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John Swinney welcomes pledge on fossil fuel levy

20 May 10 10:30 GMT

Scottish ministers have welcomed plans unveiled by the new Westminster government which could see Scotland receive £185m of extra funding.

A commitment to examine the fossil fuel levy has been included in the deal struck between the Tories and Lib Dems.

This is something the SNP government at Holyrood wanted the previous Labour government at Westminster to do.

Scottish Finance Secretary John Swinney said the cash would help the country tap into its offshore power potential.

The news came as details of the coalition agreement were announced by the Conservative/Lib Dem coalition government.

The deal included a commitment to implementing the recommendations of the Calman Commission, which recommended new tax and other powers for the Scottish Parliament.

However, changes to the way Scotland is funded have been ruled out in the forseeable future.

Scottish Finance Secretary John Swinney said spending the fossil fuel fund - raised from electricity generators in Scotland and held in an account by energy regulator Ofgem in London - could safeguard 20,000 jobs.

The Treasury had previously refused to budge on the issue, but the new UK government has agreed to "review the control and use of accumulated and future revenues from the fossil fuel levy in Scotland".

"There was an independent report which demonstrated that the offshore renewable resource could be estimated to generate over 200GW of electricity," Mr Swinney told BBC Radio Scotland's Good Morning Scotland programme.

"Scotland's consumption of electricity is 6GW at any given time, so there is a huge opportunity and we want to seize that.

"Having access to the fossil fuel levy would enable us to do that."

The coalition agreement also confirmed the government will seek to bring in the Calman recommendations, under which Holyrood would take charge of half the income tax raised in Scotland as well as gaining control over airgun legislation, drink-driving and speed limits and the running of the Scottish elections.

There will also be pilot schemes on measures to help with fuel costs in remote areas, an issue highlighted by the Lib Dems and SNP during the election campaign and a new commission will examine the West Lothian Question - whether Scottish MPs should be allowed to vote on issues at Westminster which are devolved to Holyrood, such as health and education.

The government said Britain's nuclear deterrent - strongly opposed by the Scottish government - should be maintained, although the renewal of Trident will be scrutinised to ensure value for money, while the Liberal Democrats continue to make the case for alternatives.

On funding, Scottish Secretary Danny Alexander said the priority for the new government was to reduce the budget deficit.

He says it would be too much to also try and find a replacement for the Barnett formula, which helps allocate the amount of money Scotland gets.

The agreement also set out plans to adopt the Scottish model for the DNA database, where samples are destroyed if an arrest does not lead to a charge or conviction.

And it set out a commitment to work with the Scottish government to deliver a successful Commonwealth Games in Glasgow in 2014, as well as a promise to end the detention of child immigrants - although there is no specific mention of the Dungavel detention centre in South Lanarkshire.

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