CONDEMS HIDDEN RATE HIKE IS £120m SLEEKIT CUT FOR SCOTLAND

For Immediate Release – Sunday 31st October 2010




Attn: NEWS DESKS


POLITICAL CORRESPONDENTS

CSR PILES PAIN ON SCOTLAND'S LOCAL AUTHORITIES


CONSTRUCTION SECTOR COULD BE HIT BY RATE RISE


SNP MP and Treasury Spokesperson, Stewart Hosie, has today (Sunday) written to the Chief Secretary of the Treasury, Danny Alexander, seeking immediate confirmation that the UK Government intends to hit public bodies across Scotland with an extra £120m bill to service UK government loans.



In today's Sunday Post it is reported that Para 2.38 of the Spending Review Document, says all new lending from the UK government's Public Work Loan Book is now to be charged at 1% above government gilts. This is expected to raise £1.3bn across the period of the spending review with a cost Scotland's public bodies of an additional £120m in interest payments. The Loan Book is largely used by local authorities to fund building projects.


Commenting, Mr Hosie said:



“This sleekit cut hidden in the Spending Review will pile yet more pain on the public sector bodies across Scotland already having to cope with the UK Government's hard and fast cuts.



“By hiking up the rate of the Public Works Loan Book, the UK Government are hitting the capital investment budgets of local authorities hard – depriving the construction sector of vital income in these tough times. Councils will have to choose between scaling back building projects or cutting other budgets.


“The Scottish economy continued to grow in Q2 and this was largely down to the strong performance of the building industry. It seems the UK Government is determined to pull the rug out from under the Scottish recovery.


“All of this underlines exactly why Scotland must be given financial responsibility over its own affairs – so we can make sensible decisions which protect jobs instead pressing ahead with these flawed measures which will cost them.”


ENDS