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Finance trilateral meeting

Published: 20 Jan 2017 14:45
Part of:
Economy

UK Government must give greater clarity about budgets

The UK Government should abandon plans to impose a £3.5bn of further cuts in 2019-20 and strengthen arrangements for consulting the devolved administrations in advance of future Budgets.

The finance ministers of Scotland, Wales and Northern Ireland have issued a joint letter to the Chief Secretary to the Treasury about key finance issues ahead of the March UK Budget.

In the letter, the ministers also called for the UK Government to announce the Budget earlier in the Autumn, to allow greater time for devolved administrations to consider the impact on their Budgets well in advance of the start of the financial year and sought a commitment that no further reductions will be made to devolved budgets, which are already facing real terms cuts.

Scotland’s Finance Secretary Derek Mackay said:

“It is clear that the Scottish and UK economies are facing challenging economic circumstances. There is a greater need than ever for the UK  Government to engage meaningfully with the devolved administrations on the emerging economic and financial implications of the Brexit vote.  The Prime Minister’s speech this week confirming the UK Government’s intention to leave the European single market and the Customs Union are a cause for significant concern, given the risks this presents to our economy.  

“We also remain very concerned about the potential impact of the further cuts to public spending that the UK Government intends to make in 2019-20. We seek reassurances that they will not pass on further austerity and make additional reductions to devolved budgets which are already experiencing real terms cuts.

“The decision to move the date of the Budget to an annual Autumn publication has implications for the budget cycles of the devolved administrations. We would welcome a commitment to engage ‎with us in developing the approach to the new budget timetable and ensuring that steps are taken to support rather than undermine devolved budget processes. This is particularly relevant given the further devolution of tax and social security responsibilities.”   

Welsh Government’s Finance Secretary Mark Drakeford said:   “The UK Government’s continued approach to austerity and the uncertainties following the EU referendum result mean we are facing unprecedented economic challenges and pressures on our Budgets.  That is why it is so important that the UK Government engages and consults early with the Devolved Administrations around the key finance issues we are facing.

“The possible impact of the £3.5 billion of cuts the UK Government have planned for 2019-20 could generate critical cuts to all our budgets.  This only perpetuates the uncertainty we are facing at a time when providing stability and certainty is more important than ever.  By speaking with one voice, we hope the UK Government can provide clarity on how it intends to find these savings and the resulting impact on our Budget.”

Stormont Finance Minister Máirtín Ó Muilleoir said:  "The austerity agenda that the Conservative government ‎continue to pursue is not working. It already places severe burdens on devolved budgets and further cuts in 2019-20 would be unacceptable.”

Background

The Chancellor announced in the 2016 Autumn Statement that “Starting in autumn 2017, Britain will have an autumn Budget, announcing tax changes well in advance of the start of the tax year” and “from 2018 there will be a Spring Statement, responding to the forecast from the OBR, but no major fiscal event.”