VAT cuts called for in Scottish Government’s £80bn economic plan
The Scottish Government has called for an £80 billion package from Westminster to revive the UK economy as the country starts to emerge from coronavirus lockdown.
Finance secretary Kate Forbes said the scale of the stimulus mirrors the approach taken in Germany and would help “protect jobs and deliver new ones”.
Vatcutstohelpthecountry’s beleaguered tourism industry are called for in a Scottish Government report entitled Covid-19: UK Fiscal Path – A New Approach, as well as a reduction in employers’ National Insurance to boost recruitment.
More financial powers for the Scottish Parliament are also set out.
It was published yesterday as Prime Minister Boris Johnson prepared to unveil a major multi-billion pound capital spending plan to help drive recovery over the next decade.
Ms Forbes said the Uk-wide package was needed as Westminster still controlled much of the economic levers for Scotland.
“We are emerging from the biggest economic shock of our lifetimes,” she said.
“It has hit the most vulnerable in our society disproportionately and presents challenges that the Scottish Government does not currently have the powers to meet.
“The UK Government’s fiscal policies are still key in determining our budget, so today we set out the principles we believe it should follow to ensure we emerge with a fairer, greener economy that values wellbeing alongside growth.
“This report recommends bold, practical steps which would provide an immediate boost to our economy, protect existing jobs and deliver new ones. It tackles public debt, employment and proposes measures to further support business.
“Crucially, it avoids any return to austerity.
Estimates suggests the economy has shrunk by about 20 per cent across the UK as a result of Covid-19 lockdown, while unemployment has also soared by 30,000 in Scotland.
The £80bn package would allow the tourism and hospitality industries to move onto a reduced VAT rate of 5 per cent, the report states.
It also suggests a two pence cut in employers’ National Insurance Contributions to reduce the cost of hiring staff.
A new National Debt Plan is also called for to help business and household budgets recover from the effects of the pandemic.
The report also calls for a jobs guarantee scheme for young people and extend sector-specific employment and business support schemes.