United Kingdom Government (Business Grants and Charity Support Direct Grant)

– in the Scottish Parliament on 4th June 2020.

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Photo of Alasdair Allan Alasdair Allan Scottish National Party

7. To ask the Scottish Government what engagement it has had with the United Kingdom Government regarding the funding consequentials following from recent extensions to business grants and the charity support direct grant. (S5O-04378)

Photo of Kate Forbes Kate Forbes Scottish National Party

I have welcomed the on-going constructive dialogue with the Treasury. Throughout those discussions, I have made it clear that this year—of all years—we need certainty over the level of Barnett consequential funding. We have taken policy decisions to allocate funding that has been announced, often after Opposition politicians have demanded that we move quickly to do so. That funding being later withdrawn results in cuts in other parts of the budget, as we still have to honour our commitments.

I will continue to make the case that it is vital that we have more certainty this year over the Barnett consequentials that are provided, and that the Treasury moves further than just giving us estimates.

Photo of Alasdair Allan Alasdair Allan Scottish National Party

Given what the cabinet secretary just said and what she said in response to the previous question about needing the tools to manage uncertainty, does she agree that the case continues to be made for the devolution of greater financial powers to the Scottish Parliament to cope with these questions?

Photo of Kate Forbes Kate Forbes Scottish National Party

Absolutely—I do not think that anybody in any party could disagree with that in the light of this year’s uncertainty. The fiscal framework and the Barnett formula were not designed for a pandemic, and I have emphasised to the UK Government that we need additional fiscal flexibility. Even when we lay aside the significant impact of Covid, the reserve and the resource borrowing powers in the fiscal framework are insufficient to deal with the inherent volatility in the operation of the framework.

I have always been clear that full fiscal responsibility would provide us with greater flexibility and opportunities. This year, in particular, highlights just how critically vital additional fiscal powers and flexibilities are in enabling us to continue to respond to coronavirus.

Photo of Jamie Greene Jamie Greene Conservative

Despite the £3.5 billion of Barnett consequentials that have come to Scotland from the United Kingdom Government, and generous schemes such as furloughing, many companies are still cutting staff and laying people off. In my region, Rolls-Royce has announced that hundreds of jobs will be lost. What conversations is the Scottish Government having with big employers in Scotland to ensure that they are aware of the schemes that are available to them from the UK and Scottish Governments and do not lay people off despite funds being available?

Photo of Kate Forbes Kate Forbes Scottish National Party

That is a fair question. We have had extensive discussions with small, medium-sized and large employers in Scotland. The Scottish Government speaks regularly—almost daily—with business representation organisations such as Scottish Chambers of Commerce, the Federation of Small Businesses and the Confederation of British Industry to draw their attention to the support that is available.

The question also highlights the point that I made earlier, which is that if we are to continue to develop our grants and to help some of those businesses, we need headroom—additional resource. The UK Government can borrow for that purpose, but we cannot. I hope therefore that Conservative members will work with us to ensure that we get support to businesses by enabling us to have additional flexibilities and powers.