Financial Settlement for Scotland

1. What recent assessment he has made of the adequacy of the financial settlement for Scotland.

Last weekend Scotland once again showed the world that we can host fantastic sporting events, with the World Athletics Indoor Championships held in Glasgow. I offer my congratulations to everyone involved, and especially to medal winners Jemma Reekie from Ayrshire and Josh Kerr from Edinburgh, who was the first Scottish man to win a gold medal in those championships in over 30 years. I also congratulate the Scottish rugby team who, thanks to their recent victory over England, have now won the Calcutta cup four times in a row. It would have been five in a row, but covid got in the way. [Laughter.]

Contrary to what we hear from the Scottish National party, the Scottish Government are well-funded. This UK Government have provided a record block grant, averaging £41 billion a year, with an additional £2.4 billion across the last three fiscal events. Scotland also continues to benefit from the Barnett formula, under which the Scottish Government receive around 25% more funding per person than equivalent spending across the United Kingdom.

Will the Secretary of State explain how his Government’s £1,600 million cut to Scotland’s capital budget over the next three years will impact the provision of infrastructure, including roads, hospitals, schools, new homes, digital connectivity, and the economic growth we need to escape the recession into which the Tories have dragged us?

It is nice to see that the hon. Lady and her colleagues have turned up for work today, even if that is in defiance of the deputy Leader of the SNP, who thought they should not bother coming. Let me be clear on resource spending and the capital budget: the Scottish Government are able to divert their resource spending for capital infrastructure investments; and they can also borrow to enhance capital investments if they so choose.

The Secretary of State is correct that the block grant from the UK Conservative Government to Scotland is the highest it has ever been. Despite that, just last week the SNP/Green Government pushed through their “tax and axe” budget in Scotland. Does my right hon. Friend agree that the nationalists have got the wrong priorities for Scotland by cutting services while increasing income tax rates for anyone earning more than £28,867?

I agree with my hon. Friend, and I add further that the Scottish Government’s six tax bands, as opposed to the UK Government’s three tax bands, are really holding Scotland back.

I call the shadow Minister.

While the SNP and the Tories argue about the financial settlement between the two Governments, they do agree on two things: first, that working people should pay the price of this economic mess, by raising tax to sky-high levels; and secondly, at least until today, that oil and gas giants earning record profits should not face a proper windfall tax, although it now seems as if the SNP might be the only people holding out on that position. Who does the Secretary of State support—the Scottish Tory leader who is standing up in Holyrood today attacking an extension of the windfall tax, or the Chancellor who we understand is about to announce exactly that?

My position has always been clear: I believe that the energy profits levy on the excess profits caused by Putin’s illegal war in Ukraine was the right thing for the Government to do, to give support to people in the cost of living crisis.

I call the SNP spokesperson.

It started so well, and I agree with the Secretary of State about the Calcutta cup—I was there to witness an historic occasion—and about the World Athletics Indoor Championships in Glasgow. I played rugby with Jemma Reekie’s cousin for many years, and I send my congratulations to them. However, everything from that point on, from both sides of the House, has been absolute nonsense.

At a time when many Scots are struggling to pay their energy or shopping bills due to the rapid inflation that the Secretary of State’s Government have presided over, and with inflation in the public sector running even higher, his Government have cut the Scottish Government’s funding in real terms again. Commons Library research shows that the Scottish block grant will be at its lowest level of UK Government spending since the start of devolution. As the Secretary of State counts down the weeks to his departure, is he proud of his legacy?

That is an easy one to answer, Mr Speaker, as I am very proud of my legacy. Rather like winning four Calcutta cups, I have won in court with the Scottish Government four times, and there are any number of things I would like to list for my legacy. Importantly, the Scottish Government receive a record block of £41 billion, and record Barnett consequentials on top of that. Spending in Scotland is 25% higher per person than the UK average, so that equates to an extra £8.5 billion.

I had no idea we should all just be very grateful for the largesse of the Secretary of State, but does that largesse extend to capital funding? Capital funding to the Scottish Parliament has not just been cut, but slashed by 10% on his watch. That money could have been used to invest in hospitals, schools and infrastructure, and it is about to be frittered away by the Chancellor on a sickening pre-election bribe that precisely no one will buy. Will he finally accept that it is his Government’s “bust or bust” austerity that is driving public services to the edge, and does he support tax cuts at a time when even Tory voters know that increased public investment is required?

This is nonsense. Austerity is not a thing under this Government—not a thing at all. [Laughter.] No, absolutely not. Departmental spending—this is the point that the SNP does not acknowledge—throughout this Parliament has grown by 3.2% on average. That is the simple truth.