by Rona Mackay
The Lib Dem election campaign appears to be going into meltdown after the launch of their manifesto yesterday which is entirely constructed on securing a £1.5 billion receipt in return for transferring Scottish Water to the private sector and selling off its debt.
Finance Secretary John Swinney said that the Treasury’s Statement of Funding Policy for the devolved administrations meant that any such proceeds could be clawed back by the Treasury.
In an interview with Newsnight Scotland last night, Lib Dem MSP Jeremy Purvis was unable to answer the question of whether they had a cast iron guarantee from Westminster that the money would not be reclaimed.
In relation to capital receipts, the Treasury document says: “In such circumstances Treasury Ministers reserve the right to reduce the grant to the devolved administration to reflect receipts.”
In relation to Scottish Water, the whole value of such potential receipts is in fact £2.75bn (£1.2bn raised post-devolution and £1.5bn pre-devolution). The post-devolution figure is £1.2bn – not the Lib Dems’ £1.5bn – and there is every likelihood that even this smaller sum would be clawed back by the Treasury in reduced grant.
Mr Swinney said: “The Lib Dem campaign was already in disarray, and now their manifesto has sunk on the day of its launch, because they are in absolutely no position to assume that any such receipts – which would also involve transferring Scottish Water to the private sector – would not simply be clawed back by the Tory Treasury.
“As the UK Government spell out, in such circumstances Treasury Ministers reserve the right to reduce the grant to the devolved administration to reflect receipts – leaving Scotland no better off, in return for going down the road of privatising Scottish Water.
“Nothing in the Lib Dem manifesto can be taken seriously, because the funding base for every single one of their spending pledges is under the control of the Tory Treasury – and could be removed at the stroke of a pen under the UK Government Statement of Funding Policy for the devolved administrations.
“This is a Tory Treasury that is filching a record £13.4 billion of Scottish oil revenues – does anyone seriously expect them to behave any better towards Scotland in relation to the riches of Scottish Water?”