SNP ‘could block Scotland Bill’ over cost, warns Swinney

JOHN Swinney has warned that the SNP government could block the Scotland bill over fears that the package on extra devolution would cost Scots £7 billion.

Ultimatum: John Swinney, Scotland's deputy first minister and finance secretary. Picture: Andrew Cowan

The finance secretary issued the ultimatum as he held talks in London with UK ministers about how fresh devolution will affect Scotland’s £30 billion annual grant from Westminster.

New powers agreed after last year’s independence referendum by the Smith commission mean that income tax raised north of the border will go directly to the Scottish Government instead of the UK Treasury.

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However, leading economist Professor Anton Muscatelli, principal of Glasgow University, has suggested the new arrangement could mean £7 billion of losses over 10 years, compared to the cash Scotland would have if it retained the current set-up.

A spokesman for Mr Swinney the additional powers recommended by the Smith commission were not intended to lead to a reduction in Scotland’s budget.

The spokesman said: “Smith was absolutely clear that Scotland should’s budget should be no larger or smaller simply as a result of getting new powers.

“The most important decision which needs to be made is how the block grants should work once we have the new powers.”