Scottish Government Call to Westminster for increased capital spend must be matched by commitments on Scottish taxes

September 21st 2009

The Scottish Trades Union Congress (STUC) will join Scottish Government coalition in pressing the Chancellor of the Exchequer to bring forward capital spending from 2011-2012 to 2010-2011, but the Cabinet Secretary for Finance must support his case by abandoning the Council Tax freeze.

Grahame Smith, STUC General Secretary said:

“The Scottish Government are entirely correct in arguing for the bringing forward of capital spending to enable projects such as the Glasgow Airport Rail link and increased investment in public housing to go ahead. We can create jobs, strengthen infrastructure and improve the chances of a sustainable recovery.

“But the position will be immeasurably strengthened if the Council Tax freeze is abandoned. If implemented, the freeze will be costing £210 million in 2010-2011and the total of the three years since 2007-2008 will be £420 million. Further millions are lost to the Scottish economy through reduced Council Tax Benefit receipts.

“The total cost of the Small Business Bonus scheme, which is in effect another tax cut relative to the rest of the UK, will reach £300 million. The Scottish Government has sought no evidence for monitoring its success and such evidence that has been produced points in the other direction.

“STUC has always argued that Scotland has a strong case for the higher per-capita spending provided by the Barnett Formula, but this is only justified because it costs more to provide public services given Scotland’s relative ill-health, deprivation, geographical remoteness and our different education system. By using a proportion of that money to fund what are effectively tax cuts relative to the rest of the UK, the Scottish Government puts the basis of future settlements at risk and undermines its own case for increasing capital limits for the coming year.”


For further details contact

Dave Moxham, Deputy General Secretary

0141 337 8100

Kevin Buchanan 0141 337 8100

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