Rishi’s f irst Budget to hand Scotland a £1.2bn Union boost
THE new Chancellor’s first Budget will underline the importance of the Union, with a £1.2 billion boost for Scottish public services.
Rishi Sunak will unveil tax and spending plans on Wednesday – less than a month after being appointed following Sajid Javid’s resignation.
Scotland’s Finance Secretary Kate Forbes has written a letter urging him to keep promises made during the December general election campaign.
In response, the Treasury made it clear it will honour its pledges, which have included a £1.2 billion spending boost.
The ‘Union dividend’ resulting from Scotland rejecting independence in 2014 is already worth £2,000-a-year to every man, woman and child north of the Border.
The new Budget is expected to further improve the spending power of the Scottish parliament, although it remains to be seen what impact the coronavirus will have on the Chancellor’s plans.
Ms Forbes – who is newly appointed following the resignation of Derek Mackay over messaging a schoolboy, and who has just passed her first Budget – wrote a lengthy list of demands. They include additional cash, the replacement of EU funding for farmers and communities, support for the planned UN COP26 climate conference in Glasgow in November, and the refund of VAT paid by police and fire services as a result of the SNP’s centralising the services.
While it is unlikely there will be any refund of VAT, Scots Tory sources have said there will be several boosts for Scots in the Budget.
Last night, Scottish Tory constitution spokesman Murdo Fraser claimed the long list of demands was evidence of how important the UK continued to be.
He said: ‘It’s pleasing to see an SNP Finance Secretary appreciating the importance of the Union dividend. Kate Forbes is clearly looking forward to getting access to the millions extra arriving in the form of Barnett consequentials.
‘Of course, had the SNP had its way, there would be nothing coming from Westminster and it would have an enormous financial black hole to deal with. This again underlines how much better it is for Scotland to be part of a strong UK.’
The Scottish Government’s own figures revealed public spending per head was £1,661 higher in Scotland than across the UK in 2018-19, with the gap growing.
That was despite Scots contributing £307 less per person towards government income, according to the Government Expenditure and Review Scotland (GERS) report, released in August last year. Combined, that puts the ‘Union dividend’ at nearly £2,000 a year to every man, woman and child.
Despite this, the SNP still insists it wants to hold another referendum on breaking up the United Kingdom later this year.
However, in her letter, Ms Forbes stressed the importance of the two Governments working together.
She said: ‘It is essential that the UK Budget at the very least delivers on the funding commitments made in respect of the Scottish Budget in the Conservative Party manifesto for the December 2019 general election.
‘The context of your Budget is, of course, now being influenced by the response to the coronavirus.
‘While the Scottish Government’s most immediate concern is the direct risk to people’s health, the economic and fiscal impacts will also be important factors over the year ahead for our public services, economic output and public spending.
‘I am keen to work constructively with you and the other devolved Finance Ministers to shape a collective fiscal response to the outbreak.’
The UK Government stressed that it planned to keep its promise on additional funding, highlighting the £1.2 billion extra promised to Scotland in the September 2019 spending review.
An HM Treasury spokesman said: ‘This Budget will deliver on the promises made to the British people, and will level up opportunities across all regions and nations of the UK.’