STUC boss Boyd says business scheme 'money wasted'

A union boss has told MSPs that a rate rebate scheme for small Scottish businesses was "money wasted".

Stephen Boyd, assistant secretary of the STUC, made his comment while speaking to Holyrood's Economy Committee.

He said money for the Small Business Bonus Scheme (SBBS) should be diverted to the Scottish Investment Bank.

Mr Boyd also said the council tax freeze was "hugely inefficient" for stimulating economic growth.

He described support for the SBBS by the Federation of Small Business (FSB) as "risible".

Mr Boyd said: "The FSB said the SBBS is helping its members on average to the tune of around £1,400. It is therefore making a difference between businesses being viable or not.

"Well, I think we need to be quite brutal here, frankly. If £1,400 is the difference between a sustainable business or not, that is not a viable business and public policy should not be in the game of sustaining that type of business.

"We should be channelling this money where it is going to make a difference."

The FSB reacted to Mr Boyd's criticism by saying that the businesses who were wealth-creating in Scotland were probably in a better position to comment on the matter than trade union officials.

Colin Borland, from the organisation, said: "The scheme rights a historic imbalance in rates bills and allows the smallest firms to save up to £4,260 a year. It has proved a lifeline for thousands during the downturn.

"I am disappointed that the STUC doesn't see the value in this move towards a more progressive business tax regime. Taking money from the very small businesses on which we are relying to trade us back to growth and giving it to trendy pet projects would be a dangerous backwards step."

Investment bank

Mr Boyd's attack also focused on the SNP government's council freeze policy.

He said: "Also the council tax freeze, when you speak about these in terms of stimulating the economy and adding to aggregate demand, both of these measures in terms of demand management are hugely inefficient."

Mr Boyd believed a better way to stimulate investment was to plough money into the Scottish Investment Bank which supports the development of small and medium-sized enterprises, and "high-productivity" businesses.

The union leader went on to criticise the Scottish government for welcoming new jobs created by Amazon and Ryanair whom he claimed were "some of the worst employers".

Mr Boyd said: "We're providing grants to these companies to set up in Scotland but we have to start stipulating that we expect minimum returns in terms of employment standards.

"And if we're giving grants to the Amazons and the Ryanairs of this world then we want these jobs to be sustainable and we want these jobs to be decent.

"Simply shouting about 1,000 new jobs in the Scottish economy is not going to cut it over the long term.

"You have seen the way Amazon behaved, for example, in its plant in Greenock. Some of the very, very worst employment standards you will see right across the UK economy. And the Scottish government should not be in the business of supporting this type of company."