Austerity has not ended with UK budget, says finance secretary Derek Mackay

Derek Mackay with Nicola Sturgeon in the Scottish Parliament - Image credit: John Linton/PA

The UK Government’s budget has not put an end to austerity, finance secretary Derek Mackay has claimed.

 The UK Government’s budget announcement includes an extra £950m for Scotland over three years, which it says will amount to a real-terms increase by 2020.

But Mackay said the budget failed to deliver on promises of a significant uplift in public spending, as Scotland’s resource block grant remain almost £2bn lower in real terms in 2019/20, than it was in 2010/11.

 He said: “According to this budget, the Scottish Government’s resource block grant from the UK Government – the money we are able to invest in day to day public services - remains almost £2 billion lower next year compared with 2010-11.

“This budget falls a long way short of delivering for Scotland.”

The Finance Secretary said that the changes to Universal Credit were “just a drop in the ocean compared to the impact the roll-out of Universal Credit will have” and complained that the budget offered nothing to alleviate the impact Brexit will have.

He continued: “There was little in this budget to boost our public services. 

“The Scottish Government has already set out our plans to support the NHS in the years to come and the funding we have received as a result of health spending in England will go to our NHS in Scotland – but so far the UK Government has fallen at least £50m short of what was promised only four months ago. 

 “The reality of today’s budget is that Scotland continues to be hit by UK austerity and the decision to leave the EU.

 “I have consistently argued for a better settlement for Scotland, and this budget does not reflect that.”

However, Secretary of State for Scotland David Mundell said: “Today’s budget is great news for people in Scotland.

“The Chancellor’s decisions mean there will be an extra £1 billion to invest in public services in Scotland.

“I urge the Scottish Government to use this extra money to support the NHS in Scotland, fix the roads, boost Scotland’s economy and reinvigorate Scotland’s high streets.

“The freeze on beer and spirits, support for oil and gas, cash for fisheries technology and a £150m investment in the Tay Cities Deal will all drive growth in Scotland’s economy.

“Individuals up and down Scotland will benefit from the ongoing freeze on fuel duty and the increase in personal allowance.

“Today’s budget demonstrates clearly how the UK Government is delivering for people in Scotland.” 

Key announcements for Scotland include:

• £150m for a Tay Cities Region Deal, in addition to the £200m already promised by the Scottish Government
• Spirits duty frozen for the second budget in a row, which will please the whisky industry
• A UK-wide £10m Fisheries Technology Fund to help transform the industry
• Opening of formal negotiations for a Moray growth deal and progressing talks for Ayrshire and Borderlands growth deals
• Tax rates for the oil and gas sector to remain the same
• Appointing a dedicated manager from the British Business Bank in Scotland, for the first time, to help to reduce geographical imbalances in small businesses’ access to finance