Chancellor Rishi Sunak said the Scottish people should “know that they have the strength and security of the whole of the United Kingdom behind them” in the midst of COVID-19. In a swipe at Nicola Sturgeon’s nationalist Government agenda, Mr Sunak told the Scottish Conservative Conference the UK Government had given an additional £8.2billion of COVID-19 funding to the Scottish Government “at this vital time”.
But the Scottish Finance Secretary has written to Mr Sunak asking to inject another £98billion into the UK economy to help mitigate the impact of the coronavirus pandemic despite the funding.
Ahead of the Chancellor’s spending review on Wednesday, Kate Forbes told the Chancellor to “invest for recovery, rather than balance the books”.
She added: “The importance of fiscal stimulus has never been greater, and there is a strong case for increasing day-to-day government spending to support the economy.
“This increased spending must generate increased Barnett consequentials for the Scottish Government and clarity that funding for the NHS will be adequate to meet the continued costs of responding to COVID-19.”
The SNP cabinet minister stressed a £98billion financial stimulus, would bring the UK in line with France, Germany and New Zealand where similar packages amounting to 5 percent of GDP have been announced.
However, Mr Sunak praised the impact the UK Government’s actions had had north of the border when coronavirus restrictions forced businesses to close.
During his conference speech, he stressed the “overwhelming might of the UK Treasury” meant Westminster had been able to take “unprecedented action to support all of Scotland through this pandemic”.
More than 79,000 businesses in Scotland have benefited from UK Government loan schemes, worth more than £2.9billion and 930,000 jobs have been supported under the Furlough scheme.
The Treasury’s country and regional analysis report (CRA) also found spend per head on public services was higher in Scotland signalling the benefits of Scotland remaining in the union.
Figures revealed in 2019/20, the Treasury spent £11,566 in Scotland, compared to a UK average of £9,895, a difference of £1,671.
Mr Sunak continued: “The restrictions that we are facing, the sacrifices that we have had to make.
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Edinburgh has regularly locked horns with the Treasury during the Coronavirus pandemic over the timing of the UK budget and clarity over Barnett consequentials.
The Barnett formula is a mechanism to give proportional levels of public expenditure to Northern Ireland, Scotland and Wales to reflect public service funding in England.
Kate Forbes has also been pressing for more borrowing powers for the Scottish Government, which she again raised in her letter to the Chancellor.
But Whitehall has refused requests for greater devolved finance powers or the flexibility to move capital underspend over to day-to-day spending budgets.