FORMER Scottish Labour leader Iain Gray has accused the SNP of a U-turn on the controversial Edinburgh Trams project by offering funding “through the back door”.
The accusation comes as Edinburgh city council looks set to extend the much-maligned £1 billion tram line down to Leith using money from the St James Centre redevelopment – a project which is going ahead by way of a £61 million Scottish Government loan to the developer, Henderson Real Estate.
Last week, Edinburgh council announced a business case to extend trams to Leith, estimated to cost £80m. Proposed funding for the line is expected to come from the St James Centre developer.
The SNP has repeatedly made a “not a penny more” pledge in terms of future tram extensions in Edinburgh, including senior SNP figures such as Keith Brown.
But yesterday, Scottish Labour finance spokesman Iain Gray said the SNP was going back on its word.
He said: “The SNP inherited the trams project in good order in 2007, abandoned it, then had to get involved again.
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“This is another U-turn by the SNP. Having said they wouldn’t invest any more in Edinburgh’s tram system they’re now investing a further £61m but instead of just being open about it they are going through the back door.
“Whatever way they want to say it, this is money being invested in the tram system by the SNP.”
First Minister Nicola Sturgeon announced the “innovative funding model” for the St James Centre redevelopment back in April, with Holyrood providing a loan based on estimated future income from business rates.
The £61m loan is to be repaid by Henderson from higher rates paid by retailers in the new shopping complex in what is now known as a Regeneration Accelerator Model, a loan based on future rates payments. This model used to be known as Tax Incremental Finance, which was used to fund the creation of Glasgow’s Buchanan Street Galleries.
Responding to Mr Gray’s accusation that the loan amounted to back-door funding, a Scottish Government spokesman said yesterday: “Mr Gray is mistaken. Any plan for extending the current Edinburgh tram line is a matter for City of Edinburgh Council to consider in light of its own funding priorities. We do not intend to make any further contribution, having already paid £500m after parliament voted in favour of the project.
“Our separate grant for the redevelopment of the St James Quarter – which will support around 2,300 permanent jobs and add £25m to the Scottish economy each year – will not be used to fund trams.”
Edinburgh West SNP MSP Colin Keir accused Mr Gray of “hypocrisy”, saying: “Unlike Mr Gray, the SNP opposed this project at the start, and Edinburgh has paid a heavy price for the decision Mr Gray and his Labour chums, in alliance with the Tories, helped force through in 2007. For Mr Gray to now try to blame others for Labour’s mistakes is frankly pathetic.”
The new £850m St James Quarter is due to launch in 2019 and Leith, as one of the most densely populated city suburbs, is seen as a huge potential market for the shopping complex.
A business case for the line extension is to be submitted to the council in the spring, when councillors will make a final decision on whether to proceed.
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