Deputy First Minister Jenny Gilruth has urged the UK Government to use its forthcoming Budget to tackle the cost of living, reduce energy bills and increase investment in Scotland’s economy.
The Finance Secretary set out the Scottish Government’s priorities during a Holyrood debate on Thursday 1 October, including calls for a social energy tariff, changes to housing support and greater protection for Scotland’s public finances.
Gilruth called for action to reduce household energy bills and introduce a social tariff, alongside an end to the freeze on Local Housing Allowance.
The Scottish Government is also seeking the removal of policies including the bedroom tax and the benefit cap within Universal Credit, arguing that money currently spent mitigating their effects in Scotland could instead be directed towards public services.
During the parliamentary debate, Gilruth said around £160 million was being spent by the Scottish Government in 2026/27 mitigating UK welfare policies, including £83 million relating to the bedroom tax.
Energy policy also features prominently in the Scottish Government’s Budget demands, with ministers calling for the Energy Profits Levy to be replaced by what they describe as a fairer system capable of protecting jobs, energy security and investment.
Gilruth said:
“The UK Autumn Budget is an important opportunity for the UK Government to take action to support people with the cost of living, invest in economic growth and to demonstrate its commitment to devolution.
“In 2026 27 we will allocate around £3.5 billion to policies which tackle poverty and help support the cost of living.
“However, we need to see further action from the UK Government and I have written to the Chancellor to call on him to use this Budget to make people’s lives better.
“Decisions taken by the UK Government continue to have a significant impact on Scotland’s public finances.
“As I have previously indicated, Scotland continues to face a challenging fiscal settlement in 2027-28 with reductions in our real terms resource funding projected, while demand for sustainable public services continues to grow.
“If the Prime Minister is serious about devolution, the UK Government should both reverse the projected real terms reduction in our block grant, and provide us with the fiscal powers to support investment and growth.”
The Scottish Government says current projections point towards a real terms reduction in Scotland’s resource block grant next year, with Gilruth telling Parliament that it is expected to fall by around one per cent.
The UK Budget will have a direct bearing on the money subsequently available to the Scottish Government and will help shape the choices facing Gilruth when she sets out Scotland’s own spending and taxation plans.
Her message to the Chancellor is that the forthcoming Budget should combine immediate help with household costs with longer term investment in economic growth, while giving the Scottish Government greater fiscal flexibility over how money is raised and spent.
