The true cost of Brexit

Yesterday, the true cost of Brexit – and the UK’s financial and economic future – was revealed by the Chancellor. It is a cost which will be paid through lower growth, lower tax revenues, higher borrowing, higher debt and higher inflation. That is the future the Autumn Statement revealed we are facing as a result of leaving the European Union.

Under these plans, Scotland will see a real terms cut to the day-to-day budget that pays for public services. By 2019-20, it is expected to be almost 9% lower over the decade, reducing the scope we have to mitigate against UK Government austerity and invest in growing our economy.

Even on the much heralded investment in infrastructure, all we have seen is the Chancellor moderating cuts already imposed on Scotland. As a result, Scotland’s capital budget will still be around 8% lower in real terms across this decade.

It is also deeply disappointing that the Chancellor has not chosen to implement the strong package of support needed for the North Sea which continues to be impacted by low oil prices.

Most shocking, perhaps, is the Chancellor’s failure to commit a single extra penny for the NHS today. This blatant disregard of our public services is deeply worrying. I am also concerned by the lack of commitment to the single market which would have provided a level of certainty in light of the weak economic outlook created by Brexit.

Above all, this was a massive missed opportunity to end austerity. The Chancellor has failed to ease the punitive cuts that are hitting so many Scottish families. Instead he has continued the damaging austerity that is hitting the budgets for public services, hammering family finances and failing to revive the economy.

The one thing I can welcome the UK Government’s commitment to working with us to deliver ambitious City Region Deals for Stirling and Clackmannanshire and the Tay Cities. The Scottish Government has been consistent in its support for deals for these areas for a considerable amount of time and I am delighted that the Chancellor has finally confirmed he will join us in discussions. This represent an opportunity to unlock investment in these regions, boost economic growth and invest in infrastructure.

We have already committed to £760 million over the next 10 to 20 years for City Deals in Glasgow, Aberdeen and Inverness with communities in these areas benefitting from housing, digital and infrastructure projects. This investment will also benefit Scotland as a whole, as it’s creating thousands of jobs and up-skilling local labour markets. We are also progressing discussions with Edinburgh and South East Scotland and Ayrshire. These deals represent an opportunity to unlock investment in their regions, boost economic growth and invest in infrastructure.

Today’s Autumn Statement is effectively tinkering around the edges and, while I welcome the focus on capital expenditure, there is still not enough to help hard pressed families.

I will publish the Scottish Draft Budget next month that will support our economy, tackle inequality and provide high quality public services for all – underlining the very different approaches our two governments take.

Derek Mackay is Cabinet Secretary for Finance and Constitution. This article originally appeared in the Daily Record.