Mixed reaction to Spending Review across the nations

Across the nations the chancellor’s spending review has received a mixed reaction to say the very least.

Across the nations the chancellor’s spending review has received a mixed reaction to say the very least.

In Scotland, ministers have outlined their concerns that the review means a real terms cut in the Scottish government’s total DEL budget (excluding financial transactions) of £333m between 2014/2015 and 2015/2016, whilst Scotland’s capital budget shows an overall reduction in the conventional capital budget of 26 per cent in real terms since 2010.

Calling for a change of course, finance secretary John Swinney explained:

“It is time for Scotland to choose a different course. The chancellor has chosen austerity over investment in growth and jobs and the cost has been the continuing deterioration in the public finances, prolonged recession and the downgrade of the UK’s credit rating.

“Westminster’s economic failure means that instead of the 2.9 per cent growth for 2013 the chancellor expected in his first Budget back in June 2010, the UK economy is now forecast to grow by just 0.6 per cent over the year as a whole.

“Today’s Spending Review sees a further reduction to the Scottish Budget, piling cuts on top of cuts and another attempt by Westminster to hide their failed economic policies behind promises of loans and borrowing far into the future.”

Turning his attention to next year’s referendum on independence as being a chance to achieve the change needed, Swinney continued:

“Scotland did not vote for this disastrous economic agenda and next year we can choose to take a different and better path, with all of Scotland’s resources at our disposal.

In a sign of the diverging nature of British politics, the SNP government was quick to explain that public sector workers north of the border will, contrary to the chancellor’s statement yesterday, keep their automatic annual pay rises.

In Wales, finance minister Jane Hutt noted that the outcome of the spending review means the government in Cardiff Bay will be taking a 2 per cent cut between 2014-15 and 2015-16. Overall, the Welsh government’s budget in 2015-16 will be £280 million lower in real terms than its budget in 2014-15.

Declaring that the review confirmed the difficult challenges ahead, Hutt expressed disappointment over the capital settlement, explaining:

“I have repeatedly called on the UK government to boost the funds available for capital investment; this is a disappointing capital settlement – which does not increase the funding available – and will do little to boost the economy.  This is a missed opportunity.

“Our capital budget in 2015-16 will be a third lower in real terms than in 2009-10.  And almost £180m of our capital, which is an unprecedented 12 per cent of the total, is subject to restrictions and can only be used for loans and equity investments. This means that there is a cut in the funding available for real capital investment from 2014-15 to 2105-16 of more than 5 per cent in real terms.

“These are difficult times but as a responsible government we are resolute in our commitment to stand up for the interest of Wales.”

For Plaid Cymru meanwhile, its treasury spokesperson, Jonathan Edwards MP dubbed the review “grim”. In arguing that the chancellor had laid a trap that Labour have fallen into, he said of yesterday’s statement:

“Austerity has failed on its own terms – it has been self-defeating, with the economy either in recession or stagnant in recent years.

“Even the IMF – the high priests of austerity – have realised the error of their ways and called on the Government to ease the cuts and spend much more on infrastructure to grow the economy.”

Over in Northern Ireland meanwhile, its Resource DEL budget will, as a result of the spending review amount to £10.2 billion, including £9.6 billion of non-ringfenced Resource DEL; and a Capital DEL budget of £1.1billion for 2015-16. Declaring the settlement to be “as good as could be expected for Northern Ireland”, Finance Minister, Sammy Wilson sought to focus on the positive, commenting:

“Whilst it was inevitable that we would have to share the impact of the austerity drive applied to the UK Budget, the continuation of the UK government’s decision to protect front-line services in health and education has a direct benefit for the Northern Ireland Executive’s Budget. It means that the impact of the reductions applied at a Whitehall level is somewhat mitigated for Northern Ireland.”

He continued:

“I am particularly glad that the UK government has acknowledged the key role that capital infrastructure enhancement has in stimulating economic growth – both short and long term.

“This is a point I made strongly to the chief secretary when we recently met in Belfast and reflected in a subsequent joint letter from the Devolved Administrations to the chancellor. This will aid our construction industry and I hope to follow up this good news with a further announcement of capital investment next week.”

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