UK budget is ‘make or break moment’ – John Swinney

First Minister John Swinney has said the UK budget next week is a “make or break moment” for the economy as he urged the chancellor to invest in public services.

Speaking from an event in Edinburgh, the first minister called for three per cent of UK GDP to be invested in public services, with the aim of increasing that to four per cent in the coming years.

That would bring the UK into line with other OECD nations, he said.

Swinney argues the upcoming budget must “reject austerity” and allow all four governments in the UK to “become investing governments”.

“What is needed now amongst all four nations of the United Kingdom is a collective commitment to public investment for economic renewal,” he said.

Rachel Reeves will set out her first budget next Wednesday.

She has already warned about a £22bn blackhole in public finances left by the previous Conservative government and reports last week suggested she was trying to find £40bn in total to avoid real-terms cuts.

It is thought this will largely be found through tax increases, most notably increasing national insurance contributions for employers.

But Swinney warned about the knock-on impact such a move could have on Scottish public services.

He said: “If the UK government does not fully fund this in public expenditure, it will be public services in Scotland that bear the cost. So my ask of the chancellor is clear: do not make Scotland’s public services pay for this increase in taxation.”

The first minister also called for a change to the fiscal rules the Labour government has set for itself to allow for investment in infrastructure by no longer considering the public sector as part of net debt calculations.

He said the UK Government must provide greater certainty for green industry funding programmes in particular.

And while he argued that measures put in place by his government, such as the Scottish Child Payment, were making a difference to “ease economic hardship”, it was “not enough”.

He said the financial crisis of 2008 and policy choices since than have “undermined” public services, which made the energy crisis and rising inflation “incredibly difficult” for households.