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Autumn statement: Scottish budget to receive extra £800m Autumn statement: Scottish budget to receive extra £800m
(35 minutes later)
Scotland's capital budget is to be given an extra £800m over the next five years as part of an investment package, the UK Chancellor has said.Scotland's capital budget is to be given an extra £800m over the next five years as part of an investment package, the UK Chancellor has said.
Philip Hammond made the announcement as he unveiled his Autumn Statement in the House of Commons.Philip Hammond made the announcement as he unveiled his Autumn Statement in the House of Commons.
He also confirmed City Deal agreements for Edinburgh and the "Tay Cities" of Perth and Dundee. The money is the result of increased spending on infrastructure spending in the rest of the UK.
And Mr Hammond said talks would begin on Stirling's bid for a City Deal, which also includes Clackmannanshire. Mr Hammond said the money would give Holyrood greater power to boost productivity and promote growth.
He also confirmed a City Deal agreement for Edinburgh, and is considering proposals from Perth and Dundee.
Mr Hammond said talks would begin on Stirling's bid for a City Deal, which also includes Clackmannanshire.
The chancellor said this meant every city in Scotland would be on course for a City Deal, which gives local areas greater powers and freedoms to help support economic growth, create jobs or invest in local projects.The chancellor said this meant every city in Scotland would be on course for a City Deal, which gives local areas greater powers and freedoms to help support economic growth, create jobs or invest in local projects.
Mr Hammond announced a new National Productivity Investment Fund of £23bn, which he said would be spent on innovation and infrastructure over next five years.Mr Hammond announced a new National Productivity Investment Fund of £23bn, which he said would be spent on innovation and infrastructure over next five years.
The Barnett Formula means that Scotland's share of the money will be £800m, the chancellor said.The Barnett Formula means that Scotland's share of the money will be £800m, the chancellor said.
Mr Hammond added: "Economically productive infrastructure directly benefits businesses. But families, too, rely on roads, rail, telecoms - and, especially housing."Mr Hammond added: "Economically productive infrastructure directly benefits businesses. But families, too, rely on roads, rail, telecoms - and, especially housing."
It will be up to the Scottish government to decide how to spend the increase in the capital budget is spent. It will be up to the Scottish government to decide how to spend the increase in the capital budget.
An increase in capital spending had been a key demand of the Scottish government ahead of the chancellor's statement.An increase in capital spending had been a key demand of the Scottish government ahead of the chancellor's statement.
But Prof Graeme Roy, director of the Fraser of Allander Institute, said before the announcement that the Scottish government's overall budget was likely to fall in real terms over the next five years regardless of any increase in funding for infrastructure projects.But Prof Graeme Roy, director of the Fraser of Allander Institute, said before the announcement that the Scottish government's overall budget was likely to fall in real terms over the next five years regardless of any increase in funding for infrastructure projects.
Meanwhile, Mr Hammond said growth next year will be considerably slower than was expected before the vote to leave the European Union, according to the Office for Budget Responsibility (OBR).Meanwhile, Mr Hammond said growth next year will be considerably slower than was expected before the vote to leave the European Union, according to the Office for Budget Responsibility (OBR).
Abandon its targetAbandon its target
The OBR expects the economy to grow by 1.4% in 2017, down from the 2.2% it predicted in March.The OBR expects the economy to grow by 1.4% in 2017, down from the 2.2% it predicted in March.
The growth forecast for this year has been raised slightly to 2.1% from 2.0%.The growth forecast for this year has been raised slightly to 2.1% from 2.0%.
But it expects growth to be 2.4 percentage points slower in the next five years as a result of the Brexit vote.But it expects growth to be 2.4 percentage points slower in the next five years as a result of the Brexit vote.
Mr Hammond stressed that the forecast for 2017 was still equal to the International Monetary Fund's prediction for the German economy, and ahead of its forecast for France.Mr Hammond stressed that the forecast for 2017 was still equal to the International Monetary Fund's prediction for the German economy, and ahead of its forecast for France.
He also confirmed that the government would abandon its target to spend less than it earned in 2019-20, and is now expecting to borrow £21.9bn that year.He also confirmed that the government would abandon its target to spend less than it earned in 2019-20, and is now expecting to borrow £21.9bn that year.
Other measures from Mr Hammond's statement which will affect Scotland include;