Page last updated at 01:00 GMT, Thursday, 8 January 2009

Scots ministers face budget fight

John Swinney
John Swinney earlier rejected an income tax cut

The Scottish Government is facing a fight to persuade MSPs to back its spending plans for next year.

Labour said it was ready to support the 33bn budget - but only if it was reshaped to target action on boosting the economy.

Ministers have already rejected a Liberal Democrat call for a 2p income tax cut in Scotland.

The government said the move was irresponsible and would take 800m from the Scottish budget.

Finance Secretary John Swinney's forthcoming spending plans for the year ahead will need parliamentary approval.

Scottish Labour leader Iain Gray said he was willing to support the government, but only if it brought forward "serious" economy-boosting proposals, such as more cash for skills and re-training and protection for vital public services.

"Labour and the parliament has made clear that John Swinney must change his budget in the face of the economic situation," he said.

Scottish ministers said they were taking a range of measures - such as slashing business rates and freezing council tax - to tackle the current economic downturn.

The Lib Dems have refused to get round the table with the Scottish Government until it is willing to consider the principle of tax cuts.

That could mean Mr Swinney again turning to the Conservative and Green MSPs, as well as independent Margo MacDonald, to negotiate budget support.

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