POLITICS

Scottish Labour MPs Rebuke Diane Abbott After Mansion Tax Row

07/01/2015 13:24 GMT | Updated 07/01/2015 14:59 GMT

Scottish Labour MPs have slapped down their party colleague Diane Abbott after she accused Jim Murphy of trying to "expropriate money from London to win an election in Scotland".

The rebuke marks a growing rift between English Labour MPs and their colleagues north of the border, following the Scottish Labour leader's pledge to use the proceeds of Ed Miliband's flagship UK-wide mansion tax to fund 1,000 extra nurses in Scotland.

Speaking on the BBC Radio 4's World at One programme on Monday, Abbott, the veteran Hackney MP, accused Murphy of acting in an "unscrupulous" manner by making "boasts" about using money from the south of England to pay for services in Scotland in an attempt to win the next Scottish parliamentary election.

Labour is committed to a levy on homes worth more than £2 million, with the money used to help fund the NHS, but Murphy has promised to use Scotland's share of the revenue to fulfill his pledge.

Scottish Labour MPs have now rallied behind Murphy, with Sheila Gilmore, MP for Edinburgh East, told The Huffington Post UK that Abbott's attack was "wrong".

'When oil prices and production were at their height, most fair-minded Scots were happy to see the tax revenue generated shared across other parts of the UK to fund investment in public services like schools and policing," she said.

"So it's wrong for Diane Abbot to describe Jim Murphy's proposal as expropriation from London. In reality it's just another example of how we the pooling and sharing of resources that makes our United Kingdom so valuable."

Meanwhile, Ann McKechin, MP for Glasgow North, said: "The mansion tax proposal is one of our key election offers.

She added: "It is probably not surprising that London colleagues want to secure new funds for their own local needs but the mansion tax allocation is simply a logical consequence of the existing longstanding Barnett formula."

Murphy has gone on to risk further anger from English MPs after pledging to set up an urgent "resilience fund" that could see UK taxpayers bail out Scotland’s struggling oil industry.

The Scottish Labour leader said, if elected first minister, that the fund would help offset the impact on jobs and businesses of economic shocks like the recent fall in oil prices.

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On a visit to Aberdeen, Murphy said: "If I was first minister I would set up a resilience fund.

"This is a new approach but put briefly it's the idea that there would be a specific Scottish Government pot of money set aside for economic shocks that affect a town, a city or a local authority.

"It would be a central pot of money held by the Scottish Government. Local authorities would make an application to this new fund. There's no reason why it shouldn't happen right now.

"The money is available through the Barnett consequentials of the most recent Autumn Statement. Over £100 million of that money is as yet unspent out of the Autumn Statement Barnett consequentials. There's no reason why that fund could not be set up right now to support the north east economy."

Oil & Gas UK described Murphy's plan as "sensible" but insisted the industry would weather the current storm.

Chief executive Malcolm Webb said: "Just to be clear, we are not talking about the collapse of this industry.

"But indeed, the next few months could cause some strains in various parts of this country, and particularly in the north east. Therefore, having a resilience fund seems to me, personally, like a sensible idea."

A spokesman for Scotland's energy minister Fergus Ewing said: "Jim Murphy's belated conversion to backing an oil fund is welcome, especially after he and his Labour colleagues failed to deliver a single penny by refusing to establish such a fund when they were in office and had the chance.

"We have long called for the UK to set up such an oil fund - calls which have been ignored by successive Labour, Tory and Lib Dem Westminster governments, despite receiving billions of pounds in revenue from more than four decades of North Sea production