Nicola Sturgeon mocked over claim more than half £2 billion Budget boost is 'wrong sort of money'

Nicola Sturgeon has been mocked for claiming Philip Hammond’s £2 billion Budget boost for Scotland was a “con” after it emerged that her government had repeatedly lauded its own schemes using the same type of funding.

The First Minister had argued that the increase was illusory because £1.1 billion of the money came in the form of “financial transactions”, which can be used for capital schemes to boost the economy or housebuilding but not daily spending on public services.

But Ruth Davidson, the Scottish Tory leader, pointed out that the SNP has used hundreds of millions of pounds of the same transactions in its own budget in the last year.

In a jibe that caused the Tory benches at Holyrood to erupt with laughter, Ms Davidson told First Minister’s Questions that the SNP usually complained it did not have enough money but “today we have a brand new one: it is the wrong kind of money that it is being given.”

An independent analysis published by Scottish Parliament economists found the SNP government’s overall budget will increase by 0.1 per cent next year when inflation is taken into account, and fall by 0.1 per cent in 2019/20.

Ms Sturgeon was also forced to concede that her government was considering further help for first-time buyers after the Chancellor said they no longer had to pay stamp duty on house purchases under £300,000 in England.

The First Minister claimed the equivalent cost of a property in Scotland was £175,000 but young couples buying their first home in Scotland currently pay the Land and Buildings Transaction Tax (LBTT) on the tranche of the purchase price above £145,000.

Her complaints that her government has been short-changed by Mr Hammond were further undermined after it emerged it is spending £250,000 exploring the idea of introducing a “citizen’s income.”

The money is being made available to four councils to examine the concept of the public purse handing everyone an income, replacing a benefits system that targets those most in need.

Ms Sturgeon came under pressure yesterday to abandon her plans to hike income tax for Scots earning more than £31,000 after being handed the extra funds by Mr Hammond. The Scottish Budget will be unveiled in three weeks.

Earlier this month, she unveiled plans to raise up to £255 million more in income tax next year but the Budget gave her government around £183 million extra for public services in 2018/19.

Mr Hammond’s announcements also meant an extra £215 million of capital spending for Scottish infrastructure in the current financial year, rising to £587 million in 2020/21. However, Ms Sturgeon said half the total was in the form of financial transactions that had to be paid back.

Ms Davidson said: “The usual complaint from the SNP is that it’s not getting enough money. Now that money has arrived, the nationalists claim it’s just the wrong kind of money.

“This is cash that could be spent funding housing or addressing fuel poverty, two massive issues in Scotland, yet Nicola Sturgeon doesn’t want to know.” She added: “She should spend a little less time complaining about where the money is coming from and bit more thinking of the positive ways it could be used.”

Ms Davidson said the £50 million announced so far for the SNP’s flagship Scottish Growth Scheme depends entirely on financial transaction funding. In 2017/18, the SNP used the system to fund £330 million of spending on the economy and education.

Speaking at First Minister’s Questions, Ms Davidson said: “Only this First Minister could be handed an extra £2 billion in spending power and still sound like somebody has stolen her scone.”

Ms Sturgeon retorted: “If I was a Tory these days, I would not be standing up in Parliament and talking about scones, given the number of Scottish families who are being forced to food banks because of the policies of the Tory government.”

She said the budget for day-to-day spending on public services would drop in real terms by £200 million next year and challenged the Scottish Tory leader to specify where cuts should be made.

Patrick Harvie, the Scottish Greens co-leader, later urged the First Minister to guarantee she would not follow the Chancellor’s “foolish” decision to offer more help for first-time buyers.

She said 65 per cent of those Scots buying their first home are already exempt from LBTT as the cost is below the £145,000 threshold and cited the Office for Budget Responsibility’s warning that Mr Hammond’s scheme could push up house prices.

However, she said her ministers would consider whether it was “appropriate” to provide more assistance ahead of the Scottish Budget on December 14.

Scottish housebuilder Mactaggart and Mickel announced it would match the Chancellor by paying the LBTT on purchases of its homes worth up to £300,000, a pledge worth up to £4,600.