Fuel duty and income tax cuts in today’s budget have been welcomed by local MP Michael Moore as good news for the Borders, putting hundreds of pounds a year back in the pockets of lower and middle income families in the area.

The UK Government has decided to finance a reduction in petrol prices at the pump by taking £2bn from the profits of oil companies.

Fuel duty will be cut by 1p per litre from 6pm tonight and next month’s planned increase of almost 5p has been scrapped.

Among the measures announced today by the Chancellor which will help Scottish households are:

· Cutting the cost of fuel duty by 1p per litre and scrapping the planned 5p increase.

· A further increase in personal allowances in 2012 by £630 to £8105 that will cut income tax for 2.2m Scots and remove a further 21,000 Scots from income tax altogether. 71,000 will be removed by the personal allowance change already scheduled for this April, meaning a total of 92,000 Scots taken out of income tax by April 2012. This year’s rise along with next year’s will save the average working family £326 each year.

· Delaying the planned increase in Air Passenger Duty.

Michael Moore MP also said that this budget will also create the conditions for “growth, jobs and a strong, rebalanced economy”.

Measures that will help Scotland’s economic growth include:

· Doubling this April’s planned corporation tax cut from 1p to 2p. This will be followed by annual 1p reductions until 2014 giving us the lowest corporation tax in the G20 at 23p.

· £113m of extra resources for the Scottish Government over the next 5 years: £70m of that will come in 2011-12.

· Bringing forward the operational date of the Green Investment Bank so that it is lending to green projects by 2012 and increasing its resources to £3bn. This will mean hundreds of millions of pounds of potential investment in Scottish renewable projects.

· Start-up and micro businesses will be exempt from new domestic regulation for three years from this April

· The Scottish Government will be allowed to carry forward £130m of under-spend from this financial year into next.

Speaking after the Budget statement, Michael Moore MP said:

‘Many of my constituents have contacted me regarding the rising cost of fuel and this announcement by the Chancellor to cut fuel duty, despite these difficult economic times, demonstrates that the Government is committed to helping Scottish households struggling with their fuel bills.

‘Borders families and communities rely on affordable prices at the pump, so the Government is right to cut the spiralling cost of petrol by taking a bit more from the fast rising profits of the oil and gas sector.

‘Many Borderers will pay less tax or be taken out of income tax altogether next year by rising personal allowances, a flagship Liberal Democrat policy at the last election. This measure, combined with a crackdown on tax avoidance will ensure that lower paid Borderers will benefit while those who should pay tax, do pay tax.

‘The Borders and Scotland will also be given a competitive edge in industry and job creation to help our local businesses thrive and provide the jobs local people need. The Budget cuts corporation tax, putting us on a fast track to have the lowest rate in the entire G20 by 2014.’

UK Budget March 2011 – implications for Scotland

Returning the UK to sustainable, balanced economic growth is the Government’s economic priority. Creating lasting prosperity requires the economy to rebalance from unsustainable public spending towards exports and private-sector investment. This will support the UK’s long-term economic potential and help to create new jobs.

The Government’s economic policy objective is to achieve strong, sustainable and balanced growth that is more evenly shared across the UK and between industries

Key points for Scotland:

· Fuel – A 1p per litre cut in fuel duty from 6pm tonight; and replacing the fuel duty escalator with a Fair Fuel Stabiliser to support motorists when oil prices are high.

· Oil - increased to the Supplementary Charge, a tax on the profits from UK oil and gas production, from 20% to 32%. This reflects the current high oil prices which have substantially boosted the profitability of oil production activities.

· Income tax (personal allowance) - 2.19 million taxpayers in Scotland will gain, and a total of around 92,000 tax payers will be taken out of tax altogether.

· Whisky – The Government will continue with inherited plans to increase alcohol duty by 2% above inflation each year to 2014-15.

· Green Investment Bank (GIB) - Government will capitalise GIB with £3 billion over the Spending Review period – this means an additional £2 billion.

· Corporation tax – reduction to the main rate of corporation tax by a further 1%. From April 2011, the rate will be reduced to 26% and, by 2014, it will be reduced to 23%.

· End Year Flexibility (EYF):

o UK Government is agreeing to allow SG to carry forward £130m agreed underspend from 2010-11 to 2011-12.

o a new budget exchange system to replace EYF to be introduced in 2011-12. Requirement that carry over is subject to annual limit will not be applied to Scottish Government.

· Enterprise Investment Scheme (EIS) - major reforms of the EIS and Venture Capital Trusts schemes, including increasing the rate of EIS income tax relief to 30% and increasing the size of qualifying company for both schemes. The reforms are subject to State Aid approval. The changes will allow more companies to be eligible and incentivise increased levels of investment in companies facing barriers to accessing external sources of finance.

· High Value Manufacturing Technology Innovation Centre (TIC) – announced the creation of the first of an elite network of centres and will benefit UK manufacturing. The TIC with integrate the activities of the Advanced Forming Research Centre (University of Strathclyde).

· Work experience programme - A work experience programme for unemployed young people will be rolled out nationally. An estimated 9,500 young people in Scotland could benefit from the work experience programme.

· New Enterprise Zones - Government will introduce new Enterprise Zones to encourage new investment. These are subject to a Barnett Consequential for Scotland.

· First time buyers - The £250m commitment to first-time buyers to help 10,000 families get on housing ladder will be subject to Barnett Consequentials.

Numbers:

· Consequentials: Budget announces spending increases for devolved administrations as consequentials of spending measures in England lead to an increase of £112m for Scottish Government.