"If the fiscal framework is detrimental to Scotland by even £1 less than current Barnett funding then that compromises both The Vow and the Smith Commission, and Sturgeon and John Swinney would be correct not to sign up.” So thundered the Daily Record editorial last week as it emerged the UK Government was about to pull a fast one which would see Scotland fleeced of billions of pounds of funding as a result of ongoing devolution negotiations.
As modest powers are transferred to the Scottish Parliament, it stands to reason that the existing funding settlement must change. Whilst undoubtedly a complex matter, the SNP Government and UK Government can strike a fair agreement acceptable to all. With more powers at its disposal, the Scottish Government could choose to adopt different tax and spending policies than those pursued at Westminster – for example, cutting Air Passenger Duty to boost connectivity, jobs and tourism. Naturally, along with such responsibility comes risk, and – as with all political decisions – it remains to be seen if these are as successful as we anticipate.
In essence, if the Scottish Government of the day misjudges a policy, they will be forced to accept responsibility for that failure. Equally, if a policy is successful, revenue will increase and that additional funding will stay in Scotland.
So far, nothing I have said is contentious and was agreed to by all parties who took part in the Smith Commission negotiations after the referendum. However, in recent weeks, a serious lynchpin of this agreement has become a source of heated dispute.
Whilst the SNP Government is more than up to the challenge of taking on more responsibility and having greater control over the fiscal levers which influence our economy, these powers must be backed by a fair funding settlement which would not see Scotland’s budget arbitrarily cut. This threat seemed to be ironed out during the Smith Commission and became known as the principal of ‘no detriment’, meaning that neither Scotland nor the rest of the UK loses out. Shockingly, as the deadline for a deal approaches, the Tory Government has u-turned on this principal and proposed a funding mechanism which would see Scotland’s budget slashed by £7,000 million over the next decade. Imposing such a cut as the price for additional powers is hugely disrespectful to the people of Scotland and suggests that, all along, the Tories had planned to use further devolution as a Trojan Horse to savage the Scottish Budget. Hard negotiating by the SNP Government reduced the gap to £2,700 million. This is still a huge cut to Scotland and would impact on jobs, services and possibly taxation.
As has become a hallmark of the Labour Party of late, their reaction to this developing situation has been slow and muddled – even aligning with the Tories in the Scottish Parliament and blocking an SNP amendment in Westminster to protect the Scottish budget. Nonetheless, I am pleased to say that on 8th February they woke up to the danger and – along with the Greens and the Lib Dems – backed the SNP position to ensure there is indeed ‘no detriment’ to Scotland.
To those who voted ‘no’ in the referendum, in the belief that Scotland would gain a ‘powerhouse parliament’, these latest shenanigans are a slap in the face and reinforce how little the Tories care about Scotland, its parliament and its people.
With a united political front – spearheaded by the SNP – calling for a fair funding settlement, I am optimistic that Scotland may yet get a deal that respects the Smith Commission agreement. Shamefully the Conservative Party north of the Border has stubbornly refused to join with us, putting their slavish devotion to London before the interests of Scotland. They even wanted the SNP Government to agree a deal even when it would have cost Scotland us £7,000 million.
That the Tories should play so fast and loose with the devolution settlement whilst attempting to rob Scotland of a fair settlement is truly insulting and will not be forgotten by voters in a hurry.