An early pledge from the new Tory-Lib Dem coalition government to free Scotland’s £191 million Fossil Fuel Levy fund has been described by Alex Salmond as a “giant swizz” after it emerged that a corresponding sum of money would be deducted from the Scottish grant.
The offer was branded a “conjuring trick” and a “con” in the Scottish Parliament.
The money has lain in a London bank account after the previous UK Labour government refused to hand it over. It is an accumulation of a carbon levy paid by power generators and can only be spent to promote the use of energy from renewable sources in Scotland.
First Minister Alex Salmond expressed his “bitter disappointment” at the UK coalition’s refusal to give Scottish ministers immediate access to the money and has claimed that the Tory-Lib Dem “sleight of hand” has placed Scottish renewable projects in jeopardy. The First Minister vowed to protect investments in Scotland’s renewables industry and said he would fight the Treasury ‘cash grab’.
He said: “I’m not going to talk about individual projects but clearly if you don’t have £200 million you had every reason to expect you were going to have, that has consequences. We’re not going to sit and watch investments that should have come to Scotland go elsewhere. We’re not going to do that.”
The First Minister added: “Clearly the Treasury is doing a whip-round just now. They’re doing a whip-round to grab money from wherever they can so they can capitalise this bank in 2013. “At the last minute, the Treasury have alighted on our fossil fuel levy and said ‘oh that’s handy, there’s £250 million, we’ll take that’. Well, they’re not on.”
Mr Salmond said that the coalition had given every indication that the funds would be handed over until the last few weeks and said: “It could only be described as a giant swizz,”. He said the Lib Dems had broken a clear manifesto pledge that the levy would not be removed from Scotland’s budget.
Leader of the Scottish Lib Dems, Tavish Scott said the SNP should accept the coalition offer and claimed it could lead to £500 million of investment in Scottish renewables.
Mr Scott said:
“This is a fantastic opportunity for Scotland and the SNP should back it 100%.
“Scottish renewable energy could now benefit from a £500 million boost through the Green Investment Bank. This can be an extraordinary opportunity for a key industry that will create jobs, boost the economy and make Scotland greener.”
However, this appears to be at odds with Mr Scott’s stance in early September when he agreed that a release of the funds should not lead to an equivalent cut in the Scottish budget.
Then, Finance Secretary John Swinney asked: “Would he [Tavish Scott] use every effort to try to ensure that we can win the argument for release of those resources in a fashion that is additional to the Scottish budget?”
Mr Scott replied:
“I agree with Mr Swinney; the finance secretary and I are at one on that issue. I will certainly use my powers to promote that argument in the coming months.”
The First Minister has now raised his concerns in a letter to UK Prime Minister David Cameron.
John Swinney: Perhaps I can take Mr Scott back a few paragraphs in his speech to his welcome comments on renewables. Would he join me in acknowledging the significance of the fossil fuel levy resources in providing a resource base to give Scotland a further competitive advantage? Would he use every effort to try to ensure that we can win the argument for release of those resources in a fashion that is additional to the Scottish budget?
Tavish Scott: I agree with Mr Swinney; the finance secretary and I are at one on that issue. I will certainly use my powers to promote that argument in the coming months.