Warning against a return to austerity

A return to austerity would have significant consequences for people and public services, Deputy First Minister John Swinney has warned ahead of the UK Government’s Autumn Statement.

Mr Swinney has called for an alternative to austerity to avoid the UK Government “prolonging” the recession that the Bank of England forecasts may be the longest in 100 years.

The Deputy First Minister’s other urgent priorities include:

• inflationary increases to devolved governments’ 2022-23 budgets to support people, fair public sector pay uplifts and public services
• increasing social security benefits in line with inflation in the new financial year, with an immediate and permanent £25 uplift to Universal Credit and a reversal of the two-child limit and benefits cap
• retaining the triple lock on pensions
• introducing an enhanced windfall tax to fund support for those most in need

Mr Swinney said:

“The UK Government must not repeat the mistakes of the past. Scotland has already suffered a decade of UK Government imposed austerity which has disproportionately hurt the poorest and most vulnerable in society – it does not work and will inflict misery on people, put pressure on our public services and hamper our economy.

“With the UK forecast to enter recession in the coming months – one the Bank of England warns may be the longest in 100 years – cutting public spending risks prolonging that recession, hampering efforts to restore the public finances. The Chancellor must rule this out and pursue an alternative to austerity that invests in public services and the economy.

“We are facing exceptional challenges – a cost of living crisis, soaring inflation and a Scottish Government Budget which is worth £1.7 billion less than when it was introduced last December. An additional inflationary increase in the block grant is needed to support us in addressing these challenges, as part of an overall approach that balances long-term fiscal sustainability with the increases in public spending that are needed.”

“The prospects for next year and beyond are very concerning. Reductions in UK departmental spending on the scale that is being trailed would have severe knock-on impacts on the Scottish Budget and our public services. It is vital that the Chancellor takes steps to ensure that people are supported, public services are protected and devolved governments have the funding to deliver for the communities we serve.”

Background

On 2 November, the Deputy First Minister announced the outcome of the Scottish Government’s Emergency Budget Review, which set out £1.2 billion of savings to balance the Budget and direct resources to those who need help most in the cost of living crisis.