Finance Secretary John Swinney today dismissed the CBI’s demands for fresh spending cuts in next month’s Scottish budget to fund capital investment.
The Scottish branch of the business lobby had also urged Swinney to extend the two-year public sector pay freeze, subject more public services to competitive tendering and make Scottish Water ‘less reliant on the public purse’, to help galvanise economic growth.
CBI Scotland director Iain McMillan said: ‘The Scottish Government should put economic growth at the very centre of its upcoming spending plans.’
Swinney replied that he shared the CBI’s wish for an economic stimulus but rejected their proposed stringencies. ‘There is no way the [Scottish] Government will privatise Scottish Water,’ he told the BBC. ‘We were elected on a very clear policy commitment to retain Scottish Water in the public sector.’
He also stood by his undertaking, given a year ago, to avoid a third year of public sector pay freezes. ‘That remains my hope and I’m working to deliver that, because I think I have to strike a balance in many of these decisions between the exercise of restraint and recognising the difficulties families are facing as a result of that constraint,’ Swinney said.
While some industry bodies have been demanding a change in the UK government’s austerity strategy, CBI Scotland’s budget submission endorsed the coalition’s continued efforts to reduce the fiscal deficit. It insisted there was plenty the Scottish Government could do to stimulate the economy within its £35bn annual budget.
‘We acknowledge that a number of policies and initiatives have benefited the business community over recent years, and we believe more can be done to enhance Scotland’s prospects in future,’ the paper says. ‘Our members’ over-riding priority for the budget is that it helps galvanise future growth.’
Other proposals in the paper include additional government support for new air routes serving Scotland, an increased graduate contribution to higher education costs, a commitment not to increase business taxes over the current spending period, and a re-think of plans to tax empty commercial properties, expected to raise some £36m.
‘A bolder approach to making savings and promoting competition is needed to keep business taxes down and protect important GDP-enhancing investments in infrastructure, skills development, and export support,’ the paper says.
