SNP in talks to cut fat cat pay by 5%

• Swinney: in negotiations.

Finance Secretary John Swinney has been discussing the proposal with the Liberal Democrats, who are becoming increasingly angry at the large amount of taxpayers' money being pocketed by executives in state-run enterprises.

The 5 per cent cut would affect those on the highest incomes working for quangos, health boards, councils, universities and government agencies. The proposal, suggested by the Liberal Democrats, is being considered by ministers and has been raised as a key demand in the negotiations that will determine if the minority SNP government can get its budget through Holyrood early next year.

Research has indicated that the salary bill for the several thousand public sector workers in Scotland who take home more than 80,000 totals at least 600 million per year.

A 5 per cent cut would therefore free up about 30m in public money that could be redistributed into the pay packets of lower-paid staff. Last week, Lib Dem leader Tavish Scott revealed that within the overall total of 600m there were more than 2,100 staff in the NHS who were paid more than 100,000, with their annual wage bill exceeding 300m – including 30m in bonus payments.

Writing in Scotland on Sunday today, Scott said: "It isn't just in the health service. Across government, our research indicates that around 600m gets spent paying a tiny number of top officials salaries that are greater than those paid to government ministers.

"If the Scottish Government cut that fat-cat bill by, say, 5 per cent, it would free up tens of millions of pounds that could be used to help those at the bottom end of the income scale."

Scotland on Sunday understands that Alex Salmond's Cabinet has already discussed imposing a pay freeze on high-earners in the public sector and the civil service. Government ministers have already frozen their own salaries. Cabinet secretaries receive almost 97,000 a year, while junior ministers earn about 81,000.

Yesterday a government source said: "Those who earn the most should shoulder the biggest burden. John will have more to say about this in the new year. We certainly advocate a pay freeze for the higher earners."

A 5 per cent cut in Scotland would be more draconian than the 1 per cent pay cap on pay rises that was announced by Alistair Darling on public sector workers in England and Wales.

The Scottish Government has emphasised that it wants to protect lower paid public sector workers on the front line, such as nurses and teachers.

Among Scotland's public agencies and quangos, Scottish Enterprise has seven employees earning more than 100,000, including the SNP-appointed chief executive Lena Wilson, who gets 203,000.

Barry White, the newly appointed chief executive of the Scottish Futures Trust – a much-criticised body created by the SNP to fund capital projects – is on 180,000. In NHS Lothian, 412 people are paid more than 100,000 and a further 186 receive more 80,000. NHS Lanarkshire has 226 employees in the 100,000-plus bracket while NHS Highland has 146.

In higher education there are also huge rewards on offer. The University of Edinburgh has 114 members of staff earning more than 100,000 and

Glasgow University 113. Dundee has 51 staff in the 100,000-plus category compared with Glasgow Caledonian University with only six and Heriot-Watt University in Edinburgh with ten.

In local government, Glasgow City Council has seven employees earning more than 100,000.

Yesterday Swinney said: "Scottish ministers have set an example by taking a pay freeze, and the Cabinet has already agreed to extend that approach to the highest paid people across the public sector who come under our remit."

He added: "Lib Dem policy (at Westminster] actually advocates a pay freeze for all employees in the public sector, whereas we believe in protecting the low-paid."