Holyrood's emergency budget review delayed yet again until after UK Government's Halloween statement

John Swinney has announced the delay to Holyrood’s ‘emergency’ budget review for at least another week until after the UK Government’s planned Halloween fiscal statement.

The emergency budget review, first announced in early September as taking place two weeks after a ‘fiscal event’ in Westminster – delayed already by weeks – was due to take place in the Scottish Parliament this week. It was intended to identify non-urgent areas of funding which could be redirected to help individuals and businesses during the cost-of-living crisis.

However, that is now set to be delayed at least until next week. If there are delays to the UK Government’s fiscal statement planned for October 31, that timeline is likely to slip further. Concerns the budget review may become immediately irrelevant due to the contents of that statement is understood to be the reason behind the delay.

In September, Mr Swinney announced £500 million of spending cuts and warned these were “just the beginning of the hard choices” that will need to be made. He has since convened an expert advisory group to help with the government’s approach to spending cuts and response to former Chancellor Kwasi Kwarteng’s disastrous mini-budget, much of which was reversed by Jeremy Hunt last week.

Around £40bn is needed to be saved by the Treasury in London due to the cost of increased borrowing caused by the unfunded tax cuts in the mini-budget. This is likely to have a knock-on effect on the Scottish financial position. The reversal of much of the mini-budget also means the amount of consequentials coming to the Scottish Government has also dropped significantly.

The Scottish Government’s budget is due to be outlined on December 15, potentially just a month after swathes of spending cuts are announced to the public. However, pressure to lower the tax rates for lower and higher Scottish earners has lessened after the Chancellor reversed the planned abolition of the top rate of tax and deferred indefinitely a penny cut to income tax for the lowest earners paying tax.

In response to a government initiated written question, Mr Swinney said: “Following the unprecedented uncertainty and instability brought about by the current UK Government in recent weeks, including a series of announcements and changes to UK economic and fiscal measures leading to economic turmoil, mortgage products being pulled, the pound crashing and the Bank of England having to take emergency action to stabilise financial markets, culminating in another change in Prime Minister, the EBR will be deferred until after the planned fiscal statement from the new UK administration currently scheduled for 31 October.

"This will also allow the EBR to take account of updated independent forecasts of the UK economy from the Office for Budget Responsibility.”

Deputy First Minister John Swinney announced a delay to the emergency budget review.

Scottish Labour’s finance spokesperson, Daniel Johnson, said Tory chaos had allowed the SNP to “dodge their responsibilities”. He said: “Nicola Sturgeon still hasn’t delivered on her promise to open Scotland’s books so we can take a team Scotland approach to tackling the cost of living crisis.

“The longer this gets kicked into the long grass the longer Scots are being forced to wait for the help they urgently need. Both of our governments need to get a grip and start treating this crisis with the urgency it deserves.”

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