Inflation Causes £1.7 Billion Hit to Scottish Government Budget
Stirling MP Alyn Smith is urging the UK Chancellor to use this week’s ‘mini-budget’ to boost support for struggling households and businesses across Stirling, as the cost of living crisis continues to bite.
Recent reports suggest company insolvencies are up by 42 per cent on pre-pandemic levels in England and Wales, whilst households face increasing pressure. Fresh research shows the lowest earners across the UK experience a standard of living 20 per cent weaker than their counterparts in Slovenia – part of growing inequality as a direct consequence from twelve years of Tory policy.
Mr Smith has also drawn attention to the largely fixed budget and limited borrowing powers of the Scottish Government, with inflation reducing its budget by £1.7 billion in real terms since December. The Stirling MP is calling on the UK Government to recognise the toll soaring inflation is inflicting on devolved public finances, and to act quickly using its reserved powers to address the cost of living crisis.
Stirling MP Alyn Smith said:
‘It’s clear the UK economy is in a tailspin. The UK Chancellor must use the powers at his disposal to deliver on the commitments set-out by the Prime Minister – including increased support for businesses and households facing ruin from their energy bills.
‘Soaring inflation continues to have a hugely detrimental impact on the Scottish Government’s budget. The UK Government must acknowledge the damage its economic policies have caused to devolved budgets, and act accordingly to ensure ordinary Scots don’t pay the price for Tory incompetence.
‘The Chancellor must also ditch plans to scrap the cap on bankers’ bonuses and slash taxes, at a time when public finances are in serious trouble. Such moves completely send out the wrong message – all whilst urging pay restraint for everyday workers, deepening inequality and further weakening the Treasury’s fiscal position. It’s economic illiteracy.’