Scotland politics

MSPs pass pre-referendum Scottish budget

MSPs have overwhelmingly approved the Scottish government's final budget before September's independence referendum.

The legislation secured the support of Labour, the Lib Dems and the Greens.

However, the Conservatives opposed the budget, saying it did not do enough to boost the economy.

The budget includes measures to mitigate the effects of the UK government's changes to housing benefit.

Scottish government Finance Secretary John Swinney called the policy "iniquitous and damaging".

He said the 2014-15 spending plans would boost growth and provide investment in infrastructure, schools and affordable housing.

The bill's passage was not in doubt as the SNP has a majority in the Scottish parliament, but Labour backed the housing benefit plans and the Liberal Democrats welcomed extra childcare provision.

Housing payments

Mr Swinney announced extra funding for discretionary housing payments to help tenants whose benefits are cut because they have a spare room - a policy that its opponents have labelled the Bedroom Tax.

He said data from the UK government, which controls housing benefits, showed Scottish ministers were permitted to allocate £22.85m on top of the £15m already announced, but this fell short of the £50m total needed.

The finance secretary said: "We must be clear that we will never be able to mitigate all of the damaging effects of welfare reform and any resources we deploy to this purpose are at the expense of other services that we could support within our own areas of responsibility.

"Over the period 2013-14 to 2015-16, this government will spend over £244m on alleviating the impact of welfare reform - resources we could have spent on devolved services had it not been required to safeguard vulnerable people in Scotland."

However, he added: "I give parliament the assurance today that if the [UK government] says no, the Scottish government will put in place a scheme to make this additional £12m available to social landlords so that we need not see any evictions in Scotland this year as a result solely of the bedroom tax."

Scottish Labour's finance spokesman, Iain Gray, said he wanted to see the housing benefit change "abolished by a [UK] Labour government next year".

He added that Mr Swinney "wants to see it abolished in an independent Scotland in 2016, but I think my way is better".

Conservative MSP Murdo Fraser said when a similar measure, which applied to people in the private rented sector, was previously introduced at Westminster, it was "unanimously supported by the Labour party" and "not a single SNP member could even be bothered to turn up, let alone vote against".

The UK government has said it was removing subsidies which put social sector tenants in a better position than those in the private rental sector, and the changes would free up living space for overcrowded families and help cut the £23bn annual bill for housing benefit.

'Limited powers'

Meanwhile, Liberal Democrat leader Willie Rennie welcomed extra resources for childcare and early years education, saying they would give children a chance "to change their fortunes so they can achieve their potential".

Ahead of the 18 September independence referendum, where voters will be asked the yes/no question "Should Scotland be an independent country", Mr Swinney said his government was doing everything it could for Scotland, within its "limited" devolved powers.

The Scottish government said measures the Budget Bill included:

  • £55m to provide free school meals to all pupils in the first three years of primary school from January 2015
  • £59m to expand free childcare to vulnerable two-year-olds
  • £77m for business rate relief
  • Continuation of the council tax freeze and universal benefits like free prescriptions
  • Measures to secure £8bn of infrastructure investment over the next two years
Image copyright PA
Image caption Scottish ministers said their capital budget had been cut by 26.6%, but the Conservatives said it had gone up by £3.5bn since the SNP came to power in 2007

Mr Swinney has said capital spending in the budget was being cut by 26.6%, while UK government welfare cuts would take an estimated £4.5bn out of the Scottish economy.

But the Conservatives said the Scottish budget was now £3.5bn more than when Alex Salmond became first minister, in 2007.

As part of his Autumn Statement, Chancellor George Osborne said the Scottish budget would increase by £308m over two years, meaning the Holyrood administration's budget would be cut by less than 0.2%.

Opposition parties have also said that policies promised by the Scottish government in the event of independence - such as providing 30 hours of childcare per week in term time for all three and four-year-olds and vulnerable two-year-olds - could be delivered under devolution.

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