Steve Barclay: SNP government does not need extra powers after latest £1.9 billion boost
SNP ministers do not need extra financial powers to deal with the coronavirus pandemic thanks to another £2 billion extra funding from Westminster, the Chief Secretary to the Treasury has said.
Steve Barclay said the latest £1.9 billion uplift, taking the extra money handed to the Scottish Government to £6.5 billion, meant the additional powers were unnecessary.
Speaking on a visit to Edinburgh, he said the UK's broad shoulders meant it could borrow any additional funding at low interest rates and questioned what currency a separate Scotland would use.
Mr Barclay echoed Boris Johnson's argument when he visited Scotland this week that the Union has helped Scotland "weather the storm of the Covid crisis."
But Kate Forbes, the SNP Finance Secretary, expressed disappointment at the Treasury rejecting her request for more "financial flexibility" and argued it was required to tackle the pandemic.
She said the powers she and the other devolved finance ministers wanted were "reasonable, straightforward and would not cost the UK Government a penny."
The row broke out the day after the Prime Minister said the "sheer might" of the Union had saved 900,000 Scottish jobs as he highlighted the impact of the Treasury's furlough scheme.
But Nicola Sturgeon insisted a separate Scotland could have provided the same support to struggling businesses and families, despite having no central bank or currency of its own and the largest notional deficit in Europe.
Mr Barlcay held a virtual quadrilateral meeting with Ms Forbes and her Welsh and Northern Irish counterparts yesterday, shortly after she repeated her demand for more borrowing and financial powers.
It was held after the Treasury announced the devolved administrations will receive at least £3.7 billion of extra funding this year, on top of £8.9 billion already provided.
Speaking on a visit to Gorgie Farm in the Scottish capital, he said Scottish ministers had claimed £1.9 billion extra would be needed this year to ensure they could meet the demands of dealing with coronavirus.
He said: "What the Scottish Government said is that they wanted greater flexibility to be able to deal with some of the uncertainty of the pressures from Covid and they gave us an estimate as to what that cost would be.
"We've listened to that and we've responded with something that's not been done before, which is giving that in-year clarity as to the additional Covid funding for the rest of the year."
He added: "It's difficult to see even what currency the Scottish Government would be borrowing under. The UK, through pooling its resources, is able to borrow at low interest rates."
This funding package from UKG is v welcome. We'll use every penny to combat the impact of Covid-19. Of course, UKG has the borrowing powers required to fund the response to this crisis - powers SG is still deprived of but urgently need. We need agreement on fiscal flexibilities. https://t.co/tBnD0mMUHL
— Kate Forbes MSP (@KateForbesMSP) July 23, 2020
Asked about the prospect of a separate Scotland, the Chief Secretary highlighted that 60 per cent of Scottish trade is with the rest of the UK and argued people want to see politicians "coming together" to protect jobs.
Ms Forbes welcomed the additional funding but said more powers are still required, noting she cannot use money earmarked for capital building projects for day-to-day revenue spending.
She added: “Unlike other countries across the world we cannot respond quickly to emerging needs by borrowing, leaving us overly-dependent on policy decisions made by the UK Government."
