The Autumn Budget 2024... a Scottish perspective

From a Scottish point of view, the fact Labour have had a landslide win here is significant. However as devolved departments and taxes are a devolved matter, we may not see the full impact - certainly on taxation - until the Scottish Government elections in 2026.

You could view the change to Labour as a sign of things to come north of the border, however two years is a long time in politics. It seems we saw considerable tactical voting in Scotland, with much of the electorate voting Liberal Democrats or Labour to keep the SNP on their toes.

The big question is what Labour will do for UK taxes which are not devolved. They have not pledged anything specific yet, but the feeling is that we could see some radical changes to inheritance and capital gains taxes. The key will be that first Budget – and then the subsequent Scottish Budget.

We are already more heavily taxed here in Scotland and we have seen this change people’s view of where they will live, with some talking about moving or retiring down south because they wonder why they pay so much tax without seeing any real benefits.

Specifically on the school fee changes proposed by Labour, this disproportionately impacts Edinburgh where 25% of children attend fee-paying schools. It is perhaps less of a focus elsewhere in Scotland.

Significantly, the energy sector in Scotland will be waiting with bated breath to find out whether Labour will follow through with its manifesto pledges around windfall tax and North Sea licences. Ultimately, operators need to have confidence before they will invest in renewables technology. If not, it undermines the UK decarbonisation process.

I would urge the Government to engage with the sector – to have proper consultation and representation before anything drastic is introduced. It’s not the time for knee jerk changes at such a crucial juncture.

Scottish businesses will be looking for a closer relationship with the EU, however there will be interesting discussions to come considering there are political moves to the right in Europe while the UK moves further left of centre. All the supposed benefits of Brexit have not come to fruition for business, so Labour face a battle to develop greater trading links.

Conclusion

I would hope the Labour government will have a better relationship with Scotland than the Conservatives did. However, the scale of the win shows that, where in the past Scotland was an important factor in winning power, Labour did not need Scotland to have a significant majority … albeit a unified voter backing helps.