Business was largely overlooked in Sturgeon’s legislative programme, says TERRY MURDEN
Nicola Sturgeon’s Programme for Government prompted a flurry of responses from the business lobby groups which were almost unanimous in having very little of substance to say about it, which is not too surprising as there was little about business or the economy among the dozen bills that the First Minister will present to the Scottish parliament.
There was a commitment to a “just transition” to a low-carbon economy (in other words, ensuring no one is left behind); funding to help businesses harness the economic potential of technology; and commitment to an additional £500 million to “support the new, good and green jobs of the future” (whatever they are)… and that was about it, apart from confirming that businesses will continue to receive 100% rates relief for this financial year, which was taken as a given.
No mention of a Scottish aviation or retail strategy, no new details on plans for re-skilling and retraining. There was an acknowledgement that work is required to make government processes deliver for the wider economy and that reform of the procurement programme is needed to help small firms. But this has been promised before and nothing has changed.
Summing up the response simply, CBI Scotland director Tracy Black, said: “Businesses will feel there ought to have been a greater focus on boosting growth.”
We may be up to our neck in Covid-induced debt, and the health and care services do need to be properly supported, but it was business as usual from a government that talks a good game about putting the economy and jobs first, but quickly reverts to its social agenda and pet projects.
It is tempting to say that not only is the government offering little in the way of ambitious, imaginative and creative policy ideas for the economy, it is in danger of making things worse. The hospitality industry, struggling to get back on its feet, is warning that the Scottish Government will unveil an Out of Home Action Plan later this week, as part of a Public Health Bill, that is likely to push more burdens and costs on to businesses. Additional business taxes such as the workplace parking levy and transient visitor levy (tourism tax) are still on the government’s agenda.
The opposition doesn’t help much by continuing to draw attention to the SNP’s focus on another independence referendum. They need to accept that the SNP’s principal objective is splitting up the UK, and that engaging in relentless name-calling on Twitter, which seems to pass for political discourse these days, is also getting us nowhere. The Tories in particular are allowing themselves to be led by the SNP agenda. If the economy is more important, then tweet about that and the benefits of the union instead of constantly throwing mud pies at the nationalists.
Away from Holyrood, and the programme for controlling foxes and improving firework safety, Trade Minister Ivan McKee, one of the few in the Cabinet who understands business, told an energy conference that the transition from oil and gas to green energy “must be carefully managed, not rushed”, an indication that the message may be getting through and that the Greens won’t get things all their own way. We should be grateful for small mercies.
While Holyrood and the Scottish twitterati were gorging themselves on more indyref diversions, in Westminster there was an important series of announcements that did bring the economy as well as the health service into sharp focus. The Prime Minister’s decision to hike national insurance and the tax on dividends will have implications for all of those in work, whether an employer, employee or self-employed across the UK.
Boris Johnson has chosen a risky path that has puzzled economists who think he’s chosen the wrong tax to source his much-needed revenue, and infuriated hard-pressed businesses who fear more pressures on costs. Their protests will be less of a concern to nervous Tory backbenchers than the effect that the announcement will have on voters who were persuaded to back the Tory party leader’s 2019 manifesto pledge that there would be no increases in tax.
Aside from hoping the £14 billion a year tax raid will do what he hopes by supporting the social care system, Mr Johnson will be gambling on two things: that the public acknowledges that his party cannot be held to promises made before the world was brought to its knees by Covid; and that by announcing what has been called a “mini budget in all but name” mid-way through the parliament most voters will have forgotten about the tax hikes by the time they return to the polling stations.
That will depend on how quickly business and the economy recovers. If it falters, he will be accused of making matters worse. Should growth take off as optimists still expect, he may plug the gap in funding social care and there may be an opportunity for him to rein in his tax rises at the next election, in which case – to quote a song by a famous Swedish band in the news – the winner takes it all.
Terry Murden held senior positions at The Sunday Times, The Scotsman, Scotland on Sunday and The Northern Echo and is now editor of Daily Business