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Row erupts over spending review Row over spending review figures
(2 days later)
A row has broken out in Scotland over the UK government's reassessment of its spending priorities. Scottish Government spending will increase by an average annual rate of 1.8% over the next three years, the Treasury has announced.
Labour and the SNP clashed over Chancellor Alistair Darling's Comprehensive Spending Review, which will set out plans for three years. It said spending would go up by between £1.2bn to £3.7bn each year to make a total increase of £7.2bn.
The SNP claimed the review would bring bad news, leading to a "very real spending squeeze" in Scotland. Scottish Secretary Des Browne said the outcome of the budget and spending review was "very good for Scotland".
Labour said there would be more money next year and the SNP was trying to misrepresent Scotland's share. However, First Minister Alex Salmond said the figures were misleading and that the true increase was 1.4%.
Mr Darling will deliver the review later. The SNP also said it was the worst economic settlement since devolution and claimed Scotland had been "short-changed".
Barnett formula Mr Browne said the Barnett Formula, the process which sets Scotland's share of public spending, provided the same per capita spending increase as comparable government departments in England.
BBC Scotland Political Editor Brian Taylor said "even the sums were in dispute". He said Scotland also benefited "substantially" from the UK's continued strong economic growth and employment performance.
He said: "UK spending will grow by 1.9% over the next three years. Nobody is fooled by Labour's spin that Scotland's budget increase is bigger than it really is Stewart Hosie SNP MP
"Labour says the Scottish increase will be 1.6% - in line with the Barnett formula, which aims to narrow Scotland's lead over England. He said the Scottish budget had increased from £14bn in 1999 to £26bn last year and spending was at record levels.
"But SNP ministers say the figures have been fiddled - and that Scotland's increase lies between 1% and 1.5%. He added: "This very generous settlement is in context of an overall review which has been tighter than in recent years for many Whitehall departments.
"They say they have a duty to balance the books - but that this is the worst deal since devolution." "Where spending has increased across other departments, it is in areas which also benefit Scotland - on counter-terrorism, and on international development."
"Labour's retort? There is enough money to improve schools, hospitals and other services - and the SNP should not have made exaggerated promises in their manifesto." The Treasury argued that Scotland will benefit in other ways from the measures announced by the chancellor.
it is clear that the coffers are empty and key spending departments will now be subject to a very real spending squeeze Stewart HosieSNP Moves to simplify the taxation system will "potentially" help 277,000 firms in Scotland.
Stewart Hosie MP, SNP Treasury spokesman, said: "No matter how Gordon Brown and his Chancellor try to fiddle the figures, it is clear that the coffers are empty and key spending departments will now be subject to a very real spending squeeze. Nearly 50,000 lone parents will benefit from work credits, and more than 308,000 families will benefit from child tax credits, it claimed.
"The government have already let the cat out of the bag by saying that the Scottish Government's baseline funding will be cut by 'a couple of hundred million' - that is 1% of the Scottish Government's spending for this year. But SNP Westminster Treasury spokesman Stewart Hosie MP said the spending announcement was the "worst economic settlement since devolution".
"However the Treasury, Scotland Office and Scottish Labour Party try to present it, the reality is that this is set to be the lowest spending increase since devolution began." 'Sorry charade'
Scottish Labour's finance spokesman Iain Gray MSP said that the SNP was trying to misrepresent Scotland's share. Mr Salmond said the increase in real terms was only 1.4%.
He added: "The SNP's time would be better spent explaining how they will fulfil all of their pledges, rather than making excuses. "This creates an extremely serious position in terms of Scotland's finances," he said.
"Scotland's budget has doubled in the last eight years and this spending review will give us a further increase. "It means that Scotland is effectively being both squeezed and short-changed by the Treasury.
'Better value' "That is being done at a time when Scottish oil revenues, over the next five years, are due to reach £55,00m in comparison with £38,000m over the last six years."
"In anyone's language, this means we will have more money to spend next year than we did before." The SNP claimed Scotland had been short-changed
Derek Brownlee, the Scottish Conservatives spokesman for Finance and Sustainable Growth, said: "If there is any evidence of a political fix in relation to the funding allocated to the Scottish Government, then I expect the first minister to publish in full the details of where and how he believes the figures have been manipulated. The Tories argued that the announcement left fundamental questions unanswered by both the Labour government at Westminster and the SNP administration in Edinburgh.
"If he can't do that, then the onus is on the Scottish Government to show how it will do what Labour and the Lib Dems failed to - deliver better value for money and better public services. Tory finance spokesman Derek Brownlee said: "Whoever is in power north and south of the border, Scotland needs both governments to work constructively together.
"The SNP won't then be able to blame Westminster for any of the difficulties arising out of what we all knew would be a tight spending review." "If either government uses the spending review for partisan reasons, Scotland is the loser."
Liberal Democrat MP Alistair Carmichael said it had been clear for months that the spending review would be difficult.
He said: "They cynically promised things they knew they could never deliver, and now they're desperately blaming everyone but themselves for the resulting mess.
"This sorry charade shows the time has come to move on from the Barnett formula.
"The Scottish Parliament must be given greater powers to raise its own revenue."
Key services
CBI Scotland's chairman, David Thorburn, said: "Whilst welcoming the announcement of further steps to simplify the regulatory burden on business we are, however, disappointed that the planned rises in small company corporation tax have not been shelved."
Grahame Smith, general secretary of the Scottish Trades Union Congress, said that the chancellor should be commended for "not stooping to engage in an auction of virtue with the Tories whose proposals brazenly target only the very wealthiest households".
He added: "The Scottish Government must now work to ensure that key services are protected in the forthcoming Scottish budget.
"The STUC encourages the Scottish Government not to adopt the further efficiency savings announced today that are bound to have an unwelcome impact on the quality of public services."
Matt Smith, Unison's Scottish secretary, said they wanted early talks with the Scottish Government as it prepared its budget.