THE Institute for Fiscal Studies’ (IFS) conclusion that Finance Secretary Kate Forbes was correct in stating Scotland would receive just £21 million extra in Barnett consequentials from the Chancellor’s £30bn summer statement has proved “embarrassing” for the chairman of Unionist forum These Islands.
Kevin Hague wrote a blog post “dissecting” Forbes’s claim, calling it “misleading and inaccurate”.
OK, so I've taken the time to dissect *that tweet* from the SNP's @KateForbesMSP ... and her claim is indeed as misleading and inaccurate as I first thoughthttps://t.co/H2GI8jwJJ5
— Kevin Hague (@kevverage) July 9, 2020
The IFS confirmed yesterday that the Holyrood minister had been right about the £21m figure all along, despite claims of inaccuracy from Unionists.
In the report, economist David Phillips wrote: “When asked whether the Scottish Government would receive just £21m as a result of the Plan for Jobs as the Scottish Finance Minister has claimed, I said that I couldn’t see how you would arrive at such a number given the schemes just mentioned, as well as the stamp duty holiday for England and Northern Ireland. It would get much more.
“In a big-picture sense, this is correct: the Scottish Government will get far more than £21m. Because stamp duty is devolved to Scotland it will get much more than that to enable it to enact its own tax holiday or spend on other measures.
READ MORE: Kate Forbes proved right over £21m budget pledge row
“Exactly how much is not yet clear – it will depend on updated forecasts and ultimately out-turns for stamp duty revenues in England and Northern Ireland. But initial estimates published by the OBR this week suggest it could amount to around £120m spread over this year and next.”
He added: “And the Scottish Government has already said it will use the cash it receives to temporarily raise the threshold of its equivalent tax to £250,000 and provide £50m in extra support to first-time buyers.
“But the Scottish Government won’t, as I initially presumed, get extra funding as a result of the Green Homes Grant or the full £40m it would if all of the money for traineeships and so on were new.
“Instead, apart from the stamp duty money, it will receive £21m – the figure quoted by the Scottish Finance Minister – as a result of the combination of the Plan for Jobs and the reductions in investment spending elsewhere that the Treasury is now expecting.”
Reacting to news Hague’s post had been shown up by the leading economists after eight days, SNP councillor Mhairi Hunter wrote: “Didn't take enough time …”
Colin Dunn tweeted a series of posts showing Hague, and Scottish Tory figures, stating the £21m figure provided by the Finance Secretary was “nonsense”.
He wrote: “Whoops. Egg meets face. How embarrassing for Hague and Lockhart.”
Hague apologised this morning, updating the blog post to reflect IFS findings.
Writing this morning, Hague said: “I still have issues with the tweet – the implication that £21m is all Scotland is getting, the fact she uses £30bn as the denominator (“of the £30bn) when most of the £30bn is UK-wide spend anyway and the fact that she ignore [sic] the block grant adjustment impact of the SDLT cut – but knowing what we now know about the way the Treasury recycled already committed spending to make it look like new spending, I think I was wrong to label the tweet a ‘simple lie’ and offer my apologies to Kate Forbes for doing so.”
He had written in the post that some spending was “accelerating investment” and some was “previously announced”, adding that it was possible the Barnett consequentials had already been included in previous announcements.
In his updated version, he continued: “Whilst I was right, there’s no doubt that when writing I was assuming that some rather than all of these figures had already been announced.
“So mea culpa, I fell in the same trap as the IFS.”
He went on to write that given the IFS report’s conclusions, he does not think it’s “unreasonable” for Forbes to select the £21m figure as the “Scot Gov gets” number.
He added that in an “ideal world” her tweet would have also made clear that this was the only “new” money the Scottish Government would get from Westminster. However he said it would be “inconsistent” for him to hold Forbes to a higher standard than the UK Treasury.
“It’s their attempt to pass recycled money off as new that’s caused the confusion and provided her with cover,” Hague wrote.
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