Jeremy Hunt is set to deliver his long-awaited autumn statement on Thursday lunchtime. Its impact will be felt in every household across Scotland.
As we head towards Christmas, the chancellor has already declared he’ll be playing Scrooge. We should expect tax rises and spending cuts as he struggles to balance the books.
Hunt will get to his feet just eight weeks after Liz Truss and Kwasi Kwarteng’s mini-budget. Their plans may have cost the country as much as £30bn, according to the Resolution Foundation.
It’s hard to argue this didn’t make a bad economic situation even worse.
A narrative has already been set now about “decisions of eye-watering difficulty”.
The chancellor has been explicit that taxes will be going up to tackle inflation, something that doesn’t sit comfortably with everyone in his party.
It’s likely many tax rises will be done stealthily, with a freeze in allowances and thresholds.
The Scottish Government makes some tax and spending decisions itself and will need to outline its own budget choices next month against the backdrop of what is outlined in Westminster on Thursday.
We’re told it won’t all be bad news. Rishi Sunak, the prime minister, has been keen to emphasise there will be “compassion” at the heart of the plans.
The chancellor is understood to be in favour of uprating benefits with inflation.
There’s a win expected for pensioners. The ‘triple lock’, which sees pension payments increase in line with the highest of three possible figures – inflation, average earnings or 2.5% – looks set to stay.
For younger people, Hunt could raise the National Living Wage from £9.50 an hour to about £10.40 an hour.
Oil and gas companies, which are doing very well, might expect to receive higher taxes on their profits with an extension of the “windfall tax” on the cards.
But there may be more restraints put on the support available to help households with energy bills. There could be a more targeted package, missing out some on middle incomes, to try and save money.
After the swift exits of Truss and Kwarteng, one Scottish Tory told me it was, “good to see grown-ups back in government”.
Thursday will be a defining moment for Hunt and Sunak as they attempt to soothe the markets and restore trust in both politics and politicians.