The Scottish and Welsh nationalist parties have slammed the Budget for continuing to underfund key services.

The Scottish National Party said the Budget was an admission that the government had got it seriously wrong in previous years.

The party claimed that as a result of the Barnett formula, which distributes public finances between the UK's regions, Scotland would see smaller NHS spending increases than the rest of the UK.

The SNP's Westminster leader, Alex Salmond, said the "penny for health" was an admission that new Labour got it "entirely wrong" in 1999 when it cut income tax by one per cent.

"If Tony Blair didn't have a brass neck, he'd have a red face today, because this is a humiliating climbdown - but five years too late," he said.

While health spending will rise some 7.5 per cent south of the border in real terms over the next five years, Salmond claims the rise will only be 6.5 per cent north of the border.

"Scotland has the greatest health need, but will get the smallest health increase. That is why this is a 'tax and takeaway Budget' for Scotland. As a result of this Budget, Scots will be paying more tax for less," said Salmond.

Lost opportunity

Plaid Cymru joined the condemnation, saying Gordon Brown had raised expectations but delivered very little.

"This is a pay more get less budget from a pay more get less government. This year the government will raise £8 billion extra in taxation revenuethrough increased National Insurance contributions, but only an extra £1 billion will be spent on the NHS," said Adam Price, the party's Treasury spokesman.

Even after the spending increases, Price believes there will be no improvement in the NHS in Wales.

Instead, he said, there would simply be enough new cash to "keep it from getting much worse".

Elfyn Llwyd, the Welsh nationalists' parliamentary leader, added: "This Budget was a lost opportunity, insulting the needs of Wales. No targeted measures were present to help deprived areas."