Scotland politics

Autumn Statement: Extra £125m to be spent on NHS, Swinney confirms

Doctor taking blood pressure of patient Image copyright PA
Image caption The funding boost for Scotland came about after there was an additional investment in the NHS in England

Scotland's Deputy First Minister has confirmed that an extra £125m announced in the Chancellor's Autumn Statement would be spent on the Scottish NHS.

John Swinney said additional cash was always welcome but he added it could not compensate for the £2.7bn of real terms cuts made since 2010.

Secretary of State for Scotland, Alistair Carmichael, said the Autumn Statement was good for Scotland.

He added that the Scottish government should "crack on" and spend the money.

The funding boost for the health service north of the border is to mirror the additional investment being ploughed into the NHS in England.

Mr Swinney, who is also Scotland's finance secretary, was not obliged to spend the money on the healthcare system.

Barnett Formula

What's Scotland's share?


Current annual amount

  • £20bn - The amount to be cut when new tax powers go to Holyrood

  • £10bn - The predicted annual block grant

However, he told BBC Scotland's Politics Scotland programme: "I am happy to confirm today that the consequentials that come to us from the NHS will be passed on directly to the NHS as we promised to do in the 2011 election."

In the main, the minister was not happy with the Conservative Chancellor's economic statement to the House of Commons.

He said: "The Scottish government is focused on securing economic growth, tackling inequality and protecting our public services. The Chancellor's budget fails to pass the test on all of these measures.

"Today's budget shows the failure of the UK government's austerity policy and it is clear that we in Scotland are paying the price.

"In 2010 the Chancellor embarked on his austerity programme and instead of putting the finances on a sound footing we are seeing borrowing this year of over £50bn higher than expected, lower tax revenues and austerity extended by at least a further two years."

Who has said what?

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Media captionShadow Scottish Secretary Margaret Curran says George Osborne's autumn statement offers "nothing for Scots"
Media playback is unsupported on your device
Media captionDeputy First Minister John Swinney confirms that the NHS in Scotland will benefit from additional funding in George Osborne's autumn statement
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Media captionScottish Secretary Alistair Carmichael says Holyrood "will have to be accountable" for extra funding in George Osborne's autumn statement

But Mr Carmichael insisted that the Scottish government had benefited from an extra £2.3bn in UK government money since the coalition was formed in 2010.

He added: "Scotland chose to retain a shared currency, pensions, single market and the economic stability and security that comes from being part of the UK.

"With more funding provided to the Scottish government today and more powers and great responsibility for the Scottish Parliament on the way, Scotland is strengthened by today's autumn statement."

Mr Swinney said that Mr Osborne's changes to the stamp duty system for England, Wales and North Ireland was a copy of his plans which come into effect for Scotland on 1 April, 2015.

From midnight there will no longer be a "slab" approach to the property tax. Buyers will pay a gradual levy, similar to income tax.

This new system will apply north of the border until April, when a Scotland-only property charge will be implemented.

It will have different bands to Mr Osborne's new system but it has been built on the same principle of a gradual levy.

Mr Swinney said: "There are differences in the application of the rates and the bands, but fundamentally what the Chancellor has recognised is that on the first occasion that a Scottish finance minister has had the opportunity to design a tax power and a tax system in Scotland, the chancellor has gone away and copied it.

"This is a landmark moment in that the Scottish government has taught the UK government how to do taxation."

What are the property tax changes?
Scotland New rate Rest of UK New rate
Up to £135,000 No tax Up to £125,000 No tax
£135,001 - £250,000 2% £125,001 - £250,000 2%
£250,001 - £1m 10% £250,001 - £925,000 5%
More than £1m 12% £925,001 - £1.5m 10%
- - More than £1.5m 12%

Mr Osborne's statement confirmed that the UK government block grant to Scotland - known as the Barnett formula - would fall by two-thirds when Holyrood is given control over income tax.

He said more devolved powers planned for Scotland would mean the "importance" of the Barnett formula - which currently amounts to £30bn annually for Scotland - being "effectively" reduced.

In its report last week, the Smith Commission recommended that some taxes should be raised and spent in Scotland.

It is predicted that once the revenue raising powers start working in Scotland, its block grant will be cut by two thirds to £10bn per annum.

Mr Osborne's address to MPs on Wednesday comes ahead of the General Election in May 2015.

His autumn statement was used to announce that Northern Ireland should have control over revenue-raiser Corporation tax.

That prompted the SNP administration at Holyrood to demand that Scotland should also have the power to set the levy north of the border.

The Treasury has so far rejected the calls from the Nationalists claiming that the case for Northern Ireland is different because it shares a land border with the Irish Republic.

The chancellor also announced a tax break for north sea oil and gas firms. He told MPs that lower oil prices were presenting a "challenge" to the industry.

A new allowance is also being introduced and the full details will be announced tomorrow in Aberdeen by the Chief Secretary to the Treasury, Danny Alexander.