KATE Forbes has highlighted “critical quotes” from experts at the Office for Budget Responsibility (OBR) ahead of the announcement of the next Scottish Budget.
The former finance secretary warned that austerity is on the horizon as she said that the UK block grant, which is set by the Conservatives, is “still the most critical element”.
The next Scottish Budget will lay out spending for 2024-2025 and is expected on Tuesday, December 19.
Experts from the OBR gave evidence to Holyrood’s Finance and Public Administration Committee on December 12, and Forbes highlighted key points which came up that she said should inform debate around the budget.
In a social media thread, Forbes said she aimed to highlight “a few critical quotes (all lifted directly) and facts before debates start”.
These included contributions from OBR chair Richard Hughes. He told MSPs: “[The Chancellor had] a net windfall of £27 billion … He opted to cut two taxes in his autumn statement, rather than to try to protect the real spending power of public services.
“As a result … the real spending power of Government departments in England goes down by about £19bn over the forecast period [to 2027-2028].”
Forbes said the impact of this drop in spending power would be “catastrophic”. She went on: “Remember what is spent on health/education/transport in England is what generates the funding for Scotland. It’s not based on need, it’s based on Tory choices.”
Hughes (above) later spoke about the impact of the UK’s rising national debt. He said: “Debt service costs now come to more than £100bn a year, which means that, if debt servicing were a UK Government department, it would be the second largest after the national health service.”
Forbes said this high figure was the cost of the Tories’ “economic ineptitude”.
The OBR’s Tom Josephs told MSPs that the UK had “seen a very significant increase in debt interest costs and one of the largest in the G7”.
Hughes added: “We are approaching £3 trillion worth of debt, which means that our debt to GDP ratio is approaching 100 per cent of the size of the UK economy … that is more than three times what it was at the start of the century.”
Elsewhere, Josephs (below) addressed the issue of capital spending and a UK Government freeze.
The OBR expert told MSPs: “The UK Government has chosen to freeze total capital spending … If such freezes were to be maintained over a long period, we would expect that to have a negative impact on economic growth.”
Forbes commented: “Tories are complicit in making bad choices, with dreadful implications for Scotland, but they are also responsible for economic ineptitude that forces these choices.
“Even if other G7 countries have experienced impact of Covid, cost of living etc, the impact is worse in [the] UK.”
The former finance secretary said that Labour were offering more of the same economic policies as the Tories, and warned it would lead to a new wave of austerity.
10/ Ask Labour what they would do differently. Last time I checked, Keir Starmer's answer was 'nothing'. That will mean that the next few years' austerity is worse than the George Osborne variety.
— Kate Forbes MSP (@_KateForbes) December 13, 2023
Forbes said: "The economic ineptitude of this Tory UK Government has been laid bare by the OBR – the decisions made by the Chancellor in his autumn statement are devastating to the Scottish Government's budget.
"What is even more concerning is that an incoming Labour government has said they will change nothing, that Sir Keir Starmer is happy to inflict years more of austerity on Scotland.
"The decisions made by the UK Government have an immense impact on spending in Scotland, and while the SNP government will invest every penny on eradicating poverty, supporting public services and driving economic growth, only with the full powers of independence will we be able to invest in Scotland's priorities.”
The official report of the evidence given to the Scottish Parliament Finance and Public Administration Committee can be found here.
