Scotland 'needs financial powers' to grow economy

Mr Swinney claimed the case for greater fiscal powers was growing

The Scottish government says the argument for Scotland gaining more financial powers has to be won in order to grow the economy.

Finance Secretary John Swinney said the Independent Budget Review this week showed Scotland faced acute challenges.

Cuts in the Scottish public sector could see up to 60,000 job losses.

The Scottish Conservatives said the solution to current problems was to cut spending and accused the SNP of distraction tactics.

Mr Swinney said the government's case for greater powers to stimulate growth was gaining ground.

"If we had a broader range of financial and economic powers we would be able to grow the Scottish economy and tackle some of the challenges that we face," he told BBC Scotland.

"But the current powers create a fixed funding envelope within which we've got to operate and I think illustrate the case for us to have a much wider range of financial power to enable us to grow the Scottish economy."

He claimed that the SNP had the experience to manage what would be a difficult financial situation over the coming years.

Mr Swinney also said the case for Scotland to have full financial powers had to be won with the public.

"Increasingly we're seeing a very broad cross-section of opinion supporting that proposition," he added.

'Get a grip'

Scottish Conservative finance spokesman Derek Brownlee said: "What the SNP government is trying to do is distract attention from decisions it's going to have to take over the next few months about where savings have to be made.

"I think it's trying to do that by blaming other people for the mess that we're in and also by raising the issue of the constitution.

"There are perfectly reasonably discussions to be had about the constitutional situation, but we've all got to get a grip on the spending situation."

The Liberal Democrats said Mr Swinney needed to be "extremely careful not to mislead the Scottish public" when saying the Scottish government should have all economic levers.

Lib Dem finance spokesman Jeremy Purvis commented: "The SNP government has categorically stated that the setting of interest rates should remain the power of the Bank of England.

"One of the responses from the independent review panel should not be gross hypocrisy and John Swinney must come clean with the people of Scotland on the role of the Bank of England."

Labour's finance spokesman Andy Kerr said the budget review report made it clear Scotland faced major challenges in the years ahead and that the fullest possible debate was needed.

He added: "The best way for this to happen is for the Finance Secretary John Swinney to bring forward his budget in draft form as soon as parliament returns."

Last week's Independent Budget Review report set out options that Holyrood needs to consider "in the face of the most challenging public spending environment since the Second World War".

The panel of commissioners, which considered options for future expenditure, recommended a fall in public sector employment of between 5.7% and 10% by 2014-15.

Scotland faces a squeeze in its funding estimated in the range of £42bn over the next 16 years.