How Scottish Budget can stick up for Scotland, boost growth – and shore up SNP's flagging reputation
Given the extraordinary largesse of the UK Government, which will provide Scotland with an extra £3.4 billion for the next financial year, the SNP can no longer plead poverty or deflect criticisms of its failings by blaming ‘Westminster austerity’. There is, therefore, extra pressure on the first Scottish Budget of the John Swinney era.
Shorn of the same old excuses, Finance Secretary Shona Robison and the SNP government as a whole will be forced to take responsibility for the decisions she announces on Wednesday. And what she says will have a defining impact on the public image of the Swinney government.
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Hide AdWill they try to be even more left-wing than Keir Starmer’s government which, despite some controversial policies like means-testing winter fuel payments for pensioners, has raised taxation, borrowing and spending like the Labour governments of old? Or will they seek to emulate the late Alex Salmond’s more centrist, social democratic approach? The SNP’s version of winter fuel payments for all pensioners suggests the former, but not necessarily.
Business rates relief
Instead, a politically savvy approach that Robison could take would be to pitch her Budget as undoing some of Labour’s ‘damage’ and sticking up for Scotland. Pensioners were not the only ones to lose out as a result of Chancellor Rachel Reeves’ Budget, with businesses landed with a large rise in their National Insurance (NI) contributions.
Scotland’s position means that Robison could, rather cheekily, use the extra money from Westminster to essentially provide ‘compensation’ to Scottish businesses for the UK Government’s tax hike.
One mechanism to do this is business rates relief. Nine business groups, including the Scottish Retail Consortium, the Federation of Independent Retailers, and National Hair and Beauty Federation, have written to Robison to appeal for “temporary” relief, saying shop sales have been flatlining in recent months while the NI rise will add £190 million in extra costs to Scotland’s retailers every year.
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Hide AdHowever the Finance Secretary decides to spend the money, she needs to do so wisely. Helping Scotland’s businesses seems an obvious way to boost the economy – as well as the SNP’s flagging reputation.
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