SNP finance plans pass first hurdle but tense talks hold key to final approval

Published on Wednesday 26 January 2011 18:40

THE Scottish Government's £30 billion Budget was given preliminary backing by MSPs last night as it passed its first parliamentary hurdle.

With support from the Conservatives, Alex Salmond saw his spending plans for 2011 voted through after both Labour and the Liberal Democrats opted to abstain from a vote. Only the parliament's two Green MSPs opposed it outright.

The stage is now set for a fresh round of tense negotiations ahead of 9 February, when the Budget comes back to parliament for its final debate.

If Labour opposes the Budget and the Tories support it, the Budget's fate looks set to hang on talks between the SNP and the Lib Dems over the coming days. The Lib Dems have criticised the proposals, saying finance secretary John Swinney has not done enough on further education and on job creation.

However, talks on Tuesday evening appear to have set the two parties on course for a deal. SNP sources said that the Lib Dems had been reminded that opposing the Budget yesterday would have put them in an "illogical" position if they then wanted to continue negotiations afterwards.

But the Lib Dems denied they had backed down from opposition in the face of SNP threats, saying instead they agreed to abstain yesterday after Mr Swinney pledged a fresh round of talks on education funding.

A deal between Labour and the Lib Dems could ensure the budget is passed, but there was speculation in Holyrood last night that the SNP may offer to meet Labour's demands on job creation, thereby nullifying some of their main opponents' key election campaign demands.

Mr Swinney said last night that, in a budget which is 1.3bn less than last year's settlement, opposition parties would need to show how they were saving money if they wanted to include extra spending commitments.

After a three-hour debate in parliament, he said: "If people want to spend some more money, they have to be prepared to take the tough decisions that I have already taken."

He insisted he remained open to compromise, pointing to his experience in the last three budget rounds. Mr Swinney's budget includes commitments to pay for a council tax freeze and to freeze public sector pay for anyone earning more than 21,000.

Labour finance spokesman Andy Kerr said: "I remember how Margaret Thatcher's government consigned our young people to the scrapheap. They became a lost generation unable to find a job. Now today we have intergenerational unemployment where the grandparents, parents and children in families have never worked. We cannot afford to let another generation be lost."

The Tories said the SNP had adopted their own plans on the council tax freeze and on public sector pay. Finance spokesman Derek Brownlee said: "The budget is not perfect, but nor is it beyond redemption."