A week at Westminster with Gordon MP Malcolm Bruce

Budget for most in the North East

Last week’s budget seems to have been generally welcomed in the North East of Scotland not least because it contained a number measures directly beneficial to our region.

The most important, of course, was the agreement on decommissioning certainty and additional field allowances for the oil and gas industry that helped reversed some of the damage of last year’s budget.

The industry has indicated this could unlock billions of pounds of additional investment in the coming years.

This is crucially important if we are to unlock the full potential of the UK’s Continental Shelf and sustain a viable industry at home and abroad.

In addition, as a direct result of the patent box announcement in the budget, Glaxo Smith Kline announced the go ahead for a major investment in the UK including at the company’s plant in Montrose.

Apart from these specific boosts to industry, reinforced by cuts in corporation tax there were direct benefits for almost everybody.

Raising the personal tax allowance again over the next year will see 200,000 people across the City and Shire benefit from tax cuts of up to £220 a year with nearly 15,000 people being removed from paying income tax altogether. This will give people a real choice on how they manage their budgets rather than targeted tax relief and cuts.

Of course, overall, this was not a give-away budget. It could not be given the serious state of the economy and the public finances. Nevertheless, this was an acceleration of the raising of the tax threshold to £10,000 and by next year will have given 24 million people a tax cut totalling more than £550 a year.

Lowering the 50p rate to 45p next year gave the opposition an easy hit but the facts are that a number of measures such as taxing offshore property holdings at 15%, stamp duty on home sales over £2million at 7% and limiting total tax relief claimable to £50,000 yields 5 times as much as the 50p rate.

On top of this the bank levy was increased while, capital gains tax, which was cut by Labour to 18 per cent continues at 28 per cent.

On these criteria alone, the budget gave a positive investment signal to businesses and was fair and progressive for taxpayers –especially for those on lower and middle incomes.

Small cities broadband bid could boost Aberdeen

Another measure announced in the budget was a new £50 million fund to give small cities access to superfast broadband. This should be of interest to Aberdeen.

The city had applied to the previous fund but with 90,000 homes was deemed too small. Of the ten successful cities, Edinburgh was the successful Scottish city.

As soon as I heard the Chancellor’s statement I got in touch with the Government to assess Aberdeen’s chances. The criteria will be published shortly but, on the face of it, Aberdeen should be well placed.

The City and Shire are already well advanced to make the case for funding from the UK and Scottish Governments and the industry and should be able to stress the high tech economy of the North East and the importance of broadband.

Cambridge and Brighton are already in the frame and I have registered Aberdeen’s potential with the Minister, Ed Vaizey and communicated this to Aberdeen and Aberdeenshire Councils with an offer of help to follow it through.

Malawi and Zambia – contrasting neighbours

The International Development Committee recently visited Malawi and Zambia, two neighbouring developing countries with a quite different set of issues.

Malawi is one of the poorest countries on earth and has effectively run out of foreign currency, mainly because of the fall in the price of its main crop tobacco.

The consequences are a chronic shortage of fuel and fertiliser, which is having devastating consequences for poor rural farmers.

Relations between Britain and Malawi reached a new low last year with the expulsion of the British High Commissioner, leading to a reciprocal expulsion of the Malawi High Commissioner in London.

President Bingu wa Mutharika is seeking to secure the succession of his brother as President in 2014 which is leading to tension as the opposition faces restriction.

Nevertheless, when we met the President he reminded us that Malawi was never a British Colony but a Protectorate. He stressed the long historic links and the desire for constructive future relationships. He also said he wanted a “compact” with the IMF and the World Bank to meet the needs of Malawi’s poor and get the economy back on track.

Time will tell whether normality can be restored in the near future.

Zambia is in a very different space. It is a lower middle income country with a growing middle class and ambitions to graduate out of aid dependency in the next ten or fifteen years.

Zambia has the advantage of large reserves of copper which have not always been managed in the best way for Zambia’s needs. They were previously nationalised and became a drain on the country when copper prices fell.

In recent years they have been privatised and, with rising copper prices are contributing substantially to Zambia’s exchequer. There is still an issue whether the tax regime is correctly balanced and our committee will report on this as a case study on how African countries with natural resources can get the best return for their people.

Spring records outshine London

The weather in the North East has been exceptional in recent weeks. Normally at this time of year I find winter lingering in the North East as Spring advances in London making the journey south more appealing.

This year has been different. Temperatures have been fairly consistently two or three degrees warmer here than in the south and spring has advanced rapidly with daffodils nearly over before March is out.

No doubt we will now get a cold snap (it’s forecast for this weekend) threatening early buds – but not before Fyvie and Aboyne have smashed Scotland’s March temperature records.

Let’s hope there is a real summer ahead. So often we get an early promise of sunshine and warmth only for June and July to turn out disappointingly cloudy and cool. We are overdue a summer heat wave so here’s hoping.