UNISON Scotland chief Matt Smith slams the myth that the economy is dependant only on private sector

UNISON Scotland has recently agreed to commission research to back up our view that public expenditure makes a vital contribution to the Scottish economy. This applies not only in the provision of services but in the indirect impact they have in driving much of the rest of the economy.

Earlier in the year at the STUC we were instrumental in establishing this as STUC policy. In the interim we have been further examining this issue, particularly in view of some of the pressures on public expenditure - such as Efficient Government - that are now being raised.

To listen to some of the business organisations - and some members of the media - one would think that the economy was purely dependent on the private sector and all else flowed from that.

The truth is quite different and UNISON needs to expose this. Recently the STUC met with senior civil servants to consider this matter and from some of the statistical information made available to us it is clear that the arguments we have been making are valid.

These are some of the reasons we have agreed to commission research on the impact of public expenditure on the economy. We anticipate that this will help build our argument for sustaining current levels of expenditure and ensuring that when arguments about efficient government are made, we can prove that the areas where most of our members work help generate much of the rest of the economy.

In particular we need to expose the argument that the public sector 'crowds out' the private sector. There is no evidence of this. Indeed, although there has been substantial growth in employment in the public sector it has not matched the growth in employment in other sectors of the economy.

This is a debate that it likely to become more important as we head for Scottish Parliament elections in 2007. For that reason UNISON will be making this a key element of our campaigning and we will ensure that the argument is not hijacked by those whose aim is merely to cut taxes and see a reduction in public sector provision.

Those who argue that we need to cut public expenditure should remember that when Thatcher tried this in the 80's the resultant loss of employment across all sectors was massive. Public expenditure assists growth in the economy and generates jobs in all sectors.

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