Page last updated at 12:53 GMT, Thursday, 23 April 2009 13:53 UK

Leaders clash over Budget 'cuts'

Alex Salmond
Alex Salmond insisted the Budget would threaten 9,000 Scots jobs

First Minister Alex Salmond has clashed with Labour leader Iain Gray over claims the chancellor's Budget has threatened 9,000 Scottish jobs.

During question time at Holyrood, Mr Gray repeatedly challenged the first minister to accept the Scottish budget would increase by more than £2bn.

Mr Salmond said Alistair Darling's plans would see a £500m spending cut next year under efficiency savings.

The chancellor has claimed Scotland could absorb them.

Scottish ministers said the plan would see a cut of £392m next year - along with £129m lost to Scotland as a consequence of health underspending in England.

Arithmetic 'meaningless'

This, they 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.

"That's the reality of what Labour in Westminster are forcing on the Scottish people," said Mr Salmond.

"And does Iain Gray understand that level of reduction in funding and vital services in Scotland is not only bad for the economy, not only is bad for public services, but threatens 9,000 jobs in Scotland."

Mr Gray told MSPs Wednesday's Budget would support the Scottish economy, in areas such as oil and gas and green energy - and insisted the Scottish budget would grow by £2.2bn over the next two years.

He branded Mr Salmond's budget arithmetic "meaningless", adding: "Any honest appraisal of the figures show his budget is still going up year-on-year, increasing by more than £2bn in two years."

Conservative leader Annabel Goldie said Mr Salmond had to do more than bawl and shout about the Budget and confront the reality of its consequences.

"I can't believe this first minister hasn't given thought to this, considered the options, worked out a plan, faced up to the unpalatable reality."

Beaver cash

She demanded: "What are the options - how exactly is he going to deal with Labour's Budget squeeze?"

The first minister replied: "We'll do it with the efficiency and competence with which we've approached the Budget process in Scotland - as opposed to the inefficiency and total incompetence we've seen from Westminster."

Mr Salmond went on to say the only difference between Labour and the Conservatives at Westminster was the Conservatives wanted to introduce the cuts this year, instead of next.

Tavish Scott, the Liberal Democrat leader, asked Mr Salmond if he regretted supporting the UK Government's "short-term" VAT cut.

He went on: "It is business as usual with the choices the SNP Government makes - money to be spent for free school meals for rich kids, money to be spent to re-introduce beavers to Argyll and money on their referendum campaign that can never be cut, no matter how bad government finances get or how high our taxes have to go."

On the VAT cut, Mr Salmond said there was a need for a fiscal stimulus, while Mr Scott, he added, had argued for cuts in public services through his plan for a 2p income tax cut in Scotland.

The first minister added: "There's a £3.5bn investment programme in Scottish public capital expenditure - that is sustaining 50,000 jobs in Scotland.

"I don't know how much of that Tavish Scott thought he could cut in his attempt to reduce public spending by £700m but, if he had managed to persuade the rest of this chamber, you can be absolutely sure there'd be less jobs in construction and elsewhere in the economy in Scotland than there is at the present moment."

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