Welfare cuts expected in Spring Statement spark fears for Scottish services

Ms Reeves is thought to have earmarked several billion pounds in draft spending cuts to welfare and other government departments.

The Treasury will put the proposed cuts to the government's official forecaster, the Office for Budget Responsibility (OBR), on Wednesday, ahead of Rachel Reeves delivering the Spring Statement later this month.

Welfare is expected to be particularly targeted, with the measures to be outlined in a forthcoming speech from Work and Pensions Secretary Liz Kendall.

While no details are expected until the Spring Statement on March 20, concerns have been raised about what this means for Scotland.

The First Minister urged a rethink, saying any cuts would hurt his ambition to eradicate child poverty and the UK needed to have an “honest debate” about taxation.

Mr Swinney said: “I’m troubled by the reports that are coming out of the UK Government about reductions in welfare spending, because I think that will inevitably add to the challenges that are faced by individuals facing vulnerability in our society.

“My top priority is to eradicate child poverty and I can’t imagine that will be helped if the UK Government is reducing welfare spending into the bargain.”

He added: “We’ve got to have in the United Kingdom an honest debate about public expenditure and taxation.

“I tried to have that during the election campaign, where I pointed out the pressures on the public finances and on our public services, and I have to say neither the Labour or Conservative Party were particularly interested in having that honest debate during the election campaign.

“But if we want to have a society that’s got good public services, that supports people who face difficulty and a society that can protect itself in the difficult international times that we face just now, we’ve got to have an honest debate about taxation.”

The SNP Westminster leader Stephen Flynn claimed it was a blow to public services, and a betrayal of the promise made by Scottish Labour Leader Anas Sarwar that there would be no austerity.

He said: "Labour Party plans to take an axe to public services, and impose billions of pounds of austerity cuts, would be deeply damaging for Scotland and it breaks yet another election promise.

"The news that the Labour Party will now slash billions more from our public services is a total betrayal of what voters were told at the election - and it shows that neither Keir Starmer or Anas Sarwar can be trusted to keep their promises.”

Lib Dem MP Alistair Carmichael claimed the move represented a chasm between Labour’s election campaign and their record in Government.

He said: "With every week that goes by the gap widens between what Labour said in opposition and what it is doing in government. They have created their own fiscal straitjacket and everyone else seems to be paying the price."

Another Lib Dem MP, Wendy Chamberlain, urged Ms Reeves to instead invest in health.

She said: “Everyone knows Rachel Reeves had a difficult job after the economic mess she inherited from the last Conservative Government but that can’t be an excuse for the Chancellor to make the wrong decisions - we can’t have a repeat of the winter fuel payment cut.

“The best way to bring down the welfare Bill is to bring down the number of people who cannot work due to a long-term health condition. Scotland has a huge number of people who are economically inactive and it puts a huge strain on our economy. That’s why we need to invest in our NHS & social care to make sure these people can get the care they need and return to the workforce.

There were also warnings from Scottish Labour MP Brian Leishman, who said they could impact the “most vulnerable, disadvantaged and poorest in society”.

He said: "The government has to look after those people and by cutting welfare then there is no doubt in my mind that people will be pushed into inescapable poverty and any will die.

"Hundreds of thousands of excess deaths were the result of 14 years of Conservative austerity and the Labour Party should always be opposed to the politics that punches down on people.

"I didn’t become a Labour Party member, or a Labour Councillor or a Labour MP to cut welfare for those people that desperately need help.”

Charities expressed fears for social security in Scotland, and balancing the books off the poorest.

Poverty Alliance chief executive Peter Kelly said: “People in the UK are desperate for a government that delivers a just and compassionate country - and that's one of the reasons so many voted for change at the last General Election. These proposed cuts do not embody those values.

“Further cuts to our already inadequate social security system will push more people into poverty – undermining the government’s child poverty strategy before it is even published.

“Our social security system - like our NHS - is something that the UK can be rightly proud of. Together, we decided to make sure that all of us have a right to support when we need it.

“It’s unjust that the Government are seeking to, once again, balance the books on the backs of those on the lowest incomes. Rachel Reeves has said that 'the world had changed', but unfortunately not much has changed for those living on low incomes. We urge the Chancellor to think again, looking instead at wealth taxes and changes to self-imposed fiscal rules.”

However, the Institute for Fiscal Studies (IFS) suggested the Scottish Government could act to offset any cuts.

Carl Emmerson, deputy director at the IFS, said: “The implications for Scotland will depend on where any spending cuts fall. If it is spending on areas that have been devolved that is cut back in England then Scotland would see a reduction in grant from Westminster and would have to decide whether to impose similar cuts, or whether to make them in different areas or to put up taxes instead. This includes both public services that have been devolved and also devolved benefits such as personal independence payments.

“Were cuts made to UK wide spending - most obviously on universal credit - then this would by default apply in both Scotland as the rest of the country. But even then, the Scottish Government could decide to try to offset the cut; with any compensatory measures needed to be funded from elsewhere. “

Stephen Boyd, director of IPPR Scotland, said whatever the details, they wouldn’t be positive for Scotland.

He explained: “Although the Chancellor’s autumn budget provided the Scottish Government with significant additional funds for the current year, the longer-term funding challenges remain profound.

“The UK government needs a fiscal strategy fit for the volatile world we now find ourselves in. While cuts and savings can fill some immediate gaps in the Chancellor’s budget this isn’t a viable strategy for the future.

“Recognising that the world has changed and that the challenges in delivering excellent public services and a robust welfare state have only intensified, the Scottish Government will also have to reconsider the tax strategy published alongside this year’s budget. As IPPR Scotland has consistently argued, it is difficult to see any version of the future which doesn’t see total tax revenues rise over coming decades.”

Justice Secretary Shabana Mahmood defended efforts to reduce the amount spent on welfare.

She told BBC Radio 4’s Today programme: “There is a moral case here for making sure that people who can work are able to work and there’s a practical point here as well, because our current situation is unsustainable.”

The Treasury has been approached for comment.