Labour’s New Direction Risks Squeezing Scotland’s Budget

Rachel Reeves’ latest speech makes one thing clear: it looks like Labour have found a new direction from the one they promised last year.

Labour said that if people backed Keir Starmer, living standards would improve and taxes would not go up. Instead, families are still under pressure from rising costs, and we now have a Chancellor coming back with another budget that asks taxpayers to carry more of the burden.

There is also a direct risk to Scotland’s public finances. If income tax is increased for England and Wales, the Block Grant Adjustment means Scotland’s budget is effectively reduced unless the Scottish Government follows Westminster’s lead. Decisions made for another part of the UK can cut into the money available for our services, even when they do not reflect Scotland’s choices or priorities. That is no way to run a country.

Rather than confronting the damage Brexit continues to do to the economy and acting to support households, Westminster is again passing the bill on to ordinary people. Many in Scotland will feel let down by promises that have not been kept.

Scotland should not be left paying for decisions we did not choose. That is why I believe we need the full fiscal powers of independence, so we can make coherent tax and spending choices in Scotland’s interests and give people more certainty about the future.