In the history of devolution, no Westminster government has ever given Scotland as large a block grant settlement as the one announced by Labour on Wednesday. In her fiscal statement, the chancellor declared that politicians north of the border will receive £1.5 billion this year and a record £3.4 billion next year via the Barnett formula. It’s a move that caught the SNP by surprise, and one that has thrown the nationalist’s political strategy into doubt.
Long before the July election, the SNP government began an anti-Labour austerity campaign – claiming Keir Starmer’s ‘tough decisions’ rhetoric was code for public service spending cuts while using policy positions like Keir Starmer’s retention of the two-child benefit cap and bedroom tax to back up their ‘red Tory’ narrative. On the morning of the Budget, the party’s Westminster group leader Stephen Flynn accused Starmer’s party of planning to ‘break its word and impose deeper austerity cuts than the Tories’. Meanwhile SNP communications officers took to Twitter to mock the Scottish Labour leader’s suggestion that Labour could be trying to ‘mark the end of austerity and usher in an era of investment’.
The SNP administration now has a chance to reverse policies it has so furiously attacked Labour for
But Wednesday’s funding announcement stopped the nationalists in their tracks. After years of the SNP government blaming its lack of progress in Scotland on being underfunded by Westminster, the Scottish government has finally got more of what it has been asking for in the £3.4 billion sum. So was the announcement a cause for celebration in SNP HQ? Not exactly. Instead, the Scottish government is presented with a number of issues going forwards.
‘No longer will they be able to say that actually Westminster is responsible for the issues in Scotland. They will have to now deliver with the budget that they’re given,’ remarked Scottish Labour’s Michael Shanks. Former SNP MP Stewart McDonald broadly agrees, telling The Spectator: ‘[It is] quite clear that charging Labour with austerity won’t hold: the SNP needs a new song.’ And this is the challenge presented to Scotland’s governing party. The Westminster blame game the SNP has become so accustomed to playing isn’t quite as valid as it once was.
Labour’s cash injection means the Scottish government has to now become more creative – in politicking, to find a new way of pushing the SNP-good guy/Labour-bad guy message, but in governing too. The SNP administration has long countered accusations of bad governance by pointing the finger at Westminster governments for inadequate funding. Not that this always worked: it was a strategy that had sway with the party’s core voter base but one the soft indy voters were fed up of hearing by the time the election came round. Wednesday’s promise of a significantly improved cash injection puts pressure on the nationalists to show more money equates to better results. Proving they can spend wisely could not only pave the way for more investment from Westminster down the line but win the SNP lot back favour with the electorate.
Whether the Holyrood group sees it this way is another matter. Finance Secretary Shona Robison has called the Budget ‘a step in the right direction’ but adds weakly that it ‘still leaves us facing enormous cost pressures’. There is a concern that the Scottish government will prioritise public sector pay rises, which could significantly cut into its allotted Barnett sum. This would be a ‘political mistake’, warned McDonald. Others worry that the SNP government will continue to aimlessly funnel money into the health service – which, despite being the biggest recipient of previous Scottish budgets, is still facing prolonged A&E wait times, near-record levels of cancer treatment delays and rising rates of bed blocking. ‘The Scottish government now has some major choices to make,’ remarked Scottish Lib Dem leader, Alex Cole-Hamilton. ‘In the past they have chosen poorly.’
Will the funding lead to an end of the two child benefit cap in Scotland? Labour didn’t meet that demand from the SNP – which Robison lamented as ‘disappointing’ – but the Scottish government could use funds to provide top-up payments to stop the cap affecting Scots, effectively ending the policy north of the border. The same can be said for the cuts to winter fuel payments that First Minister John Swinney has so furiously hit back at. The Scottish government could keep the payment universal – instead of means-testing it like Starmer’s government will do – but has in the past cited budgetary concerns. With its promised funding boost, the SNP administration now has more chance of reversing policies it has so furiously attacked Labour over in recent months – but as yet its signals suggest the Scottish government is unwilling to trade in that ammunition.
With just over a month until the Scottish Budget in December, the SNP government doesn’t have long to figure out how best to syphon off its new pot of gold. And there is the additional, and rather large, problem of passing the Budget – thanks to former first minister Humza Yousaf abruptly ending the Green coalition to leave the nationalists governing as a minority. Robison hinted on Wednesday that the SNP wouldn’t be averse to a deal being done with Anas Sarwar’s lot – whose polling has suffered slightly following Starmer’s short-lived honeymoon – but the nationalists will have to rethink its Labour blame game rhetoric if it wants to soothe tensions between the two groups. With a Holyrood election looming ever closer, the pressure is on for the latest iteration of the SNP to show it can react well to its unexpected budgetary gift – and actually deliver in government.
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