A LABOUR-RUN Westminster government would not give its Scottish counterpart complete control over levelling up funding, Anas Sarwar has said – despite a pledge in his UK party’s manifesto.

The Scottish Labour leader told The National that his party would look to take a “partnership approach” to allocating money from pots such as the UK Shared Prosperity Fund, which was brought in to replace the European structural funds lost to Brexit.

Before Brexit, the EU had given the structural funds to the devolved government in Scotland to allocate as they chose.

However, the Tory-run UK Government kept control over replacement “levelling up” pots such as the Shared Prosperity Fund to itself, sparking claims of rolling back the devolution settlement.

Asked if Labour would return control of these funds to the devolved Scottish Government, Sarwar said: “I think if you look at the way the Tories have done levelling up, it has been a slogan and a strapline. It's not genuinely been about levelling up communities.

“In many cases, if you look at their record, they've actually levelled down the whole of the UK …

“The other thing that the Tories have done with the levelling up money is they have looked at where they think there are political opportunities for them in Conservative Party-held seats, rather than the actual needs of people in Scotland and the wider UK.”

Speaking at a Labour campaign event in Johnstone on Friday, he went on: “What we would seek to do is change the Scotland Office so it stops being the UK's eyes and ears in Scotland and instead becomes Scotland's window to the world. That's partly around Brand Scotland, export, and creating more jobs here.

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“But it's also then looking at how we use that funding money to identify those areas with the highest levels of need, the highest levels of deprivation, and then looking at what we can do to invest in anti-poverty projects and infrastructure projects.”

It was put to Sarwar that it sounded as if he was saying a Labour-run Scotland Office would invest directly and not pass money to Holyrood to allocate.

He responded: “I think it's a partnership. If you look at what we did with the city regional deal, that was a partnership between the UK Government, the Scottish Government and local authorities in order to invest in local infrastructure.

“I think we can take a partnership approach, but that requires good faith actors on all sides.

“We have said we would reset devolution, take it back to its founding principles where two governments work together when it's in the national interest, rather than two governments seeking to find divides.

“That's the approach we would take to try and work together to deliver for the people of Scotland.”

Scottish Labour group leader Anas Sarwar (Image: Newsquest)

Sarwar’s comments come despite an explicit pledge in the UK Labour manifesto to “restore decision-making over the allocation of structural funds to the representatives of Scotland, Wales, and Northern Ireland”.

The Labour manifesto, which was published on Thursday, further states: “Labour will strengthen Scottish democracy and devolution, championing Scotland at home and abroad.”

Responding, Tommy Sheppard, the SNP’s Scotland spokesperson at Westminster, said: “It's shocking that Labour are proposing less engagement with and authority for the Scottish Government and the elected Scottish Parliament than existed when we were in the European Union.

“Brussels gave Holyrood more respect and more involvement and more authority that it looks as if a Labour controlled-government is going to do.

“That's extremely disappointing and very bad indeed from a party that itself [was] the architect of devolution. Now its instincts seem to run contrary to that.”

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Elsewhere at the Labour event on Friday, Sarwar was asked about whether Labour’s manifesto commitments amounted to austerity.

Paul Johnson, the director of the Institute for Fiscal Studies (IFS), had said the party’s plans leave “literally no room – within the fiscal rule that Labour has signed up to – for any more spending than planned by the current government, and those plans do involve cuts both to investment spending and to spending on unprotected public services”.

Asked if Johnson was wrong, Sarwar said: “I'm making it very clear. There'll be no austerity under Labour. There will be no austerity.

“What Paul Johnson is looking at is what happened in the last budget from the Conservatives and the projection over the next five years. We believe we can improve the economic outlook of the UK.

“We don't think we have to have a flat-line growth economy like we currently have under the Tories.”

Sarwar said that Labour would raise taxes on oil and gas giants, close non-dom tax loopholes, remove the VAT exemption for private schools, and appoint a “Covid corruption commissioner” to look to recoup “the millions of pounds tens of millions, if not hundreds of millions of pounds in dodgy contracts” given out by the Conservatives during the pandemic.

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He stressed, as UK Labour leader Keir Starmer has done, that growth is Labour’s number one priority, and sufficient growth would allow a Starmer government to avoid cuts and not increase taxes like income tax and VAT.

However, Sheppard said Labour’s plans amounted to “fantasy economics”.

The SNP candidate and former MP went on: “They have got no policies to grow the economy.

“They're just sitting back, without any state intervention in the economy, and hoping that it happens.

“The best way to grow the economy is to increase, not cut, spending on public services – and to have state-funded intervention in an accelerated transition to renewable energy. That's the best way to do it.”