UK faces ‘make or break moment’ in Budget as Swinney calls for spending

Scotland’s First Minister will use a speech on Monday to urge the Chancellor to increase spending, as he said the Budget presents a “make or break moment” for the UK.

Rachel Reeves will present the new Labour Government’s tax and spending plans on October 30, as she seeks to close a £40 billion gap in the public finances to avoid a return to austerity.

But reports suggest cuts to departments across Government could be used to plug part of the gap, with some ministers privately voicing their opposition.

Prime Minister Sir Keir Starmer, speaking at a press conference in Berlin, said his Government would “keep our manifesto pledges” not to increase taxes on working people.

On Monday, First Minister John Swinney is expected to make his most outspoken intervention on the budget and push the Chancellor to invest in public services.

Speaking at an event in Edinburgh on Monday in front of academics, think tanks and representatives of the private, public and voluntary sector, the First Minister is expected to describe the past seven years – which has seen Brexit, the pandemic, the war in Ukraine and the subsequent energy price and inflation hikes – as a “long, dark economic winter”.

He will add: “What is needed now is a collective commitment to public investment for economic renewal, investment that will allow us to move into an economic spring, with new growth, new opportunities and new hope.

“In this century, defined by global crises, we must invest boldly to improve living standards, increase equality, and protect the planet.

“We cannot simply sit back and wait for economic conditions to improve after nearly two decades of volatility.”

The First Minister will seek to bring together a “consensus” in Scotland over the need for public investment.

He will tell those present: “One thing is clear, we have reached a turning point, a pivotal moment for UK decision-making in a world of sustained turmoil.

“That is why I believe the United Kingdom faces a make or break moment in this next Budget. It must be seized.”

A little more than a month after the Chancellor outlines her spending plans, the Scottish Government’s draft budget will be announced.

Ministers north of the border are hoping for greater investment from Westminster in devolved areas, which would increase spending available in Scotland through the Barnett formula and take pressure off a Government which has already had to announce hundreds of millions of pounds of in-year cuts.

A UK Treasury spokesman said: “The Chancellor has been clear that the prize for bringing stability to our economy is investment and well-paid jobs which make every part of the country better off.

“We have been honest about the state of the public finances we have inherited but we are acting to rebuild Britain based on our fundamental strengths, including our world-leading renewable energy and service sectors.”