Liberal Democrats secure serious measures for serious times.

10.00.40pm GMT Tue 3rd Feb 2009

Liberal Democrats have secured an economic recovery plan for Scotland that will allow Lib Dems MSPs to support the Scottish Government budget.

The agreement includes engagement by the Scottish Government with the Calman Commission to secure borrowing powers for Scotland; a new revenue funding stream to get the school building programme moving again; a new programme of recession-busting savings that could be used to fund future tax cuts; agreement to seek a Finance Sector Jobs Task Force to protect the financial services industry; and for the Council of Economic Advisors to make recommendations on the Budget to help it meet the challenge of the recession.

Commenting, Mr Scott said:

"We have secured an economic recovery plan with serious measures for serious times.

"We have made progress on the Budget to tackle the economic recession not just for the next financial year, but for the long term.

"Our proposals bring triple benefits: they lock in long term benefits to Scotland and the economy; they will help the Government meet its aims; and they line up the resources for permanent tax cuts for low and middle income earners.

"Above all, Budget spending should be about tackling economic recession. Every line of expenditure needs to be assessed against that benchmark."

Councillor Jenny Dawe, leader of Edinburgh City Council said:

"A proper programme of support for school building will be a very helpful move. So far, this has been missing from the Scottish Government's plans."

The key proposals include:

• The SNP have changed their position and will now engage with the Calman Commission. This is the best way to get extra powers for the Scottish Parliament. It will allow, for example, the Forth Bridge to be paid for without jeopardising every other transport project in Scotland.

• The SNP have changed their position on the Scottish Futures Trust. They will now give the quango a funding stream to restart school building in Scotland. Local councils and the construction industry had criticised the SFT for paralysing investment.

• The SNP have changed their mind and agreed to seek a Finance Sector Jobs Task Force to protect the financial services industry in Scotland, which is so important for our economy.

• The SNP have agreed to a new strategic review of Government spending. This will identify where resources are not being used to support the economy. It will unlock the resources that could pay for permanent tax cuts for low and middle earners.

• The SNP have changed their position and will ask their Council of Economic Advisers to make recommendations on the Budget to help it meet the challenge of the recession.