22nd June 2010
Commenting on the Chancellor’s Emergency Budget Statement today, Liz Cameron, Chief Executive of Scottish Chambers of Commerce, said:
“This was always going to be a painful Budget as the new coalition Government seek to make early inroads into tackling the UK’s budget deficit. Despite assurances from all the political parties that raising the rate of VAT was not in their immediate plans, I think we all expected an increase to 20% sooner rather than later. For Scotland, this will undoubtedly cause concerns in our retail and tourism sectors, as it will serve to dampen consumer demand in the economy next year.
“We do welcome the plans to reduce headline levels of Corporation Tax, which will help to boost our competitiveness as a place to do business and, in particular, we applaud the Chancellor for listening to Scottish Chambers of Commerce and announcing plans to the Small Companies Rate of Corporation Tax to 20%.
“Of serious concern, though, is the lack of support the UK Government has shown to the Scottish video games industry. With home-grown developers such as Dundee’s Realtime Worlds and Ruffian Games about to launch major new products across the world over the coming weeks, the Government have made a bad decision in reversing the planned tax breaks for one of our key industries of the future.
“We are also disappointed that the Government has failed to match pre-election promises to axe the planned National Insurance Contribution rises in full, although the exemptions created for new business start-ups outside London, the East and South East are a welcome bonus for Scotland.
“Also, the changes to the Capital Gains Tax regime do not appear to have been as burdensome as many had feared, and the extension of the 10% rate for entrepreneurs to £5m of lifetime gains is positive.
“However it is the shift away from reliance on the public sector towards a recognition that it will be the private sector which delivers future growth that characterises this Budget. From that perspective, and for its clear direction in tackling the deficit, it is welcome. Nonetheless there will undoubtedly be fierce battles ahead to ensure that Scottish business receives the recognition and support it needs going forward.”
