Report claims SNP plan will lose Scotland £6.5bn

THE SNP’s demand for Scotland to be given “full fiscal autonomy” will leave a £6.5 billion black hole in finances north of the Border, a report has warned.

The committee concentrated on the Nicola Sturgeon's demand for full control of taxes and revenues. Picture: Ian Rutherford
The committee concentrated on the Nicola Sturgeon's demand for full control of taxes and revenues. Picture: Ian Rutherford

The Scottish affairs select committee report has also dismissed as “ludicrous” claims by SNP Scottish ministers that the draft legislation for the new powers recommended by the Smith Commission amounts to 12 vetoes for UK ministers.

But it has criticised UK ministers for failing to deal with the allegations with “sufficient vigour”.

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However, the committee concludes Scotland will have “the best of both worlds” once the powers are delivered after the election, with all the parties pledging to put them in the first Queen’s speech.

And the MPs on the committee, which is boycotted by the SNP, focused on First Minister Nicola Sturgeon’s demand that Scotland is given full control of taxes and revenues and sends money to Westminster for defence and foreign affairs as part of a deal after the election, while the Barnett Formula, which guarantees a high level of funding for Scotland, is dumped.

The report notes that this would mean £8bn less coming from the UK government to Scotland, replaced by oil revenues which, after the recent collapse in the price of a barrel, would be just £1.5bn

The report noted: “The collapse in the oil price is a stark reminder of the risks that face economies which rely on a volatile revenue stream to fund a large proportion of their public spending.

“The conclusion of the Smith Commission not to devolve such a volatile source of revenue, nor to recommend full fiscal autonomy, but instead to retain the system of shared benefit and pooled risk across the United Kingdom, has already proved to be a wise decision, and one that is of obvious and immediate benefit to the people of Scotland.”

A Scotland Office spokesman said: “This report from the Scottish affairs select committee confirms the UK government has delivered the next chapter in devolution for Scotland. It also highlights the importance of Scotland’s two governments working together in good faith to implement the draft clauses and develop a fiscal framework to govern the new economic 
relationship between Scotland and the rest of the United Kingdom.”

But the SNP said the committee was “unaware” of the mood in Scotland.

SNP Westminster leader Angus Robertson said: “The debate in Scotland is about how to get the maximum power for Scotland as soon as possible to counter Westminster’s continued austerity and cuts programme – which both Labour and Tories have signed up to for the next parliament.”