Chancellor Rachel Reeves has dealt another blow to Anas Sarwar’s chances of becoming First Minister by announcing billions of pounds of cuts.
Labour’s initial hope was to front load the pain in the early months of Keir Starmer winning power.
His Government wanted to make a dash for growth and showcase the positive changes they had made ahead of the 2026 poll.
Reeves’ latest economic statement confirms this strategy is in the shredder.
Her Spring Statement was good news for SNP First Minister John Swinney and another sore one for Sarwar.
Balancing the books on the backs of the disabled is not the change Scots voted for last year.
The seeds of the Labour Government’s early difficulties in office were sown ahead of the general election.
Reeves ruled out rises to key taxes and promised to reign in borrowing as part of stringent “fiscal rules” that are now causing her party grief and anguish to vulnerable people.
She believed strong economic growth would be the magic pill for the country, but the medicine has yet to arrive.
The growth forecast for 2025 has been slashed, her rainy day cash vanished and so she has slammed the brakes on spending to comply with her self-imposed rules.
President Trump’s crazy tariffs plan is unquestionably playing havoc with the global economy and the uncertainty cannot be downplayed.
Equally, some of the blame for the sluggish growth has to be placed at the door of the Treasury.
Reeves wants growth and yet she lumbered business with a tax rise on hiring staff by increasing employer national insurance contributions.
She should be making it easier for companies to take on new workers, particularly those who have been out of the jobs market, not more expensive.
Today’s statement could be the latest in a string of difficult announcements, if the havoc emanating from the White House continues.
As the economy worsens, and the Chancellor is hampered by her fiscal straitjacket, she will have no choice but to slow the growth of public spending again.
Critics will call this approach austerity and defenders of the Government will deny the charge by pointing to big rises in funding for the NHS and other areas.
One thing is clear: people who need benefits to survive will see it as austerity and an attack on the modest payments they receive.
An obvious solution is to rethink the fiscally conservative rules that have tied the Chancellor’s hands.
If, as she rightly says, we live in a “changing world”, surely the old fiscal rules should also change?
Reeves’ defenders remain confident her strategy will be vindicated in time for the next general election.
Lower NHS waiting lists, controlled immigration and higher economic growth by getting people back to work would be an impressive record to take to the voters. It is doable.
But it is increasingly difficult to imagine living standards improving ahead of next year’s Scottish Parliament election.
Every indication is that Holyrood 2026 will be a mid-term judgement on Labour, rather than a verdict on the SNP’s dismal record in government.
Reeves is cutting public spending while taking an axe to Scottish Labour’s hopes of beating the SNP.
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