Scotland to introduce emergency measures as Javid postpones budget
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Version 0 of 1. Scottish finance secretary says UK chancellor’s delay threatens devolution’s principles The Scottish parliament is to introduce an emergency budget process, after the chancellor postponed the UK budget until mid-March. Derek Mackay, the Scottish finance secretary, said Sajid Javid’s decision to delay the UK’s budget until 11 March could have profound consequences for Scotland’s public services. He said that delay had forced the Scottish parliament to scrap its normal budget process, which involves two months of votes and negotiations between mid-December and mid-February. That includes setting Scotland’s separate income tax rates, worth nearly £12bn in spending, and the budgets for Scotland’s 32 local councils. Around £22bn of the Scottish government’s £34bn budget comes from the Treasury through the block grant. The Scottish Fiscal Commission, an independent advisory body, relies heavily on forecasts published by the Office for Budget Responsibility alongside each UK budget for its advice to Mackay on likely tax revenues and social security spending in the coming year. Scottish councils are legally required to set their budgets by 11 March, leading the Convention of Scottish Local Authorities to warn on Tuesday that delays in confirming their grants could imperil public services. In an emergency statement at Holyrood, Mackay said Javid’s decision threatened the constitutional arrangements underpinning devolution. The Tories “will pay the price” for that disrespect, he said. “This is about respect to a nation; this is about respect to a nation’s parliament and to a nation’s government,” he said. “This is about good governance and responsible fiscal policy. And this is about a degree of honour in the established relationships, protocols, custom and practice that we have that the UK government has totally disregarded.” Treasury officials said they had tried to help Scottish ministers plan ahead by giving them interim OBR forecasts on 20 December, knowing the election delayed the UK budget process. Scottish officials also knew the block grant would increase in April by £1.2bn, the Treasury said. Many parts of the public sector across the UK will be affected by Javid’s decision to delay his budget, although the Welsh government published its £20bn draft budget and income tax rates as normal on 16 December, despite the delay. Scottish civil servants have been working on contingency plans for setting Scotland’s budget since last December’s snap election was called, including exploring the options for emergency funding to help the public sector ensure they can pay for services and wage bills. Officials predicted the election would affect Holyrood’s normal budget process. Boris Johnson won Commons support for the snap election partly because the Scottish National party allied itself with the Liberal Democrats in backing it, pushing Labour into doing so too. A senior adviser to Nicola Sturgeon, the first minister, claimed on Tuesday that if Holyrood was unable to vote on a new Scottish income tax resolution before the start of the next financial year on 6 April, HM Revenue and Customs would be unable to collect them. The Chartered Institute of Taxation said that was highly unlikely. Joanne Walker, a spokeswoman for the institute, said that if Mackay failed to get a tax resolution passed in time, the Scotland Act empowered Westminster to authorise HMRC to continue collecting taxes at their current rate. Javid brushed aside complaints in the Commons from the SNP’s new Treasury spokeswoman, Alison Thewliss, about the delay. He said her party’s policies were the real issue. “Scotland has been let down time and time again by the SNP government, which is giving Scottish people the highest taxes in the United Kingdom and the worst set of public services,” he said. |