SNP's budget hangs in the balance as opponents refuse to strike deal

THE Scottish budget was on a knife-edge last night after opposition parties threatened to vote it down.

Meetings were taking place late into the night and were due to continue today as John Swinney, the finance secretary, tried desperately to reach agreements with enough parties.

As the heat was turned up, Mr Swinney's spokesman went on the offensive, accusing the other parties of "playing politics", and he warned that Scotland would lose out on £1.8 billion of public spending if the budget did not go through.

He said: "Ministers are determined to get this budget through for the good of Scotland."

And – on the day the third-quarter GDP figures for the UK will be published and are expected to reveal more bad news – he warned that the budget failing to go through would seriously affect the chances of Scotland exiting the recession quickly.

But late yesterday, he had failed to win the definite support of any party, with the Greens possibly holding the crucial votes.

However, they made it clear that they were unhappy with the response to their demands for a £1 billion scheme of providing free insulation for households over the next ten years.

A Greens spokesman last night confirmed that unless they are offered more than the £10 million a year believed to be on the table, the party's two MSPs will vote against the budget.

They believe a second budget brought forward before the deadline at the end of March might prove more profitable.

Even the Conservatives, who are still expected to back the budget, were threatening that if Mr Swinney did not give in to their £200 million of demands then they would vote against.

Annabel Goldie, the Conservative leader, said: "If the SNP government meets our demands this year, then tens of thousands of businesses will see rates scrapped altogether. But more needs to be done. That's why the Scottish Conservatives are calling on the SNP to support our proposals … to help town centres with a regeneration fund."

The SNP has claimed it has made a substantial offer to Labour to win its backing.

However, the Scottish Labour leader Iain Gray yesterday insisted his MSPs would vote against the budget, which he said was not good enough to tackle the current economic problems. Labour MSPs were due to meet before the debate at 12:30pm today to decide their final position, but the final vote will take place at 5pm.

Mr Gray said: "Unfortunately, Alex Salmond has stuck his head in the sand. Despite a series of meetings, we regret that the response from finance secretary John Swinney continues to fall short of what needs to be done."

He added: "Nonetheless, our door remains open in the sincere hope they will now consider their decision and act in the interests of the Scottish people and the economy."

A Labour spokesman added that "no games were being played" and that Labour would act in Scotland's best interests.

A spokesman for the Scottish Government last night refused to discuss the possibility of having to prepare a second budget.


More horsetrading or downfall of government? How row could pan out

IF THE budget falls, then the Scottish Government will have to come up with a new one. The budget does not need to be passed until the end of March, which is the completion of the financial year.

It is believed that this can be done in a truncated way because most of the discussions have already taken place.

In addition, it could allow opposition parties to hijack the budget in the new first stage where they are allowed to put down amendments. However, this would require them to come to an agreement between themselves which most observers believe is unlikely.

If nothing can be agreed by then, the current financial year's budget will continue for next year, potentially taking £1.8 billion out of Scottish spending and forcing a pay freeze for public sector staff.

At this point, the lost money from previous months will be put back into the Scottish budget. The SNP has also hinted at repeating last year's threat of resigning if it cannot get its budget passed. In this case, there will only be an election if parliament cannot decide on a new government within 28 days.

Labour has already indicated it would be willing to put up Iain Gray as an alternative First Minister.


So what does each party want?

Labour

LABOUR has put forward a 15-point plan which it says must be significantly met before it backs the budget.

The headline item is money for 23,400 new apprenticeships, which Labour believes are essential to prepare Scotland for the years after the recession.

On top of this, Labour wants more money for Pace schemes, designed to go into companies where redundancies will take place for training and support.

It is also asking for £50 million to be spent on regenerating town centres.

Added to that, it wants the NHS to get its full allocation of £3.9 billion, instead of the £3.25 billion the SNP plans to give health boards.

Conservatives

THE Conservatives have been coy about what they want from this Budget, insisting that their first priority would be to save measures on extra policing and business rates cuts that they won last year.

Yesterday, they claimed that they are pushing for £200 million worth of measures, including last year's concessions, plus money for town-centre regeneration and guaranteed week-long outdoor education trips for schoolchildren.

They have also briefed that they want the Scottish Government to adopt a bed-by-bed checking system to stop major outbreaks of hospital-acquired infections, such as C difficile and MRSA.

Lib Dems

THE Liberal Democrats want a reduction in income tax of 2p, using the "tartan tax" variable powers of the Scottish Parliament.

The SNP have always ruled this out, not least because it would mean an £800 million reduction in the budget.

They have also claimed that it is too late to introduce a 2p cut for next year's budget because it takes almost a year to get the collection changes required in place.

The Lib Dems have maintained that the only measure available to MSPs that can really help Scotland out of the recession is an income tax cut. Negotiations between the two parties has been restricted to one 20-minute meeting.

Greens

THE Greens have put in an ambitious bid for a £1 billion programme spread over ten years for free insulation for every household that needs it across Scotland.

The scheme takes away all the boundaries for people applying for insulation schemes, saves them money and reduces household carbon emissions.

Independent

Independent MSP Margo MacDonald wants special capital city funding for Edinburgh. She has also been holding out for more cash for affordable housing for both Edinburgh and Glasgow.