There were fears more than 110,000 Scottish jobs could go as a result of cuts announced in Chancellor George Osborne’s Comprehensive Spending Review.
Scottish Labour leader Iain Gray predicted 100,000 jobs could go and the Scottish Government warned that greater-than-expected cuts to Scotland’s budget for infrastructure projects could result in an additional 12,000 job losses.
Finance secretary John Swinney said the review will see Scotland’s overall budget fall by £1.3 billion pounds in cash terms in 2011-12 compared to 2010-11, including a fall of £800 million in the capital budget.
However, the Scotland Office said next year’s Scottish budget would see a £900m reduction less than had been predicted.
How the new Scottish budget will be spent, and where the axe will fall, is up to First Minister Alex Salmond, his ministers and MSPs.
Mr Swinney has said he will deliver a Scottish budget within one month. That budget must go through the Holyrood parliamentary process, which means the minority SNP government must win enough support to get it through three parliamentary stages.
That will involve a considerable amount of horse trading with the opposition parties as each tries to secure some kind of concession.Tortuous processThe process this year will be even more tortuous than usual with the Scottish elections looming in May and all the parties seeking some political advantage.
Scottish Labour said Chancellor George Osborne’s plan could cost 100,000 Scots jobs and plunge the country back into recession.
Across the four-year review period Scottish spending will be reduced by about 10% in real terms, while the UK total is cut by about 11%.
The Scottish total includes a 7% cut in resource spending and 38% cut in capital spending, according to the Treasury.
It is the slashing of Scotland’s capital budget that surprised the SNP.
“Today, the chancellor’s cuts went beyond our expectations, particularly on swingeing cuts to the capital budget, with an overall cut in next year’s Scottish budget of £1.3bn including an £800m reduction in vital capital spending,” said Mr Swinney.
“Today’s cuts go far too deep, far too quickly the capital budget cuts alone will threaten some 12,000 jobs in Scotland.
Mr Swinney said there were elements of the Comprehensive Spending Review affecting Scotland that the Scottish Government welcomed, particularly the potential for Longannet in Fife.”Same mistakes as Thatcher”Mr Gray accused the coalition government of “repeating the same mistakes as Margaret Thatcher.”
“The Tories are doing just what we always feared they would cutting too fast and punishing the poorest and the most vulnerable in an ideologically-driven rush to reduce the size of the state with no regard for the consequences,” he said.
And he fired a broadside at the SNP, accusing the First Minister of “promoting independence, not jobs.”
“He inherited £1.5bn in reserves that Labour deliberately left for hard times and the Scottish budget grew by over £1 billion every year. But instead of fixing the roof when the sun was shining he frittered the money away on vanity projects.” Scottish Secretary Michael Moore said the reduction in the Scottish budget is less than for some other departments.
“Scotland will play its part in helping reduce the huge deficit we inherited from the last government,” he added.
Scottish Tory finance spokesman Derek Brownlee said, “The Scottish Government had been planning for a 12.3% real terms reduction in revenue spending. The Comprehensive Spending Review revealed a significantly smaller cut of 6.8% over the period.
“Difficult decisions lie ahead, but the Scottish Government faces less of a challenge than anticipated. Indeed the challenge for the SNP, and Scottish Labour, is to stop carping from the sidelines and to start setting out what they will do.”