Scotland’s First Minister has described No 10 plans to boost economic growth as a “catastrophic disaster”, saying the Scottish Government following suit would be the “wrong thing to do”.
During a visit to Graham’s Family Dairy in Bridge of Allan, Nicola Sturgeon told the PA news agency: “We’ll take a sensible approach, which will be in stark contrast to the one we’re seeing from the UK Government.
“We have a situation right now where everybody bar the most tribal Tory supporters thinks what the Chancellor has done is morally repugnant, fiscally damaging and reckless.
“And yet somehow, there is an expectation that the Scottish Government should follow suit – that would be absolutely the wrong thing to do.
“So, we’ll take sensible, careful decisions that are about helping those who need help most.”
Asked for her response to the broader plans laid out by the Chancellor on Friday, Sturgeon said: “The UK economy is in crisis, we’re seeing sterling in freefall, we’re seeing the cost of government borrowing ratcheting up.
“We saw on Friday from the Chancellor policies that are, in my view, morally abhorrent, racking up borrowing that future generations will have to repay, not to invest in the overall wellbeing of the economy or help the majority, but to make a relatively small number of already rich people even richer – that’s indefensible.”
Earlier in the day, John Swinney said the Scottish Government will “reflect carefully” on tax decisions announced by the Chancellor – but insisted the approach will be based on “fairness”.
Scotland’s Deputy First Minister - who has taken on the finance brief while Finance Secretary Kate Forbes is on maternity leave - said the tax cuts announced by Kwasi Kwarteng on Friday will have “significant” consequences.
The Chancellor announced a raft of measures, including cutting the basic rate of income tax to 19p in the pound and scrapping caps to bankers’ bonuses – plans that Swinney said put the UK’s finances in “a very dangerous place”.
It also sees the top rate of income tax axed for those earning £150,000 or more each year.
Speaking on BBC Radio’s Good Morning Scotland, Swinney said: “We will reflect carefully on the announcements that were made by the UK Government on Friday.
“We take an approach to taxation which is driven by the principles of fairness and ensuring we have a progressive character to our tax system.”
He added: “I think it has to be clearly understood that there are some really significant and dangerous moments that we are facing just now.
“We are seeing the UK public finances in a very dangerous place on the back of the tax cuts on Friday.
“Borrowing is increasing, interest rates are rising, investor confidence is declining and the pound is collapsing in value.
“That’s what the Conservative changes on Friday have delivered for us as well as tax cuts that are benefiting the very wealthy in our society.”
It is estimated the Scottish Government will receive around £600m as a result of the tax cuts elsewhere in the UK.
But Swinney said that difficult decisions on how that money is spend will have to be made.
Earlier on the BBC programme, Scottish Conservative finance spokeswoman Liz Smith urged the Scottish Government to follow suit with the tax reductions.
“The challenge now is for the Scottish Government to match some of these changes, because what we can’t have is a widening gap between the tax agenda in Scotland in comparison to the UK,” she said, although accepting there was a “very difficult message here when people see bankers’ bonuses are increasing” at a time when “many people are finding it extremely difficult to pay their bills”.
Smith also stated: “The biggest picture within this is to ensure the growth within the economy.
“We cannot go along the path that we are on just now where it is sluggish and the jobs scenario is not as strong as it should be, particularly in Scotland where we have got a diminishing working population in relation to total population, there are productivity issues.”
Hitting back at her comments, Swinney said: “Yes, there will be about £600m that will be available to the Scottish Government as a result of the tax cuts.
“But you’ve had a Conservative spokesperson on the radio this morning who wants me to reduce to equal UK decisions and use all of that money to reduce taxation.
“And then you’ll have the Conservative spokesperson on health on the radio demanding that we spend that same £600m on health.
“Now what that tells us is two things - one, there are difficult choices to be made and - two the Conservatives are opportunists who are quite simply trying to spend the same amount of money twice by demanding tax cuts and increasing public expenditure at the same time.”
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