Date for statement
Javid sets tough test for Mackay with 11 March Budget
First statement: Sajid Javid
Chancellor Sajid Javid will hold his first Budget on 11 March when he will lay the foundations of the Tories’ ‘union dividend’ with a pledge to spread billions of pounds of investment across the UK.
The new date presents a tight timetable for Scottish Finance Secretary Derek Mackay to deliver his Scottish Budget just three and a half weeks before the start of the new financial year on 6 April.
It is understood that 11 March is the day by which Scottish councils legally have to set council tax rates, which poses serious questions about their ability to do so without knowing the size of the block grant until that day.
Mr Mackay has responded to the date announcement by accusing the Treasury of failing to engage in the process.
He said last month that it was possible for him to set out his Budget before Westminster, but the general view at Holyrood is that this would not be wise.
The UK government has said it will provide estimated figures for Mr Mackay in order for him to get his budget out within the required timetable.
However, should MSPs fail to pass the Budget, the rules dictate that Scotland would revert to the tax rates and bands set by Westminster.
Alexander Garden, chairman of the Chartered Institute of Taxation’s Scottish Technical Committee, said: “We are facing a Scottish budget process that will be conducted at breakneck speed, with little room for manoeuvre.”
During a visit to the new £350 million Trafford Park tram line project in Manchester, the Chancellor promised to “unleash Britain’s potential” and usher in a decade of renewal.
He has signalled an easing of austerity with an increase in borrowing, more spending on public services, transport, and help for the lower paid.
The Chancellor was due to unveil the annual set-piece statement on 6 November but it was postponed after the General Election was called.
The Budget is also likely to include key spending commitments that will benefit Scotland or put pressure on Mr Mackay to match them, such as business rates relief and potential cuts in income tax which would create further divergence for higher rate payers.
Mr Javid, said: “People across the country have told us that they want change. We’ve listened and will now deliver.
“With this Budget we will unleash Britain’s potential – uniting our great country, opening a new chapter for our economy and ushering in a decade of renewal.”
He says the Budget will deliver on the Government’s promises on tax; help tackle the cost of living for hard-working people; and make good on the commitment to level up and spread opportunity, including billions of pounds of investment across the country.
He will use the Budget to update the Charter of Fiscal Responsibility with new rules, taking advantage of low interest rates “to invest properly and responsibly”, while keeping debt under control.
The Budget will prioritise the environment, and build on recent announcements to boost spending on public services and tackle the cost of living.
These include investing in new hospitals, training thousands of new police officers, funding vocational education and the biggest ever cash increase to the National Living Wage, which has already been announced.
On 31 December, the Government said that low-paid workers will receive a 6.2% pay rise with a new National Living Wage (NLW) of £8.72 per hour.
John McDonnell, Labour’s Shadow Chancellor, said: “After a decade of wrecking the economy, we can have no confidence in a Tory government delivering the scale of investment needed for renewal especially with a no-deal Brexit still on the table.
“The lack of foresight in not focusing this budget on the threat of climate change is also criminally irresponsible.
“The government has learnt nothing from the fires in Australia and the floods on Indonesia. This will be a budget of climate change recklessness not renewal.”
Labour’s new leader will be announced on 4 April, the party’s ruling body has stated.
Those who join the party or become affiliated supporters before 20 January will be eligible to vote.
Six MPs have so far entered the running to succeed Jeremy Corbyn after shadow business secretary Rebecca Long Bailey joined Clive Lewis, Lisa Nandy, Jess Phillips, Sir Keir Starmer and Emily Thornberry.