Scottish Government likely to get above-inflation pay demands, warn unions

4 Sep 17

Union leaders have today warned Scottish ministers to brace themselves for above-inflation pay demands across the public sector.

This is in anticipation of tomorrow’s confirmation first minister Nicola Sturgeon that the cap on wages for public employees is to be lifted.

It is expected to form the centrepiece of the programme for government, the Holyrood equivalent of the Westminster Queen’s Speech.

Sturgeon is keen to use the speech to counter claims that the Scottish National Party government is running out of steam after 10 years in office, and there is speculation that a reshuffle of her cabinet may follow.

There has been pressure on Theresa May from within her own party and from the opposition to lift the cap south of the border, though the UK Cabinet is reported to be divided on the issue.

Meanwhile, the expectation of the cap – currently 1% - being lifted from next year in Scotland brought a warning from the Scottish Trades Union Congress that public sector workers would be looking to recover some of the earning power lost over the years of austerity in the public finances. 

The STUC calculates that the real incomes of public sector workers have fallen by an average of £3,000 since the banking crisis heralded the onset of recession and austerity. 

General secretary Grahame Smith also believes that fiscal devolution offers the Scottish economy significant gains from a rise in the spending power of people who provide public services.

“The Scottish Government should build on its announcement by making clear that it expects all public bodies to agree pay increases which exceed the rise in the cost of living,” Smith said. “It must provide sufficient funding tied to these pay rises to ensure this takes place.

 “Public service workers’ pay continues to fall below the rise in the cost of living.  Rather than waiting until next year, government should act now.”

Years of enforced restraint, Smith said, had damaged local businesses and economies, as well as penalising the families of public sector staff.  Devolution of some tax and benefit powers offered Scotland increased advantage from an end to the cap.

“Retaining more income tax and VAT receipts provides an additional incentive for government to increase the pay of all public service workers, because Scotland will retain an increased proportion of a decent pay settlement,” Smith argued. “Fair pay will also combat increasing problems with recruitment and retention in some areas of public service.”

  • Keith Aitken
    Keith Aitken

    covers Scottish affairs for Public Finance from Edinburgh. He was formerly economics editor and chief leader writer on The Scotsman and now has a busy freelance career as a writer, broadcaster and event chair.

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