The UK Chancellor has discussed plans to raise UK income tax and VAT thresholds with his party colleagues in Scotland.
These were two of the top items on the agenda at a ‘behind closed doors’ confidential meeting between George Osborne and senior Scottish Tory MSPs in Edinburgh earlier this week.
Also discussed was the ‘divergence between the Scottish and Rest of UK economic performance’ – where Scotland is suffering from a lower – and declining growth rate – and higher than UK unemployment, both driven by the North Sea crude oil slump.
The full 7-point agenda for the meeting** between Osborne and Tory Holyrood MPs was:
- The economic impact of an’ increase in the 40% income tax’ threshold
- ‘Increase in the VAT threshold’
- The air passenger ‘jet tax’ duty, and
- The divergence between the ‘Scottish and Rest of UK economic performance’
- Apprenticeship levy
- Support for ship-building and defence contracts
- Introduction of loan guarantees for the oil and gas industry
Afterwards Scottish Conservative Energy spokesman Alexander Burnett, publicly called on the UK Chancellor to provide Treasury-backed loan guarantees to boost investment in the North Sea.
Given ‘normal’ party and political etiquette, it would be unusual for a Tory politician to make such a public policy statement which could embarrass himself and the Chancellor unless there is some kind of understanding that this will be formally endorsed by Osborne later.
Burnett said that the Chancellor was ‘receptive’ to calls to expand the UK Loan Guarantees Scheme to help secure new investment in oil and gas infrastructure.
Leading business analyst Deloitte predicted earlier this week that there would be a rise in North Sea infrastructure deals this year, with private equity playing a growing role.
Burnett said: “I took the opportunity to speak to the Chancellor during his visit to Scotland to press the case to provide more support for the North Sea oil and gas industry.
“In particular, we discussed using Treasury-backed loans to secure new investment.
“We have already seen the level of commitment from this Conservative government with an unprecedented level of support for the oil and gas industry over the last two Budgets.
“In March, the Chancellor effectively abolished Petroleum Revenue Tax and cut the supplementary charge from 20% to 10% as part of a tax overhaul worth £1 billion for the North Sea sector.
“I believe there is more that can be done to encourage investment and, while the industry still faces significant challenges, there are reasons for optimism for the future.
“The Wood Review highlighted the importance of joint working as companies look to increase efficiency and maximise recovery of remaining North Sea reserves. This will help to ensure that the industry remains resilient and competitive for future years.”
- SNP MSP Graeme Dey is set to become the convenor of the Environment Committee in the Scottish Parliament.
** Note to Ruth Davidson, Leader, Scottish Conservative Party:
This exclusive report on the UK Chancellor’s plans for possible rises in UK income tax and Value Added Tax was sourced exclusively by Scottish Energy News and in no way involved Alexander Burnett.