Page last updated at 16:49 GMT, Wednesday, 9 December 2009

Budget plans to 'damage Scotland', says SNP government

Alistair Darling
Mr Darling made his final pre-Budget report before the election

The Chancellor's pre-Budget report is "deeply damaging" to Scotland's economic recovery and puts 5,000 jobs at risk, the Scots government has said.

SNP ministers hit out at Alistair Darling's plans after they contained no move to accelerate cash for projects to boost jobs and the economy.

But Scottish Secretary Jim Murphy said the Holyrood budget had never been higher, and would now increase by £23m.

He also suggested SNP ministers should spend money "more wisely".

The Scottish government had pressed for a repeat of the scheme to bring forward about £350m for capital projects, a call backed by Scottish Labour leader Iain Gray.

The UK Government suggested they could be funded through PFI schemes, of which the SNP is highly critical.

The Scottish government has more money than it's ever had - it should probably spend it more wisely
Jim Murphy
Secretary of State for Scotland

In his final pre-Budget report before the general election, Mr Darling said National Insurance would go up by a further 0.5p from 2011, while announcing a public sector pay freeze, a bank bonus tax and a home boiler scrappage scheme.

But Scottish Finance Secretary John Swinney said the Chancellor had ignored a "compelling case" for a further acceleration of capital spending into Scotland's budget for the coming year, which totals more than £30bn.

"Instead the Treasury has pulled the plug on that vital cash flow at the very time the Scottish government is doing everything we can to support recovery - a reckless decision that holds us back and places 5,000 jobs at risk," Mr Swinney said.

The finance secretary backed some of the measures, including a bank bonuses super-tax, but added: "The Pre-Budget Report is deeply damaging for Scotland.

Brian Taylor
Brian Taylor
Political editor

The Scottish government is less than impressed.

They say that they have "shovel-ready" projects which could have benefited from a further tranche of accelerated capital spending.

They draw attention to this previous comment by Iain Gray:

"It was Scottish Labour who called for the Treasury to allow the Scottish government to accelerate capital last year and I am calling on the Chancellor to do so again."

In response, Mr Gray says that the Nationalists are simply intent on picking a fight.

"It puts in jeopardy all the progress we have made through our economic recovery plan and threatens to undermine the first fragile signs of recovery we are beginning to see across the country."

Mr Murphy told BBC Scotland the pre-Budget report had set out the road to economic recovery, while recognising the need to balance he books.

"The Scottish government's budget is at a record high and because of the decisions taken today, it's going up again next year by a further £23m," he said.

The Scottish secretary said there was still an opportunity to address the acceleration of capital spending during next year's comprehensive spending review.

He went on: "This is about much more than the Scottish government budget.

"The budget's doubled and it continues to increase. It's never been bigger and the Scottish government currently has more money than it's ever had - it should probably spend it more wisely."

Elsewhere, the Treasury outlined measures in the pre-Budget report to help businesses, including support for the North Sea oil and gas industry.

The Enterprise Finance Guarantee support scheme for business, which has seen more than £75m of applications from almost 600 firms in Scotland, will continue for another year.

And an investment fund for advanced manufacturing which supported life sciences companies in Edinburgh and a video games centre of excellence in Dundee would be making further cash allocations.

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