Extra funding 'only undoing cuts'

Dec 6 2012

The extra £331 million available to the Scottish Government through the Chancellor's Autumn Statement will only undo previous cuts, according to the First Minister.

The Government will receive the boost to its capital budget, to which the cut is now 25.9% over the spending review period to 2014-15, rather than 33%, in real terms, according to the Scottish Government.

Speaking at First Minister's Questions, Alex Salmond said: "It should be remembered across this chamber that (the £331 million) will just undo some of the position of the previous cuts. The capital budget net will still be going down by 26%."

Mr Salmond said the Chancellor's "change of heart" on capital spending could be "in itself an admission that the previous strategy was not working, the economy was flatlining".

He said: "But his tendency to punish those least able to protect themselves is in itself an indictment of his approach. The Treasury's own analysis indicates that the poorest households will be £200 worse off next year as a combined result of the tax and benefit measures which were outlined in the autumn statement."

Scottish Greens co-leader Patrick Harvie said the poorest are being hit while big business benefits from "another massive tax cut".

Referring to the Scottish Government's own proposals to lower corporation tax, Mr Harvie said: "Isn't it time for the Scottish Government to give up on the dream of even deeper corporate tax cuts and accept that corporation tax is a necessary tool for raising the investment we need for a fairer society and a healthier economy."

The First Minister said: "We should plan our tax policies to increase the wealth in the community and the economy, and having a competitive economy is part of that. We should also plan our tax and distribution policies to bring about an equitable distribution of that wealth."