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Call for capital stimulus
17/06/2012
On the eve of chairing the second meeting of the Joint Exchequer Committee (JEC), which takes place in Whitehall on Monday June 18, Scottish Government Finance Secretary, John Swinney, has written to the Chancellor of the Exchequer urging him to urgently fund over 30 ‘shovel ready’ projects worth £300m.
Mr Swinney also highlighted that he will use tomorrow’s JEC meeting to press the Treasury to ensure new financial powers for Scotland are delivered efficiently, effectively and in the interests of the people of Scotland.
The Joint Exchequer Committee will also be attended by Cabinet Secretary for Government Strategy Bruce Crawford, Chief Secretary to the Treasury Danny Alexander, Exchequer Secretary David Gauke and Secretary of State for Scotland Michael Moore. The meeting is expected to focus on implementation of the financial provisions of the Scotland Act.
In his letter to the Chancellor Mr Swinney emphasised that it was the Prime Minister who originally asked the Scottish Government to provide the list of ‘shovel ready’ projects, and stressed the need for immediate capital stimulus, which these capital projects would provide.
The list of more than 30 projects that are "shovel ready" was provided to Westminster by the Scottish Government in March, but funding for these projects has not been forthcoming. If these projects went ahead now, they would provide a vital support to employment with every additional £100 million of capital spending estimated to support around 1,400 jobs in Scotland and benefit communities across the country.
Mr Swinney stated that the delay over funding for shovel ready projects was another example of the limitations of the current constitutional arrangements, commenting:
"I have written to the Chancellor again today to express my disappointment at the unacceptable delay in providing funding for these projects and to ask him to rectify this as a matter of urgency.
"It’s time for the Westminster government to stop dragging its heels and find the funding so that work on these projects can get underway and benefit communities up and down Scotland.
Commenting on the JEC meeting Mr Swinney added:
"Two weeks ago I set out the first steps towards the setting and collecting of taxes in Scotland. We are clear that the devolved taxes, to be introduced from 2015, can be run more cheaply and flexibly, in a way that responds to Scottish needs and circumstances, than if the tax collection were to be handled by the UK Government.
"While this Government believes the powers delivered to the people of Scotland under the Scotland Act are deficient, we will ensure that such powers that we have will be used to the benefit of the people of Scotland.
"In setting up Revenue Scotland we are developing an innovative approach to taxation, working with existing organisations, to deliver Scottish taxes set by this Scottish Parliament to replace the UK Stamp Duty Land Tax and Landfill Tax and save the Scottish taxpayer money.
"We estimate that these proposals will be at least 25 per cent cheaper than asking HMRC to administer the replacement taxes in Scotland. And we will be able to shape them in Scotland, for Scotland. This is an example of the advances that could be made if Scotland had the powers to determine its own future.
"The Scottish Government will continue to work closely with UK Treasury ministers through the JEC to ensure that powers made available to us through the Scotland Act are delivered and developed efficiently and effectively, in line with Scotland’s ambitious programme of reform and in the interests of the people of Scotland."
Revenue Scotland will work with Registers of Scotland and the Scottish Environment Protection Agency to ensure the collection and administration of the proposed Land and Buildings Transaction Tax and the replacement for landfill tax from April 2015. It will be a small and efficient body, with estimated costs of collecting the two taxes coming below the costs estimated by Her Majesty’s Revenue and Customs (HMRC).