UK government needs to raise cash to fund statutory services
Anti-poverty campaigners have welcomed first minister John Swinney’s call urging the chancellor to increase spending.
Ahead of the Labour’s first budget announcement next Wednesday, the SNP leader called for a change to how the Treasury measures debt.
He also backed income tax changes in England to raise revenues, warning that austerity measures would be "disastrous".
The Scottish government, which will announce its own budget in December, has already made £500m of cuts to its budget for the current financial year.
It cited UK government austerity, as well as higher than expected pay deals, inflation, the pandemic and the war in Ukraine.
The first minster said an increase in UK government spending - which could lead to direct investment in Scotland or consequential boosts for the devolved administration's budget - was an "absolute necessity".
Poverty Alliance chief executive Peter Kelly said: “We welcome the first minister’s speech. We hope it marks the start of a fundamental shift towards compassion and justice among our political leaders. We were particularly pleased that he talked about how the experience of people living in poverty has shaped his thinking.
“The UK is one of the richest countries in the world. Since the 1960s our collective wealth has trebled in size. But over the decades our political leaders have refused to unlock that wealth for the public good and to support a wellbeing economy.
“The results are clear for everyone to see – insecure work, inadequate incomes, rising child homelessness, deepening poverty, increasing reliance on food banks, and weakened communities.
“It doesn’t have to be like this. We built our public services - like the NHS, education, and social security - to make sure all of us have a stable foundation to build a decent life for ourselves and our households.
“Our political leaders can use our country’s massive wealth to invest in those services, building a stronger society, and an economy where no one is left in poverty.”
Swinney said the prime minister faced a "make or break" moment.
“The choice for the UK government could not be more stark, either continue with the current failed model of public spending cuts, which undermine growth, or chart a new course and invest to grow," he said.
Swinney said the Labour administration should seek to increase public sector investment to at least 3% of GDP following a "a long dark economic winter" since the 2008 financial crash.
He also called for detailed three-year spending plans to provide clarity to devolved administrations, and warned against an increase in employers' National Insurance without compensation for public bodies.
Swinney said any increase would mean the NHS, councils and other bodies would have to pay a higher tax bill.
“Do not make Scotland’s public sector pay for this increase in taxation," he said.
A Treasury spokesperson said: "The chancellor has vowed to lead the most pro-growth Treasury in history and has been clear that it is important that we count the benefits of public investment and not just the cost of it.
"We have already taken action to deliver more investment in the UK economy by fixing the broken planning system and setting up a new National Wealth Fund, and the International Investment Summit secured a record-breaking £63bn in investment commitments."
