Philip Hammond tells Nicola Sturgeon to use new powers for growth

Chancellor Philip Hammond will meet Nicola Sturgeon today. Picture: Stefan Rousseau/PA Wire

The Tory Chancellor is to travel to Edinburgh today a week after making his Autumn Statement, which included an additional £800 million of funding for the Scottish Government.

While the First Minister has previously warned the vote for Brexit makes a second Scottish independence referendum “highly likely”, Mr Hammond will stress the rest of the UK is still Scotland’s largest trading partner.

And he will say it is “imperative” that administrations in London and Edinburgh work together now to “achieve the best for everyone” in the wake of the decision to leave the European Union.

Finance Secretary Derek Mackay hints at tax rises in Scotland

While the Chancellor said last week that Autumn Statement “delivers for Scotland”, Scottish Finance Secretary Derek Mackay claimed the the extra cash from Westminster would only mitigate previously planned cuts to Holyrood’s budget.

Meanwhile experts at the IPPR Scotland think-tank claimed on Wednesday that the package of measures put forward by the Chancellor could result in some Scottish Government departments having their budget slashed by 11.3 per cent between 2015/16 and 2019/20 - warning tax rises or significant public service reform could be needed as a result.

But speaking ahead of the visit, Mr Hammond said: “Scotland’s contribution to the UK is invaluable and we have delivered on the Scottish Government’s call for increased capital funding and investment through our Autumn Statement.

“The rest of the UK is also Scotland’s most important market, providing four times the trade volume than that of the EU 27 - so it is imperative that we work together to achieve the best for everyone in the United Kingdom.”

His trip north comes the day after St Andrew’s Day, during which the UK Government put forward the formal Parliamentary orders necessary to transfer powers over income tax rates and bands to Holyrood from April 6 2017.

Mr Hammond added: “The Scottish Government now has responsibility for significant areas of policy as a result of further devolution and I look forward to meeting with the First Minister of Scotland to ensure we seize the opportunities we face together in the future.”