Swinney in call over Scottish renewable energy fund

Mr Swinney said the chancellor could reduce fuel duty in rural areas

Scottish Finance Secretary John Swinney has urged the chancellor to detail Scotland's share of a £185m renewable energy fund when he announces the emergency Budget.

George Osborne will spell out the government's plans to reduce the UK's £156bn deficit on Tuesday.

The measures are likely to affect public spending in Scotland.

The Scottish government has repeatedly called on the UK government to release money from the fossil fuel levy.

This comes from energy firms in Scotland and is held by industry regulator Ofgem.

Access to the money has been blocked because any funds paid out would be deducted from the Scottish block grant.

Meanwhile, Scottish Secretary Michael Moore, who this week said public finances were in a "brutal" state, again warned of the cuts to come.

Mr Swinney said being able to invest £185m in renewable energy would make "a crucial contribution to economic recovery".

In a letter to the chancellor he wrote that "confirmation within the 22 June Budget of the release of the fossil fuel levy surplus ... would be widely welcomed in Scotland and would demonstrate real progress in inter-governmental relations".

Mr Swinney also urged the chancellor to provide tax breaks for the video game industry in Scotland and not to "discriminate" against the Scottish whisky industry by adding more duty.

He said the chancellor could help Scotland by reducing fuel duty in rural areas.

Mr Swinney also wrote that any spending on regeneration connected to the Olympics should also mean a comparable allocation of money for Scotland.

Front-line services

But he said the priority should be on maintaining "as far as possible, front-line services on which many people in Scotland depend".

"Tuesday's Budget is a real opportunity to embed the much-heralded respect agenda of the new UK government," he said.

"The chancellor can bring real benefits to Scotland and help our economy at a crucial time by taking action on the issues I have raised."

Former chancellor Alistair Darling, whose predictions over the size of the spending deficit have turned out to be less worse than earlier thought, accused the Conservatives of using the current climate as an excuse to make "ideologically driven" cuts they had planned anyway.

Mr Moore told BBC Scotland's Politics Show: "Whatever the tinkering over the size of the numbers in the deficit, it is the largest peace time deficit this country has ever faced and, untackled, would create unprecedented problems.

"Not just for the government in terms of forcing us to pay higher interest charges, which would be against the interests of the front line public services, but also for every business, every household in the country faced with higher interest rates on their homes, on their mortgages, on their credit cards, it is not sustainable we need to tackle it."