SNP warn Rishi Sunak’s Budget ‘for the Union’ will undermine devolution

Finance Secretary Kate Forbes and SNP Westminster leader Ian Blackford hit out after the Chancellor set out his plans designed to boost economic recovery after the pandemic.

Sunak announced a hike in the ­living wage to £9.50 an hour, an end to the public sector pay freeze and argued his spending plans were ­evidence of the “indisputable fiscal benefit” of being part of the United Kingdom.

He said the Scottish Government would receive an extra £4.6bn a year as a result of the measures, ­claiming devolved governments would ­receive the “largest block grants since 1998”, with Wales receiving £2.5bn a year and Northern Ireland an extra £1.6bn.

As part of the UK Government’s plans to “level up” the UK, Scottish projects will receive £172m.

READ MORE: The Budget: Here's what the UK is controversially funding in Scotland

The funding announcement is ­regarded as controversial as it ­bypasses Holyrood and hand grants directly to council led projects.

The schemes include £20m to revamp Inverness Castle, £20m for a new marketplace in Aberdeen, £13m to convert Pollok Stables and Sawmill in Glasgow to a net-zero heritage centre and £16.5 m to ­redevelop the Granton Waterfront in Edinburgh.

The projects also include £20m to build new roads and roundabouts in Falkirk, £20m to buy and redevelop a shopping centre in Dumbarton, and £24m to upgrade road links between North Ayrshire and Glasgow and the rest of Scotland. 

The largest single payout from the “levelling-up” fund is £38.7 million to support the regeneration of Paisley’s town centre and business area as well as upgrading pedestrian, cycling, public transport and road links between the town and the nearby Advanced Manufacturing Innovation District Scotland.

The SNP has accused the Treasury of undermining devolution by siphoning funds to councils rather than delivering them through the Scottish Parliament. However, Edinburgh, Renfrewshire and Falkirk, which are SNP -led authorities, have all successfully applied to the scheme.

UK ministers believe that voters will welcome the investment — and ignore the constitutional dispute — which will in turn strengthen the Union.

“We are, always will be, one family, one United Kingdom,” Sunak told MPs as he delivered his budget.

The Treasury said that the Scottish Government would receive an average of £41 billion a year in funding based on the Barnett formula, a 2.4 per cent increase in the Holyrood budget. The Scottish Government would now get £126 per person for every £100 per person of equivalent UK government spending in England, officials said.

“By providing record funding, the Scottish government can tackle backlogs in the NHS and ensure people in Scotland get the support they need as we recover from the pandemic,” Sunak said.

“The UK government continues to level up opportunities across all parts of the UK, with investments in green jobs and high-speed internet access for thousands more homes in Scotland.”

Prior to the Budget, Forbes had written to the Chancellor urging him to ensure he had devolved support before approving direct funding or passing over Holyrood.

Responding to the Budget, she said last night: “I am disappointed, but not surprised, that the Chancellor has pushed ahead with his centralised approach to levelling up, ignoring the views of governments in Scotland, Wales and Northern Ireland.

"It means that money Scotland would have previously received under the seven year EU Structural Fund programmes to spend according to its own needs will now be distributed annually according to a UK Government agenda. This approach potentially leaves Scotland worse off, raises value for money concerns and undermines devolution.

“Overall this Budget and Spending Review disappoints in too many key areas.”

Budget explained: How Rishi Sunak's announcement impacts people in Scotland

Forbes and ­Blackford also pointed to rising prices, supply chain problems, a hike in ­National Insurance contributions and the £20 week reduction in ­Universal Credit (which they say is not mitigate by changes to the benefit Sunak unveiled) which all put a squeeze on living standards.

“The Chancellor’s talk of ‘a new age of optimism’ will sound pretty hollow to those on low incomes, who face a cut in Universal Credit, increased National Insurance contributions, rising inflation and surging energy costs," said Forbes.

“The national living wage increase is important but not all that it seems. The new £9.50 per hour rate does not apply to under 23s, one of the groups worst affected by the pandemic, and workers on the national living wage in receipt of Universal Credit will lose over 50% of any wage rise to the reduction in benefits. “

Forbes said Sunak’s approach ­contrasted with that of the Scottish Government’s approach with the ­living wage already standing at £9.50 per hour from the age of 18 and set to increase next month.

She took issue with the ­Chancellor’s assertion that the block grant to ­Scotland would increase and said “in reality” the Scottish Government would receive less grant funding in every year of the spending ­review than it has in 2021-22, despite the challenges presented by Covid.

​READ MORE: Rishi Sunak promotes his Budget for the Union - but leaves Scots 'short-changed'

Ahead of COP26, which starts in Glasgow next week, Forbes stressed the Budget did not take account of the extra financial pressures involved in tackling tackle climate change. She echoed the First Minister’s ­criticism of the UK Government for failing to fund a major carbon capture project near Aberdeen.

“Any investment in Aberdeen ­announced today is dwarfed by this once in a generation opportunity that has been missed – but which must be revisited,” she added as she gave a cautious welcome to ­Sunak’s announcement of a revaluation of non-domestic rates saying the ­Scottish Government had already committed to three yearly revaluations from 2023.”

Blackford said: “It’s ­increasingly clear that there will be no fair ­recovery under Westminster control. The only way to keep Scotland safe from Tory cuts is to become an independent country.”

Shadow Scottish Secretary Ian Murray MP said: “The budget today shows how out of touch the Chancellor’s priorities are with the rest of the country.

“A week before the global climate conference in Glasgow, he is cutting taxes on flights and champagne while working people face the highest taxes since the Second World War.

“And after taking £6 billion out of the pockets of the poorest people in our country [through the cut to Universal Credit] he’s handing just a third of that back and expecting people to be grateful.

“The country deserves better than the Tories’ waste and cronyism. Labour would tax fairly, spend wisely and get our economy firing on all cylinders.”

Responding to the Budget John Dickie, Director of Child Poverty Action Group (CPAG) in Scotland welcomed the Chancellor's decision to reduce the Universal Credit taper rate, which allows low earners to keep more of the benefit , but said the reform will not help people out of work.

“The long-overdue decision to lower the UC taper rate will help lots of low earners in Scotland and across the UK. 

"But there was nothing for those who cannot work – carers, those with young children and people who are sick or disabled  - who face the same cost pressures as other households and will still have a black hole in their finances after the Universal Credit cut. 

"The UK Chancellor acknowledged every child’s right to succeed - but we have record child poverty levels across the UK and this budget left too much still to do.   To enable every child to thrive he needs to restore the value of children’s benefits and remove the punitive two-child limit”.

Dickie continued: “It is now more important than ever that the Scottish Government puts the national mission to end child poverty front and centre in its forthcoming budget.

"Any additional resources should be used to contribute to meeting the statutory child poverty targets. An immediate doubling of the Scottish child payment must be the top priority.”