impact sector stability.

He said: “I've made the case very strongly to the chancellor that, if he chooses to go ahead with this, then we've got to see what other measures are in place to provide that certainty and security to the oil and gas companies.”

Labour has said it would increase the levy from 75 to 78 per cent and extend it by a year.

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Read the most recent article written by Louise Wilson - Patrick Harvie: Douglas Ross ‘playing shallow politics’ over Michael Matheson row.

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