Scots are facing a “real cost of living crisis”, Finance Secretary Kate Forbes has said, as she urged the Chancellor to reinstate the £20 a week recently removed from Universal Credit.

Ms Forbes made the plea ahead of Rishi Sunak delivering his second Budget of the year to the Commons on Wednesday.

In a letter to the Chancellor, she called on him to use the keynote address to “provide certainty to the wider public sector, boost the economy and support our most vulnerable at this challenging time”.

Kate Forbes said ministers at Holyrood were ‘strongly opposed to any return to austerity’ (Fraser Bremner/Scottish Daily Mail/PA)

Ms Forbes, who will set out the Scottish Government’s draft budget for next year in December, stressed that ministers at Holyrood were “strongly opposed to any return to austerity”.

The Finance Secretary appealed to the Chancellor to re-think the Government’s recent decision to end the £20 a week uplift in Universal Credit introduced during the coronavirus pandemic.

She told Mr Sunak: “A real cost of living crisis is emerging as a result of this cut, combined with the escalating energy costs and upcoming rise in National Insurance contributions.

“The Universal Credit cut alone will push an extra 60,000 people in Scotland, including 20,000 children, into poverty and hundreds of thousands more into hardship, whilst also reducing social security expenditure in Scotland by £461 million by 2023-24.”

She insisted it was not justifiable for UK ministers to introduce these “cuts to individual income”.

Instead, she said, the Budget should “prioritise spending that supports the financial security of low-income households, the well-being of children and young people, and delivers good, green jobs and fair work”.

With the Cop26 climate change summit in Glasgow getting under way in just a few days, she added that “significant investment is required from the UK Government in reserved areas” to help ensure that Scotland meets its emissions targets.

And here Ms Forbes urged the Chancellor to match the £500 million the Scottish Government has pledged to spend over 10 years to help the north-east of Scotland transition away from oil and gas.

The Finance Secretary told Mr Sunak: “Given the UK Treasury has, over decades, benefited from billions of pounds of revenue from activity in the North Sea, I ask that you at least match our commitment to help secure jobs in the north-east of Scotland, support the energy transition, and reduce emissions.”

Scottish Labour finance spokesman Daniel Johnson also demanded the Chancellor use his Budget to deal with the “cost of living crisis” many are facing “due to spiralling prices and the damage done by callous Tory cuts”.

Mr Johnson said: “The pandemic has shaken our economy to the core and if we do not act now to put fairness at the heart of our recovery, thousands of people will be thrown into hardship this winter.

“This Budget must deliver real and tangible support for those struggling to make ends meet.

“The Tory government must wake up to the cost of living crisis unfolding due to their disastrous governance and act now.”

Mr Sunak, meanwhile, is expected to announce details of a new £150 million fund aimed at helping smaller businesses in Scotland.

The fund, to be delivered through the British Business Bank, will be similar to existing schemes in England and Northern Ireland, which have provided investment and loans for small and medium-sized enterprises (SMEs).

Mr Sunak said it would show the UK Government was “continuing to support businesses across the UK”.