This Budget fired the starting gun on the 2026 Holyrood election
Make no mistake, this was a Budget with an eye firmly on the 2026 Holyrood election. The big surprise was the pledge to scrap the two-child benefit cap in Scotland - a move that poses a challenge for Scottish Labour.
Prime Minister Sir Keir Starmer previously came under huge pressure from the Labour benches in Westminster to remove the cap, but argued this was unaffordable.
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Hide AdScottish Government insiders denied the announcement was designed simply to cause Labour discomfort in Holyrood. “That’s just a lovely extra benefit,” one said.


Addressing MSPs, finance secretary Shona Robison said action to mitigate the cap – which means families can only claim some benefits for their first two children – will lift 15,000 youngsters out of poverty.
Charities have long argued this is the most cost-effective way to help struggling families. It is forecast to cost the Scottish Government around £150 million in 2026/27, with this rising to more than £200 million by 2029/30.
However, as Ms Robison made clear, the cap is a UK-wide policy and so taking action will require co-operation from Sir Keir’s government. Nevertheless, she told MSPs: “Be in no doubt that the cap will be scrapped.”
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Hide AdHer intention is to start paying families “as early as we can in 2026”, which is, of course, the year of the Holyrood election.
The Scottish Government had already promised to reintroduce winter fuel payments for all pensioners. This was widely seen as a bid to outmanoeuvre Scottish Labour, which was pushing for SNP action.
Labour sources dismissed the two-child benefit pledge, arguing it was simply an intention and had no concrete funding attached. “It’s just vibes,” said one. Another added: “I’ll file it with the intention to combat delayed discharge or tackle the poverty-related attainment gap. The road to hell is paved with good intentions.”
The respected Fraser of Allander Institute said the announcement was “clearly a late addition” to the Budget, and had not been included in analysis.
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Hide Ad“The Scottish Government will be hoping this is brought in UK-wide before they have to fund it – a heavily caveated 2026 was mooted as the start date, but it can take the moral high ground in the meantime,” the independent think tank said.
Elsewhere, Ms Robison said income tax rates will be frozen for the rest of this Parliament and more of people’s money will be taxed at the starter and basic rates.
The Scottish Fiscal Commission estimated that anyone earning more than £30,300 will pay more income tax in Scotland than they would in the rest of the UK, but those on below £47,310 will now pay slightly less than previously.
Households may yet be clobbered by council tax rises, however. The Scottish Government chose not to repeat its controversial council tax freeze, which was widely hated by local authorities.
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Hide AdMs Robison said an extra £1 billion of additional investment in local government “should enable all councils to keep any council tax rises to a minimum”, telling journalists: “I am a believer that common sense will prevail here.”
Cosla, the council umbrella body, will meet to discuss the spending plans on Friday.
The finance secretary said this was a Budget “filled with hope for Scotland’s future”. It was certainly more upbeat than we have come to expect in recent years. There was a “record” uplift of £2 billion for frontline NHS boards, alongside a “record” funding settlement for councils.
Figures close to First Minister John Swinney highlighted that language of hope. “Hope plus delivery builds trust,” a source said. “That is his political strategy, pretty simply.”
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Hide AdThe focus will now turn to the backroom deals necessary to get this Budget over the line. The SNP operates a minority administration in Holyrood and needs support from another political party. This will most likely come from the Greens or the Liberal Democrats.
The spending plans included £4.9 billion for climate action, but the Greens said further “big changes” will be needed to secure their support.
“This Budget fails to deliver on Green proposals like expanding free school meals for P6 and P7 or a price cap on bus fares,” said the party’s Ross Greer. “It slashes funding for core local services like schools and for key climate projects like the nature restoration fund.”
Alex Cole-Hamilton, the leader of the Liberal Democrats, was more positive. He said SNP ministers had “listened” to his party and included spending on “social care, affordable homes, insulation, winter fuel payments, additional support needs, ferries, GPs, dentists, long Covid, mental health, Edinburgh’s Eye Pavilion, the Belford Hospital and business rate relief for hospitality”.
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Hide AdHowever, this did not “guarantee” Lib Dem support, he added. “As in all Budgets, the devil will be in the detail.”
Labour insisted Scotland is “going in the wrong direction” under the SNP. “This Budget amounts to more of the same, sending Scotland ever faster in the wrong direction,” said the party’s Michael Marra.
Ms Robison said she would be “astonished” if Labour chose to vote down a Budget that included winter fuel payments for pensioners.
“Are they really going to vote against that?” she said. “I think that would put them in an extremely difficult position. That’s before we get on to the building blocks for the two-child cap being lifted and making progress on that. I think they would have some explaining to do to their party, apart from anyone else, if they were to do that.”
As I said, this was a Budget with an eye on the Holyrood election. Scrap that: both eyes.
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