Commons Sense

House of Commons · Ministers' Questions

Devolved Finances

Wednesday 16 November 2022 · 12 questions

Summarised by AI from the official record, so it can contain mistakes.

At a glance

Answered 2 Partly answered 9 Not answered 0

Key points

  • Scottish National party Members asked about the impact of the reduction in the Scottish block grant on devolved finances.
  • The UK Government provided a record block grant settlement of 41 billion over three years, the highest since devolution began in 1999.
  • Independent research indicates that the Scottish block grant will be cut by 5 billion in real terms over the next two years, affecting public spending and council budgets.

Topics (select to filter)

Questions & Answers

Context

The Scottish block grant has been reduced, leading to concerns about the impact on devolved finances.

Question

What assessment his Department has made of the impact of the reduction in the Scottish block grant on devolved finances?

Answer from Alister Jack

Scottish National party Members may want independence, but they certainly do not have independence of thought. The UK Government are providing the Scottish Government with a record block grant settlement of £41 billion a year over the next three years. That is the highest spending review settlement since the advent of devolution, and I hope that the SNP will join me in welcoming that, although I will not hold my breath.

Partly answered

Not addressed: The assessment of the impact of the reduction in the Scottish block grant on devolved finances was not provided.

How: We Are Providing A Record Settlement., Snp Should Welcome This.

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Context

According to the House of Commons Library, the Scottish block grant was cut by 4.1% this financial year and is set to be cut further.

Question

So much for “Jackanory”. According to the House of Commons Library, the Scottish block grant was cut by 4.1% this financial year and is set to be cut by a further 6% in the next financial year. That is a two-year real-terms cut of nearly £5 billion. The UK Government repeatedly claim to be increasing funding for Scotland, but that is clearly not true, so why do the Minister, the Secretary of State and his Government refuse to admit that they have cut the block grant and plan to cut it even further, and when will the Secretary of State for Scotland stand up for Scotland?

Answer from Alister Jack

This Secretary of State is standing up for Scotland. The £41 billion settlement over three years was a record figure; it is the highest figure since devolution began and the first grant was agreed in 1999. I am standing up for Scotland, but I recognise that the Scottish Government have tough choices to make. Inflation is affecting the whole world and they will have to make responsible choices.

Partly answered

Not addressed: No acknowledgment of the cut in block grant or specific plans to mitigate it.

How: Record Settlement., Tough Choices For Scottish Government.

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Context

Independent research shows that the Scottish block grant will be cut by £5 billion in real terms over the next two years.

Question

Independent research shows that the Scottish block grant will be cut by £5 billion in real terms over the next two years. What if the Scottish Government have £5 billion less to spend and our councils have less to spend, despite cost and demand going up? Let us consider Glasgow City Council. The city treasurer, Councillor Ricky Bell, said today: “The consequences of what looks likely to be passed on to Scotland's public services will be catastrophic and communities, already reeling from 12 years of Tory austerity, are being pushed to the brink of destruction.” What can he do, other than support independence, to stop those communities being destroyed?

Answer from Alister Jack

Supporting independence will certainly not help the finances of Scotland; many independent economists have made that observation. As I said, it is absolutely a choice that the Scottish Government have to make about how they spend their budget. If they need to do so, they have tax-raising and borrowing powers.

Partly answered

Not addressed: No specific actions beyond supporting independence were provided.

How: Supporting Independence Is Not Helpful.

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Context

Thanks to Brexit, the UK has the highest inflation in the G7, causing an additional £1.7 billion to be knocked off the Scottish budget due to pressures such as energy increases and cost of living.

Question

Thanks to Brexit, the UK has the highest inflation in the G7, which has caused an additional £1.7 billion to be knocked off the Scottish budget due to pressures such as energy increases, wage increases and the cost of living. Instead of giving a robotic answer about the biggest budget being awarded—the Secretary of State wrongly stated that Scotland has borrowing powers, which we do not for our revenue budget—will he say what discussions he has had with the Chancellor about additional revenues coming to Scotland to offset the inflationary pressures?

Answer from Alister Jack

I must set the record straight: borrowing is available for both capital and revenue, and there is an emergency figure, as was available during covid. The hon. Gentleman raises a point about inflation. Rising energy costs and rising food prices, as a result of Putin's illegal war in Ukraine, have affected continental Europe and the United Kingdom.

Partly answered

Not addressed: No specific discussions with Chancellor were mentioned.

How: Set Record Straight On Borrowing Powers., Global Issues Affecting Inflation.

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Context

The UK Government are denying devolved Governments the ability to increase public sector pay in response to a cost of living crisis.

Question

Public sector pay increases are a sensible way for a Government to help their citizens with a cost of living crisis, but the UK Government are denying devolved Governments the ability to do that by cutting devolved budgets. Would a better use of public money not be to shut down the Scotland Office propaganda unit and transfer its budget to the Scottish Government to help fund pay rises for tens of thousands of people in Scotland?

Answer from Alister Jack

The hon. Lady and I have this discussion on many occasions, because this is one of the points that she is keenest to make in the Select Committee on Scottish Affairs. She knows the answer, which is that the Scotland Office's spending on its communications pales into insignificance in comparison with the Scottish Government's.

Partly answered

Not addressed: No concrete benefits of shutting down the unit were addressed.

How: Answer Known To Her.

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Context

Anti-poverty groups have praised the expansion of the Scottish child payment scheme.

Question

Anti-poverty groups such as the Joseph Rowntree Foundation and the Child Poverty Action Group have praised the Scottish Government for expanding and trebling the Scottish child payment—a watershed moment for tackling poverty in Scotland. Families in Scotland now get £100 every four weeks for each child up to the age of 16, which will have a significant impact. Instead of trying to hamstring such positive anti-poverty activity by cutting the block grant, will the Secretary of State increase spending for Scotland so that we can put it into the pockets of needy families hammered by Tory austerity?

Answer from Alister Jack

There has been an increase. As a Barnett consequential, there is an extra £82 million coming to Scotland this year through the household support fund. As a result of the rates cut in England, there is an extra £296 million coming this year.

Partly answered

Not addressed: No clear commitment to increase spending for poverty reduction efforts was given.

How: Increase Through Barnett Consequential.

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Context

Nicola Sturgeon wrote in the Financial Times that Scottish Government's budget this year has not received a single additional penny from the UK government, which was refuted by Alister Jack.

Question

Yesterday, Nicola Sturgeon wrote in the Financial Times that the Scottish Government's budget this year has 'not received a single additional penny from the UK government'. The Secretary of State will know that that is completely false. Does the Secretary of State agree that that is a misleading and incorrect quote from Scotland's First Minister? Will he outline what additional funding has gone from the UK Government to the Scottish Government this year?

Answer from Alister Jack

My hon. Friend is absolutely right. The extra funding from Barnett consequentials that is going to the Scottish Government this year from the household support fund is £82 million; it was £41 million last year. The council tax rebate in England has generated another £296 million that is going to the Scottish Government.

Answered
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Context

Kevin Foster is concerned about the potential impact on the Scottish block grant if the separatist Benches achieve their ambition of breaking up the United Kingdom.

Question

In my right hon. Friend's assessment, did he reflect on what the impact on the Scottish block grant would be if hon. Members on the separatist Benches achieved their ambition of breaking up our United Kingdom?

Answer from Alister Jack

My hon. Friend makes a very good point. Scotland is the best-funded part of Great Britain, and there is a Union dividend there of £2,000 per man, woman and child.

Answered
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Q9 Ian Murray Lab Edinburgh South
Context

Ian Murray is questioning the economic crisis caused by tax cuts to the richest and its impact on Scottish public services and working people.

Question

The Secretary of State, or should I say Lord Jack-elect, was blindingly loyal to the former former Prime Minister, the former former Chancellor, the former Prime Minister and the former Chancellor over the summer. They crashed the British economy on the back of handing out tax cuts to the richest. The economic crisis was created around the Cabinet table in Downing Street by the people the Secretary of State sits beside, and it will be paid for by working Scots. What price does the Secretary of State think Scottish public services and Scottish working people should pay for his Government crashing the economy?

Answer from Alister Jack

First, as I have said in previous answers, we are facing a global economic downturn as a result of Russia's illegal war in Ukraine. On the hon. Gentleman's final point, the Prime Minister has made it very clear that he wants to protect the most vulnerable in society.

Partly answered

Not addressed: global economic downturn caused by Ukraine rather than UK Government's policies

How: Under Review

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Q10 Ian Murray Lab Edinburgh South
Context

A constituent came to Ian Murray's surgery in tears about their mortgage rate increase from a stable income to an unaffordable level, which was avoidable but ignored by the UK Government.

Question

It is the reckless plans of both Governments that pose a danger to Scotland, but the point is—and this is what the Secretary of State denies—that it is about not just the last 12 weeks but the decisions of the last 12 years. A constituent came to my surgery in tears. My constituent's 1.79% five-year fixed-rate mortgage rate was expiring, and the remortgage rate was nearly 6%. That familiar story means going from a stable income and affordable bills to the crushing anxiety of being unable to pay for the roof over one's family. This Government and Secretary of State chose to ignore the experts, ignoring independent bodies such as the Office for Budget Responsibility, and the result has been a Tory premium on everyone's mortgage. Does the Secretary of State think that he and his new Prime Minister should stop refusing to say sorry and give the public an apology?

Answer from Alister Jack

I do understand how concerned people are about their mortgages. Obviously, a number of factors are influencing interest rates, but we are doing all we can to limit those factors and to support the people who need support most at this difficult time.

Partly answered

Not addressed: supporting people rather than apologizing or addressing mortgage rates specifically

How: Under Review

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Context

Mhairi Black is concerned about the denial of democracy by the Secretary of State and the adverse effects of austerity measures on Scotland's budget, services, and economy.

Question

It is very concerning to hear the Secretary of State dispute the figures from the House of Commons Library. Let me emphasise that Scotland's block grant is being cut, our services are being eroded by Tory cuts, the economy is being undermined by Brexit, and Scotland, as part of the UK, is facing the deepest recession in Europe. This Government's response is more austerity despite Scotland's rejecting that premise for more than 50 years. Will the Secretary of State and the rest of his disaster capitalist Tories get out of Scotland's way, stop denying democracy, and allow Scotland to choose its own path out of this nightmare?

Answer from Alister Jack

As the hon. Lady knows, the party that is denying democracy is the one that does not accept the result of the 2014 referendum.

Not addressed: denial of democracy and austerity measures

How: Changing Subject

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Context

Mhairi Black is questioning whether the Tories are causing Scotland's demise and short-changing it due to its Union status.

Question

I would not be here if we had not accepted the outcome of that referendum, and I do not need any lectures on democracy from a soon-to-be-unelected baron. No matter how much this Government deny it, Scotland's budget is being cut. Let us put independence aside for a moment. Does the Secretary of State think that it is the Tories who are causing Scotland's demise and short-changing us, or is it this Union institutionally?

Answer from Alister Jack

As I have said before, the Union brings a Union dividend of £2,000 per man, woman and child to Scotland. It deals with last year's deficit of—according to the Scottish Government's own figures—£23 billion. It is a Union that delivers jobs. As we announced yesterday, it is delivering 4,000 jobs on the Clyde for the building of five type 26 frigates. This is a Union that serves the whole United Kingdom well.

Partly answered

Not addressed: causing Scotland's demise and short-changing rather than positive aspects of the Union

How: Under Review

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