Extra funding for Scotland means more fiscal powers not needed – Steve Barclay

An extra £1.9 billion of Covid-19 funding from Westminster should ensure Scotland does not need more fiscal powers, the Chief Secretary to the Treasury has said.

Steve Barclay said the uplift, which has seen a total of £3.7 billion handed to the devolved nations, was in response to a request from the Scottish Government.

Speaking to the PA news agency during a visit to LOVE Gorgie Farm in Edinburgh with Scottish Secretary Alister Jack on Friday, Mr Barclay said Holyrood ministers had claimed £1.9 billion extra would be needed this year to ensure they could meet the demands of dealing with coronavirus.

Mr Barclay met with Scottish Finance Secretary Kate Forbes on Friday afternoon, hours after she again asked for greater flexibility on fiscal matters and the ability to borrow more.

Similar repeated requests have been made, including one alongside the finance ministers in Wales and Northern Ireland, but all were turned down.

Mr Barclay 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.”

Mr Barclay said £6.5 billion has been invested in Scotland since the beginning of the pandemic to aid the response.

Steve Barclay
Steve Barclay

He questioned how Scotland would borrow the extra funding it seeks.

He said: “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.

“Through the block grant, Scotland benefits in terms of its funding – £125 per head compared to £100 in England.

“But the measures today are in addition to that and they sit within the wider package of UK support, and that’s because across the UK we’re better able to weather the storm of the Covid crisis.”

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

When asked about the prospect of Scottish independence or another referendum on the issue in the near future, the Chief Secretary echoed comments made by Prime Minister Boris Johnson when he visited Scotland on Thursday that the union has worked for Scotland and the rest of the UK in the response to Covid-19.

Mr Barclay also highlighted that 60% of Scottish trade is with the rest of the UK, but when asked if an independent Scotland could make a trade deal with the rest of the UK in the same way the UK Government is currently attempting to with the European Union, he said: “The question would be for the Scottish Government as to what sort of trading relationship they were hoping to secure.”

Mr Barclay also claimed the people of the UK want to see politicians “coming together” to protect jobs and the economy during the pandemic.