Page last updated at 09:27 GMT, Thursday, 23 April 2009 10:27 UK

Budget impact on Scotland studied

Budget coverage
Mr Darling delivered his budget against a background of economic uncertainty

The chancellor has insisted Scotland can absorb Budget efficiency savings but said the figure had yet to be finalised.

The Scottish Government believes the planned savings will cut £500m off spending plans, at a cost of 9,000 jobs north of the border.

Chancellor Alistair Darling said the Scottish Government had to find savings and work more efficiently.

Meanwhile, economic growth predictions were attacked as "fantasy".

Scottish Finance Secretary John Swinney has claimed the spending plans will lead to a budget cut in Scotland of just under £500m with knock-on consequences for jobs and services.

KEY POINTS IN THE BUDGET
50% tax rate for earnings over £150,000
Big debt and deficit increases
Economy shrinks at record rate
Public spending squeeze planned
Books not balanced until 2018
2p on fuel, 1p on a pint of beer and 7p on cigarettes
£15bn public sector 'efficiency savings'
Claw back tax relief on top earners' pension
£2bn help for young unemployed
£1bn to boost housing market
£2,000 car scrappage scheme

According to the SNP, £392m will be cut next year, along with £129m lost to Scotland as a consequence of health underspending in England.

The party said this would result in about a £497m cut to the Scottish budget, after taking into account an extra £24m due to come to Scotland through public spending in England.

Mr Swinney told BBC Radio Scotland's Good Morning Scotland programme the fact the chancellor had made the "choice" to cut spending in Scotland would severely affect public spending and the ability to recover from the recession.

He said: "What the chancellor announced yesterday was not an efficiency saving, it's just a good old fashioned cut in public spending and it will have an affect on our public services."

The finance minister refused to say what areas were likely to be affected by cuts in spending.

Meanwhile, the Scottish Government is not opposed to the new top rate of income tax announced in the Budget, where those earning more than £150,000 a year are taxed at the rate of 50%.

A source close to the first minister pointed out the SNP was "on record supporting progressive taxation" and had not chosen to criticise this part of the chancellor's statement.

Labour challenged Mr Swinney's calculations for the efficiency savings but, speaking to BBC Radio Scotland, the chancellor would not reveal the actual figure.

BUDGET FORECASTS
Growth - Minus 3.5% in 2009, rising to 1.25% in 2010 and 3.5% in 2011
Debt - Doubles to 79% of GDP by 2013
Deficit - Rises to £175bn for two years before falling to £97bn in 2013/14

Mr Darling said: "We still have to finalise what the position is there but the central premise that Alex Salmond advances that he can't do anything any more efficiently I just don't accept."

Labour finance spokesman Andy Kerr insisted the Scottish Government would have £700m more cash to spend in 2010-11.

The Liberal Democrats' Alistair Carmichael described the predictions that the budget deficit would rise sharply to £175bn for the next two years as "incredibly alarming".

He said: "This Budget is a short-term fix designed to get the Labour party through the next general election rather than meet the long-term needs of Scotland and the UK."

The Conservatives said it was a "dishonest Budget" based on "fantasy forecasts".

The chancellor said the UK economy would return to growth by the end of 2009, expanding by 3.5% in 2011.



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