My statement on the Budget

This is a Budget which offers breathing space now for families and businesses and fresh hope for the future.

At the heart of this budget is support for households, action to ease the pressure of the cost of living, and a commitment to making sure that working people and pensioners feel the benefit of decisions taken by this government.

Welcome for island drivers

Freezing fuel duty is welcome for businesses and car drivers and fixing the tax-free mileage rate for those driving for business at 55p per mile will help health workers nurses and those who deliver services across the islands.

Drivers using their own vehicle for business purposes will be able to claim 55p per mile for the first 10,000 miles they travel – effectively amounting to a £5,500 non-taxable allowance payment. 

The rate for higher mileage users will also increase from April 2027. Anyone driving above that 10,000-mile limit will be able to claim 35p per mile, up from 25p.

Reducing energy bills

The four per cent reduction in kerosene tariffs should have an effect on the price of heating oil but the Scottish Government must put far more into getting the existing £300 household support out to those eligible.

Over 1.8 million households in Scotland would be eligible for the £100 winter energy payment announced by the chancellor, but only if the SNP passes it on. 

The funds should go straight to local authorities who can take £100 off council tax bills and use it to give Scots breathing space, not to plug holes in the Scottish Government Budget. 

The Chancellor has announced that he will work to abolish gas standing charges, saving Stornoway households on mains gas an average of £45 a year. He hopes to also extend this measure to wider electricity bills in the future.

The VAT cut on energy bills will be extended through winter until the end of June. 

Common sense taxes and wage rises 

The Chancellor asked for “more of banks to support ordinary people”. A bank surcharge of three per cent will run for just 15 months, starting from next January and will pay for immediate relief on energy bills.

Minimum wage and national living wage to increase by 3.9 per cent to benefit 2.3 million of lowest paid workers – an estimated 1000 workers in Na h-Eileanan an Iar will benefit.

A further welcome announcement is the new Pension Tax Allowance. This will mean that pensioners with income of up to the value of the full new state pension will not pay income tax during this parliament. This is an important principled commitment to protecting pensioners and recognising the contribution they have made throughout their lives.

Good for Scotland, but where’s the money John? 

The Scottish Government continues to have the largest real terms Block Grant settlement since devolution and as a result of decisions taken at the Budget today Scotland will receive an additional £600 million for Scottish public services.

This is a valuable uplift, and public spending in Scotland is £2,720 higher per person in Scotland than in the rest of the UK.

Since the election in 2024, the Scottish Government has received more than £18 billion in additional funding to spend on public services but businesses waiting for ferry compensation funds and families struggling with heating oil bills are being let down by the SNP Scottish Government. 

This is a budget about easing immediate pressures and building confidence in a more secure future with Labour decisions, rooted in fairness.  We need the Scottish Government to match that ambition in so many areas and deliver support that really matters.