The Press and Journal (Inverness, Highlands, and Islands)
BUDGET BOOST FOR OIL INDUSTRY
FLURRY OF DEALS EXPECTED
Chancellor Philip Hammond was forced to admit a significant downgrading of economic growth forecasts at the start of his autumn budget.
Growth was expected to be 2% this year back in March but has now been revised back to 1.5% by the Office for Budget Responsibility (OBR).
Preparations for Brexit meant another £3billion aside to deal with “every possible outcome” over the next two years.
The fiscal climate left little wiggle room for public spending and Mr Hammond admitted to having to raid his war chest for yesterday’s announcements.
However, the chancellor was still able to announce an emergency cash injection of £2.8billion for the NHS over the next three years, plus a freeze on fuel and alcohol duty, except for cheap white cider.
Significantly, the chancellor caved on pressure over delayed payments in the new Universal Credit system, pledging to make waits shorter.
Universal Credit (UC) will roll separate benefits including jobseeker’s allowance and housing credits into a single payment.
But campaigners have highlighted claimants being threatened with eviction and forced to use foodbanks during the six-week wait for the first payments to arrive in pilot areas like Inverness.
Now Mr Hammond has said he recognises cross-party concerns about delivery of the new benefit.
“Today we will act on those con- cerns,” he said, outlining a reduction in the wait for the first payment from six to five weeks and confirming housing benefit will continue to be paid for the first fortnight during the switchover.
Scottish Secretary David Mundell welcomed the move, which he said showed the UK Government was listening to feedback from pilot areas such as Inverness.
He said: “There are examples of people who have had difficulties that we need to learn from and the budget today has reflected that.
“All of these things are about ensuring the system moves forward as effectively as it possibly can.
“UC is about supporting people back into work because that is the best way out of poverty.”
But SNP Westminster economy spokeswoman Kirsty Blackman said she was disappointed new claimants would still be left waiting seven weeks for support this Christmas.
The Aberdeen North MP said: “The chancellor has had to act because of the devastating impact UC has had on areas where it has been rolled out, with he increases in people needing to use food banks and in housing arrears.
“The fact he has reduced the waiting time from six to five weeks is not a huge concession and the reasons he has given for that don’t seem good enough to me.
“I hope it helps but I don’t think it will -- people applying for UC near Christmas will still have a seven week wait until they get the funds they need.”
Citizens Advice Scotland (CAS) chairman Rory Mair welcomed what he called “significant changes” showing the chancellor was “willing to work constructively”. He added: “We would urge that the changes be introduced as quickly as possible however, so claimants do not have to go for long periods of time without income.
“There are also other problems with UC which we believe still need to be addressed, and we will continue to press for these changes.”
Scottish Federation of Housing Association (SFHA) chairwoman Sally Thomas said she was disappointed the rollout of UC was not “halted until its failings are resolved”.
Shopworkers’ trade union Usdaw added the changes went “nowhere near far enough to prevent unnecessary hardship for many working families”.
The chancellor’s headline announcement was on abolishing stamp duty for first time buyers on properties under £300,000 and also on the first £300,000 of homes worth up to £500,000.
“House prices are increasingly out of reach for many,” said Mr Hammond. “It takes too long to save for a deposit and rents absorb too high a portion of monthly income.”
The Treasury expects the change to help a million first time buyers over the next five years, with an average saving of £1,660 outside London.
But the OBR said the tax relief was likely to drive up house prices, leading to questions over how effective the policy would actually be.
And the relief will not apply in Scotland, where ministers have introduced the Land and Buildings Transaction Tax - which applies a levy of 2% on property sales between £145,000 and £250,000, with this rising to 5% from £250,000 and £325,000.
Mr Mundell said the chancellor had highlighted how Scotland was becoming a high tax area for both housing and income compared with south of the border.
He said: “Despite having higher stamp duties, the Scottish Government brought in less revenue than they predicted. This is not the basis on which to grow the Scottish economy.”
Ms Blackman countered: “It’s pretty cheeky for David Mundell to suggest the UK is leaving Scotland behind when we have been blazing the trail on housing issues.”
Comment, Page 29