TUESDAY saw the Scottish Government present its budget in the most difficult of circumstances.

Context in politics, as in life, is everything.

Prior to the budget, the Cross-Party Finance Committee of the Scottish Parliament took evidence from the UK Office of Budget Responsibility (OBR) and the Institute of Fiscal Studies (IFS). Inflation may be coming down, but it was increases in the OBR’s forecast for inflation that saved the Chancellor’s bacon. That is largely what is driving higher tax revenues over the next few years, despite a downgrade in real growth prospects, and it is doing so by more than enough to offset higher spending on debt interest and welfare benefits.

Meanwhile, higher economy-wide inflation is because departmental spending plans are not being sufficiently topped up in response, resulting in lower real-terms spending on public services both now and in the future.

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There were two substantial tax cuts – cuts to NICs and making full expensing in corporation tax permanent. Yet the projected tax burden is still set to reach 37.7 per cent of GDP, its highest ever level in the UK. Effectively, those cuts offset the additional revenue generated by that additional inflation. Put another way, the tax cuts are paid for by planned real cuts in public service spending: the cuts in public spending in England and in cuts to the devolved administrations in Scotland and Wales

Mr Hunt has taken a modest improvement in the public finance forecasts and spent most of it. He has told us he will meet his targets by fiscal restraint at some point in the future.

UK debt repayment is £112bn this year – that’s one year. That’s £40,000 for every single person in the UK. Remember the Scottish Government has no national debt – it must have a balanced budget legally every year.

George Osborne managed to get the size of the state back down after the financial crisis. That was painful. Doing it again will be more painful still. Mr Osborne made his cuts after a decade of big spending increases. Mr Hunt, or his successor, will have no such luxury.

The IFS concluded that the UK Chancellor banked on additional revenue from higher inflation and pencilled in harsher cuts to public spending. We are all paying the price for his mismanagement.

The priority for the Scottish Government will be around funding public services.