What it means for Scotland and what happens next when Holyrood responds

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More than 2.3 million workers in Scotland will be better of by an average of £285 a year after the UK Government scrapped plans to increase national insurance payments in its mini-Budget.

The Treasury said the Scottish Government would also receive more than £600m extra as a result of its cuts to income tax and stamp duty, which do not apply north of the border.

However, this will be delivered over the three-year spending review period that began in 2021, meaning that Holyrood ministers will not receive all of the money immediately.

The extra cash will become available under the Barnett formula – the system wihch determines central government funding for Scotland and the other devolved administratoins.

Only about £170m of the £600m is generated by the changes to stamp duty which take effect from Friday, with £460m coming from next year’s income tax cuts.

The Treasury also said that the reversal of the Health and Social Care Levy in England would save 4.3m people in Scotland, Wales and Northern Ireland more than £230 on average next year, but did not offer a country-by-country breakdown.

The Scottish Government has said it will announce the outcome of its own emergency Budget review within a fortnight, which is likely to contain further measures to help households.

The UK Government’s plan for “investment zones” will also apply in Scotland, meaning that councils north of the border could apply directly for the status.

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The scheme will offer “targeted and time-limited” tax cuts for businesses and looser planning rules, with the aim of releasing more land for housing and commercial development.

The Chancellor also said the ongoing freeze to alcohol duty would result in whisky continuing to benefit from the lowest real-terms tax rates since 1918.

Scottish Secretary Alister Jack said the “ambitious” measures from the Chancellor proved that the UK Government was “delivering for the people of Scotland when it really matters”.

But Scotland’s acting Finance Secretary John Swinney said: “The Chancellor’s statement provides cold comfort to millions of people in Scotland who have been looking for the UK Government to use reserved powers to support those that need it most. Instead we get tax cuts for the rich, bonuses for bankers and nothing for everyone else.

“The Scottish Government will consider these measures and their implications as we prepare our Budgets. We will do everything within our power to support people, public services and the economy.

“But make no mistake, our efforts are threatened by a reckless UK Government on a dangerous race to the bottom. With a fixed Budget, and no scope to borrow for short term challenges, Scotland is at the mercy of UK decisions. This reinforces the urgent need for independence.”

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