Anas Sarwar challenges John Swinney to use £1 billion underspend as Holyrood braces for UK Budget

Scottish Labour leader Anas Sarwar has urged First Minister John Swinney to utilize a £1 billion underspend in the Scottish Government's accounts, as Holyrood prepares for potential tax changes in the upcoming UK Budget. This challenge arises amidst speculation that UK Chancellor Rachel Reeves may increase income tax, a move that could indirectly impact Scotland's public spending due to the block grant adjustment mechanism. While Scotland sets its own income tax rates, the Fraser of Allander Institute has warned that a 2 pence increase in the UK's basic rate of income tax could reduce Holyrood's block grant from Westminster by as much as £1 billion. This occurs because the block grant is adjusted based on UK-wide tax revenue projections. Therefore, even though Scottish taxpayers' bills might not be directly altered by a UK tax hike, Holyrood's overall budget could be reduced through a Block Grant Adjustment. Sarwar highlighted that the Scottish Government has received an additional £5.2 billion since Labour took office, with £1 billion of this currently unspent. He argued that this money could be directed towards publi... download the app to read more