Hammond accused of short-changing Scotland over £3 billion impact fund

The SNP has accused London of short-changing Scotland on its share of a £3bn fund to prepare for Brexit.

Finance Secretary Derek Mackay said a £37.3 million allocation from the Treasury pot was “significantly short” of what was expected under the Barnett Formula.

The UK government published details of how much would be given to Whitehall departments and devolved administrations to prepare for Brexit in 2018-19, with the £3bn set to be spent over two years.

Mr Mackay said it was “deeply frustrating that money we are receiving is significantly short of a full Barnett share of the funding allocated at the UK level”

He said: “The Scottish Government will only receive 2.5 per cent, or £37m, of the funding allocated in 2018-19... we will not allow spending on Scottish public services to be diverted to meet the cost of a damaging UK Brexit.”

Meanwhile, analysis by the independent UK economic forecaster of new devolved income taxes warned that significant numbers of top earners would seek to dodge higher tax rates imposed by the SNP.

The Office for Budgetary Responsibility said that increasing the higher rate of income tax from 40-41 per cent and the additional rate from 45-46 per cent would lead to “proportionately large” behavioural changes as people with addresses in England change their tax registration.

The OBR also predicted a boost in corporation tax, collected by the UK Treasury, running into the tens of millions of pounds as individuals incorporate themselves to avoid income tax and national insurance.

OBR analysis reveals that imposition of a minimum unit price for alcohol will wipe £40m from duty revenues over the coming year. Estimates of tax revenues from the oil industry have been revised upwards, with the Treasury expecting to collect £2.2bn over the next five years.