SNP threaten formal dispute over DUP deal as they claim Scottish Secretary's position 'becoming untenable'

Nicola Sturgeon has threatened a formal dispute with the UK Government over the £1 billion Tory deal with the DUP, as the SNP claimed David Mundell's position as Scottish Secretary was "fast becoming untenable".

The First Minister said Mr Mundell had proved he was not “able or willing to fight Scotland’s corner in Cabinet” after it emerged the deal to prop up Theresa May’s minority Government would mean new funding for Northern Ireland, but nothing for Holyrood.

Her spokesman claimed this was incompatible with the Scottish Secretary’s statement at the weekend that he would oppose “anything that could be construed as backdoor funding to Northern Ireland”.

Derek Mackay, Scotland's Finance Minister, has written to the Treasury demanding talks and warning that if there was no progress he would formally initiate a mechanism that seeks to resolve disputes between UK and Scottish ministers through the Joint Ministerial Committee.

Sources close to Mr Mundell insisted the Barnett formula did not mean extra funding should be allocated to Scotland, as its calculations were based solely on extra spending in England.

They also argued her intervention was a “desperate attempt to throw a smokescreen” around the First Minister’s “embarrassment” about her partial climbdown on a second independence referendum in the wake of the SNP’s General Election mauling.

But Ian Blackford, the SNP’s Westminster leader, attempted to ramp up the pressure on Mr Mundell by claiming that he had been “utterly humiliated” by the deal and he cannot continue in his post unless he answers a series of key questions.

These include when the Scottish Secretary learnt there would be no spending “consequentials" for Scotland under the Barnett formula and whether he had been lobbying behind the scenes for extra money to be allocated north of the Border.

Meanwhile, as John Bercow rejected an SNP request for an emergency debate on the DUP deal,  Mr Mackay accused the Tories of "ripping off Scotland to the tune of £2.9 billion" and undermining devolution and called for an urgent meeting with Elizabeth Truss, Chief Secretary to the Treasury.

He said that if the row was not resolved through talks with HM Treasury, the Scottish Government would invoke a formal dispute resolution which would see ministers from both governments tackle the issue through the Join Ministerial Committee.

The JMC was formed through a memorandum of understanding to deal with the relationships between the UK Government and the devolved administrations.

Mr Mackay said ministers “fundamentally disagreed” with the way the additional money had been allocated and claimed all the areas  to which the funding package had been allocated - infrastructure development, health, education, broadband, deprivation - were devolved matters to which the Barnett formula should apply.  

He wrote: “The UK Government’s argument that there should be no Barnett consequentials for Scotland and Wales (or indeed funding for England) from the financial elements of the agreement is unacceptable and inconsistent with the terms of the Statement of Funding Policy.

“Paragraph 2.15 of the Statement of Funding Policy, is very clear that the “assessment of whether a programme is unique at a UK level (and thus outside the Barnett arrangements) should be exceptional and that any such assessment should be evidence-based, be undertaken in a timely manner, and be considered by Treasury ministers and their counterparts in the devolved administrations to ensure all viewpoints are understood before final decisions are taken.”

He added that there had been no consultation with ministers north of the border and said the Scottish Government did not accept the UK Government’s view that there were precedents for the funding going to the province, through initiatives such as “city deals”, which have seen hundreds of millions of pounds go to Scotland without any Barnett consequentials elsewhere.

In the Commons, the Speaker said he had listened carefully to representations from Pete Wishart, the SNP MP, but was not persuaded the matter should be discussed under the procedure.