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Osborne to announce homebuilding Budget with major windfall for Scots

GEORGE Osborne will signal that he aims to deliver a "building for Britain" Budget by announcing a £6 billion cash injection to build 120,000 homes by 2020 to help first-time buyers.

The announcement by the Chancellor on the eve of his fifth Budget, which includes plans for the creation in Kent of the UK's first garden city in a century, will mean the Scottish Government is set to receive several hundred million pounds over the period under the Barnett spending formula.

While Holyrood will not be obliged to spend the windfall on the Help to Buy scheme it runs, political pressure might force it to do so.

Mr Osborne is also tipped to increase the personal tax allowance on Wednesday by a further £500 to £10,500 while rejecting Tory pleas to stop more middle earners being dragged in to the 40p tax band.

Pressure is still mounting for him to scrap the whisky duty escalator, which automatically rachets up the price of whisky each year.

Angus Robertson, SNP leader at Westminster, derided the Treasury's "tax and grab mentality" as he pointed out how 80% of the price of a bottle of whisky goes to the Exchequer.

"This week the Chancellor has a chance to do something to stop this unfair and discriminatory tax regime," he said.

There is also speculation that the Chancellor will deliver a "Budget for the Union", which could include not only scrapping automatic whisky tax hikes but also devolving air passenger duty to Holyrood.

Under the Coalition's Help to Buy scheme, the UK Government lends a prospective home-buyer up to 20% of the cost of their new-build home - so a buyer needs only a 5% cash deposit and a 75% mortgage to make up the rest. The maximum purchase price is £600,000.

Since its launch last year, it has helped more than 25,000 households to buy or reserve a new-build home. Research shows that in England around one-third of new homes are supported by the scheme.

It will be extended for another four years to 2020 with an additional £6bn invested to help 120,000 more households purchase a home. This will bring the total spend to almost £10bn by the end of the decade.

The SNP Government's own Help to Buy scheme was launched last September and is similar to the one south of the Border, which is limited, at present, to a total of £220m over three years while the maximum value of a new home is set £200,000 below that in England, at £400,000.

Announcing the plan, the Chancellor said: "This means more homes, this means more aspiration for families, this means economic security and economic resilience because Britain has got to get building."

He added: "Families who today may be in good jobs, they simply cannot afford to buy a house. I am not as the Chancellor prepared to let that rest."

But Ed Balls dismissed the Coalition plan as a "damp squib".

The Labour Party's Shadow Chancellor pointed out how housebuilding was now at its lowest level since the 1920s.

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