Sunak backs the Union with cash, not love-bombs

Devolution has done so much to fracture the UK that, in Scotland, Rishi Sunak's Budget is an event of the second order. Scottish interest in Budget day is typically limited to whisky duty, support for North Sea industries and the Barnett formula: the additional spending Scotland gets when the Chancellor splurges on England.

Today’s Budget was for all of Britain. Not just Scotland, but Wales and Northern Ireland were weaved throughout Rishi Sunak’s speech. Quite apart from the fiscal or economic merits of the policies announced, the Chancellor’s speech was good politics.

Not long after Sunak was promoted to the Treasury, I was told Scotland was a weak spot for him and he was not particularly up-to-speed on the intricacies of Scottish politics. The speech he delivered today was that of someone who has gone away, hit the books and come away with a decent grasp of the political geography. This was a pro-Union budget from a Prime Ministerial hopeful.

Sunak did what chancellors do: marshal the political power of the public purse. Funding for the Scottish government would increase by an average of £4.6 billion per year, while Wales would get an extra £2.5 billion and Northern Ireland a further £1.6 billion annually. This was, Sunak said, ‘in real terms, the largest block grants for the devolved administrations since the devolution settlements of 1998’.

What’s more, the ‘planned increase’ in duty on booze including Scotch whisky is being cancelled. Scotland will also benefit from more than £170 million in direct investment via the Levelling Up Fund. With so much political power surrendered to Holyrood in the Blair-Cameron years, all Westminster has left is its ability to outspend the SNP. Trying to do so via the Nationalist government is a non-starter: they’d gobble up the Treasury’s cash and hoard it for future pre-election demands. So why not cut them out of the process altogether and go straight to councils, waving a chequebook?

It’s an appoach I’ve been arguing for since the May years and while it is insufficient to save the Union, it is a decent start. The Scottish government opposes the Levelling Up Fund because it disregards the devolution settlement, which is after all the Scottish government’s job. Whether the SNP likes it or not, Sunak will be bunging boosting public transport in Paisley and restore the old market town’s centre to its former glory; he will be upgrading the B714 in Ayrshire; regenerating Aberdeen's city centre; building roads and roundabouts in Falkirk; funding a library and museum in Dumbarton; redeveloping Inverness Castle; regenerating the Granton waterfront; and turning an old sawmill in Pollok into a hydro-powered heritage centre.

It’s not clear how Sunak intends to pay for this retro New Labour spending spree, but he got the politics right. Michael Gove might be busy love-bombing the Scots but Sunak prefers to buy their affection. 

Still, the strongest pro-Union signal sent in the speech was one that didn’t come with a funding allocation. Sunak told MPs:

“Whilst today demonstrates the indisputable fiscal benefit of being part of the United Kingdom, this is and always will be secondary to the simple truth that we are bound together by more than transactional benefit. It is our collective history, our culture and our security; we are, and always will be, one family, one United Kingdom.

The Chancellor is learning how to speak Unionese and, candidly, he is already more fluent than Boris Johnson. What economic or political impact the Budget has on Scotland can't be measured today, but the lengths of Rishi Sunak's ambition are becoming clearer. He is positioning himself as the real Minister for the Union and, sooner or later, he will want Boris's other title too.