Are you going to let the SNP portray you as panto villains, Labour?

Ooo, dastardly Labour, we’re all meant to think. Can’t trust them with Scotland.

Read more by Rebecca McQuillan

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This boo-hiss routine is aimed at the Treasury’s decision to give the Scottish Government what SNP ministers say is insufficient cash to mitigate the cost to the public sector of higher employer National Insurance contributions (NICs). Scotland is getting up to £330 million next year for mitigation, on top of a £3.4bn overall funding boost. That £330m is a lot, but not enough to cover the whole cost of public sector NICs, say Scottish ministers, so the SNP will have to dig into the other money to cover the shortfall. Hence Rachel Reeves’ casting as a rather nerdy Wicked Queen.

Now this is not the easiest argument for the SNP to sell. Receiving £330m on top of an extra £3.4bn next year doesn’t sound too shabby, does it? Many people will hear Forbes and Robison complaining and dismiss it as just the usual bleating about Westminster. It’s most inconvenient for the SNP that their favourite panto villains, the Tories, have disappeared down the trap door. Rachel Reeves just doesn’t really cut it as a stand-in.

But is there some truth in what Forbes and Robison say?

Well, clearly this isn’t austerity. Even after the Scottish Government has made up the shortfall, it will still have literally billions more to spend on public services than it had under the Conservatives. Any cuts the Scottish Government then imposes will be its choice, not Westminster’s.

And it's a brave SNP minister who accuses the UK Government of being panicked and incompetent when the Scottish Finance Secretary did such a good impression of being both earlier this year with her unplanned cuts. The Scottish Government withdrew promises for P6s and P7s to get free school meals, and made cuts to mental health services, active travel and other areas, because ministers had promised high pay awards to public sector workers without having the cash to cover it. Holyrood’s finance committee says it’s “deeply concerned” about the Scottish Government’s lack of a strategic approach to the nation’s finances.

So we shouldn’t be setting much store by Robison and Forbes’ overblown rhetoric.

And yet Labour still needs to have a care. There’s an anomaly here that Scottish Government ministers are not going to keep quiet about.

SNP ministers argue the UK Government is wilfully ignoring the proportionally larger size of the public sector in Scotland compared to the rest of the UK (22 per cent of the workforce, compared to 17 per cent). Because the UK Government is failing to cover the full cost of higher employer NICs, they argue Scotland is being unfairly disadvantaged.

The Fraser of Allander Institute, Scotland’s leading economic think tank, points out neither the Scottish nor UK government really knows how much those higher employer NICs payments will cost. This is because there is a worrying lack of data on the pay bill information for the hundreds of organisations that make up the Scottish public sector. While the UK Government estimates around £300m, Robison says it’s more like £500m, which matches Fraser of Allander’s best estimate, leaving a £200m shortfall. The Scottish Government thinks that bill could rise substantially further when those services that are indirectly publicly funded are added in, like childcare, colleges and social care. That’s without considering the voluntary sector.

If this is correct and especially if the UK Government is fully mitigating public sector NICs costs elsewhere, their funding settlement for Scotland would seem unfair.

One reason for the higher NICs costs in Scotland is that public sector workers are paid relatively more here than elsewhere in the UK, which can hardly be framed as Westminster’s fault. But then again, paying public sector workers better is an aspiration of Labour’s so it would be odd if it was seen as punishing the Scottish Government for doing so.

Scottish Finance Secretary Shona Robison (Image: Getty)

It's complicated, then, but anything that allows the SNP to accuse Labour of treating Scotland harshly or failing to understand its unique circumstances is risky for Anas Sarwar. “Labour don’t get Scotland” is not the message he wants to hear repeated endlessly in the 18 months running up to the Holyrood election, not when he’s already had to field attacks over cutbacks to winter fuel payments that have left some pensioners struggling to stay warm.

Sarwar has promised that if First Minister, he would ensure all pensioners received a new devolved winter fuel benefit, tapered so wealthier pensioners get less. He clearly knows that being seen to disagree respectfully with your UK party leader and come up with a Scotland-specific solution is a better look than toeing an unpopular line.

But he’ll need a considered response to this latest controversy too. He can’t be complacent. His should use his clout as a party insider to ensure the Treasury stumps up more cash. He should make a plea for voluntary organisations to get help while he’s at it.

The SNP won so many elections because it succeeded in convincing voters it was the party most likely to fight for Scotland’s interests. It was easy against the Westminster Tories but it’s harder against Labour with its 37 Westminster seats. Still, SNP politicians are past masters at setting up Westminster as the baddies in an endless political pantomime, so Labour cannot afford to put themselves on the back foot. If Anas Sarwar can extract more Treasury cash to compensate for the rise in employer NICs, it would mean a better deal for Scotland. Heading into 2026, he will need a confident response when challenged: Labour doesn’t get Scotland? Oh yes it does.

Rebecca McQuillan is a freelance journalist and Herald columnist specialising in politics and Scottish affairs. She can be found on X at @BecMcQ.