Grahame Smith: Unions will be a vital force in helping our industries to recover

AS THE STUC Congress 2010 convenes today in Dundee, the Scottish economy stands precariously poised.

Figures released on Wednesday will confirm whether Scotland has followed the rest of the UK out of recession. On the same day, labour market statistics will show whether there is a continuation of the worrying trend that has seen unemployment rise in Scotland but fall in the rest of the UK over the last three months.

STUC analysis published this morning shows that youth unemployment in Scotland has risen by 89 per cent over the past two years and that there are currently more than nine Jobseekers Allowance claimants for every Jobcentre advertised vacancy in Scotland. Unemployment hasn't reached the levels predicted a year ago, but there can be no room for complacency.

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I expect delegates to be angry that jobs, wages, terms and conditions and pensions are under threat due the current state of the public finances, a problem caused by the irresponsibility and greed of extravagantly rewarded bank bosses. I anticipate dismay and bemusement at the lack of reform since the banking crisis.

I will be very surprised if speakers do not draw attention to the distribution of rewards during the UK recovery: Dhaval Joshi of RAB Capital calculates that national income rose by 27bn in the second half of last year; higher profits accounted for 24bn of the rise. Wages accounted for only 2bn. "It is almost unheard of for profits to rise more quickly than wages in absolute terms," says Joshi.

Much of the focus around congress will be on the potential impact on the Scottish public sector should the new government decide to implement swift and deep cuts. This is a profoundly important issue and will be covered extensively during debates.

But the trade union role in the private sector should not be diminished. Unions are active in some of our most successful and competitive firms in energy, aerospace, construction, retail, transport, whisky, and power engineering. Workers and companies across the private sector have much to gain from a union presence.

STUC Congress will be as concerned about the opportunities for these workers as it is about workers in health and education. Indeed, the STUC's policy agenda has never sought to draw the often spurious distinctions between public and private interests that have been the stock-in-trade of other organisations.

A dynamic and innovative private sector is pivotal to Scotland's economic success. The problem is that, despite a very favourable business environment for most of the past decade, the Scottish private sector has suffered from a lack of indigenous ownership, lacked ambition and failed to invest sufficiently in people, plant and research. That is why rapid progress with the Scottish Investment Bank is essential.

A reappraisal of the role of government in economic and industrial affairs is also badly needed. If the economy is going to create green jobs to match the extravagant political rhetoric then nascent industries will have to be nurtured. The UK government's new proactive industrial strategy signals the way forward.

If the wrong decisions are taken post-election, then these difficult times could get much worse. It is essential that Scotland makes the most of the industrial opportunities that undoubtedly exist to start rebuilding the collective prosperity of all its workers and citizens.

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• Grahame Smith is general secretary of the Scottish Trades Union Congress