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Budget apples and paring back spending

Douglas Fraser | 15:04 UK time, Wednesday, 24 March 2010

It's a bad day for scrumpy, cider and the Wurzels, and a good day for kids who make their living making and playing computer games.

Duty on cider is soaring by 10%, on top of an alcohol tax accelerator.

The cynic might look at a map of the cider-producing counties of England, and find few marginal constituencies in which Labour is a contender at the general election.

The alcohol tax move is hardly going to make any difference to the big questions about the state of the public finances.

Raising tax on alcohol may not even raise revenue. It could cut consumption as well as tax take.

Indeed, at least implicitly, that may be the intention for health and social reasons.

Dundee games

And one impact it looks likely to have is that the whole dispute over minimum alcohol pricing in Scotland may be rendered redundant.

Raising the floor on taxation, and targeting the strongest cheap drinks, notably ciders, most closely associated with late-night violence, could make it unnecessary for the Scottish Parliament to legislate for minimum pricing, while avoiding all the complications of minimum pricing under European law.

Another of the few sweeteners to come out of today's Budget that has a direct impact on Scotland is in the computer games industry, offering the same tax relief on investment as are already enjoyed by the film-making industry.

That's already going down well in Dundee, one of the main centres for what has become a very large employer with high quality jobs.

The games industry body reckons on 9,500 "highly-skilled creative jobs" throughout the UK in July last year, across 240 companies, and supporting a total of 27,000 people in studios, publishing and retail.

The lobbying operation has been arguing strongly that other countries are offering tax cuts for the games sector, notably Canada.

I'll leave others to develop the metaphorical links between the Budget, the election six weeks from now and Scotland's best-known computer games export: Grand Theft Auto.

Lending ombudsman

Of course, the Budget's not going to be judged by its impact on Scotland, but on the whole of Britain and on the election result.

The £82m in additional consequential spending for Holyrood will fill some potholes in the Budget and the nation's roads, but it's not going to fill the hole in spending plans and expectations.

Some of the more eye-catching ideas are not going to cost the Treasury anything, but they ought to go down reasonably well with business.

For instance, there's to be an adjudicator in disputes between banks and their business customers, and the small businesses dependent on public sector contracts should get their invoices paid faster.

It's not big picture stuff, but it should help.

Meanwhile, delays in the introduction of fuel tax will only delay the pain for rural businesses and others.

Expect that to be a big issue in Britain's rural and marginal constituencies - including those already counting the cost of the great cider-drinkers' tax raid.

Comments

  • Comment number 1.

    "Raising the floor on taxation, and targeting the strongest cheap drinks, notably ciders, most closely associated with late-night violence, could make it unnecessary for the Scottish Parliament to legislate for minimum pricing"

    How does that work if supermarkets are already selling it as a loss leader. Wont they just absorb the hike.

  • Comment number 2.

    "a good day for kids who make their living making and playing computer games."

    You patronising, ill-informed, little man. I am 41 and work in the games industry; an industry that contributes massively to the UK GDP. If you think video games are made by, and solely made for, kids then perhaps you should pay a visit to one of Scotland's highly successful games companies.

    This is a grown up industry that is finally getting the (tax) break it deserves. At least show it a scrap of respect.

  • Comment number 3.

    Douglas the mood here in the south west is grim at this news. Its only been a few hours and I've already heard various people muttering about a protest to it, whether anything comes of these mutterings is another thing. But this cider lover from the south is not happy.

  • Comment number 4.

    I have to agree with Yorkie, i was compelled to write a similar response on the ´óÏó´«Ã½ website earlier this week about computer game addiction. Why are all the people commenting on the Games Industry the most ill informed to do so.

    I too work within the games industry and have seen it evolve and innovate for over 20 years. Maybe instead of constantly dragging up the same tired stereotypes about 'addiction' and it being a 'kids' industry, we should look at the creative 'adult' talent in the UK that have not only produced successful games, but some of THE most successful games the industry has ever seen.

  • Comment number 5.

    This week a well known German supermarket was selling a case of six, 2 litre bottles of cider (5.4% AbV) for £7.20. So 10% plus inflation will have a big impact?

    Still this was only the sham budget, the real one will come in an "emergency" statement just after the GE.

  • Comment number 6.

    "The cynic might look at a map of the cider-producing counties of England, and find few marginal constituencies in which Labour is a contender at the general election."

    And I look at the map and think that it is for the good of society that the Government has felt able to right a wrong, without looking to invent excuses as to why an area [esp. one populated by its supporters] should be differentially advantaged.

    It is, however, the kind of policy which should be enacted immediately AFTER an election - giving time for local people to get used to the new reality before they again have to vote - rather than possibly alienating those who might help save the UK from Call Me Dave...

  • Comment number 7.

    Brian Taylor's blog has been closed for comment since last night.No other ´óÏó´«Ã½ political or economics blog has been closed as far as I can see.

    On

  • Comment number 8.

    On Question Time from Glasgow tonight there are four panellists from south of the border with a fifth panellist to be confirmed.Clearly the choice of panel is geared toward a discussion of the budget.It means of course that a political discussion show staged in Scotland two weeks before the start of an election campaign will have little Scottish politics content.

    The Question Time people will of course say they are fulfilling their obligation to have an edition in Scotland,but the timing,right after the budget to try and justify a non-Scottish panel and on the cusp of the GE campaign is clearly not coincidental.If the mystery fifth panellist is not from the SNP then it will be even more of an outrage.Either ´óÏó´«Ã½ Scotland are happily going along with this or else they can easily be walked all over by London.

    Take this together with the ´óÏó´«Ã½'s snubbing of Plaid and the SNP over the leaders' debates and it's a clear case of a state broadcaster trying very hard to manipulate the political process.

    And of course as the ´óÏó´«Ã½ attempt to decaledonianise Scotland's election campaign as much as they can they close down Blether with Brian to comments.Quel suprise.

    Still what better could be expectad of an organisation that bent over backwards to accomodate a fascist party on the very same Question Time last year.

  • Comment number 9.

    10% on cider its a start I suppose but to complain about such a small hike is meaningless get on with it medical cannabis users had to deal with a doubling in price with the announcement of class B, still its done wonders for the Pharma's share prices.

    Its good to see the games industry getting a break finally having worked for scee in the 90's this is really good news and hopefully will open up a lot of none mainstream genres like RPG's, this genre seems to be widespread in japan Korea and other countries but are widely ignored in the UK because they take a lot more time and effort to produce. Not keeping up with the quick fix market that have grown in the UK gaming industries.

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