Request for financial powers ‘kicked into the long grass’
Finance secretary Kate Forbes says her request for more financial powers has been “kicked into the long grass” by the Treasury.
The Scottish Government says it needs to borrow up to £500 million more to deal with the impact of coronavirus, as well as having greater flexibility over its capital budget.
A formal request was sent to the Treasury last week, ahead of a meeting of finance ministers from administrations around the UK last Friday.
Speaking on the BBC’S Good Morning Scotland radio programme on Tuesday, Ms Forbes said she hoped the request would be taken seriously.
She said: “I last spoke to the Treasury on Friday and we went through the issues once again.
“Unfortunately it keeps getting kicked into the long grass and my hope is that at some point they will deal with the issue seriously and enable us to have those powers.”
The Scottish Government is also calling for an £80 billion Uk-wide stimulus package, which would be the equivalent of 4 per cent of GDP.
Ms Forbes was asked if the Treasury would take this request seriously.
She said: “My job is to set out persuasively what we need right now to reboot the economy. This is one of the most significant economic crises of our generation and we desperately need the powers and the investment to reboot it.”
Other parties in the Scottish Parliament - excluding the Conservatives - had backed her calls for more powers, she said.
She added: “I’m not waiting for those powers to be passed over, we’re using the powers that we have and we’re using the resources that we have.
“But there’s no question that a lot of these ambitious ideas come down to the need for the UK government to be a little bit more relaxed.”
The finance secretary suggested that the UK government should be ready to break its own fiscal rules in order to fund the stimulus package to kick-start the economy. “At the moment the Chancellor has largely bankrolled his interventions to date through record low interest rate borrowing,” she said.
“Clearly those rates are still as they are and we believe that over the coming years, the Chancellor should take a long-term perspective on debt, incidentally like the UK did after the Second World War, where they paid off that debt over a longer period of time compared with 2008 when they prioritised austerity to try and return the nation’s finances to health.
“And that just stymied economic growth and hurt the most vulnerable in our communities the hardest.
“So we think at this point he should be taking a very different approach and continuing to invest. That may mean suspending some of the fiscal rules to do that.”
Vatcutstohelpthe country’s beleaguered tourism industry were called for by Ms Forbes as part of the £80bn package set out on Monday, along with a 2p cut in employers’ National Insurance Contributions to reduce the cost of hiring staff. A new National Debt Plan is also called for to help business and household budgets recover.