The Deputy Presiding Officer:

8. To ask the Scottish Government when it last met with the Chancellor of the Exchequer and what was discussed. (S6O-02275)

The most recent meeting between the Scottish Government and the Chancellor of the Exchequer was at a meeting of the Prime Minister and the heads of the devolved Governments on 10 November 2022, when the economic outlook and impact of rising inflation were discussed.

I had an introductory meeting with the Chief Secretary to the Treasury on 2 May, and will meet him again at the upcoming finance interministerial standing committee meeting on 22 June.

I would welcome a meeting with the chancellor himself to discuss the economic challenges facing Scotland and the constraints placed on the Scottish Government’s finances. I also encourage the United Kingdom Government to do more to provide support to people and businesses during this difficult economic period.

Given in particular the on-going negative impacts of high inflation on Scotland’s fixed budget, the need for fiscal flexibility such as normal borrowing powers is ever more pressing in order to manage risk and to support economic recovery.

Can the cabinet secretary therefore advise whether the UK Government is in fact on Scotland’s side here?

Annabelle Ewing is quite right to mention the impact of inflation, which is very much being felt in the budget, as the block grant at the time that the budget was set was 4.8 per cent lower in real terms than it was in 2021-22, and the fixed nature of the budget means that we have to redirect money from other priorities to pay for things such as increased public sector pay deals.

I have made clear to the UK Government the need for greater flexibility in borrowing powers to enable us to manage risks and support economic recovery. We have consistently made the case for additional funding; in my recent meeting with the CST, I stressed the need for further clarity on what consequentials we can expect, for example, from national health service pay in England.

While the UK Government has rejected our previous calls for greater fiscal flexibility, we remain in constructive discussions on the wider fiscal framework review.