Devolved governments call for Rishi Sunak to end Budget ‘nightmare’

SCOTTISH, Welsh and Northern Irish finance leaders will today make an unprecedented linked statement to their parliaments over the cancellation of the UK Government’s Autumn Budget.

Chancellor Rishi Sunak had been expected to set out a detailed statement last month. But the UK Government said it was “not the right time” for this and he instead revealed new measures to respond to the Covid-19 crisis, including a replacement for the furlough scheme.

But devolved legislatures depend on clarity over the UK Budget to set out their own spending plans.

Now Scotland’s Kate Forbes and her counterparts at Stormont and the Senedd, Conor Murphy and Rebecca Evans, will make linked statements to their legislatures revealing grave concerns about the lack of clarity on future spending. The statements will also underline fears about funding to mitigate the impact of the pandemic.

The move will be the first of its kind in the history of devolution.

Forbes said: “We are taking this joint step to convey the depth of our concern about the cancellation of the UK Government’s Autumn Budget.

“The devolved administrations have done much to support businesses, communities and individuals through the pandemic, but the UK Government decides on the size of our budgets and holds most of the financial levers, so it is essential that they take further action. We urgently need more flexibility and funding to meet the immediate needs and clarity in order to plan for the coming year. Today we will use our collective voice to lay out these requirements.”

A delay to the UK Budget last year saw MSPs forced to agree their plans for tax and spending a week prior to the Chancellor’s announced, basing the figures for Scotland on estimates amidst serious concerns about the need to secure parliamentary support and allow local governments to set out their own budgets.

But it’s feared that a similar move this year could create more problems due to the timing of the 2022 election in May.

In written evidence to MSPs in August, the Chartered Institute of Taxation called for “proactive cooperation between the Scottish and UK Governments”.

But last month Forbes revealed how Sunak “didn’t even have the courtesy of telling me then the Budget was going to be delayed or indeed scrapped, which has a huge impact on the Scottish Government’s Budget”.

READ MORE: Kate Forbes: Rishi Sunak didn’t have courtesy to tell us Autumn Budget was off

Yesterday she said she’d also not been consulted about another key change – the scrapping of the VAT Retail Export Scheme, which allows non-EU nationals to claim back tax paid on goods they take home in their personal luggage, and which will end on December 31 as Brexit takes effect.

The Association of International Retail says this could have a

£92 million impact on Edinburgh alone, jeopardising 1840 jobs in Scotland’s capital.

Responding to a written question from Scottish Labour deputy leader Jackie Baillie, Forbes said: “This change was announced suddenly by the UK Government and, despite the obvious and substantial implications for the Scottish retail and tourism sectors, without prior engagement with Scottish Government officials.

“Accordingly, we have had no opportunity to carry out analysis of our own and none has been shared by the UK Government. Since this announcement, the Scottish Government has received representations from a number of stakeholder organisations expressing concerns about the impact on trade and the wider economy.

“We share their concerns and do not believe that this is an appropriate juncture at which to make such an abrupt and significant change.”

A UK Government spokesperson said: “At all stages of the pandemic we have sought to work constructively with the devolved administrations and we will continue to do so.

“The UK Government has put in place one of the most generous and comprehensive economic plans anywhere in the world with over £190 billion of support to aid our economic recovery as one United Kingdom.

“In July we guaranteed the devolved administrations would receive at least an additional £12.7 billion this year to support them to respond to Covid-19.

“Nothing stops the devolved administrations from passing their budgets before the UK Budget. For example, the Scottish Government’s last budget was set on February 6, ahead of our Budget on March 11.”

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