By Lucy Ashton
With the Scottish Liberal Democrats unable to hold a spring conference due to the emergence of Omicron, Scottish Liberal Democrat leader Alex Cole-Hamilton has used a visit to Peak Scientific, a manufacturer of scientific equipment based near Glasgow, to set out proposals to tackle the cost-of-living crisis, including cutting VAT to 17.5% across the UK and scrapping the National Insurance tax hike.
Alongside these proposals, the LibDems are also calling on the SNP/Green Government to:
- Invest in insulation: Household budgets need protection from soaring energy prices. Insulating homes and delivering green upgrades will bring down costs and emissions. It is a win-win.
- Reverse the £250m cut to councils: The Scottish Government is receiving record levels of budget funding. That hasn’t stopped it handing down a £250m real-terms cut to councils which put pressure on them to raise council tax.
- Cancel the 3.8% rise in rail fares: The Scottish Government is taking over the running of Scotland’s railways. This isn’t the time to drive up the price of climate-friendly transport. Instead, an expansion of the railcard discount scheme would bring down costs and encourage more people to leave the car at home.
- Boost disability benefits: The SNP/Green Government copied the UK Government’s plan, leaving benefits lagging up to 4% below inflation this year.
- Pay-up for fire alarms: Many households can’t afford hundreds of pounds right now. They require extra help to make the changes the Scottish Government is demanding.
Mr Cole-Hamilton, pictured right, said: “It’s time to move on from the division that has held Scotland back for so long. Let’s lay aside talk of an independence referendum and get to grips with what matters right now.
“That starts with getting Scotland back on its feet after two years of the pandemic and by recognising that our people are facing the biggest hit to household budgets in a generation.
“So what we are we going to do about it?
“Scottish Liberal Democrats would insulate you and your home from the cost-of-living crisis and the climate emergency with a massive investment in improving energy efficiency.
“Across the UK we would put a Robin Hood tax on energy companies making super profits and cut VAT to reduce household bills.
“Scotland has a proud history and our people are magnificent – you can see that in the way we’re opening our homes to Ukrainian refugees. But it can be so much more.
“Back us this May and I promise you that Liberal Democrats in the villages and towns of Scotland will show you the meaning of hope once again.”
Meanwhile, the Liberal Democrats are calling for the standard rate of VAT to be reduced from 20% to 17.5% for one year. The party’s analysis suggests this would save households around £600 on average.
Cutting VAT would help the retail industry, giving a much-needed boost to local high streets and increasing economic growth. A similar VAT cut in 2008 was found to boost retail sales by about 1%, increasing aggregate expenditure by around 0.4%.
A VAT cut will help to keep inflation lower than it otherwise would be. When the last VAT cut came in in December 2008, inflation fell from 4.1% to 3.1%.
Reducing VAT to 17.5% would only require a very short and simple statutory instrument. The standard VAT rate can be changed by up to 25% for up to a year through secondary legislation. This means no new primary legislation is required unless the cut needs to stay for longer than a year.