Labour’s first budget since returning to power promises “an end to austerity” West Dunbartonshire’s MP has claimed.
Chancellor Rachel Reeves revealed her spending plans for the year last week, which included the biggest budget for the Scottish Government in the history of devolution, a rise in the minimum wage and an additional £470 a year for those on the new State Pension and an additional £360 a year for those on the basic State Pension.
Around 1.7 million families in Scotland will see their working-age benefits uprated in line with inflation – a £150 gain on average in 2025-26.
And a reduction in the maximum level of debt repayments that can be deducted from a household’s Universal Credit payment each month from 25 percent to 15 percent – which Labour say will benefit a Scottish family by over £420 a year on average.
Tax loopholes including the ‘Non-Dom’ scheme used by Tory Prime Minister Rishi Sunak’s wife, will also be closed said Reeves, who pledged she would “invest, invest, invest” to drive growth.
Commenting, Labour MP for West Dunbartonshire Douglas McAllister – who was elected in July – said: “Labour delivered a historic budget for Scotland, which will deliver huge benefits for people across West Dunbartonshire communities.
“This budget keeps our promises to Scotland, ends the era of austerity, provides billions for investment in public services, and prioritises economic growth.
“This Labour government has delivered the investment that West Dunbartonshire deserves, alongside billions of pounds of more investment into Scotland, with the largest settlement in history for the Scottish Government to spend on schools and hospitals.
“The UK Labour government has inherited a £22billion in-year black hole in the accounts from the previous Tory government, who had spent the Treasury reserves three times over by July this year.
“Labour has taken a different path – investment over decline. We will increase the minimum wage, the state pension and the value of Universal Credit.
“ The budget protects working people in West Dunbartonshire, ensures more money than ever for Scottish public services and delivers an end to the era of austerity.”
The budget was hailed as a “step in the right direction” by the Scottish Government’s Finance Secretary in a sign of improved relations between Holyrood and Westminster.
Shona Robison welcomed the Labour Chancellor’s decision to change Treasury rules to allow greater investment in infrastructure.
But she warned the Scottish Government still faced “enormous cost pressures” despite being handed an additional £3.4billion by Reeves.
Ms Robison commented: “This budget is a step in the right direction, but still leaves us facing enormous cost pressures going forwards.
“By changing her fiscal rules and increasing investment in infrastructure, the Chancellor has met a core ask of the Scottish Government. But after 14 years of austerity it’s going to take more than one year to rebuild and recover.
“There is a risk that by providing more funding for public services while increasing employer national insurance contributions, the UK Government is giving with one hand while taking with the other.
“We estimate that the employer national insurance change could add up to £500million in costs for the public sector unless it is fully reimbursed – and there is a danger that we won’t get that certainty until after the Scottish budget process for 2025-26 has concluded.”
MSP Jackie Baillie added: “Our pledge for government included our mission to make work pay, deliver economic stability, lift Scotland’s children out of poverty and drive growth.
“Rachel Reeves’ budget will help achieve that, as well as offering greater security for many low-income households.
“I am delighted that Labour is delivering on pledge to improve public services – and the Chancellor’s £3.4billion of additional funding for Scotland will help to achieve that.
“It is now up to the SNP Scottish Government to properly target that funding to improve key priorities like Scotland’s crippled NHS and affordable housing crisis. Every single penny for the NHS must be spent on the NHS – nothing less will do from the Scottish Government.”
There was anger from the Scotch whisky industry after duty on spirits was increased.
Nuno Teles, head of drinks at giant Diageo Great Britain, said: “Keir Starmer pledged to ‘back the Scotch whisky industry to the hilt’. Instead, the government has broken this promise and slammed more duty on spirits.
“This betrayal will leave a bitter taste for drinkers and pubs, while jeopardising jobs and investment across Scotland.”