Following ten rounds of negotiations, involving the Prime Minister, Chancellor and Chief Secretary to the Treasury, the UK and Scottish Governments have agreed a new fiscal framework.
The UK Government has gone the extra mile to deliver a deal that is fair for Scotland, fair to the rest of the UK and built to last.
It means that the UK government is implementing the recommendations of the Smith Commission in full, delivering the cross-party ‘Vow’ which will mean unprecedented new powers for Scotland.
The final step will come once the Scotland Bill passes through Parliament later in the spring.
This historic deal means that:
- funding for Scotland will be at the same level as the Barnett funding set in the recent Spending Review – Scotland will not receive a penny less than under Barnett
- the Scottish Government will get new borrowing powers – so that it can manage its budget effectively and invest up to £3bn in vital infrastructure, while being accountable to the Scottish people for its decisions
- the Scottish Government will get £200m to implement the new powers
- a review in the next Parliament will make ensure the deal we have agreed is still delivering against all the Smith principles
Chancellor of the Exchequer, George Osborne said:
“Today we’ve secured a stronger Scotland in a stronger UK.
“The arrangements we’ve reached with the Scottish Government are fair to Scotland and fair to taxpayers in the rest of the UK.
“This enables us to deliver on the vow we made to the Scottish people and delivers one of the most powerful devolved Parliaments in the world and the economic and national security that comes from being part of the UK.
“This clears the way for the debate in Scotland to move on to how these tax and spending powers should be used.”