THE Treasury will today launch its £20 billion scheme to provide cheap loans to Britain's struggling businesses, stressing it is only possible because of the strength of the UK's fiscal credibility.

The money would almost certainly not be available to businesses north of the Border if Scotland were independent, the UK Government department will add.

It comes on the eve of Chancellor George Osborne's Budget, which will involve a political trade-off between the Conservatives and the LibDems. The former looks set to succeed in scrapping the 50p top rate of income tax with a drop to 45p next year and then to 40p by 2015. The latter seems certain to secure a "tycoon tax" plus a tax-free allowance of £10,000 a year earlier than planned in 2014.

Simon Hughes, the LibDem deputy leader, yesterday softened up his party grassroots by making clear the leadership was not committed to "hanging on" to the 50p top rate.

He said: "The whole priority is to make sure we have a Budget for the millions not for the millionaires."

One senior LibDem Coalition source told The Herald: "What we want is a Robin Hood Budget."

However, Ed Miliband insisted David Cameron's Coalition seemed more interested in cutting taxes for the rich than helping most low and middle income earners. "We would be concentrating on jobs and growth and we would be using every penny of scarce resources to help millions of hard-pressed families, who are struggling to make ends meet," said the Labour leader.

Today, as a precursor to his annual economic statement, Mr Osborne will launch the Coalition's National Loan Guarantee Scheme (NLGS), otherwise known as credit easing.

Four high-street banks will be taking part in the first phase – Royal Bank of Scotland, Lloyds, Santander and Barclays. HSBC, which offers loans not through the markets but through its deposits, is not taking part.

During the next two years, the four big banks will be able to take advantage of the low rates currently enjoyed by the UK Government and will make available £20bn in loans with £5bn offered in the first tranche.

Businesses with an annual turnover of up to £50 million will be able to apply for an NLGS loan at a discount of one percentage point compared with the interest rate they would otherwise have received from that bank outside the scheme. As an example, a business receiving a loan of £1 million could receive a discount up to £10,000 a year.

The Chancellor said: "The Government promised to help small businesses get access to lower interest rates; today we deliver on that promise with a nationwide scheme.

"It's only because we have earned credibility with our deficit reduction plan that we have low interest rates and it's only because of this scheme that we can pass the benefits of those low rates on to businesses."

Danny Alexander, the Chief Secretary to the Treasury, sought to place the new scheme in the context of the Scottish independence debate, saying: "From today thousands of Scottish small businesses will be able to seek out cheaper loans thanks to the UK Government's NLGS. This will help businesses save money and is only possible because the UK's fiscal credibility and record low interest rates."

A Treasury source added: "This is a benefit of being part of the UK. There is a massive question mark over whether an independent Scotland would be able to have the same low interest rates because it would be a new country with no track record."

Under the scheme, the UK Government will not guarantee individual loans to businesses but it will be the insurer of last resort should any bank fold.

The allocation of guarantees to each participating bank will be at the Treasury's discretion and based on factors such as market share, lending amounts and a bank's track record of lending to small businesses.