Meeting of the Parliament 26 October 2022
The reality is that we do not know. I already highlighted the amount that we have lost through inflation, and, as members will appreciate, we do not know what our finalised budget picture will be until the end of the year because of supplementary estimates, and there is always the risk of negative consequentials. That makes in-year budget management extremely challenging.
The UK Government’s statement must not inflict further austerity on Scotland as a result of the mess that it has caused. The triple lock for pensions must not be removed again. We cannot have benefits not increase in line with inflation, and we cannot have people not being helped with their energy bills as they continue to soar.
As the First Minister made clear to the Prime Minister last night, the UK Government holds levers over energy, the majority of tax, the bulk of benefits and the business support and regulation that could help address the crisis. It also has borrowing powers and the ability to deploy financial instruments that can transform household and business budgets.
For example, a strengthened windfall tax should be an important source of funding for that support, rather than borrowing and spending cuts. That would help meet the costs of providing additional help for households and business, rather than increased borrowing and cuts to public spending, which would exacerbate the existing situation. We estimate that around £9.3 billion could be raised by broadening the energy profits levy and removing the investment allowance.
There must also be an inflationary uplift to the 2022-23 budget to enable the Scottish Government to take further steps to support people with the cost of living, provide fair public sector pay uplifts and support public services, given the fiscal constraints on devolution. That will allow us to continue to take action to support people at this very challenging time and is how we can build on the almost £3 billion of support that the Scottish Government has already provided this year, including £1 billion of support that is available only to households in Scotland.