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Labour backs SNP budget after deal on bedroom tax

Labour has voted to support the SNP's spending plans for the year ahead after constructive talks on how to mitigate the impact of the so-called bedroom tax.

The main opposition party, which has not backed the SNP's previous budgets, said it would back the general principles of the Budget Bill for 2014-15 as it passed its first hurdle at Holyrood.

The SNP has enough seats at Holyrood to push the Bill through on its own but the decision indicates political differences are being set aside on the issue.

Iain Gray, the Labour finance spokesman, said: "On that basis we are willing to support the Budget Bill moving forward this evening, in spite of the weaknesses we believe it embodies, so it can come back enhanced by measures and funds which effectively consign the bedroom tax to history in Scotland, right here and right now."

The Scottish Government has already pledged to spend £68 million in each of the next two years to mitigate welfare reforms introduced by the UK Government, as well as £20 million in each year to limit the impact of the controversial "bedroom tax".

The Tory-Lib Dem policy, called a tax by opponents, cuts the amount of benefit people can get if they are deemed to have a spare room.

Labour wants the SNP to spend £50 million a year - described as a small fraction of the overall budget. The party is also pushing forward with its own Bill designed to protect social housing tenants.

Mr Gray criticised other areas of the SNP budget.

"There is, in this budget, no discernible long-term plan or strategy to create jobs and growth, to reduce inequality to eradicate poverty, to address climate change or move definitively to preventative spending," he said.

Finance Secretary John Swinney opened the debate on the principles of his spending plan, the last before the independence referendum.

"On September 18 the people of Scotland will have the opportunity to vote on our country's future," he told MSPs.

"Today I have set out the principles of the Budget Bill. It is a budget based on this Government's vision of a nation founded on the principle of fairness and prosperity, and one which demonstrates the benefits to Scotland of decisions being taken in Scotland by those who care most about Scotland: the people who live and work here."

The budget was promoted as focusing on key infrastructure, such as hospitals and schools, while tackling poverty.

It also confirms plans for £59 million over two years to provide more free childcare places, taking the total additional money for childcare over that period to about £250 million.

Funding of £55 million over two years for free school meals for youngsters in primaries one to three is set out in the Bill as part of a £114 million package of help for young people.

The budget will also provide funds to expand a rates relief scheme for small businesses, as well as to maintain the council tax freeze.

Conservative finance spokesman Gavin Brown said his party will not support the overall package.

"This is not a budget for the economy," he said.

"They don't even pretend to talk a good game about the economy any more, it is not front and centre. This is all about the referendum."

Lib Dem leader Willie Rennie said the Scottish Government is getting it right on nursery education and free school meals.

"The budget, even so, will still not be perfect," he said.

"It may be good enough for us to vote for the budget - we will have to see how the discussions develop in the coming weeks."

Green Party co-leader Patrick Harvie said extending free childcare and free school meals are "important steps in the right direction", but he opposes other elements.

"The unsustainable transport projects which the Government, with the support of most opposition parties, has pushed through, we have criticised completely," he said.

"The shift in the budget in the last few years from revenue to capital is going to fund those projects that we don't support.

"One of the consequences of this shift is there is less money there for public sector pay."

He welcomed moves to address the bedroom tax, urging Mr Swinney to work with opposition parties to find a solution.

The Bill was backed at the first of three stages by 90 votes to 13 with two abstentions.

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