Warning over Scottish Budget cuts

Mr Darling is due to announce the Budget on Wednesday

Union leaders have warned cuts in public services would be a "disaster" which could hit Scotland's communities.

The warning comes just days before Chancellor Alastair Darling delivers his Budget.

On a recent visit to Glasgow, Prime Minister Gordon Brown faced criticism over £500m worth of proposed cuts planned for Scotland next year.

Grahame Smith, of the STUC, said the budget for Scotland should include tax cuts for low-paid workers.

Mr Smith, general secretary of the STUC (Scottish Trades Union Congress), which is holding its annual congress in Perth on Monday, said the "fiscal stimulus" should also contain increases in benefits.

Cuts in funding for vital public services would be a disaster which Scotland's communities will feel for many years to come Grahame Smith STUC

Mr Smith said both the Budget on Wednesday and the Scottish Government's policy answer to it would be "the next test of whether the response to the recession is on track".

He said the STUC was calling for a fiscal stimulus of about 2% of GDP to bring the UK in line with the international average.

"This should focus on tax cuts for low-paid workers, benefit increases, public works programmes, short-time working incentives and enhanced support for the unemployed," he said.

"These measures will provide direct support for those hit hardest by recession, boost demand and help prepare the economy for the challenges of the future."

But he also warned: "Cuts in funding for vital public services would be a disaster which Scotland's communities will feel for many years to come."

'Urgent need'

The STUC is planning to launch its Agenda for Rebuilding Collective Prosperity, with the organisation urging civic leaders, community and campaigning organisations to back the initiative.

The agenda aims to put the interests of Scotland's workers and those who are out of work first.

The STUC will also work to develop and promote policy in a number of key areas, including tackling poverty, rewarding work, fair taxation, excellent public services for all and a fairer global economy.

Mr Smith said: "The current crisis proves that there is an urgent need to create a new economic architecture in Scotland and the UK that reconnects a strong, flexible economy to the living standards of all, not just to residents of the penthouse.

"Through sharing policy and holding events and briefings, we aim to engage with wider civic Scotland and its communities in the formation of a new vision for collective prosperity in Scotland and across the UK."

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