Scottish industry tax breaks may be scaled back over budget clash, says Kate Forbes

Scotland's finance secretary has warned that Covid-related support for retail, hospitality and leisure may be scaled back in next week’s budget over a “gap” in fiscal information from Westminster.

Kate Forbes says her planning for the budget has been made "significantly more difficult" as a result of having to set out spending plans more than a month before Chancellor Rishi Sunak sets the UK Budget.

It means the SNP minister is being forced to publish spending plans for 2021/22 when she does not know what half of her own budget – through the block grant from Westminster – will amount to.

Sign up to our Politics newsletter

Read More

Read More
Human rights watchdog raises Covid concerns over Scottish prisons
Finance secretary Kate Forbes speaks in Holyrood. Picture: Andrew Cowan/Scottish Parliament via Getty Images

Ms Forbes insisted that it would be a budget that would drive economic recovery while forging a "fairer, greener and more globally competitive Scotland”.

The Scottish Government is also poised to unveil an Infrastructure Investment Plan detailing £24 billion of spending on major projects over the next five years, soon after the budget, to get Scotland’s economy "building back" to growth after the pandemic.

Mr Sunak took the unprecedented decision last year to delay his UK budget until March, meaning it was set after the devolved administrations for the first time.

It meant Holyrood was left in the dark about its share of Treasury spending before the Scottish budget was set.

Ms Forbes warns the pandemic this year has made the situation even more acute in an article for The Scotsman published today.

"Unfortunately, our budget planning is made significantly more difficult by the fiscal arrangements the devolved nations currently operate within,” she writes.

"Postponement of the UK Budget until March means I have only half the financial information that would normally be available, with details of future tax, the final block grant adjustment and any spending that may generate consequential payments for Scotland unavailable to me.

"This gap includes any information on the UK Government’s plans for non-domestic rates relief. Its decision to apply 100 per cent relief for hospitality, retail and leisure business in the current financial year generated consequential funding which enabled us to do similar, at a cost of around £900 million.

"Without confirmation of the UK Government’s plans for 2021/22, and with severely limiting restrictions on borrowing, I simply do not have the resources to continue this scale of relief in my forthcoming budget."

A message from the Editor:Thank you for reading this article. We're more reliant on your support than ever as the shift in consumer habits brought about by Coronavirus impacts our advertisers.

If you haven't already, please consider supporting our trusted, fact-checked journalism by taking out a digital subscription.


Want to join the conversation? Please or to comment on this article.