Scotsman head of news Dale Miller catches up with our Westminster correspondent Alexander Brown to discuss the £22 billion black hole in public finances
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00:00Hello and welcome to the Scotsman's daily video bulletin for this Tuesday. My name is
00:12Dale Miller. I'm head of news at the Scotsman and I'm joined by our Westminster correspondent
00:17Alexander Brown. Alex, a couple of weeks into this new Labor government and things are starting
00:23to get interesting. I want to get your views on that shortly. The front page today, Scotsman
00:29we led on Rachel Reeves. It was a stern address. I don't know whether there's a better way to
00:36describe that in terms of her delivery yesterday, in which she talked about the $22 billion hole
00:44in the finances. Now, the Office for Budget Responsibility went as far to say that last
00:51week they found out that the extent of the financial gap was greater than they expected
00:56as well, which seemed to back up Rachel Reeves' position. But the big thing here was the,
01:01and the new update was a cut or an introduction in the means testing of the winter fuel payment.
01:07And it leaves the Scottish government with a particularly interesting decision to make,
01:12Alex, because we're reporting this morning that it could take a hundred million pounds
01:16for them to continue offering this payment when it becomes devolved this winter. It's
01:22a sticky one. Do you think Labor got the messaging right about this black hole?
01:27I think it's very difficult to square the landing on promising no tax rises and no austerity,
01:36and then in the first few weeks announcing that there will be huge cost public services when
01:42promising change. But I think to look at whether Labor handled this well, I think we have to look
01:46at how Rachel Reeves conducts herself in the chamber, and also what the response has been
01:51from academics and think tanks. So in the chamber, Rachel Reeves was very angry. I think it was the
01:56angriest I've seen her since she became chancellor, or even shadow chancellor, and was going through
02:02line by line for some quite astonishing figures. I think the overspend on asylum and immigration
02:07alone was a 6.5 billion black hole. I think the total figure for it was 22 billion. Examples
02:15given were one of the advanced learning things, a flagship policy for Rishi Sunak that was going to
02:20transform education, would have cost billions of pounds, and the Tories had set aside no money for
02:25it. So it's really damning for the Tory government, and I think it's important to make sure that
02:29everyone looks bad about this. But a lot of the black hole we did know was there. So it is,
02:37in the words of the Institute of Fiscal Studies, not entirely honest for Labor to say they had no
02:43idea about the scale of the problem. And what's difficult for them going forward is the SNP will
02:49try to frame this as a choice. I think the Lib Dems are going to try and frame this as a choice
02:53to deliver these cuts. And now, having promised there won't be any tax rises, we are expecting
02:58there to be some form of tax rise in October. And I think it was notable the chancellor kept saying
03:04there would be no tax rises for working people, which, if we're reading between the lines, means
03:10a wealth tax or a tax on businesses. And then that, you know, makes it difficult because the
03:15Labor Party have to answer, what constitutes a working person? If you're running a lot,
03:19are you not a working person? So it's very difficult. And it also creates an argument
03:24and a rift again with the Scottish government, who now have to, you know, find money to shore up this
03:29shortfall, which is going to be hard when there's not any money, there is no money to be had.
03:36Alex, Rachel Reeves kept repeating it was almost this one set line that she'd read out about
03:43the blame was squarely on the Tory government. Jeremy Hunt refuted that quite strongly in the
03:48chamber as well. It was an interesting dynamic. I want to ask you what this means for there's
03:54all this talk about the reset in relationships between this new UK government and the Scottish
03:59government. This seems to be the first blip on the radar. The Scottish government saying they
04:04only found out 90 minutes before it was read out in the chamber. The Labor government have said,
04:09no, we did tell them the Scottish government earlier. But it doesn't seem a great start to
04:16the relationship a couple of weeks. Is that fair to say? It's not a great start. But I also I think
04:22it's really not the biggest thing in the world. The convention is things have to be announced in
04:25the Commons. And we have to take some of the announcements from both the UK government and
04:31Scottish government with a pinch of salt. Just because Scottish governments say they weren't
04:34informed, doesn't necessarily mean they weren't informed. And the same for the UK government
04:39saying they did. Both sides try and, you know, play politics with these issues, which is
04:44unfortunate. And I think it speaks to the wider problem with this. We have a Tory government that
04:49kind of hit the figures, it cooks the books. And a Labour Party that has refused to be honest
04:54about the financial situation, knowing they knew what they would be coming into.
04:59And one of the bigger problems when we speak about Scottish government is the Labour kind of knew
05:04and have defended the Winterfield Allowance. I think Darren Jones, Chief Secretary of Treasury,
05:08wrote a letter last year to the then-Chancellor, Jeremy Hunt, saying it was imperative it was
05:14protected. Why was he abandoning pensioners? Why was he abandoning the most vulnerable?
05:19And now that's being thrown back in their faces, and that will be thrown at them by the SNP. It's
05:24already being referenced by the Conservatives. And a huge row has emerged over the civil service,
05:29whether they hide things from the Tories, obviously they didn't, but it helps the
05:34Conservatives to kind of have a, we weren't informed about this, we didn't know, I would
05:38like to call into question the integrity of the civil service rather than be accountable for our
05:43own actions. And it smears everyone. No one is having a particularly honest conversation about
05:49the finances when hard decisions and hard conversations need to be had. So it's the
05:54beginning of a rift. It's not a huge problem, but it speaks to a vulnerability on the part of the
06:01Labor Party that could only get worse come October. You can read all the latest about the
06:08100 mil gap or bill that the Scottish Government faces at the back of this decision at Scotsman.com
06:15and all Alex's coverage of the ongoing fallout from what the Chancellor has announced at
06:22Scotsman.com. Just go to the politics tab on the navigation bar and please follow us on Facebook
06:28X and Instagram and go out and buy a copy of the paper tomorrow. Thanks for joining us.