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Wednesday, 14 January 2009

Scotland needs a Budget that responds to the economic storm

Today the Liberal Democrats voted against the SNP Budget. We did so after careful consideration, as this is a very serious issue affecting Scotland.

The SNP Government's Budget is only one per cent different in the choices it makes from the figures published in the Spending Review of October 2007. That was well before what Finance Secretary John Swinney has described as an "economic storm" engulfed Scotland. A variation of one per cent forms the weakest response of any Western European Government, national or devolved, to the economic difficulties we face in 2009.

We believe that the economic downturn, unprecedented since the Scottish Parliament was established, requires a distinct Scottish approach. To address the collapse of consumer confidence and the real hardship being faced we argued for a two pence reduction in income tax. This would have put £330 in the pockets of every typical low and medium earner in Scotland. It
would have been a real help to struggling families and individuals when they need it most.

Vince Cable has put forward proposals at a UK level to bring Income Tax down to the lowest levels of modern times. He was also the first person to call for dramatic reductions in interest rates to be part of the radical action needed to stave off the worst effects of recession. He was prepared to say that Labour's VAT reduction was simply not going to work to restore consumer
and business confidence. That has turned out to be the case.

Nick Clegg argues in the Scotsman today that Britain needs "big, permanent and fair tax cuts" to address the failure of Gordon Brown and the Labour Party to address social inequality in their ten years in power.

Liberal Democrats know that we need more support for our economy. Other choices the SNP have made over the last year are not helping. The SNP have slashed the budgets for Highland and Islands Enterprise, abolished Local Enterprise Companies, provided a real terms cuts in Universities' budgets for the first time since 1999. All this harms the ability for our economy
to recover when the credit crunch begins to turn. We are very concerned that the downturn in Scotland may be deeper and longer as a result of these actions and a business-as-usual budget.

The Conservatives' response has been extraordinarily weak. They call for more action from the Government outside the Chamber in local areas. But as far as the economy is concerned they are not just the "do nothing party" in Scotland, they are the "don't even try" party.

I am proud to be a Liberal Democrat, and I am proud that Tavish Scott and the MSP team have taken a principled stance on this matter.

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