Brown defends Scots Budget impact

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Chancellor Gordon Brown has defended his Budget against claims it would bring little benefit to families as well as businesses.

He said it was "ridiculous" to argue that people were generally worse off under the new tax package.

Mr Brown also told BBC Scotland that the SNP, in contrast, offered the prospect of instability and job losses.

The Nationalists have maintained that the Chancellor was guilty of a "con trick" on tax as well as oil.

Speaking on BBC Radio's Good Morning Scotland, Mr Brown rejected as "completely untrue" claims that Scotland would be particularly hit by the budget because its high proportion of small and medium sized businesses would pay more tax.

When Brown talks about falling revenues, they are not real falls - only corrections from his own previous forecasts Alex Salmond MPSNP Leader <a class="" href="http://news.bbc.co.uk/2/shared/bsp/hi/business/budget_calc/html/budget_calculator.stm">Work out how the 2007 budget will affect you</a>

"We have cut the mainstream corporation tax rate from 30p to 28p, we are dealing with a problem where people have been artificially incorporating themselves as companies simply for the purposes of avoiding income tax and not paying National Insurance," he said.

"Nobody can deny that over the last 10 years, 200,000 new jobs have come to Scotland, and the Scottish economy is a growing economy, focussing on some of the innovative areas where we can sell to the rest of the world."

The Chancellor said the real issue in the Scottish election was between Labour policies which had brought stability, employment, growth and rising living standards, against the risk of an SNP that would mean a separate interest rate, instability and a loss of jobs.

In a swipe at the SNP's economic policy, Mr Brown said North Sea oil revenues were estimated at £12bn last April but now stood at just £7bn as a result of loss of production in the North Sea and rising costs.

BUDGET HIGHLIGHTS 2p off basic rate of income tax10p starter rate abolished 2p cut in corporation taxGas guzzling car duty up to £300 this year and £400 next Beer and cider up 1p, wine 5p, spirits duty frozen11p on cigarettes2p petrol increase frozen for six monthsMore cash for schools and hospitals <a class="" href="/1/hi/uk_politics/6474997.stm">Budget at-a-glance</a> <a class="" href="http://www.bbc.co.uk/blogs/thereporters/budget2007/">BBC experts' blog</a>

"Yet all the policies of the SNP are premised on having huge revenues from the North Sea," he added.

"You cannot build the future economic policy of a country on one volatile resource."

However, SNP leader Alex Salmond said the chancellor was playing political games on oil and income tax and claimed Scottish oil revenues were on a rising curve.

He added: "When Brown talks about falling revenues, they are not real falls - only corrections from his own previous forecasts.

"Indeed, the Chancellor is becoming as bad as forecasting oil and gas revenues as he is at estimating the cost of the London Olympics."