Spending Review sees UK Government gamble on trust, not just spending

There was a £2 billion increase to the devolution settlement, taking it to £52 billion, the largest settlement since devolution, funding for the long-awaited Acorn Project, and big boosts for defence, schools and the NHS, the latter two of which will translate to more money for Scotland.

Speaking to Scottish Labour MPs afterwards, there was a sense that Rachel Reeves had done it, ramping up spending to help the Government turn its polling around after a difficult few months.

One MP told me they couldn’t be happier, and another just replied with an emphatic yes. However, there were concerns that despite “some good things in there”, it did little to tackle “inequality and poverty”. In short, much like Labour’s tenure so far, there were a few areas of merit, but not quite enough to inspire a rally in the polls.

Tories were predictably more critical, telling this newspaper the flaws were hiding in the “nuance”. One added “how are they going to pay for all of this?”

This issue continues if we drill into the details of what was actually announced. While more money for Scotland is welcome, the SNP argue it’s actually leaving them a billion short, due to inflation, and with lower than average growth compared to other UK Departments. That would be damning, given the Home Office, Foreign Office, Housing, culture, environment, HMRC, Work and Pensions, and the Treasury all suffered cuts.

Ministers reject this notion of a cut for Scotland, arguing it’s still the biggest amount Scotland has been given since devolution, but which narrative is swallowed will be key to Scottish Labour’s prospects next year.

As the IFS explained, the spending is heavy at the beginning then tails off in the middle, with ministers hoping that investment pays off further down the line. Whether voters feel it will be crucial to their prospects. As the Hamilton by-election showed, in voters' eyes, recent events don’t necessarily trump years of another government.

The other issue lies in Acorn, where ministers have been unable to provide an exact figure for how much will go towards it. They say this is down to needing agreement with the commercial parties involved, but the ambiguity doesn’t help them. A lack of certainty can lead to distrust, something only amplified by wording in the Spending Review Document. It reads “a final investment decision will be taken later this Parliament, subject to project readiness and affordability". That may be how these decisions work, but voters may see these announcements and have doubts. You either do something or don’t.

Labour’s gamble is that voters will trust them more than the SNP, regardless of any blurring of the details in the Spending Review. In a briefing with Scottish journalists, Chief Secretary to the Treasury Darren Jones said on average, the increase will mean £2.9 billion extra for Scotland each year – £2.4 billion of which will be revenue spending up to 2028-29 and around £510 million in capital for the slightly longer period of four years. Scottish Secretary Ian Murray added: “The question then becomes, who do you trust to spend that?”

That is the question that will define Labour’s electoral prospects, not necessarily the details of what’s on offer.