The Scottish government has accused the chancellor of “letting Scotland down on every count” after he unveiled a modest £545m increase in Treasury funding, and extra funds for Wales and Northern Ireland.
Jeremy Hunt announced an overall boost of £1bn for the UK’s three devolved governments, with Wales in line to receive an extra £305m and Northern Ireland £185m over the next two financial years, alongside £545m for Scotland.
Shona Robison, the Scottish finance secretary, said some of the UK-level measures in his autumn statement were welcome but overall it was a “worst case scenario” for Scotland that failed to deliver properly on the cost of living crisis and on the climate crisis.
“Scotland needed a fair deal on investment for infrastructure, public services and pay deals – the UK government has let Scotland down on every count,” she said.
The extra health funding that flowed to Scotland from the boost to England’s NHS budgets, she said, was equivalent to just 0.06% of Scottish health spending. Cutting national insurance also deprived the public sector of much-needed funding.
The Welsh first minister, Mark Drakeford, has complained bitterly about what he believes is systematic underfunding of Wales by the Treasury, which has forced Cardiff to reallocate its infrastructure budget to help stem deep cuts in day-to-day spending.
Significant doubts also emerged over whether the extra cash for Northern Ireland would go directly on improving public services or paying off a £300m overspend by the devolved administration at Stormont.
UK ministers insist the wide range of tax cuts and benefit rises, including the 2p cut in national insurance, the pensions rise and a 6.7% increase in welfare payments, will have broader benefits for the devolved nations.
They also point to multimillion-pound pledges to invest in roads, ports and community projects through the UK-wide levelling up fund, including £8m on a microgravity research centre in Cardiff, £3.8m on new 5G services in Belfast, £10m on a genetics therapy site in Renfrewshire, and upgrades in the A75 trunk road from Gretna to Stranraer, partly running through the constituency of the Scotland secretary, Alister Jack.
Hunt spent billions cutting national insurance rates but Sean Cockburn, of the Chartered Institute of Taxation, said those measures did not remove a significant anomaly in Scotland that penalises higher tax earners.
The anomaly arose because after income tax was devolved to Holyrood, the Treasury failed to peg national insurance thresholds in Scotland to Scottish income tax thresholds, which are now higher due to decisions taken by the devolved government in Edinburgh.
As a result, Scottish income tax payers earning above £43,663 a year pay 52% on their earnings up to £50,270. Employees elsewhere in the UK pay only 30% tax on those earnings. The Treasury has not considered addressing that glitch.
Jack, however, said there was “a lot to cheer about” in the autumn statement, including a duty freeze for Scotch whisky, which could drive up sales. “This is an autumn statement to support hard-working families and grow our country’s economy. It is great news for Scotland,” he said.
David TC Davies, the Welsh secretary, said the “hugely ambitious” statement put money back into Welsh pockets. “As we grow the economy, I’m delighted to see substantial direct UK government investment in Wales,” he added.
• This article was amended on 23 November 2023. An earlier version quoted Shona Robison, the Scottish finance secretary, as saying that the extra health funding that flowed to Scotland from the boost to England’s NHS budgets was equivalent to 0.01% of Scottish health spending. The Scottish government corrected this figure after publication to 0.06%.
