SNP says Alistair Darling's report means £800m cuts for Scottish budget

Published on Thursday 10 December 2009 21:39

SCOTLAND will face a cut of more than £800 million to its budget next year because of decisions made by Chancellor Alistair Darling in the Pre-Budget report (PBR), it was claimed yesterday.

• Chancellor of the Exchequer Alistair Darling leaves a TV studio yesterday after discussing Wednesday's Pre-Budget Report.

Alex Salmond made the allegations during a fiery session in First Minister's Questions yesterday, adding that the cut represented a reduction of 1.6 per cent in the Scottish budget.

His claims came as it was also revealed by experts at the Institute for Fiscal Studies that Britain as a whole will face 36 billion of public spending cuts, not revealed by Mr Darling in the PBR on Wednesday.

There were also signs that the financial sector was bracing itself for a year without bonuses after investment bank Goldman Sachs announced last night that it would not pay cash bonuses.

Mr Darling has said that all cash bonuses worth 25,000 or more will be taxed by 50 per cent.

Read further analysis by David Maddox here

But in Holyrood yesterday it was the decision not to accelerate capital spending, bringing forward money for projects from future years to help boost Scotland's economic recovery, that provoked the most anger.

Despite Labour facing criticism from across the political and social spectrum in Scotland for Mr Darling's omission, Scottish Labour leader Iain Gray decided to go on the attack over the issue during question time.

He reminded the First Minister that he had given his backing to the money being brought forward "if, and only if, the SNP sorted their budget". Examples of how this could be done included reinstating the Glasgow airport rail link (Garl) and the housing budget, said Mr Gray.

However, Mr Salmond said that Mr Gray had been "totally humiliated" by the Chancellor, who had not listened to his advice. Mr Salmond said the spending was part of a recovery programme that generated 5,000 jobs – and he had welcomed Mr Gray's "conversion" in his 29 October letter to Mr Darling.

"We had Iain Gray's support on October 29 – only to have it dumped by the Chancellor in December," he said.

"I suppose the lesson we should take from that is that if you are running a successful campaign, for goodness' sake don't get Iain Gray's support."

Mr Salmond reeled off a list of projects which will be delayed. These included the M8 White Cart Viaduct, the A9 Cromarty Bridge refurbishment, Glasgow subway modernisation, Forres health centre, Airdrie community centre, Dundee waterfront and a further 2,000 socially rented houses.

But Mr Gray hit back, listing projects including Garl, Edinburgh airport rail link, Glasgow Southern General Hospital and Aberdeen bypass which had been cancelled or delayed because of the SNP refusing to use 2bn of private finance initiative money and delaying over setting up the Scottish Futures Trust.

"He couldn't build his way out of a paper bag – never mind a recession," Mr Gray said.

Afterwards Labour, who had previously denied any cuts to the budget, put round a paper showing that the 814.4m claimed by Mr Salmond should be reduced by 347m because the money had been accelerated to this and last year's budget.