27 Nov 2002
Commenting on the Chancellor's Pre-Budget Statement to the House of Commons, which contains measures to boost enterprise and employment and help families and pensioners the Secretary of State for Scotland said:
"As a result of the Government's prudent management of the economy and the public finances, Scotland and the UK have weathered the recent global economic slowdown better than many of our major competitors and better than in past downturns.
"Large increases in public spending in Scotland are in prospect following the Government's spending review in July. Our public spending plans remain affordable within the Government's fiscal rules, but we must ensure that public sector productivity increases and that our plans deliver better outcomes.
"The Government has taken tough decisions to secure a platform of economic stability. Employment is close to historically high levels, unemployment is at its lowest level for a generation, interest rates and inflation are low, and public finances are sound. This stability has allowed the Government to:
"Enterprise and employment in the poorest parts of the country will be boosted by the establishment of new enterprise areas. Having already cut stamp duty in these areas, we plan to abolish it entirely with full stamp duty exemption for all business property purchases, subject to EU rules. This will encourage economic activity in the most deprived neighbourhoods and benefit 2,000 areas in the UK, including the poorest 15 per cent of communities across Scotland.
"We will offer businesses special investment help through the community investment tax credit - which offers for every £100 of private investment an extra £25 of public investment.
"We will continue to help small businesses. The VAT flat rate scheme will be extended to businesses with a VAT excluded turnover of up to £150,000, benefiting up to 44,000 businesses in Scotland. Furthermore, eligibility for the Small Firms' Loan Guarantee Scheme will be extended to the retail and catering sectors.
"The Chancellor announced funding for an extension of employer training pilots for a second year in 2003/04. There will be a consequential increase of just over £11 million in the Scottish Government's budget for 2003/04.
"Business in Scotland is set to benefit from the measures outlined by the Chancellor today. Oil and gas are of vital importance to the Scottish economy - employing directly and indirectly some six per cent of the workforce. Today's announcement that North Sea Royalty is to be abolished in its entirety will provide the stability companies are looking for to enable their investment plans to proceed with certainty.
"The full package of changes announced by the Chancellor in the budget have now been implemented. This is a regime that is designed to encourage investment while giving fairer return to the British people. It delivers a long term framework for the next stage development of the North Sea.
"Families and pensioners are also benefiting from the sound economic stability maintained by the government; the Retirement Pension is going up by more than the RPI for the third year running, benefiting over 900,000 pensioners in Scotland. For our poorest pensioners, the Minimum Income Guarantee will rise by over £00 a year, benefiting around 182,000 pensioners in Scotland. And from October 2003, we will be introducing further support for 400,000 pensioner households through the new Pension Credit. This will reward people who have saved for their retirement.
"We are supporting families too. From April 2003, we are introducing the new Child Tax Credit and the Working Tax Credit. This will provide real benefits for 450,000 families in Scotland.
"The Government will continue to work closely in partnership with the Scottish Government to promote prosperity for all the people of Scotland."
NOTES TO NEWS EDITORS