Rishi Sunak has announced record funding for the UK’s devolved nations next year but faced accusations from the Scottish National party that the Treasury’s overall stimulus package is too weak to cope with the Covid crisis. The chancellor unveiled an increase in overall funding for the Scottish, Welsh and Northern Irish governments of £4.7bn next year, including £2.6bn in extra spending to deal with impacts from the pandemic. That broke down to £2.4bn extra for Scotland, £1.3bn for Wales and £900m for Northern Ireland, adding to the “unprecedented” £16bn the Treasury had given the devolved nations since March to combat the Covid crisis.
The Treasury said this funding was double the sums it had provided to the devolved nations in March’s statement, although UK government officials acknowledge privately that the pandemic has created a unique situation. The Office for Budget Responsibility said these increases added to the spending uplifts pledged by Sunak in March which, in a “striking turnaround” in UK government support, had reversed all the real-terms cuts imposed by the Treasury over the previous eight years. The Treasury asserted too that each devolved area would be given at least one free port, an area that pays little to no tax; nearly £3bn in support for city deals; a share of the UK government’s “levelling up” fund; and more than £1bn to compensate farmers and fishermen for the loss of EU subsidies. Alison Thewliss, the SNP’s Treasury spokeswoman at Westminster and MP for Glasgow Central, said Sunak had failed to provide the investment the economy needed to help it recover from the pandemic and recession. The SNP had called this week for a fiscal stimulus package of at least £98bn, but that was ignored, she said. Scotland also needed the devolution of further financial powers, to help it tailor the response to fit the country’s economic needs, she added. “The fact that the Tories are wasting millions on a Brexit festival while slashing public sector pay, and cutting support for the world’s poorest, tells you everything you need to know about this government’s twisted priorities,” Thewliss said.
Douglas Ross, the Scottish Tory leader, said Sunak had gone further than any government in peacetime, and had listened to his calls for city and regional growth deal funding to be accelerated. “These unparalleled spending promises show that the deep pockets of the UK government are best placed to support Scottish jobs, schools and hospitals,” he said. Alister Jack, the Scottish secretary, said Sunak’s statement upheld the UK government’s pledge to maintain EU levels of funding for farming and infrastructure spending – a position the Scottish government disputes. “The UK government’s spending review delivers for all parts of the UK at this challenging time. Never before has the strength of the union, and the role of the UK Treasury, been more important,” Jack said. Kate Forbes, the Scottish finance secretary and SNP MSP for Skye, Lochaber & Badenoch, said the extra Treasury help for building and infrastructure investment actually led to a real terms cut of 5% in capital funding. She said Sunak’s policies in England, such as freezing public sector pay, had knock-on implications for Scotland’s share of UK spending. “Freezing public sector pay for so many at the frontline, scrapping the proposed increase in the national minimum wage to £9.21 and failing to extend the £20 uplift to universal credit and working tax credit beyond April 2021 mean millions of people will have less money to spend to help drive our economic recovery. “I am also alarmed at the failure to replace EU funding in full. A promise that the new shared prosperity fund will be fully funded at an unspecified future date will be of scant comfort to Scottish communities that have benefited so much from EU support,” Forbes said.