STUC on Budget Statement

March 24th 2010

Following the Chancellor’s Budget statement in the House of Commons Grahame Smith, General Secretary of the Scottish Trades Union Congress(STUC), said:

“The Chancellor has done enough in this budget and over the past year to demonstrate that a strategy of tackling the deficit through growth rather than immediate cuts is the right one. In so doing he has exposed the fundamental flaws in the Tory alternative of deep recession inducing cuts.

“Whilst the Chancellor had little room for manoeuvre, the major weakness in this budget is timidity. Many of the priorities for the £2.5 billion growth package are right but the sums are too small - the overall spend is a mere 1/5 of one per cent of GDP.

“The same criticism can be levelled at the welcome but limited measures to increase the tax paid by the wealthy and to tackle tax avoidance.

“The net effect is that, to appease the currency and share speculators, the Chancellor is still predicting future cuts in public spending which would spell serious trouble for front line services and be a slap in the face for dedicated public service workers.”


“The Government strategy of investing in skills and employment has been vindicated by a lower than expected increase in unemployment. Extending the jobs or training guarantees for 18 to 24 years olds until March 2012 will mean a significant and very welcome increase investment in the Future Jobs Fund.”

Public services and public sector pay

“This spells bad news for public service workers who have already accepted limit strict pay limits and changes to their pensions - which are on average £4000 per year. Further cuts will impact front-line services and badly affect morale”.

Tax and benefits

“STUC welcomes the support offered through child benefit changes and the continuation of the winter fuel allowance. The freezing of the inheritance tax, previously announced measures for those earning in excess of £100,000 per year and closing of tax loopholes are all tentative steps in the right direction”

Reform of the Banks

“Whilst STUC is deeply sceptical that the Tories would deliver a UK bank levy, the Chancellor missed the opportunity to act now ahead of the international community. However it would be a mistake to assume that a levy would act as an effective mechanism for changing bank behaviours. This will require structural reform, effectively policed capital ratios and reform of corporate governance.

Measures to support small business

“Many of the measures to support small businesses are welcome including guarantees on small business loans lending and rewarding investment in plant and machine. Such targeted measures are far more effective than the proposed across the board cut in business rates, the Scottish version of which has proved to be completely ineffective in creating jobs or supporting training or other investment.


“It is reassuring that the stamp duty giveaway for first-time buyers is to be funded by duty on house sales over £1 million. But a far more effective and progressive use of those funds would have been to invest directly in social housing.”


“The 2 billion investment bank to back low carbon industries is entirely welcome but STUC will continue to press for a far more ambitious investment to deliver a ‘Green New Deal’.”


For further information contact Dave Moxham 0141 337 8100

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