There was “nothing” in the Chancellor’s spring statement that would reduce household bills, Scotland’s Finance Secretary Kate Forbes has said.
Rishi Sunak announced on Wednesday that fuel duty would be cut by 5p per litre, as well as an increase to the national insurance threshold of £3,000.
The Chancellor also pledged to cut the lowest rate of income tax by 1%.
In Scotland, different income tax charges apply, with 19% already the starter rate north of the border on earnings between £12,570 and £14,732 – rising to 20% for those making between £14,732 and £25,688.
But Kate Forbes hit out at the plans on Twitter, saying: “Households and businesses are seeing soaring energy costs right now – that could plunge thousands into fuel poverty.
“There was nothing in the spring statement to reduce energy bills today or uprate benefits.”
Ahead of the statement, Ms Forbes had urged the Chancellor to take action on the impending cost of living crisis, including by matching a Scottish Government pledge to uprate benefits by 6%.
Ms Forbes has also urged the Chancellor to implement business relief on national insurance contributions, providing immediate funding for sectors impacted by the Russian invasion of Ukraine, as well as removing VAT from energy efficient heat equipment and reducing or removing it altogether from energy bills.
Put simply, much more needs to be done than has been announced today
The Finance Secretary added that there should be powers provided to increase levels of flexible working – to allow more people back into work – along with another two cold weather payments – one to be paid immediately and another provided this winter.
Of all the proposals outlined by the Finance Secretary, only scrapping the VAT on energy efficient heat equipment was included.
Scottish Secretary, Alister Jack, said there would be £45 million coming to the Scottish Government as a result of the statement, although it is unclear from which announcement the money will flow.
“Families across the country are struggling with the cost of living. The reduction in fuel duty, zero VAT on green home improvements, and a tax cut for low and middle earners will help them with these growing pressures,” he said.
“And an extra £45 million for the Scottish Government will allow them to provide additional support to the most vulnerable families over the coming months.
Scottish Labour leader, Anas Sarwar, said the proposal from the Chancellor “does not touch the sides”.
“Rishi Sunak could have taken steps to ease this cost of living crisis,” he added.
“To end the choice between heating and eating for those making impossible choices. He failed.”
Derek Mitchell, the chief executive of Citizens Advice Scotland, said more needed to be done than what was included in the statement, adding that household budgets in Scotland were at “breaking point”.
“It’s vital to understand that this crisis has been brewing for some time, with 1.8 million people in Scotland seeing their finances worsen during the pandemic,” he said.
“One in three of us already find energy bills too high even before the record rise in prices due in April, and the knock-on effect of that is almost half a million people cutting back on food to afford energy bills.
“Some of the measures announced today by the chancellor will provide some respite, however, in reality, it won’t be enough to halt a rising tide of poverty that could sweep millions across the UK into debt and destitution.
“Put simply, much more needs to be done than has been announced today.”
The Scottish Chambers of Commerce welcomed some of the measures, but added: “The Chancellor should have gone further to help Scotland’s businesses recover.
“A delay to the imminent national insurance rise and the introduction of a temporary or permanent energy price cap for micro, small and medium sized enterprises would have helped businesses to expand and grow as they get back on their feet following the impact of the Covid-19 pandemic.
“The economic environment facing Scotland’s businesses remains challenging and it’s essential that Government in Westminster and Holyrood do everything they can to tackle inflation and rising cost pressures to help drive a strong economic recovery.”
