The two main tax measures – lower NICs and making full expensing permanent – are UK-wide, and apply automatically in Scotland.
Some other measures announced are England-only, and therefore bring with them additional funding for the Scottish Government through the Barnett formula, totalling £233m in this financial year and £281m in the next. The main measures generating consequentials are:
- The funding of the pay award for the NHS in England in 2023-24, which generates £235m;
- The 75% relief on business rates in England for the retail, hospitality and leisure sectors in 2024-25, up to a £110,000 cash cap, which generates £232m;
- Freezing the small business multiplier in England in 2024-25, which generates £32m.
As these are devolved matters, the Scottish Government receives this funding but is under no obligation to match the policies announced by Westminster. For example, the retail, hospitality and leisure relief is a repeat of the measure for 2023-24, which the Scottish Government decided not to pass on and spent elsewhere. So this is one to watch out for at next month’s Scottish Budget.
Settlements with the Treasury are only fully determined until 2024-25, when the current spending review period finishes. Nevertheless, the UK Government budgets on a 5-year basis, and has to give the OBR an indicative assumption for departmental and devolved spending. This is a technical detail, and is only indicative at this time, but the OBR’s forecast incorporates a slightly higher spending assumption than it did in March, whose consequences are buried deep in our favourite supplementary table 3.11. If this did come to pass, it would mean Scottish Government spending power being higher in each year by between £1.1bn and £1.4bn from 2025-26 onwards.
We have also summarised which measures apply directly to Scotland or are devolved in the table below.
Table 7: Summary of whether measures are reserved or devolved
| Announcement | Reserved | Devolved |
| National Insurance contributions (NICs): 2p cut to the main rate of Class 1 employee NICs from January 2024 | Applies in Scotland | |
| National Insurance contributions (NICs): 1p cut to the main rate of Class 4 self-employed NICs from April 2024 | Applies in Scotland | |
| National Insurance contributions (NICs): abolish Class 2 selfemployed NICs liability from April 2024 | Applies in Scotland | |
| Business Rates: 75% relief for Retail, Hospitality and Leisure sectors in 2024-25, up to £110,000 cash cap | Consequentials 2024/25: £232m | |
| Business Rates: freeze the small business multiplier in 2024-25 | Consequentials 2024/25: £32m | |
| Local Housing Allowance (LHA): set to the 30th percentile from April 2024 | Applies in Scotland | |
| Universal Credit: extend the £2,500 surplus earnings threshold for one year from April 2024 | Applies in Scotland | |
| Universal Credit: increase the Minimum Income Floor by up to a max. of £1,250 a month for lead carers from April 2024 | Applies in Scotland | |
| Alcohol duty: freeze rates until 1 August 2024 | Applies in Scotland | |
| Tobacco duty: increase duty on Hand Rolling Tobacco by RPI+12% from 6pm on 22 November 2023 | Applies in Scotland | |
| Individual Savings Accounts: maintain subscription limits at current levels for 2024-25 for Adult, Junior, Lifetime ISAs and Child Trust Fund | Applies in Scotland | |
| VAT: extend the zero rate on Women’s Sanitary Products to include period underwear from January 2024 | Applies in Scotland | |
| Universal Credit: Severe Disability Premium transitional protection | Applies in Scotland | |
| Restart: expand eligibility and extend the scheme for two years | Consequentials: 2024/25: £27m | |
| Mandatory Work Placements: phased rollout | Consequentials: 2024/25: £3m | |
| Talking Therapies: expand access and increase provision | Consequentials: 2024/25: £2m | |
| Individual Placement and Support (IPS): expand access | Consequentials: 2024/25: £1m | |
| Fit Note Reform trial | Consequentials: 2024/25: £1m | |
| NHS: funding for Agenda for Change pay awards (consolidated and non-consolidated) and winter planning | Consequentials: 2023/24: £235m | |
| Apprenticeship Growth Sector Pilot | Consequentials: 2024/25: £2m | |
| Local Authority Housing Fund, housing supply and planning | Consequentials: 2024/25: £10m |
Source: OBR, FAI calculations
Extract from the full FAI analysis of the Autumn Statement
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