CRAIG ALEXANDER RATTRAY supports calls for the new government to change its relationship with business
In the aftermath of last week’s elections surely now is the time to focus on what is right for the economy, for business and to improve Scotland’s economic performance? For too long we have suffered from low productivity, poor business creation through to longevity, and a lack of successfully scaling our most promising businesses.
Something needs to change. Can we rely on our politicians to create and deliver a framework that will allow this?
In my view, no. Without becoming too political, I completely agree with one of our most celebrated Scottish comedic talents, Billy Connolly who is famous for many quotes, two of which are:
“The desire to be a politician should bar you for life from ever becoming one.”
and
“Don’t vote. It just encourages them…”
Whilst I quote this with a small part of my tongue in my cheek, and my grandfather, who was more left wing than Stalin, turning in his grave, there is a serious point here.
The government is responsible for setting the framework for business to operate in, including regulation, (some limited) support and the taxation regime.
However, as has been recognised, we must do more.
Sir Tom Hunter and the Hunter Foundation recently commissioned the report by Oxford Economics “Raising Scotland’s Economic Growth Rate”, and I heard very little of it mentioned over the last few weeks during the many political debates.
It seems too far removed from the priorities of our politicians, and that is a concern. It appears to me that it is not even on their radar.
As outlined in the report, we need “radical and ambitious policy changes if Scotland’s economic performance is to be transformed within the next 15 years”.
We are a nation famous for developing new and innovative technologies over many centuries, we have some of the best research and ideas coming from our universities, and many of us clearly have the talent and willingness to improve.
But we do not deliver.
Even within the UK, our GDP per capita is 8% lower principally because of poor productivity. Similarly, our GDP per head is a fraction of comparable countries: 44% of Singapore’s level, 48% of Ireland’s, 68%of Norway’s and 75% of Denmark.
The report forecast that Scotland’s real GDP growth rate for the next 15 years will average 1.3%. Those figures do not make me proud to be Scottish.
The Oxford Economics Report proposed three key strategies
- Increasing borrowing to stimulate growth in demand and output.
- Significantly cutting taxes and de-regulating industries to improve competition.
- Increasing government spending on infrastructure, skills, innovation and the green economy.
They are not difficult.
They are not novel.
They are not mutually exclusive.
However, they require a change and unfortunately that means we must rely on our politicians to assist.
Business owners must encourage our politicians to do more, and perhaps as a group they need to enforce change in some way.
Personally, I believe that significantly cutting taxes and de-regulating industries should be one of the key drivers.
It has worked in other countries and it would most definitely help our SME and owner managed business base.
Leaving aside recent Covid-19 related support, I can think of very few business owners who believe the government has assisted them in any way whatsoever.
It is quite simple. We must change. We must do something different.
As the report states “it is not realistic to think that the current economic policies of either the UK or Scottish governments will produce a transformation of Scotland’s economic performance”.
That gives me the opportunity to close with another quote from someone who was much wiser than I am: Albert Einstein. He said:
“The definition of insanity is doing the same thing over and over again and expecting different results”.
We must change, we must do something different, and we must take action, otherwise our children and their children will be having the same discussion in years to come.
Craig Alexander Rattray’s column on issues affecting owner managers appears on alternate Mondays
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