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Tuesday 13 January 2025

In your briefing today:

  • Shona Robison delivers the Scottish budget today: political drama may be dialled down, but what she says will still have consequences for years to come

  • China's "secret room" under London is revealed - heightening security concerns

  • The Old Firm are on the transfer hunt

TODAY’S WEATHER

🌦️ It’s going to be a wet start in Glasgow in Edinburgh, although it’ll dry off - and get colder - later. Aberdeen will see a little rain in the late morning, while Inverness will have a wet morning and then the threat of snow this evening. London faces rain all day. (Here’s the UK forecast).

THE BIG STORIES
Pleas grow louder ahead of Scottish budget | Trump hits Iranian backers with 25% tariffs | Starmer warns X

📣 Finance Secretary Fiona Robison delivers Scotland’s budget this afternoon with pleas for cash, and criticism of services and taxation, ringing out from the day’s front pages.

  • More than half of Scots think the SNP’s income tax hikes haven’t improved services, a poll for True North Advisors has found. Only 27% thought they saw value for money in public services. (The Scotsman)

  • The Scottish Conservatives are calling for the tax burden on working Scots to be reduced. Leader Russell Findlay has called on the SNP to “ditch their catastrophic business rates revaluation and provide the relief they’ve denied hospitality firms for years.” (Daily Mail)

  • The Federation of Small Businesses is also warning against more tax rises, with business confidence already near record lows. (The Herald)

  • The Scottish Child Payment should be increased to £40, an anto-poverty charity has said. (Holyrood)

  • A breakdown of what’s driving today’s budget is later in today’s briefing ⬇️

📣 Donald Trump has told countries "doing business with Iran" they face a 25% tariff on US trade. The move comes in support of the anti-government protests there, and are in addition to sanctions against Iran which have been in place for years. (Guardian)

  • Trump is holding off on military action - for now (AP)

  • But he's been briefed on a "wide range" of covert and military tools for use against Iran (BBC)

  • Paul Adams: "For President Trump, it's decision time" (BBC)

📣 The X social network could lose the "right to self regulate" in the ongoing row about its AI system, Grok, and its ability to create non-consensual sexual images. Prime Minister Keir Starmer warned that "If X cannot control Grok, we will". (BBC)

  • Labour MPs are said to be “baffled” the government is continuing to post on X (Independent)

  • The world may be rejecting Grok… but it’s being embraced inside the Pentagon’s network. (AP)

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AROUND SCOTLAND

📣 Lord Malcolm Offord, the former Conservative peer who defected to Reform late last year, is tipped to be named its Scottish leader this week. Paul Hutcheon profiles the peer - and says the rich yacht lover may struggle to connect with hard-pressed voters. (Daily Record)

📣 Lifeboat crews rescued a man who - wait for it - was stranded on an inflatable mattress near Cramond Island, in the Firth of Forth. (Sky News)

📣 An Aberdeen fan who threw a chair at one of his own team’s players has been jailed for 18 months. The player - defender Jack MacKenzie - needed stitches after the incident. (Daily Record)

AROUND THE UK & WORLD

📣 Lord Mandelson has apologised to the victims of Jeffrey Epstein over his friendship with the convicted paedophile, after he was criticised for an interview at the weekend when he only apologised for "system failures" that let down the women. (BBC)

📣 Nadhim Zahawi, the former Conservative Chancellor, has defected to Reform, making him the highest-profile former Tory to join Nigel Farage's party. The Conservatives claim it only happened after he was denied a peerage by his former colleagues. (Guardian)

📣 China is said to be building a "secret room" under its new embassy in London, right next to sensitive fibre-optic cables which connect some of London's biggest financial institutions. There are suspicions the very well-ventilated room could be used to tap those cables. (🎁The Telegraph has the richly-illustrated exclusive - gift link)

📣 Trump's criminal investigation of Federal Reserve chair Jerome Powell is sparking a rare backlash, with some Republicans and economists saying the pursuit is encroaching on the Fed's independence. (AP)

📣 Some filling stations in London will stop selling diesel within the next four years because of dwindling demand, a report claims. Many more will follow suit by 2035. (Independent)

SPORT

⚽️ Rangers expect to hear on their "bold" bid for Denmark winger Andreas Skov Olsen in the next day - they want the Wolfsburg attacker on loan. (The Sun)

  • They also have their eye on Hungarian winger Damir Redzic, who's having a good season in Slovakia and made his international debut last year. (Daily Record)

⚽️ Celtic are about to pull the plug on their bid for Jocelin Ta Bi, with - unusually - reported concerns about his fitness being aired in public. He would have cost £2 million to buy from Israeli side Hapoel Petah Tikva. (The Scotsman)

⚽️ Pilton-based club The Spartans are famous for their community efforts and youth set-up, but their first team is ambitious, too. Graeme McGarry finds a side chasing promotion - and transfer fees. (The Herald)

IDEAS
The Scottish Budget: why it may be what Robison doesn’t say that grabs the headlines tomorrow

🗣️ Scotland’s Finance Secretary, Shona Robison, will deliver Scotland’s budget from around 2.20pm this afternoon. Don’t expect much drama.

Yes, Robison’s announcing how £60 billion will be spent. And, after the histrionics of Chancellor Rachel Reeves’ budget at the end of November, and given the proximity of a Scottish election in May, not to mention the challenges the Scottish state and economy faces, you might think this will be high-stakes, high-tension occasion.

It’s a mark of where Scottish politics are that… it probably won’t be all that.

That sense of slight anti-climax won’t entirely be down to Robison’s delivery. It’ll also be the case that the political stakes are, in truth, reduced. Scottish Labour has already indicated it won’t let this budget fall. Words will be said, positions taken… but this budget will pass, barring some sort of cataclysmic cock-up.

That doesn’t mean, however, that all is well. Or that Robison won’t be making some difficult - and important - choices.

The Fraser of Allander Institute produces a wildly comprehensive set of budget previews, which do a great job of setting out in detail what’s going on with Scotland’s finances.

Read their work and three things leap out. They might be worth bearing in mind as you listen to Robison this afternoon, or digest the fallout afterwards.

  1. Scotland’s budget isn’t really balanced at all. As the Institute points out, claims that it is balanced are made all the time. But it’s not really true. Yes - what it spends is successfully financed, but that’s different to balanced as it’s achieved through borrowed money and one-off funding windfalls such as the ScotWind auctions. That means Robison, today, still has to confront an underlying £1.5 billion-a-year deficit, because it can’t be masked for ever.

  2. That said, things don’t look as bad as they might. Decisions made at a UK level have led to big increases in day-to-day funding from Westminster, reducing a gap on that part of the national P&L to £208 million. That income, once more, includes some one-off items - without them the deficit in this part of the budget is more than £500 million - but Robison might conclude that’s a problem for another day (and another finance secretary).

  3. There’s more of a problem on the capital expenditure side. There are little or no extra funds coming from Westminster for big capital projects, which means the Scottish Government is still looking at a shortfall of around £1 billion.

It’s in the third point where the grit might lie. Alongside today’s budget, a new Infrastructure Investment Plan will be published - and that’s where the day’s most meaty decisions will be found. Competing priorities - think new hospitals, schools, improved roads such as the A9 and A96, ferries - will be ranked and given money, or not.

I’d expect howls of outrage from the communities which lose out, which is why - a few months ahead of the election - this document, rather than Robison’s core budget, may provide the biggest talking points.

All that doesn’t mean Robison won’t announce changes across a range of areas controlled by Holyrood. As this preview from The Scotsman suggests, there has been speculation about changes to tax thresholds - even if tax rates and bands don’t move.

John Swinney also used his column in the Daily Record yesterday to say the budget would focus on “the priorities of the people like our NHS and the cost of living”.

Watch out, too, for money being spent on alleviating child poverty: it may be that the windfall provided by Westminster’s decision to get rid of the two-child cap on benefits will be used to increase the Scottish Child Payment, which currently sits at £27.15.

But the really big changes may take place away from those headline-grabbing announcements, in big capital projects that either get funded, or get kicked far, far down the road.

In short, don’t conflate the relative lack of drama for a lack of importance: big choices will be announced today, and they’ll have an impact on lives across Scotland for many years to come.

👍 That’s your Early Line for the day

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