Ministers accused of 'cobbled' policy

Holyrood failed to consult Treasury over £500m loan scheme

Derek MackayScottish government ministers failed to inform the Treasury about the £500 million loan guarantee scheme it unveiled this week.

Finance secretary Derek Mackay (pictured) told MSPs that it was included in Tuesday’s programme for government as a “courtesy” to other members.

The UK government must approve the initiative as it involves non-discretionary funding.

Mr Mackay said he was confident the scheme would be backed by the Treasury but he came for criticism from the Scottish Conservatives, who accused the Scottish government of cobbling the policy together without consultationn”.

The scheme, aimed at providing support to small businesses, was a surprise package in Nicola Sturgeon’s statement and a part of her measures to stimulate the economy.

The government plans to use its balance sheets to guarantee loans from banks.

That means it does not involve taxpayers money unless a firm default on any loan given under the terms of the policy.

Finance committee members heard yesterday that the Scottish government wanted to tell MSPs about the scheme before consulting Westminster.

He said: “We had no conversations with them on this specifically before bringing it to parliament. We gave parliament the courtesy of knowing first.

“I have written to the Chief Secretary to the Treasury, and I hope the UK Treasury will be co-operative around this, because it has no financial call upon the UK government, but if delivered could be of great assistance to the business community in Scotland and be managed by the Scottish government.”

Tory MSP Murdo Fraser said: “It now appears that you’ve had no discussions at all with the Treasury as to whether this will have their support.

“Surely you should have had at least a conversation with them in advance to try ad understand whether support would be forthcoming, before announcing it with such fanfare.”

Mr Mackay replied: “I’m sure that the UK government, with its alleged support for the business community, will want to support the Scottish government to deliver such a scheme. Should we not come to parliament to engage with Scottish parliamentarians on such matters?

“Murdo Fraser is well aware that the UK government often makes decisions that impact on Scotland our budget and our businesses without engaging with the Scottish government first.

“It is a significant intervention, it shows innovative thinking on the part of this government, how we will use the strength of our balance sheet to support Scotland’s economy.

“I see no good reason why the UK government wouldn’t want to proceed with this and support us on this. In fact I wouldn’t be surprised if they copy it.”

Mr Fraser responded that the policy had been “cobbled together without any real consultation”.


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