Lucky Derek still in denial over SNP budget

Lucky Derek still in denial over SNP budget

by Murdo Fraser
article from Friday 13, January, 2017

HE MAY NOT like to admit it, but the SNP’s Derek Mackay is the luckiest Finance Minister in the history of devolution. Not only does he have an unprecedented range of choices over tax and spend, following the full devolution of Income Tax in April, but he also has more money in total than any of his predecessors.

It has become an article of faith for the SNP in recent years that the Scottish Government’s budget has been the victim of “Westminster austerity” or, alternatively, “Tory cuts”. We have heard this time and time again from Derek Mackay, Nicola Sturgeon, and every SNP politician that you can name, with claims that “Scotland’s budget” has been cut by the UK Conservative government by a cumulative total of over 9% in the decade since 2010.

Unfortunately for the SNP, their own budget documents tell a different story. The assiduous financial blogger Kevin Hague pointed this out shortly before Christmas, and I was able to challenge Derek Mackay with some of these figures at this week’s meeting of the Scottish Parliament’s Finance Committee.

The Scottish Parliament’s independent Financial Scrutiny Unit has assessed that the budget for 2017-18 will be up by £501 million in real terms as against the current year, thanks to decisions taken at Westminster. Derek Mackay was able to confirm to me that he accepts that this was the case. Whatever else is going on, even the SNP accept that they will have a cool half a billion pounds extra to spend next year that they did not have in the current year.

But the Finance Secretary went on to claim that this had to be set against a context of overall budget cuts. Unfortunately for him, this is not what his own budget document says.

It is perfectly clear from Table 4, Annex G, on page 169 of the budget documentation that the total Scottish Government budget has been on an upward trajectory since 2010-11. The total outturn for 2010-11, the first year of a Conservative government, was £34.2 billion. This dipped a little in subsequent years, but came back up from 2013, and the figure for the draft budget for 2017-18 is £37.9 billion – a substantial increase.

Astonishingly, Derek Mackay appeared not to recognise his own figures when challenged on them. When, at the Finance Committee, I quoted to him these very figures from his own publication, he was left floundering. It is hard to imagine his predecessor John Swinney coming across as so incapable.

But there was worse to come for the Finance Secretary half an hour later, when the SNP backbench MSP Ivan McKee, who also sits on the Committee, attempted to ride to his rescue. No doubt having received an urgent message from an SNP Special Advisor to try and dig Derek Mackay out of the hole he had dug for himself, Mr McKee returned to the same issue, claiming that the figures demonstrated “a cut in real terms”. Unfortunately, the desperate SpAd who had sent the dutiful backbencher his frantic note hadn’t done his homework.

For the real terms figures also show an increase, as I took some delight in pointing out to the Finance Secretary. Again, the Scottish Parliament’s Financial Scrutiny Unit produced figures showing that the 2010-11 outturn figures in real terms amounted to £37.229 billion, whereas the figures in the draft budget 2017-18 amount to £37.401 billion – a modest increase in real terms, but an increase nonetheless.

At least the Committee Convenor, the wily Bruce Crawford, was able to provide some respite for the beleaguered Mackay, pointing out that the total figures include Annual Managed Expenditure over which the Finance Secretary has no discretion. Whilst this is indeed correct, these sums are still part of the Scottish Government’s total budget.

What is perfectly clear is that when the SNP are quoting their figure of 9% cuts, they are referring to only one element of their overall budget, that is Fiscal Revenue DEL (Discretionary Expenditure Limit). Whilst an important part of the budget, it is only one element. To compare like with like, we have to look at the overall sums, and it is undoubtedly the case, from the SNP’s own budget documentation, that these are showing a real terms increase over the term of the previous and current Conservative government at Westminster.

So Derek Mackay’s budget, even if he doesn’t want to admit it, is higher than any of his predecessors’ in the history of devolution. He is indeed the luckiest Finance Secretary that the Scottish Parliament has ever had.

It is time now for the SNP to drop their inaccurate mantra about “Tory cuts”, which have now been blown out of the water by their own Budget papers. And, perhaps, if Derek Mackay spent more time on the day job, instead of promoting a disastrous and unwanted second independence referendum, he might have the chance to read and understand his own Budget before he appears in front of Parliamentary Committees.

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