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EDITIONS
 Wednesday, 17 April, 2002, 18:29 GMT 19:29 UK
Mixed response to Budget plans
Gordon Brown with red box
Holding aloft the traditional red box
Scotland is set to receive an extra �8.2bn for public services over the next five years under Gordon Brown's Budget.

The figure was detailed by Scottish Secretary Helen Liddell following the Chancellor's speech in the House of Commons.

She welcomed the measures which have received a mixed reception north of the border, with support from unions but criticism from business leaders and opposition politicians.

Key points
1% on National Insurance payments
Single pensions up �3 a week
6p on a pack of cigarettes
Fuel duties frozen

"Today's Budget is good news for Scotland," said Mrs Liddell.

"It will provide an extra �2.7bn for public services in Scotland over the next three years - equivalent to �528 for every man, woman and child in Scotland - and a further �5.5bn in years four and five.

"It encourages business and job creation and recognises the needs of the most vulnerable in our society by providing additional support for pensioners, families and the low paid."

However, the Scottish National Party's Westminster leader, Alex Salmond MP, said Scots would be "paying more tax for less".

He said the 1% rise in National Insurance contributions for employers, employees and the self-employed to pay for a large cash injection into the NHS was "a total u-turn" by Labour.

Helen Liddell
Helen Liddell: "Good news for Scotland"

"Gordon Brown has moved onto the SNP's ground on tax and spending," he said.

"But New Labour's chronic under-investment over their five years in power - after nearly two decades of Tory government - has done enormous damage to our health and other public services."

And he said that health spending would rise by 7.5% rise in real terms south of the border over the next five years compared to 6.5% in Scotland - a "Barnett squeeze" of �1bn.

The Budget also included a freeze on duty on beer, spirits and wine.

Mrs Liddell said this was "a welcome boost" for Scotland's whisky industry, which commands annual sales of some �2.6bn.

'Burden on business'

However, John Downie, the Scottish Secretary of the Federation of Small Businesses, said it was not a pro-enterprise budget.

"This budget gives little and takes a lot from business," he said.

"The 1% increase in employers' National Insurance contributions is going to cost Scottish businesses �350m.

"That's a tax on employers and it is a burden on businesses."

New Labour's chronic under-investment over their five years in power... has done enormous damage to our health and other public services

Alex Salmond
However, union leaders in Scotland gave the chancellor's proposals a warm welcome.

Scottish TUC deputy general secretary Grahame Smith hailed Mr Brown's commitment to the principles of the health service.

"We also welcome his commitment to substantially increase resources to the health service which will benefit service users and the workforce.

"There was also good news on support for pensioners and families and we particularly welcome his announcement of support for the manufacturing industry through the new research and development tax credit.

"The chancellor has made a good start on the health service but if we want to properly modernise our public services we need to see the same commitment to investment."

The Shadow Scottish Secretary, Jacqui Lait MP, said the Budget contained "more taxes, with no change and no difference.

Scottish bank notes
National Insurance contributions will rise
"Scotland deserves world-class public services, but all the government does is tax more and waste more.

"What is needed is modernisation, not more tax."

Liberal Democrat MP John Thurso said the increase in health service funding reflected his party's policy.

"It is for my colleagues in the Scottish Parliament to decide on how this money should be spent in Scotland," he said.

"However, it is a pity that the chancellor, even when he is doing the right thing, cannot resist being over-complicated about it."

Mr Brown also unveiled a new 10% supplementary charge on North Sea oil profits, while also raising first year capital allowances to 100%.

Undermine confidence

The UK offshore oil and gas industry welcomed this move on capital allowances.

However, it said it was "disappointed" at the decision to introduce the charge on profits.

The UK Offshore Operators Association fears this could undermine investor confidence and affect growth in exploration.

"There seems to have been an element of give and take," said a spokeswoman.

  WATCH/LISTEN
  ON THIS STORY
  Reaction to the Budget
from across Scotland
  David Porter, Westminster correspondent
"Labour's opponents say ministers have stolen their clothes"
  John Downie, Federation of Small Businesses
"This Budget is a tax on employment"
  Scottish Secretary Helen Liddell
"It is rather churlish of the business community to be critical"
 VOTE RESULTS
Would you pay more tax to fund the NHS?

Yes
News image 38.79% 

No
News image 61.21% 

14319 Votes Cast

Results are indicative and may not reflect public opinion


Gordon Brown's budget on Wednesday is one of the most keenly anticipated for years - by both sides, writes BBC Political Editor Andrew Marr.
Brown's big gamble


Key stories

Analysis

QUIZ

BUDGET DIARIES

AUDIO VIDEO

TALKING POINT
See also:

17 Apr 02 | Politics
07 Nov 01 | Scotland
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