JOHN Swinney has said there will not need to be changes made to Scotland’s upcoming Budget statement on the back of UK Government U-turns, because he never believed the mini-Budget would be sustained.
New chancellor Jeremy Hunt made an emergency announcement on Monday as Westminster made a desperate attempt to calm jittery markets.
He confirmed the public sector would be forced into major spending cuts as part of his plans to stabilise the economy, which the SNP’s Alison Thewliss has warned will “further entrench the poverty the Tories have caused”.
Hunt insisted all departments would have to “redouble their efforts to find savings” and some areas of spending would need to be cut.
The Chancellor also confirmed the energy price guarantee currently in place will only remain so until April and a Treasury-led review will be launched into how the UK Government can provide support beyond this.
His announcement could have serious implications for the Scottish economy which, according to the Institute for Fiscal Studies (IFS), is already facing a £3.5 billion gap by 2026/27 – the equivalent of £640 per person.
I won’t have to make any re-calculations because I never believed these Barnett consequentials would ever materialise. I knew the mini-Budget would never be sustained. https://t.co/fBxq9BeTjP
— John Swinney (@JohnSwinney) October 17, 2022
But acting finance minister Swinney said he was not concerned about having to rip up his own Budget statement due on December 15 because he knew Barnett consequentials as a result of the mini budget “would never materialise”.
He said on Twitter: “I won’t have to make any re-calculations because I never believed these Barnett consequentials would ever materialise. I knew the mini-Budget would never be sustained.”
Meanwhile, First Minister Nicola Sturgeon said “thank goodness we didn’t act so rashly” after the Scottish Government came under pressure from opposition MSPs to echo tax cuts in the mini budget.
Hunt was forced into U-turning on previous pledges to cut the basic rate of income tax south of the border and said it would remain at 20p in the pound indefinitely.
Scottish ministers have powers to set tax rates which are separate from the rest of the UK.
Sturgeon said on Twitter: “Another reminder of the many demands made of the Scottish Government to immediately match this without any consideration of cost and impact.
“Thank goodness we didn’t act so rashly.”
Another reminder of the many demands made of @scotgov to immediately match this without any consideration of cost and impact. Thank goodness we didn’t act so rashly https://t.co/mXtebgqCEy
— Nicola Sturgeon (@NicolaSturgeon) October 17, 2022
Scottish Conservative leader Douglas Ross supported former chancellor Kwasi Kwarteng’s tax cuts after they were announced and urged the Scottish Government to pass them on to Scottish taxpayers. He later said the U-turn on the top rate of income tax was “the right decision”.
Despite UK Government attempts to undo the economic turmoil of the last few weeks, the SNP said it was now a question of “when, not if” Liz Truss will be removed from office.
Four Tory MPs have already come out and said she must go, with many believing she has already caused too much damage to survive at Number 10.
Alison Thewliss, the SNP’s economic spokesperson at Westminster, said Hunt’s statement confirmed plans to usher in a new era of Tory austerity.
She said: "Liz Truss has run out of road. This is no longer a question of if but when the Prime Minister will be removed from office, after the Chancellor junked her disastrous mini-Budget.
"The Chancellor's statement was more than just another round of screeching U-turns, it also confirmed plans to usher in a new era of devastating Tory austerity which will further entrench the poverty the Tories have caused.
"Rather than delivering real and targeted support as households and businesses grapple with a cost of living crisis, the Chancellor has instead scaled back the limited support that was in place and backed plans for deep public spending cuts.
"The game is up for Liz Truss. The policies in the disastrous mini-Budget were hers and the responsibility for trashing the economy, putting people's incomes, homes and pensions at risk lies squarely at her door.”
Maggie Chapman, Scottish Greens economy spokesperson, said Hunt’s plans would be “every bit as damaging” as the mini budget.
She added: “Jeremy Hunt may have reversed almost everything that his predecessor announced, but what he is offering will be every bit as damaging. He has already said that nothing will be off the table when it comes to cuts, which will come on top of 12 years of austerity.
“His decision to axe the limited support that is being given to help stretched households and families to pay for energy bills will plunge even more people into poverty and destitution.
“Hunt knows the impact that his decisions will have, particularly on vulnerable people, but he simply doesn’t care.”
