Unions in 'challenging’ talks over Scottish Budget

Ahead of the budget next week, the STUC are calling for the government to scrap the council tax freeze, introduce a proportionate wealth tax and invest in local services. 

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After talks with the Scottish Government finance secretary Shona Robison yesterday morning, STUC general secretary Roz Foyer told The Herald: “Conversations have been challenging and that’s always been the case but at least we are in the room and having the conversations. 

“I look at my colleagues south of the Border and up until the recent election they weren’t even in the room, so we do have a challenging relationship with the Scottish Government but it’s a constructive one.”

The Herald understands the STUC met with Labour,  the SNP and the Greens at Holyrood yesterday, however, no conversations were had with the Scottish Conservatives or the Scottish Liberal Democrats. 

Ms Foyer said the trade union body would not back a budget with the Conservative plans around rates relief. Her comments come after the Scottish Conservative Russell Findlay called for a 100% rate relief for businesses when the Scottish Budget is introduced next week. 

The plan for pubs and restaurants means they would pay no business rates at all next year. 

The general secretary of the STUC told The Herald: “You can invest in business all you like but if there’s no one there to be the customers and if they don’t have money in their pockets then we are in a really difficult place. Ordinary working people have been through real difficulties in the past 15 years. We saw austerity, Covid and the cost of living crisis. 

“We need to make sure we are re-investing in our communities and making sure that work pays and people have money in their pockets to spend on all these businesses. That’s how you make businesses successful. Not through government subsidy but through investing in communities and making sure they can be healthy because people have money to spend.” 

To pass their budget, the minority SNP government will need to seek help from other political parties in order to get their spending plans over the line. The Greens or the Liberal Democrats are thought to be the most likely partners to strike a deal with, but so far it is not clear which party will be more amenable to Mr Swinney’s proposals.

The SNP leader gave a speech at the Royal Society of Edinburgh on Wednesday where he set out his vision for Government, emphasising the need for collaboration and consensus in tackling the challenges facing Scotland.

In a lobby of the Scottish Parliament yesterday, STUC delegates and union members called on MSPs to put promises on free school meals, creative arts funding and investment in public transport “back on the table” following the additional resources allocated to the Scottish Government as a result of the UK Budget. 

The UK government says it will provide a block grant of £47.7bn to the Scottish Government an increase of £3.4bn from the previous year.

The Fraser of Allander Institute economists say this extra money is “likely to make the Scottish government’s job of balancing its budget significantly easier".

However, the First Minister John Swinney has said the extra Treasury funding was not “nearly as much" as has been claimed. SNP ministers have also warned they will have to find an extra £500m in public sector costs as a result of Labour's plans to increase National Insurance payments for employers from April next year. 

In a briefing sent to MSPs ahead of the budget, STUC research showed satisfaction with Scottish public services has plummeted 25% since 2010 with councils now facing a £780 million shortfall in cash by 2026/27. 

The STUC say this has been “compounded” by the Scottish Government policy to hold down council tax bills since 2007/08, leading to a ‘council tax gap’ of more than £800 million with the rest of the UK as well as £3 billion being “squandered” on the Small Business Bonus Scheme.

Ms Foyer said: “One of the areas of concern is we’ve been having a look at the small business bonus. We’ve seen over £3 billion pounds invested in that over a number of years and we are not sure that’s giving a return on that investment that we would want to see. The Scottish Government’s own figures don’t show any evidence that that’s actually achieved even better outcomes for business so we feel a more targeted approach to growth is the way to go.” 

Ms Foyer added: “We really want to make sure that the budget is spent well. There’s been a war chest of money delivered from Westminster and we also know that the Scottish Government has the ability to raise additional taxes on top of that and we want to see them now really investing in public services across Scotland and rebuilding those public services after the years of Tory austerity that we’ve seen.”

The STUC general secretary added: “We’re focused on making sure the Scottish Government makes the right decisions.” 

“They promised to make pay better for carers, they promised to do something about public transport and a fair work and a just transition and we’ve seen these things depleted and cut because of funding. 

“Although they don’t have all the money they like, it’s time for them to start make positive decisions about how they are going to build back.” 

Ms Foyer said she is determined to make the case to every party that public services need to be “fully invested in”.  

A Scottish Government spokesperson said ministers are committed to to building “as broad support as possible” across the Parliament ahead of the budget on December 4th. 

The spokesperson added:  "The Scottish Budget will prioritise our resources in line with the First Minister's priorities of ending child poverty, growing the economy, investing in public services and supporting the path to net zero.”