logo
Look at increasing Scottish Government borrowing limits, MPs tell UK Government

Look at increasing Scottish Government borrowing limits, MPs tell UK Government

Currently, the Government is limited to borrowing £600 million for day-to-day spending and £450 million for capital projects.
But in a report from the Scottish Affairs Committee at Westminster on the fiscal arrangements north of the border, MPs pushed for the limits to be increased.
The report said: 'At present, the Scottish Government's limited borrowing powers constrain its ability to manage fiscal shocks, as it is only able to borrow for resource purposes to cover forecast errors.
'Capital borrowing limits are currently linked to, and grow in line with, inflation, which may not necessarily be the highest metric of growth.'
It added: 'We agree with the Secretary of State that borrowing limits should be linked to the measure which offers the Scottish Government the highest level of flexibility but, crucially, we note that which metric delivers this remains undetermined.
'The UK Government should therefore publish a transparent analysis of what borrowing limits would look like based on the different metrics advised in the evidence for this inquiry.
'At the next fiscal framework review, we encourage the UK Government to consider reforming the Scottish Government's capital borrowing powers, by automatically coupling borrowing to the metric which offers the highest limit.'
The report comes at the end of an inquiry by the committee which sought to gauge the effectiveness of the Barnett Formula – the measure which dictates the level of funding the UK Government sends to Scotland every year.
The MPs found the measure was 'fit for purpose', although it is 'imperfect'.
The committee also rejected calls for the formula to shift and provide funding to Scotland based on need.
Scotland, the report said, already receives more funding per head than any other country in the UK and a change in the framework could see funding cut.
In written evidence to the committee, Scottish Finance Secretary Shona Robison reiterated the Scottish Government's support for full fiscal autonomy – an arrangement which would see powers over tax and spending devolved.
But the committee dismissed such a move as not being a 'realistic prospect'.
'Fundamental questions remain about how full fiscal autonomy would work in practice, and whether it would be operable within the constraints of the UK's current devolution settlement,' the report said.
'Practicality aside, we do not believe that a compelling case has been made that such a change would automatically result in Scotland receiving a higher level of funding.'
Ms Robison declined an invitation to appear before the committee, leading the MPs to say 'do not see how we can consider this a serious proposition, and we remain to be convinced that this proposal is desirable in principle, let alone workable in practice'.
Responding to the report, Ms Robison said: 'This report rightly recognises that Scotland's finances remain largely dictated by the UK Government's spending decisions, irrespective of the impact on Scottish public services.
'That has meant Scotland has been left with a shortfall of £400 million to pay for the Chancellor's national insurance increase, and saw Scotland short-changed by more than a billion pounds over the next three years at the recent spending review.
'The decisions we have taken to ask higher earners to pay a little bit more – while most income tax payers pay less than in the rest of the UK – mean that we can support vital public services and provide free tuition, prescriptions and the Scottish child payment to help tackle child poverty.'
Scottish Secretary Ian Murray said: 'The spending review provided the Scottish Government with an extra £9.1 billion, giving them a record settlement.
'People will expect that to deliver better outcomes for Scots – lower NHS waiting lists and better attainment in our schools.
'Spending per head in Scotland is around 20% higher than the rest of the UK thanks to the Barnett formula. This report confirms that it appears to be the position of the Scottish Government to scrap that formula that delivers higher funding – they should explain why they want less money for public services in Scotland.
'Their plans for full fiscal autonomy would mean a £12 billion cut in public spending for Scotland.'
Orange background

Try Our AI Features

Explore what Daily8 AI can do for you:

Comments

No comments yet...

Related Articles

PM signals UK will help Gaza aid airdrop amid calls for Palestinian statehood
PM signals UK will help Gaza aid airdrop amid calls for Palestinian statehood

North Wales Chronicle

time18 minutes ago

  • North Wales Chronicle

PM signals UK will help Gaza aid airdrop amid calls for Palestinian statehood

Israel said on Friday it will allow airdrops of aid by foreign countries into Gaza to alleviate starvation in the Palestinian territory. The Prime Minister said the UK will 'do everything we can to get aid in via this route'. Sir Keir meanwhile faces growing calls to recognise a Palestinian state immediately, amid mounting global anger over the starving population in Gaza. Some 221 MPs from Labour, the Conservatives, Liberal Democrats, SNP, Greens, Plaid Cymru, SDLP and independents, have signed a letter calling on the Government to take the step at a UN meeting next week. France's president Emmanuel Macron announced his nation would formally recognise Palestine at the UN General Assembly in September, leading UK politicians to question whether the British Government would follow suit. US President Donald Trump suggested Mr Macron's announcement 'doesn't matter' as he left America for a visit to Scotland. But Sarah Champion, the senior Labour MP who organised the letter by parliamentarians, said recognition 'would send a powerful symbolic message that we support the rights of the Palestinian people'. Other senior Commons figures who signed the letter include Labour select committee chairs Liam Byrne, Dame Emily Thornberry and Ruth Cadbury. Lib Dem leader Sir Ed Davey, as well as Tory former minister Kit Malthouse, and Sir Edward Leigh – Parliament's longest-serving MP – also signed it. The majority of those who have signed, 131, are Labour MPs. In a video statement released on Friday, Sir Keir made plain his desire for a ceasefire in the war. He said: 'I know the British people are sickened by what is happening. The images of starvation and desperation are utterly horrifying. 'The denial of aid to children and babies is completely unjustifiable, just as the continued captivity of hostages is completely unjustifiable.' The appalling scenes in Gaza are unrelenting. The UK will pull every lever we have to get food and lifesaving support to Palestinians, and we will evacuate children who need urgent medical assistance. This humanitarian catastrophe must end. — Keir Starmer (@Keir_Starmer) July 25, 2025 Signalling the UK is willing to help get aid into Gaza via air, the Prime Minister added: 'News that Israel will allow countries to airdrop aid into Gaza has come far too late, but we will do everything we can to get aid in via this route. 'We are already working urgently with the Jordanian authorities to get British aid on to planes and into Gaza.' Children who need specialist medical treatment will be evacuated from Gaza to the UK, Sir Keir added. The Prime Minister also called for an international coalition to 'end the suffering' in Gaza, similar to the coalition of the willing aimed at helping Ukraine. Sir Keir had earlier responded to calls for the recognition of a Palestinian state, insisting such a move needed to be part of the 'pathway' to peace in the Middle East, which he and allies are working towards. He added: 'Recognition of a Palestinian state has to be one of those steps. I am unequivocal about that. But it must be part of a wider plan which ultimately results in a two-state solution and lasting security for Palestinians and Israelis.' In a statement released on Friday alongside the leaders of France and Germany, the Prime Minister urged Israel to stop restricting the flow of aid into Gaza. Charities operating in Gaza have said Israel's blockade and ongoing military offensive are pushing people there towards starvation, warning that they are seeing their own workers and Palestinians 'waste away'. The Prime Minister will meet the US president during his trip to Scotland, where he arrived on Friday evening. US-led peace talks in Qatar were cut short on Thursday, with Washington's special envoy Steve Witkoff accusing Hamas of a 'lack of desire to reach a ceasefire'. The deal under discussion is expected to include a 60-day ceasefire in which Hamas would release 10 living hostages and the remains of 18 others in phases in exchange for Palestinians imprisoned by Israel. Aid supplies would be ramped up and the two sides would hold negotiations on a lasting truce.

Get your act together on immigration, Trump tells Europe as he lands in Scotland
Get your act together on immigration, Trump tells Europe as he lands in Scotland

Leader Live

time23 minutes ago

  • Leader Live

Get your act together on immigration, Trump tells Europe as he lands in Scotland

Mr Trump is in the country for a four-day visit to both of his golf clubs in Aberdeen and Ayrshire. Landing at around 8.30pm on Friday, the president was greeted by Scottish Secretary Ian Murray before speaking to reporters. Asked about illegal immigration – which successive UK governments have sought to curb – Mr Trump said: 'On immigration, you better get your act together. 'You're not going to have Europe anymore, you've got to get your act together. 'As you know, last month we had nobody entering our country – nobody, (we) shut it down.' He added: 'You've got to stop this horrible invasion that's happening to Europe.' Immigration, Mr Trump said, was 'killing Europe'. Some European leaders, he continued, 'have not let it happen' and are 'not getting the proper credit they should', though the president did not say who he was talking about. Mr Trump said: 'Many countries in Europe, some people, some leaders, have not let it happen, and they're not getting the proper credit they should.' The president also praised Sir Keir Starmer ahead of a meeting between the two at one of his courses in the coming days, describing him as a 'good man'. 'I like your Prime Minister, he's slightly more liberal than I am – as you probably heard – but he's a good man. He got a trade deal done,' he said. 'You know, they've been working on this deal for 12 years, he got it done – that's a good deal, it's a good deal for the UK.' The president's motorcade – which contained more than two dozen vehicles – passed a small group of protesters as he entered his Turnberry golf club. Mr Trump also suggested he would be meeting Sir Keir 'tomorrow evening', although it is understood the pair will not meet until Monday. As well as the Prime Minister, Scottish First Minister John Swinney will meet with the president, as will European Commission president Ursula von der Leyen, who confirmed on X she will come to Scotland on Sunday in a bid to hash out a trade deal between the US and Europe. Mr Trump told journalists there was a 'good 50/50 chance' of a deal being struck, adding that it would be the 'biggest deal of them all'. The president and Sir Keir are expected to discuss potential changes to the UK-US trade deal which came into force last month. Mr Swinney has pledged to 'essentially speak out for Scotland'. Speaking as he boarded Air Force One in the US, Mr Trump said he would be having dinner with the Prime Minister at Turnberry, before 'going to the oil capital of Europe, which is Aberdeen'. He said: 'We're going to have a good time. I think the Prime Minister and I get along very well.' Mr Trump added: 'We're going to be talking about the trade deal that we made and maybe even approve it.' He also told journalists he was 'looking forward' to meeting with the 'Scottish leader' Mr Swinney, describing him as a 'good man'. During his time in Scotland, the president is also likely to spark a number of protests, with concerns being raised about how such demonstrations are policed. Police Scotland has called in support from other forces in the UK to help bolster officer numbers, though senior officers and the organisation which represents the rank-and-file have accepted Mr Trump's visit will have an impact.

Get your act together on immigration, Trump tells Europe as he lands in Scotland
Get your act together on immigration, Trump tells Europe as he lands in Scotland

North Wales Chronicle

time23 minutes ago

  • North Wales Chronicle

Get your act together on immigration, Trump tells Europe as he lands in Scotland

Mr Trump is in the country for a four-day visit to both of his golf clubs in Aberdeen and Ayrshire. Landing at around 8.30pm on Friday, the president was greeted by Scottish Secretary Ian Murray before speaking to reporters. Asked about illegal immigration – which successive UK governments have sought to curb – Mr Trump said: 'On immigration, you better get your act together. 'You're not going to have Europe anymore, you've got to get your act together. 'As you know, last month we had nobody entering our country – nobody, (we) shut it down.' He added: 'You've got to stop this horrible invasion that's happening to Europe.' Immigration, Mr Trump said, was 'killing Europe'. Some European leaders, he continued, 'have not let it happen' and are 'not getting the proper credit they should', though the president did not say who he was talking about. Mr Trump said: 'Many countries in Europe, some people, some leaders, have not let it happen, and they're not getting the proper credit they should.' The president also praised Sir Keir Starmer ahead of a meeting between the two at one of his courses in the coming days, describing him as a 'good man'. 'I like your Prime Minister, he's slightly more liberal than I am – as you probably heard – but he's a good man. He got a trade deal done,' he said. 'You know, they've been working on this deal for 12 years, he got it done – that's a good deal, it's a good deal for the UK.' The president's motorcade – which contained more than two dozen vehicles – passed a small group of protesters as he entered his Turnberry golf club. Mr Trump also suggested he would be meeting Sir Keir 'tomorrow evening', although it is understood the pair will not meet until Monday. As well as the Prime Minister, Scottish First Minister John Swinney will meet with the president, as will European Commission president Ursula von der Leyen, who confirmed on X she will come to Scotland on Sunday in a bid to hash out a trade deal between the US and Europe. Mr Trump told journalists there was a 'good 50/50 chance' of a deal being struck, adding that it would be the 'biggest deal of them all'. The president and Sir Keir are expected to discuss potential changes to the UK-US trade deal which came into force last month. Mr Swinney has pledged to 'essentially speak out for Scotland'. Speaking as he boarded Air Force One in the US, Mr Trump said he would be having dinner with the Prime Minister at Turnberry, before 'going to the oil capital of Europe, which is Aberdeen'. He said: 'We're going to have a good time. I think the Prime Minister and I get along very well.' Mr Trump added: 'We're going to be talking about the trade deal that we made and maybe even approve it.' He also told journalists he was 'looking forward' to meeting with the 'Scottish leader' Mr Swinney, describing him as a 'good man'. During his time in Scotland, the president is also likely to spark a number of protests, with concerns being raised about how such demonstrations are policed. Police Scotland has called in support from other forces in the UK to help bolster officer numbers, though senior officers and the organisation which represents the rank-and-file have accepted Mr Trump's visit will have an impact.

DOWNLOAD THE APP

Get Started Now: Download the App

Ready to dive into a world of global content with local flavor? Download Daily8 app today from your preferred app store and start exploring.
app-storeplay-store