Labour warns of gloomy reality for economy

Labour inherited the "worst economic and public service finances situation since the Second World War" when they won the general election, according to the Secretary of State for Scotland, Ian Murray.

Speaking to BBC Scotland's Sunday Show from the Labour party conference in Liverpool, Murray said his party had a "whole host of things to fix".

He said: "Our public services are broken, our economy is broken, we’ve got an industrial crisis in some of the sectors in Scotland as well," adding that there was a £22bn "black hole" in the public finances that they were not aware of before taking office.

But the Scottish Conservatives said Murray was making a "desperate attempt to rewrite history" and Labour were "lying about the state of the economy".

Murray told BBC Scotland News that the country was broken.

He said: "Our public services are broken, our economy is broken, we’ve got an industrial crisis in some of the sectors in Scotland as well in terms of Grangemouth, Mitsubishi, Harland & Wolff.

"All those things take time to fix but in order to fix those, we’ve got to fix the foundations which are pretty shaky at the moment and if we don’t, we’ll have no chance of being able to give that brighter future."

Murray was referring to plans to close the Grangemouth refinery, with the loss of 400 jobs.

Shipbuilding company Harland & Wolff announced this week they would go into administration, leaving uncertainty over jobs at the company's two Scottish sites.

An additional 440 jobs are at risk of redundancy at a Mitsubishi factory in Livingston which has provided jobs in the area for 30 years.

Murray said Chancellor Rachel Reeves had been clear that there would be no return to austerity, and that those "with the broadest shoulders" would "carry the can in terms of trying to help us out of this situation".

He added: "Let's see what the chancellor lays out [in the Budget], but it's very, very, very clear that we will not increase income tax, we'll not increase national insurance, we'll not increase VAT and we'll not increase corporation tax on businesses to try and help that economic growth, but there has to be something done with the public finances we've inherited."

While the picture painted of the economy by the Scottish secretary was bleak, Scottish Labour leader Anas Sarwar has suggested in order to win the next Holyrood election in 2026, his party would need to outline a “positive alternative” prospectus for government in Scotland, adding that the country needed “change” from the SNP government at Holyrood.

He said a UK Labour government would also have to demonstrate that it was delivering for Scotland.

The Sunday Times reported that Sarwar was encouraging his party to “project that change has begun” with, the paper says, a more upbeat message.

This week, the party has defended itself after it was revealed that the prime minister, his wife, the deputy prime minister and the chancellor had all accepted thousands of pounds worth of free outfits.

The party has insisted it has acted within the rules, and Murray insisted transparency was important and everything was on the public record.

He said people could make their own minds up about whether or not it was appropriate.

On Saturday, First Minister John Swinney was asked whether he had ever taken free outfits.

He told BBC Scotland News: "My jaw dropped when I heard these stories... I just think it’s ludicrous that people who are in prominent public life are accepting donations of clothes, that’s what you get your salary for.

Asked whether he or his cabinet had ever taken such donations, Swinney said: "I certainly don’t do it, and it’s the wrong thing to do."

The PM has also defended accepting more than £35,000 of free football tickets over the last parliament, which Murray said the PM had been "clear and transparent" about.

Mr Murray told BBC Scotland's The Sunday Show it would have been more expensive for the PM or leader of the oppositon to sit in the stands with other fans because of the security required around the politician.

He said: "If you were in the box, it's much easier for security.

"It means there is no cost to the public purse, it's good value for the public purse in terms of not having all that security."

Commenting on Murray's interview, Scottish Conservative chairman Craig Hoy said: "This was a desperate attempt to rewrite history by Ian Murray to explain away the calamitous start made by Keir Starmer's Labour government.

"The public can see that Labour are lying about the state of the economy they inherited to justify their shameful decision to abolish universal winter fuel payments."

Under new rules being brought in by the Labour government at Westminster, future payments will only be made to those getting pension credit or other means-tested help.

Former Scottish Labour MSP Neil Findlay said the donation saga was a "really, really bad look" for the party.

Findlay said that recent events had been a "huge gift to the opposition".

He told the BBC that the Prime Minister was enjoying "largess" while pensioners were "suffering" without their winter fuel allowance.

He added that UK Labour had had a choice over their winter fuel decision and had made a "dreadful choice".

Asked about the 2026 Holyrood election, the former Labour MSP said that the "biggest threat to Anas Sarwar becoming Prime Minister is Keir Staremer".