Kate Forbes is only 31 and yet the Scottish budget she delivered yesterday was her third. Her name is routinely mentioned as a possible successor to Nicola Sturgeon amid persistent speculation about the first minister’s future. Did the finance secretary polish her prospects with this budget? Or did the apprentice show that she still had much to learn?
Ms Forbes said that she wanted to provide “stability” for hard-pressed households and she confirmed help for the poorest families through the child payment.
With an increase of 10.6 per cent in the cash at her disposal there was no need for big changes to income tax but she still ensured more Scots will find themselves paying the highest rates. This was a bold political move. Ms Forbes was not required to take any action that entailed a reputational risk but she did so regardless. Voters now have a better idea who they are dealing with.
In truth she did not need to hammer taxpayers because Rishi Sunak had already done so. Much of the new money the SNP will spend in the coming financial year comes from a UK-wide hike in national insurance ordered by Mr Sunak in October. The UK government took the political hit and the Scottish government can now splash the cash. This is not how devolution was meant to work. The treasury may wish to reflect on how this came to be.
Initially this was billed as a recovery budget but the emergence of the Omicron variant complicated matters. Covid is not yet done with us.
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The tricky task for Ms Forbes was therefore to look beyond the pandemic while still wrestling with it. When we talk of Covid recovery we essentially mean three things: an NHS equal to the challenge of the virus and the long backlog; an education system equal to repairing the damage done to pupils’ schooling; and a plan for a sustainable economic recovery.
Judged against these criteria how does the Forbes budget stack up?
The eye-watering £18 billion for health and social care is a reflection of a simple political reality: with stakes so high, overreaction on the NHS is preferable to underreaction. An NHS already at breaking point will somehow have to be capable of “running hot” for the foreseeable future. Few voters will begrudge the enormous sums of money and political bandwidth that this requires.
The consequence, however, is that other legitimate spending priorities get squeezed. This is the worry for schools, which fall under the control of local government. Ms Forbes said the £12.5 billion for councils was “fair”. Councillors may disagree, once pay rises are factored in.
Scotland can ill afford a lost generation and there will be a political price to pay if the education recovery founders.
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On no other issue does the Scottish government face more scepticism than on the economy. Ms Forbes produced a battery of measures including extended rates relief and £2 billion of infrastructure investment to help make the move toward net zero.
Still, the response from a jittery business sector, thrown by new Covid curbs and uncertainty about the Cambo oil field, was far from warm. The Sturgeon administration still has to demonstrate it has the necessary vision and insight to secure Scotland’s future prosperity.
