The UK Government must inject at least £500m to invigorate Scotland's house building industry and create thousands of jobs, Deputy First Minister Nicola Sturgeon says in a letter to the Chancellor urging him to take 'radical steps' and deliver new housing investment through the 2009 Budget.

Scottish Government projections show that each new investment of £100m in the housing sector would support around 1,000 jobs directly, with an additional 600 jobs within related supplier industries.

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Ms Sturgeon is also pushing for the Chancellor to reduce VAT on building repair and maintenance work to 5%.

The DFM said: "Within our limited powers, the Scottish Government is doing all it can to build more homes, support the construction industry and keep the economy moving.

"We have brought forward £120m of expenditure for housing, but what is needed now is an injection of new money for investment in affordable housing."

Ms Sturgeon said she has written to the Chancellor urging him to take radical steps to do what is right and asking him not to turn his back on Scotland's construction industry in its hour of need.

"This is no time to tinker at the edges. We need to see immediate action in the shape of at least a 500 million pounds injection and changes to VAT to provide the affordable houses that people in Scotland need, and to breathe new life into Scotland's hard-pressed construction industry."

(GK/JM)