Independent Scotland would have faced ‘catastrophic cuts’
The Chancellor said that if Scotland had voted for independence it would now be making “catastrophic cuts in public services” due to the fall in the oil price which had led to a collapse in revenues.
He referred to an Office for Budget Responsibility forecast which said North Sea oil revenues were down 94%.
“We would have seen catastrophic cuts to Scottish public services. Thankfully, Scotland remains a strong part of a stronger United Kingdom,” he said.
Claiming that The Vow on new powers had been delivered he said Scotland will get a £30 billion block grant.
Paul Gallagher, tax partner and head of government and public sector at EY Scotland said: “The “Resource” aspect of Scotland’s block grant will increase from £25.9bn to £26.5bn which represents a 5% reduction in real terms of Scotland’s day-to-day spending by 2020-21.
“From a Scottish perspective, the Deputy First Minister [John Swinney] faces a challenging period to assess the impact of the block grant and set the Scottish Budget in short order to achieve the 16 December target.
“It will be no easy feat to achieve a fair and balanced budget within the context of increasing constrained resources; the Deputy First Minister may need to demonstrate a high degree of fiscal alchemy to achieve this.”
Mr Swinney (right) said the Scottish Government will see a real terms reduction of almost 6% in the funding for day to day public services over the next four years.
The DFM condemned the continued “austerity of choice” but welcomed the U-turn on tax credits as a victory for the 250,000 families in Scotland who would have been painfully impacted by the cuts.
Mr Swinney said: “The Chancellor has continued with ideologically driven austerity of choice. Scotland will see almost 6 per cent of the day-to-day budget that pays for public service slashed as a result of this Chancellor’s statement.
“The Scottish Government has consistently demonstrated that the UK’s deficit and debt can be brought down without the need for huge public spending cuts. These cuts are damaging, needless and will hit the poorest hardest.
“What is welcome is the victory over tax credits. 250,000 families in Scotland can breathe a sigh of relief after the proposed cuts were scrapped by the UK Government.
“This U-turn demonstrates it was right to maintain pressure on the Chancellor to re-think this damaging proposition.
“We will continue to do everything within our power to protect the most vulnerable from the UK Government’s austerity measures – austerity of choice, not necessity – but we want to use our powers and resources to lift people out of poverty, not just continually mitigate as best we can.
“That will be our focus as we draw up spending plans ahead of the Scottish Budget next month.”