Scotland to receive extra £320m from UK Budget, chancellor announces 

Jeremy Hunt unveiled a new investment zone for Scotland as well as funds for Edinburgh's festivals.

Scotland will receive an extra £320m from the UK Government, the chancellor has announced.

Delivering his Spring Budget on Wednesday, Jeremy Hunt unveiled a range of measures to tackle the cost of living crisis, grow the economy and draw people back to work.

The chancellor said the UK had avoided a technical recession after the Office for Budget Responsibility (OBR) forecast higher growth than anticipated.

The fiscal watchdog predicts inflation will fall from 10.7% at the end of last year to 2.9% by the end of 2023.

The UK economy is expected to grow 1.8% in 2024 and 2.5% in 2025, the OBR forecasts.

Speaking in the House of Commons, the chancellor announced new funding for the Scottish Government, delivered through Barnett consequentials.

He revealed 12 new investment zones will be set up across the UK, including at least one in Scotland, one in Northern Ireland and one in Wales.

Meanwhile, Edinburgh’s festivals will be directly handed £8.6m from the UK Government.

The money could go towards a new, permanent headquarters for the Edinburgh Festival Fringe that could support performers in the capital year-round.

The chancellor said £1.5m will also go towards repairing the Cloddach Bridge.

Hunt unveiled a range of measures to tackle the cost of living crisis during his speech.

This includes an extension to the energy price guarantee which will see average household bills stay at £2,500 for a further three months.

Prices were due to rise by £500 in April but will remain at current levels until June.

Following campaigning from anti-poverty groups, those on prepayment metres will no longer be charged more than those on direct debits.

Hunt said the measures announced to battle the cost of living crisis amount to £94bn over the next two years, or £3,300 per person in the UK.

As part of plans to get more Brits back into work, free childcare of 30 hours a week will be expanded to working parents with children between nine months and two years old in England.

The chancellor also announced plans to abolish the lifetime allowance limit on pensions.

A further change to pensions will mean the tax-free yearly allowance will rise from £40,000 to £60,000.

Meanwhile, the 5p cut to fuel duty will be frozen for another year which could save the average driver £100 a year, according to the government.

And from August, alcohol taxes in pubs will be 11p in the pound lower than the rate seen in supermarkets.

On defence, the chancellor committed to raising the budget by £11bn over the next five years.

He said by 2025, the defence budget would account for nearly 2.25 of the UK’s GDP.

Labour leader Sir Keir Starmer said the chancellor had announced a “Budget for growth that downgrades the growth forecast”.

He told the Commons: “After 13 years of his Government, our economy needed major surgery, but like millions across our country, this Budget leaves us stuck in the waiting room with only a sticking plaster to hand.

“A country set on a path of managed decline, falling behind our competitors, the sick man of Europe once again.”

Deputy first minister John Swinney described the Spring Budget as “another missed opportunity” to help households, businesses and public services through the cost of living crisis.

John Swinney said long-term funding for the Scottish Government will fall in real terms.STV News

He said Hunt had failed to deploy the full range of powers available to him to mitigate the impact of soaring energy prices and high inflation.

Swinney said: “While reversal of the planned increase in the energy price guarantee is welcome, with the end of the energy bills support payments, average household monthly bills will still rise by almost a third in April, at a time when wholesale energy costs are falling.”

“The limited additional money for the Scottish Government’s budget is welcome but will not go far enough and in the long-term our capital funding will fall in real-terms.

“Without extra funding, we will have to find money from within the Scottish budget to invest in public services, provide fair pay rises and help people with the cost of living. “

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