NICOLA Sturgeon has issued Rishi Sunak with a list of spending demands to address the cost of living crisis and avoid austerity, including more cash for Holyrood. 

Despite the Prime Minister indicating tax hikes and spending cuts were needed in a “profound economic crisis”, Ms Sturgeon called for more spending, without attaching costs.

However she said £9.3billion could be raised by broadening the windfall tax on energy companies and removing the £1m investment allowance intended to help business.

The First Minister also said it remained her “intention” to hold a second independence referendum, although she did not put a date on it.

In her first letter to the new Prime Minister, Ms Sturgeon said it was “not credible” to stick to devolved funding plans based on 3 per cent inflation when it was now in double-digits.

“It is clear much more needs to be done,” she said, given the need to support public services through “a crisis of this magnitude”.

She wrote: “Amongst other measures, it seems to me that the following are essential”, before listing a series of demands, including targeted financial support for low income households, bearing in mind the end of the universal energy price guarantee next April. 

Ms Sturgeon also asked for an increase in social security benefits in line with inflation in April, plus a £25 per week uplift to universal credit, the end of the two-child limit for universal credit and tax credits, and the abolition of the benefit cap

She also said there should be “additional funding for devolved governments” to help pay for “fair public sector pay uplifts” and to protect public services.

In addition, she said it made “no sense” to proceed with the Westminster Bill intended to strip EU law out of the statute book, and urged withdrawal of the Bill which could see UK ministers to disregard parts of the Northern Ireland Protocol.

“Finally, I noted the view expressed in your speech yesterday that your government has a mandate to deliver the policies set out ahead of the 2019 general election.

“As you know, the Scottish Government was re-elected on a commitment to give people in Scotland the opportunity to vote in an independence referendum. 

“That commitment is supported by a substantial majority in the Scottish Parliament. As I indicated last night [in a phone call on Tuesday], it is my intention to honour this mandate.”

Mr Sunak, who replaced Liz Truss in No10 on Tuesday, rejected a call for Indyref2 at PMQs yesterday, saying the SNP should “respect” the No vote of 2014.  

After several date changes, Chancellor Jeremy Hunt is due to set out an autumn statement to MPs on November 17, when significant tax hikes and spending cuts are expected. 

A Downing Street spokesman said: “Speaking on his first day in office, the Prime Minister and First Minister agreed on the need to work constructively together on the shared challenges faced by people across the UK.

“The Prime Minister has been clear this Government will always act to protect the most vulnerable.”

Mr Sunak is expected to reply to the letter in due course.

Downing Street highlighted that the Scottish Government would be provided with £41 billion each year for the next three years, the highest spending review settlement since devolution.