Chancellor misses an opportunity to help business – and Scottish Labour's spluttering election hopes
Scottish Labour leader Anas Sarwar may have been hoping for a little more help from his colleagues in the south as the Scottish Parliament election looms
“Rage, rage against the dying of the light,” Dylan Thomas once advised in a famous poem. Chancellor Rachel Reeves, however, took the opposite approach in her Spring Statement, in another decision taken at Westminster that her Scottish Labour colleagues may rue as their once-twinkling light fades.
Labour made a conscious decision not to make this a ‘fiscal event’ in a bid to foster much-needed economic stability. However, given the Scottish Parliament election is now just two months away, Anas Sarwar may have been hoping for something more to help boost his party’s flagging challenge.
Scottish Secretary Douglas Alexander pointed out that, thanks to the Barnett formula, an extra £921 million would now be making its way to the Scottish Government, meaning that “since the general election in July 2024, we have provided the Scottish Government with nearly £12 billion extra for them to invest into public services like the NHS, transport or education”.
Economic importance of migration
Unfortunately, all this cash has allowed the SNP to claim credit for the resulting spending, while cheekily complaining about being short-changed by Westminster. It’s easy to see who the political winner is with just a glance at the polls.
The state of the economy is the main source of public discontent and the Office for Budget Responsibility’s downgrading of its growth forecast for this year, from 1.4 to 1.1 per cent, will only add to that feeling. However, Reeves’ point that this was partly because of a fall in net migration was a reminder that the size of the working population is a central factor in calculations of any country’s gross domestic product.
Given anaemic growth and the current global turmoil, Reeves’ ‘steady as she goes’ approach may not have been the best idea. Responding to the statement, the CBI’s chief economist Louise Hellem said there was a need “to tackle the high cost of doing business” by, for example, cutting energy costs and ensuring the tax system “rewards, rather than penalises, employment, investment and risk-taking”.
Both she and Sarwar may see this as a missed opportunity and find themselves wondering whether Labour are at risk of ignoring Dylan Thomas’s immortal maxim: “Do not go gentle into that good night.”
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