Page last updated at 17:18 GMT, Wednesday, 22 April 2009 18:18 UK

Clash over Budget spending 'cuts'

Alistair Darling
Alistair Darling has outlined his Budget in the Commons

Labour has entered a war of words with the Scottish Government over its claims the UK Budget contains a "bare-faced" cut in public spending.

Chancellor Alistair Darling's plans included making £9bn of efficiency savings a year, by 2013-14.

Scots Finance Secretary John Swinney said the Budget would cut millions off his spending plans, at a cost of thousands of jobs.

Labour's Andy Kerr accused Mr Swinney of scaremongering.

Elsewhere, Mr Darling's budget included plans to boost North Sea oil and gas industries with help to unlock two billion barrels of remaining reserves.

And he said fiscal barriers would be removed to encourage development of carbon capture, offshore wind generation and exploration.

We need public spending to help us out of the recession and we don't need public spending cuts
John Swinney
Scottish finance secretary

The chancellor admitted the UK was heading for its worst annual decline since World War II, with public borrowing reaching a record £175bn.

He said plans to find an additional £5bn of efficiency savings in 2010-11, on top of a total of £30bn in this spending review period, were on track.

But Mr Swinney said the Budget contained a "bare-faced reduction in public spending" that would cut £500m off the Scottish budget next year.

"It's not what we need, particularly because the country has been confirmed as being in recession with unemployment rising," he said.

"We need public spending to help us out of the recession and we don't need public spending cuts."

The UK Government said the level of efficiency savings demanded from Scotland in 2010-11 worked out at £367m.

But SNP ministers said this did not include a further reduction of £129m as a consequence of changes in NHS capital spending, and took no account of the post-2011, £9bn savings drive.

BUDGET 2009

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Scottish Labour finance spokesman Andy Kerr said Holyrood ministers would not ultimately lose the health service cash.

And he insisted the amount of cash the Scottish Government had to spend would go up by £2.2bn over three years, rising from £33.3bn last year to £35.5bn in 2010-11.

"John Swinney either cannot count or he is deliberately misleading the public," said Mr Kerr.

"He should take a reality check and face the facts instead of trying to mislead the Scottish public."

Scottish Secretary Jim Murphy said Scotland had reaped the benefits of a £2bn fiscal stimulus and the £50bn rescue of the banking system - and insisted it was time for the Scottish Government to take its share of savings he argued were necessary to restore public finances.

Liberal Democrat Scottish affairs spokesman Alistair Carmichael said the Budget would fail to give people in Scotland the help they needed.

"Pushing ahead with the useless VAT cut is an unforgivable waste of money which should have been invested in building programmes to create jobs and kick-start the economy," he said.

Shadow Scottish Secretary David Mundell said spending and the UK's level of government debt - which will double to 79% of GDP by 2013 - had to be brought under control.

"There will now be £1,000 of Labour tax rises for every family in Scotland and the public debt is set to double, with every Scot now born owing £22,500," he said.

The Chancellor also announced alcohol duties would increase by 2% from midnight, adding that he expected fuel duty to increase by 2p per litre in September.

There will also be an increase in tobacco duty of 2%, while a 50% band of income tax for those earning more than £150,000 a year was outlined.



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