Scottish Government will do 'everything' to avoid replicating UK welfare cuts, finance secretary says

Shona Robison brands measures unveiled by Rachel Reeves in Spring Statement as “austerity on stilts”

Scotland’s Finance Secretary has vowed the Scottish Government will do “everything in its power” to avoid passing on UK welfare cuts unveiled in the Chancellor’s Spring Statement.

Shona Robison accused Labour ministers of ushering in "austerity on stilts" and pushing people into poverty after Rachel Reeves announced a tightening of benefit payments in her speech to MPs.

Ms Robison said the changes would mean less money for Scotland, a claim echoed by the University of Strathclyde’s Fraser of Allander Institute, which predicted the Scottish Budget would be around £900 million worse off by 2029-30 than previously projected.

Speaking at Holyrood, Ms Robison said: "This is austerity on stilts. It is austerity, no one can deny it. Making people poorer is austerity.”

She said the welfare changes will push people into poverty, and this was not something the Scottish Government "can agree to".

She said: "We will do absolutely everything within our power - and we do have power - in terms of looking at what else can be done in order to avoid having to do that.

"Now, that's going to be hard. But we will set out in due course what we believe is achievable in order to avoid taking those decisions."

She added: "We'll set out in due course the choices that we are going to make, but we are at the foothills at that.

"We will do absolutely everything we can to avoid pushing vulnerable people into poverty."

Ms Robison said this was “not going to be easy” but pointed to a forthcoming Scottish Government spending review.

She said: “We'll set out our plans of how we will ensure and work to protect the most vulnerable, and we'll set that out in due course.

"But let's be under no illusion - the announcement today will reduce the Scottish Budget by hundreds of millions of pounds by 2030."

Ms Robison said the Scottish Government hopes to make savings of "a magnitude that will be extremely important and helpful" by making efficiencies and reducing back office costs.

"I think we're going to have to turbocharge some of that work over the next few years in order to give ourselves some choices around how we can ensure that we can support our most vulnerable, because we don't want to be replicating these decisions."

Asked if this could include reducing the Scottish Government's workforce, Ms Robison said ministers are already taking action in this area.

It came following a statement that saw the Chancellor claim the “broken” welfare system must change and help more people into work, otherwise “we are writing off an entire generation”.

Ms Reeves used her Spring Statement in the House of Commons to confirm a further squeeze in the welfare budget, building on cuts to the disability and incapacity bill set out earlier this month, with the package now expected to save £4.8 billion rather than the more than £5 billion in 2029-30 hoped for by ministers.

The fresh welfare cuts will now leave an estimated quarter of a million more people, including 50,000 children, in poverty, according to the Government’s own impact assessment.

The Office for Budget Responsibility halved its forecast for growth in gross domestic product in 2025 from 2 per to just 1 cent. The watchdog’s assessment also indicated the Chancellor would have missed her goal of balancing the nation’s books without action.

Economists have warned that tax hikes are “likely” later this year due to narrow headroom in the public finances in order to meet fiscal rules.

Responding to the growth forecast, Ms Reeves said: “I am not satisfied with these numbers.

“That is why we on this side of the house are serious about taking the action needed to grow our economy. Backing the builders, not the blockers.”

Joao Sousa, deputy director of the Fraser of Allander Institute at the University of Strathclyde, said the Scottish Government would see a small increase of around £28 million in the forthcoming financial year.

However Scottish ministers face “significant reductions” in future years, he added.

In his initial reaction to the spring statement, Mr Sousa said: “The current forecast points to the Pip (personal independence payment) reforms reducing the block grant adjustment for social security devolution by increasing amounts, from £177 million in 2027-28 to £455 million in 2029-30.

“Put together, and in the absence of any other changes, the Scottish budget would be around £900 million worse off on the current side in 2029-30 than previously projected.

“On the other hand, some additional capital spending on areas which are devolved in Scotland – so aside from the defence spending increases – are expected to raise the Scottish Government’s capital budget by nearly £250 million by 2029-30 relative to current plans.”

Criticism also came from John Dickie, director of the Child Poverty Action Group in Scotland, who said: “Stealth cuts to UK social security bring neither stability nor security to struggling families. They will push children into poverty across the UK, undermining the progress on child poverty being made in Scotland.

“The Westminster Government must invest in social security support – not cut it – or risk being remembered as the Labour administration under whose watch child poverty continued to rise.”

Roz Foyer, general secretary of the Scottish Trades Union Congress, claimed the Chancellor had “rushed through deeply damaging cuts to support for disabled people”.

She added: “No-one denies that this statement was made in the midst of testing domestic and international circumstances.

“However, the Chancellor had choices. She could have rewritten her self-imposed and self-defeating fiscal rules. She could have increased taxes on corporations or the wealthy.

“Putting fiscal rules above human dignity is not progressive nor economically astute. It is deeply damaging and risks repeating the austerity doom loop of her predecessors.”

The Chancellor announced fresh cuts to welfare | House of Commons/PA Wire

There was also a backlash from the Scottish Labour MP Brian Leishman. He said: “I want a society that looks after our most vulnerable people and the statement I’ve just listened to has some appalling cuts that disabled people will be the victims of. I’ll vote against these horrendous cuts.

“We have to reject austerity. We’ve seen the damage it has done for the last 14 years. There is plenty of money out there, there should be an annual wealth tax on the multi millionaire class.”

Business also raised concerns, with Stephen Montgomery, director of the Scottish Hospitality Group, claiming hospitality was losing confidence in the Chancellor.

He said: “This statement does absolutely nothing to support the hospitality sector in Scotland or across the UK. In fact, the Chancellor did not even mention the hospitality industry once in her statement despite speaking for more than half an hour.

“The reality is hospitality businesses up and down the country are facing a tax bombshell next week of nearly £3.5B, and the Chancellor of the Exchequer’s statement has done nothing to allay the danger of job losses and closures across the nation’s pubs, hotels, and restaurants.”

The Scotland Office disputed the Scottish Government claims, with the Scottish Secretary Ian Murray insisting it was more money on top of the “record settlement”.

He said: “We are living in an increasingly insecure world, and the extra £2.2 billion for defence – on top of the £2.9 billion announced at Autumn Budget – will make Britain stronger and safer.

“This is a huge boost for Scotland’s world-leading defence sector, which delivers Scottish economic growth and more highly-skilled jobs. The increase will also mean better homes for our military personnel and families, including the thousands based in Scotland.

“Today’s announcements underpin the great strides being made by the UK Government in achieving stability in our public finances. There have been three interest rate cuts since the general election. Next week the increase in the minimum wage will mean a pay rise for hundreds of thousands of workers in Scotland and our employment rights legislation will deliver the biggest upgrade in workers’ rights in a generation.

“The Spring Statement also delivered an extra £28 million for the Scottish Government. That is on top of their £4.9 billion extra from the budget, creating a record £47.7 billion settlement for 25/26, announced at the Autumn Budget. This is the biggest budget settlement in the history of devolution and an end to austerity. The Scottish Government must now use that wisely - to improve Scotland’s failing public services.”