Finance Minister Has Deep Concern Over UK Internal Market Bill

17th September 2020

Finance Ministers from Scotland, Wales and Northern Ireland have met to discuss a range of fiscal matters and voiced their collective concerns about the financial implications the UK Internal Market Bill will have on devolved governments.

Kate Forbes, Rebecca Evans and Conor Murphy expressed their joint concerns on the spending powers set out in the Bill which override the existing devolution settlement.

The powers enable the UK Government to undertake spending in devolved areas, including for replacement of EU funding, without any engagement with the devolved nations.

Finance Ministers also voiced concerns about what this could mean for future consequential funding arrangements.

Finance Secretary, Kate Forbes said:"It is entirely unacceptable that - with no prior notice - the UK Government has written provisions into the Bill that presume Whitehall control over the delivery of replacements for the EU funding programme in Scotland - a programme that Scottish Ministers have delivered successfully for decades.

"This Bill would also allow the UK Government to dictate how money is spent in devolved areas without the consent of Scottish Ministers. It puts at risk funding for a whole host of capital programmes - schools, hospitals and infrastructure. It reverses the devolution process and we will oppose any attempt to bypass the Scottish Parliament and Government, which are elected by the people of Scotland.

"Not only is it in contravention of the devolution settlement, but it has the potential to create confusion, duplication and unnecessary additional bureaucracy at a time when economic recovery is paramount."

Welsh Finance Minister Rebecca Evans said:"I am deeply concerned that the Bill gives UK Ministers, for the first time since devolution, powers to fund activity in areas which are clearly devolved to Wales.

"In Wales funding decisions are taken in partnership with local communities, to ensure that they reflect the needs of the people in Wales. The powers set out in the Bill completely undermine devolution and will see decisions currently taken in Wales, clawed back by the UK Government."

Finance Minister for Northern Ireland, Conor Murphy said:“The Internal Market Bill will give the British Government wide ranging powers to make funding decisions in devolved areas.

“This is greatly concerning and could have huge implications for the Good Friday Agreement. The British Government should not interfere in funding matters which are currently the responsibility of the Devolved Administrations.

“It is also imperative that they provide details on the scope of the Shared Prosperity Fund. This will be a vital source of replacement funding for devolved areas and the lack of meaningful engagement to date is extremely disappointing."

Note

If the UK leaves the EU it will no longer receive support from the European Structural Funds. The purpose of these funds is to “invest in job creation and a sustainable and healthy European economy and environment." . In Scotland, they have played a vital role in reducing disparities across different parts of the country for over 40 years.

Under the current 2014-2020 programme Scotland benefits from over £780m of such funding through the European Regional Development Fund and the European Social Fund. This provides investment for key policies such as our Modern Apprenticeship schemes and our Low Carbon Infrastructure Transition Programme. The loss of this funding will have a significant impact on the ability of local authorities, community groups, funding bodies and enterprise and skills agencies to deliver the kinds of initiatives that will drive inclusive economic growth and promote wellbeing and cohesion in communities across Scotland.

The UK Government has indicated its intention to provide successor funding to EU Structural Funds through its proposed UK Shared Prosperity Fund but there is little or no detail as yet on the scale, objectives or allocation of such funding.

For more information on EU funding in Scotland see HERE

Question - how many people knew about this before they voted in the EU referendum? Politicians maybe should have made much more information about this before the vote. 40 years in the EU but in reality people in the UK often had little understanding of how important the relationship had become and how devastating the changes may be in the short-term especially.