Lib Dems want MSPs to block fat cat wages in public sector

• Business Secretary Vince Cable launches the Lib Dem pre-election manifesto at the Scottish Whisky Centre Picture: Esme Allen

Party leader Tavish Scott unveiled what is set to be a flagship Lib Dem policy at next year's Holyrood elections to cut back the pay of high earners such as the 5,000 senior staff in Scotland's public sector, paid about 650 million a year.

The policy was announced as part of the Scottish Lib Dems pre-election manifesto yesterday, which said that MSPs would need to give "specific approval" to "every proposal to pay a public employee higher wages" than the package of more than 80,000 currently pocketed by cabinet ministers.

With the Lib Dems confident of forming a coalition deal to govern Scotland after the next Holyrood election, the policy could be put in place after the 2011 elections.

Under the plans the pay of figures such as the chief executive of the Scottish Futures Trust Barry White, who receives a salary of 180,000, could be blocked or reduced by up to 10 per cent.

Although the Lib Dems did not define exactly which public-sector jobs would be targeted, bodies such as NHS Lothian, which employs 412 people on salaries over 100,000, could be affected by the move.

A Scottish business leader last night claimed that the policy would make it "more difficult" to get top people from private industry to take up positions in the public sector and said that the Lib Dems needed to look "more broadly" at the pay of public employees.

David Lonsdale, the assistant director of CBI Scotland, said: "A robust but flexible approach to reducing the public-sector wage bill is an absolutely critical response to the looming public-sector recession. But having people from the private sector going over to work in the public sector can be an attractive option and this could make it more difficult to do that."

The Lib Dem leader said the policy was targeted at "high pay and bonuses" handed out by public-sector bodies as a whole, rather than looking at "individual contracts".

But Mr Scott admitted that the Scottish Parliament's committee system could look into pay, with some "high profile" cases taken on an individual basis before being approved in the Scottish Government budget.

He said: "For the first time we want to make sure that parliament will have to approve that spend. I don't mean on individual contracts, that would obviously be daft.

"In overall terms, parliament would have to take a formal process through the budget looking at that pay bill. If you're investing more than a cabinet minister's salary in a public official in Scotland, I think parliament should be asking why."

Scottish Tory finance spokesman Derek Brownlee said that public-sector pay restraint "cannot just apply to a few senior employees" and called for a complete public-sector recruitment and pay freeze.

Meanwhile, the Lib Dem pre-manifesto launched on the eve of today's autumn conference in Dunfermline also proposed job development agency Scottish Enterprise being replaced with regional development banks.

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