The Chancellor’s Autumn Statement provides little respite to Scottish households and businesses as we continue to tackle the consequences of the UK Government’s financial mismanagement and economic U-turns, plus the corrosive effects of soaring inflation.
While the Statement contains some positive announcements, such as the rise in benefits and pensions in line with inflation, they cannot hide the fact that most people will be worse off.
Indeed, the Office for Budget Responsibility forecasts that average household disposable incomes will fall by seven per cent in real terms – an unprecedented drop which, as the director of the Institute of Fiscal Studies has said, will take earning back to 2013 levels.
The one-off cost of living payments are only a temporary fix when permanent solutions are needed – like a £25 uplift to Universal Credit, an end to the two-child limit and the scrapping of the benefit cap which the Scottish Government has been calling for.
And despite repeated requests, the Chancellor has provided no extra assistance to help us manage this year’s budget which has been severely devalued by inflation, requiring us to make unplanned savings of more than £1 billion.
This means that any further enhancement to public sector pay offers would have to be matched by savings elsewhere, while balancing this year’s budget remains extremely challenging, a fact acknowledged by Auditor General Stephen Boyle, who yesterday spoke of the “unprecedented scale” of the problem caused by double digit inflation.
Over the coming days, officials will scrutinise the numbers to understand precisely what the Chancellor’s statement means for next year’s Scottish Budget, which will be presented to Parliament on December 15.
It clearly will be a difficult balancing act, but we will do all we can within our limited resources to mitigate the impact of the cost of living crisis on Scotland’s families and businesses and continue building a fairer, greener and more prosperous Scotland.
However, only with full control over our own financial affairs will we be able to grasp the opportunities available to countries possessing full fiscal and borrowing powers.
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