The starting gun has now been fired on the 2026 Holyrood election.
SNP Finance Secretary Shona Robison has delivered a Scottish Government budget loaded with vote-winning goodies, most notably record spending on the NHS, a reinstatement of the winter fuel allowance and a commitment to abolish the two-child benefit cap.
The latter measures in particular reflect a budget that was as much about drawing dividing lines with – and stealing the thunder of – the Scottish Labour Party, who now face a rockier ride to Bute House than many had expected.
Despite delivering the Barnett-backed windfall that helped pay for such measures, Anas Sarwar’s resurgence in the polls has stalled post-General Election, and it seems unlikely this budget will deliver a recovery for him in the short term. Meanwhile the SNP, which has suffered a daunting 18 local government by-election defeats in a row since July 4, will hope the more populist measures in the budget help arrest any further electoral decline.
Speaking at the True North budget breakfast event today, Deputy First Minister Kate Forbes was bullish about the budget and its headline announcements, which also included the creation of a new offshore wind hub in Aberdeen as part of a wider £150million investment. Forbes stressed to attendees that the budget included measures from across the political spectrum, and very much placed long-term economic growth at its heart. There was little doubt from her general demeaner that senior figures in the SNP feel their statement has landed well.
Of course, as the questions in the room reflected, many in the business community remain concerned that the budget has not gone far enough, particularly after Rachel Reeves delivered her tax-raising prospectus in October.
Non-domestic rates relief for hospitality is, for instance, significantly less generous than the equivalent scheme announced by the Chancellor of the Exchequer for England. Meanwhile, the uplifting of basic and intermediate rate income tax thresholds are effectively aesthetic, and will have a minimal impact for businesses struggling to attract and retain talent.
Similarly, while the housebuilding industry gave a cautious welcome to the reinstatement of the affordable homes budget, they challenged Forbes on overregulation and proposals to bring forward a Building Safety Levy, which will make home ownership unaffordable for more families.
But with now just 18 months to go until the Scottish Parliament election, such issues are unlikely to matter too much to the SNP, who have used the budget to firmly set the terms for what promises to be one of the most significant contests in the history of devolution.
Headline announcements
- Capital spending totalling £7billion for ‘green reindustrialisation’ of Scotland.
- Almost triple investment in offshore wind to £150million next year.
- Establish a Scottish Government hub for offshore wind in the North East.
- Work to begin to build a system to mitigate the two-child cap from 2026.
- Funding for universal winter heating payments.
- Basic and intermediate rate income tax thresholds to increase by 3.5 percent.
- Investing £768million in affordable homes to make 8,000 properties available for social rent, mid-market rent or low-cost home ownership, returning the housing budget over and above the level from two years ago.
- £321million to support enterprise agencies, emerging technologies and programmes like the TechScaler initiative.