Every lever to be used - Salmond

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First Minister Alex Salmond has told the STUC that the Scottish Government is using every lever at its disposal to protect jobs in the recession.

His comments came as he announced the first steps towards creating a Scottish Investment Bank to support business.

Business leaders and political opponents called for more details.

Mr Salmond also warned the £15bn of efficiency savings expected in Wednesday's UK Budget would result in a huge reduction for the Scottish budget.

The UK Government said it would not mean cuts in services and personnel.

Mr Salmond told delegates in Perth the Scottish Government's own 2% year-on-year efficiency savings programme would see the cash re-invested in areas such as the health service and local government.

'Competitive edge'

"What's being talked about here is top-slicing from public spending," he said of the UK Budget plan.

"It's not efficiency savings, it's cuts that are being proposed."

The first minister added: "The Scottish Government is using every lever at our disposal to protect jobs, protect skills, protect businesses and families through the downturn.

"Today's announcement will see the first steps towards a Scottish Investment Bank, pulling together Scottish Enterprise and European funding to support businesses with the growth potential to help Scotland make a strong economic recovery."

"The establishment of a Scottish Investment Bank will be a significant addition to the collaborative work, across government and industry, to strengthen Scotland's economy, reputation and competitive edge."

Mr Salmond's concerns about public spending cuts were echoed by STUC general secretary Grahame Smith, who also welcomed the investment bank plan.

CBI Scotland's Director, Iain McMillan, said: "The existing funding schemes have played a valuable role in providing a blend of equity and long term capital to support growth businesses in Scotland.

"If this new brand and extra cash builds on that and helps better market the support on offer to growth-oriented firms then that could well be a worthwhile proposition.

"However, we look forward to learning more detail about the proposal, including over the continuation of private sector involvement and the governance arrangements."

Scottish Labour's Economy Spokesman John Park said: "The Scottish Labour Party will look closely at any serious proposals to help Scotland through the recession.

"I believe the idea of a Scottish Investment Bank has merit, but we need to know how it will operate.

"Alex Salmond needs to explain exactly how the new bank will raise funds and how it will help create jobs for ordinary Scots."