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  • Writer's pictureKenneth Gibson MSP

Fair Funding Deal is Essential

Since the referendum, the political landscape in Scotland has changed markedly. Parties which previously drew ‘a line in the sand’ on further devolution have suddenly embraced the notion of enhanced power and responsibility for Holyrood. Of course, such a volte face is built upon political calculation. Those who stubbornly refuse to accept the reality that Scots want more say in their own affairs would soon find themselves punished at the ballot box. As such, the UK parties have decided that political survival means it may be best to ‘go with the flow.’

Whilst this is to be welcomed, one must be wary of those who may still harbour feelings of ill will towards the concept of a more powerful Scottish Parliament. The party most guilty of such hostility is the Conservatives. Indeed, it was the current Tory leader in Scotland who made the now infamous, ‘line in the sand’ comment, regarding further powers during her leadership bid.

Meanwhile, Tory MPs in England, aided by the UK Treasury, are trying to derail more powers, outlined in the infamous ‘Vow’ and, latterly, in the Smith Commission and Scotland Bill.

Following various promises made to the people of Scotland prior to the referendum, the Smith Commission was established – with SNP, Labour, Conservatives, Lib Dem and Green representatives – to decide which powers Scotland should have, short of independence. Whilst the SNP felt Smith stopped far short of the ‘near federalism’ promised, the powers offered can be made to work for Scotland and the agreement was duly signed.

Running in parallel with new powers and responsibilities was a deal to establish a new ‘fiscal framework’. With Scotland soon to raise income tax, less money will come directly from the UK Treasury in the form of the Block Grant.

During negotiations, a policy of ‘no detriment’ was agreed by all parties. The agreement stated that: “the Scottish and UK Governments’ budgets should be no larger or smaller simply as a result of the initial transfer of tax and/or spending powers, before considering how these are used.” This is both fair and sensible. Of course the Scottish Government should not expect the UK Government to plug gaps in our budget if a tax/spending decision doesn’t succeed. Likewise, we should reap the rewards of effective policy and not lose that money to the UK. We should start with a level playing field.

The SNP Government – backed by independent experts, such as Professor Anton Muscatelli, Principal of Glasgow University and more recently the Greens, Lib Dems and latterly the Labour Party - who until 8th February backed the Tories - agreed that a system of block grant adjustment known as ‘per-capita indexed deduction’ is the fairest.

However, the UK Tory Government prefers an alternative funding method, known as ‘levels deduction’ which, if chosen, would see Scotland’s budget cut by a further £7,000 million over the next ten years. To introduce cuts of this magnitude as the price for further promised devolution is completely unacceptable and the SNP Government has said so. The Tories in Scotland urged us to accept this shoddy deal. Hard negotiating by SNP Ministers has brought the gap down to a still horrendous £2,700 million, which if imposed would mean job cuts, fewer services and possibly higher taxes.

Even the broker of ‘the Vow’, the Daily Record – not famed for supporting the SNP – stated in an editorial piece that if the fiscal framework is to make Scotland even £1 worse off, the SNP Government should not sign up.

The importance of securing fair funding and genuine enhanced devolution is absolutely vital and the SNP will accept nothing less. The clumsy attempt by the UK Government to short change the people of Scotland shows it intends to deliver a financial trap designed to cut Scotland’s budget even further. By opposing a fair deal, the Tories here in Scotland are exposed as a party incapable of fighting for Scottish interests.


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Kenneth Gibson SNP

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