THE Scottish Government will have to find around £100 million to mitigate Labour’s cuts to the Winter Fuel Payment, a minister has said.
Ivan McKee, the Scottish Minister for Public Finance, told the BBC that the fact his government had been given only 90 minutes’ notice of the cuts in Rachel Reeves’s speech showed Labour’s claimed reset of devolved relationships “clearly hasn't happened”.
McKee was speaking on Tuesday morning, after Chancellor Reeves told MPs at Westminster how she aimed to make up for a £22 billion “black hole” in day-to-day spending, including cutting the Winter Fuel Payment for people not on benefits.
Reeves also said that departments will be expected to find a total of £3.2bn in savings in order to part pay for above-inflation pay awards for public sector staff.
McKee said the measures were “absolutely austerity, and there's no doubt about that”.
The Public Finance Minister told the BBC’s Good Morning Scotland that the Scottish Government had been expecting to receive around £180m to cover the costs of the Winter Fuel Payment, but that would “clearly be a much lower number now”.
“How much lower, we don't know,” he went on. “We think there'll be at least £100m come out of that that we need to find from somewhere else if we want to continue to pay that Winter Fuel Payment, which we absolutely want to do.
“I think that gets to the nub of it because if you look at this in the broader context, we've got an energy rich Scotland but we've got that fuel poverty exacerbated by the decisions that the UK Labour Chancellor has made.”
Asked if the Scottish Government could guarantee that the Winter Fuel Payment would remain universal north of the Border, McKee said: “Of course, the Winter Fuel Payment is now being devolved to Scotland from this September, so we'll have to very closely look at what we can do.
“We would very much like to keep the universal aspect of that benefit, but we need to look at the numbers very, very closely.
“We only got told about this 90 minutes before it was announced, which is really concerning, given Labour's grand talk about resetting the relationship with the Scottish Government. That clearly hasn't happened.”
McKee pointed to comments from the charity Age UK, which has said that some two million UK pensioners could be pushed into poverty by making the fuel payment means-tested.
He added: “I think going back to this austerity point is very important. During the election campaign, [Scottish Secretary] Ian Murray said it was ‘mince’ there was going to be Labour austerity and cuts as a consequence of electing the Labour government.
“So when you've got him on your programme, maybe get him to eat that mince because he's been absolutely proved wrong.”
Appearing on the BBC’s Good Morning Scotland afterwards, Murray was challenged on those comments.
He responded that McKee was “completely and utterly wrong because he's comparing apples with pears”.
The Scottish Secretary went on: “This is a £22bn in-year overspend by the previous government that they hid from the Office for Budget Responsibility, which is the independent body that measures these things, most of the Treasury, and indeed the Budget that [then-Tory chancellor Jeremy Hunt] did back in the spring.
“So Ivan McKee's got this completely wrong. It's got nothing to do with the arguments we had during the election campaign.”
The Office for Budget Responsibility said it was only made aware of the extent of pressures on departmental budgets after meeting with the Treasury last week.
“The Treasury document also sets out its plans for further managing down these pressures over the remainder of the financial year,” its chair, Richard Hughes, said.
“If a significant fraction of these pressures is ultimately accommodated through higher DEL [department expenditure limits] spending in 2024-25, this would constitute one of the largest year-ahead overspends against DEL forecasts outside of the pandemic years.”
