The Scottish Government’s budget cleared its first Holyrood hurdle last night, paving the way for two weeks of fervent backroom negotiations.
John Swinney’s £30billion spending plans for 2011-12 was approved in principle, with support from the Tories and independent MSP Margo MacDonald.
Labour and the Liberal Democrats said it failed the test of prioritising economic growth, but they abstained allowing it to progress to stage two in the parliamentary process. The two Green MSPs voted against it.
The finance secretary has a £30million hole to fill after the local government and communities committee voted five to three to throw out his controversial “Tesco tax”, an additional business rate levy on large retailers.
The committee’s decision to back Liberal Democrat finance spokesman Jeremy’s Purvis’ motion to reject the levy must be ratified by parliament. Mr Swinney vowed to press the case when it is put to MSPs next week.
The committee decision was welcomed by CBI Scotland, the Scottish Chambers of Commerce and Scottish Retail Consortium who said the levy threatened investment and jobs.
Colin Borland, of The Federation of Small Businesses, said he was disappointed but believed there was enough common ground on the broad principle to come up with a “mutually acceptable alternative”.
Mr Swinney told both the committee and parliament that if he could not raise the projected £30million from the largest retailers he would have to find the money from other areas.
The finance secretary appealed to opposition parties to work together, in the national interest, to build a consensus around the budget bill.
He warned that, faced with a £1.3billion funding cut from London, the government had to be realistic about available resources.
“When other parties wish to make proposals increasing expenditure in support of particular objectives, I ask that they also bring forward proposals for identifying the resources to fund such spending,” he said.
Labour warned that, without action to support economic growth and provide jobs for young people, it would vote it down at stage three in a fortnight.
Finance spokesman Andy Kerr said: “The budget before us today is not a budget for jobs, it is not a budget for the economy and in its current form it is not a budget we can support.”
The Tories said while the budget was not perfect it was “not beyond redemption”.
Finance spokesman Derek Brownlee said it contained many Tory policies such as the council tax freeze and keeping more police officers, but their support did not extend beyond the current stage.
Mr Purvis said the budget failed the test the government had set itself to grow the economy.
“The government has now given up on addressing its own priorities for addressing economic growth,” he said.
“It blames the reduction in funding from the UK Government and it now is focusing almost exclusively on some public services in some policy areas at the expense of others.”