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Nicola Sturgeon called Philip Hammond’s Budget pledge of £2billion for Scotland “smoke and mirrors” yesterday.

The First Minister also rubbished Scots Tory MPs’ attempts to take credit for the decision to exempt ­Scotland’s emergency service from VAT payments.

Police Scotland and the Scottish Fire and Rescue Service have had to pay the tax since they became single organisations in 2013 – the only such services in the UK required to do so.

Hammond yesterday confirmed he would scrap the £35million annual payments after saying he had been lobbied on the issue by the 12 new Scots Tories elected in June.

(Image: Getty)

He insisted SNP ministers were well aware the two organisations – formed from the merger of the previous regional forces – would be subject to the charge.

He told the House of Commons: “The SNP knew the rules, they knew the consequences of introducing these bodies and they ploughed ahead anyway.”

But he said his colleagues had persuaded him that “the Scottish people should not lose out because of the obstinacy of the SNP Government”.

Sturgeon said the move was “very welcome, if overdue”, but said not ­backdating the measure to refund earlier payments was “disappointing and unfair to emergency services”.

Of the Budget overall, she said: “Early ­indications are of more smoke and mirrors than substance.”

Hammond’s measures included a freeze on spirits duty, making a bottle of whisky £1.15 cheaper than it would have been if planned increases had gone ahead.

The Scots whisky industry had been lobbying for a cut.

The Chancellor also announced a ­transferable tax history scheme for the oil and gas sector, which ­ministers say will encourage investment in the North Sea.

Meanwhile, some 2.4million Scots will benefit from the increase in personal allowance – the amount people earn before they have to pay income tax.

While much of the control over income tax is now devolved to Holyrood, ­Westminster retains authority over the personal allowance threshold, which is to increase from £11,500 to £11,850 in April 2018.

The higher rate 40 per cent tax threshold will rise to £46,350, up from £45,001 – but not for Scottish taxpayers.

The threshold in Scotland is £43,000. The SNP will announce their intentions next month.

Hammond said Budget spending decisions would mean £2billion for the ­Scottish Government in what are known as Barnett ­consequentials.

But Sturgeon said that “the headline £2billion extra spending figure for Scotland has much less to it than meets the eye”.

The First Minister tweeted: “Taking account of today’s announced changes, next year’s (2018-19) revenue budget still facing real terms cut of £239million.”

She also said Hammond’s £350million extra for the NHS in England this year ­translates into a net increase in NHS ­Scotland’s budget of “just £8million”.

Sturgeon also criticised the Chancellor for failing to announce spending “or any real commitment” to lifting the public sector pay cap.

Hammond also said progress was being made on city deals for the Tayside, ­Stirling and Clackmannanshire areas, and a growth deal for the areas straddling the Scotland-England border.

(Image: REUTERS)

Scottish Secretary David Mundell said the Budget “demonstrates the UK Government is delivering for Scotland”.

He added: “From support for city deals and some of our finest ­charities to landmark tax measures on oil and gas and whisky, this Budget backs Scotland’s great industries.

“This is in addition to the £2billion of extra spending power the Scottish ­Government will have.”

Police Scotland welcomed the move on VAT.

Deputy chief constable Iain Livingstone said: “The issue has been a ­significant ­financial burden since the creation of Police Scotland.”