The Finance Secretary left businesses empty-handed and missed opportunities to make a positive impression, says TERRY MURDEN
Shona Robison clearly didn’t get the memo. You know, the one that said businesses were keen to meet to discuss what they needed in this year’s Scottish Budget. They had a list of measures to help pubs and restaurants, house builders, operators of big retail stores and headhunters trying to lure top talent to Scotland.
The Finance Secretary, who talks about helping business like a burglar claiming to be a good neighbour, thought it would be a lot more helpful if she jacked up income tax, refused to offer the rates relief available in England and Wales, ignored the hospitality sector and blamed Westminster for every setback, loss of power and spending restriction that only independence could solve.
The budget will mean 22,000 commercial premises overall – which are liable for the intermediate and higher business rate – pay more in tax. For these firms their business rate will now escalate to a 25-year high and add millions of pounds to their rates bills.
Introducing a sixth band of income tax – which she calls an advanced rate of tax – along with other income tax rises will raise £82 million, equivalent to less than 36 hours of Scottish NHS spending, according to the Institute for Fiscal Studies.
The CBI Scotland added that it will harm Scotland’s ability to attract highly skilled employees and Scotland’s competitiveness nationally and internationally. Struan Stevenson of Scottish Business UK said Scotland’s higher earners and wealth creators – the entrepreneurs and businesses – will end up “footing the bill for the SNP’s fiscal incompetence”.
With three local authorities declaring a housing emergency and housebuilding targets being missed, the industry was floored by Ms Robison announcing a 43% funding cut to planning and 33% for building homes. Jane Wood of Homes for Scotland described the Finance Secretary’s announcement as “quite shocking”.
After at least escaping the worst case scenario of a business rates increae, the Scottish Retail Consortium noted that ministers are thinking of re-introducing a Scotland-only Public Health Supplement surtax on larger grocery retailers. This is a stealth tax that could open the door to what the SRC describes as “an unwarranted tax grab” that could affect grocery prices for customers. These are the same grocers who were lumbered with tens of millions of pounds in costs for the deposit return scheme fiasco.
Of course, it wasn’t all bad. There were things the Finance Secretary didn’t do – such as hiking the main poundage rate or further tinkering with the small business bonus scheme. Among the positive measures was 100% rates relief for hospitality businesses in the island communities and a £67 million strategic investment in offshore wind But that was about as good it got.
Liz Cameron of the Scottish Chambers of Commerce said businesses that had been promised a fresh start with Humza Yousaf’s administration will feel “neglected and disappointed” following the Budget statement.
I have long doubted the capacity of the Holyrood government to materially drive growth, but it should not be implementing policies that damage the economy. Figures published last week by Scottish Labour show that Scotland underperforms areas of England which have only an elected mayor and are largely relying on a mix of actions from Westminster and the dynamics of their local economies.
If Scotland cannot do better with two governments then there is something fundamentally wrong. The lack of imagination and innovation, together with an unwillingness to step back from the plethora of free services is not helping.
As she raced through her first Budget statement with barely a pause for breath, Ms Robison appeared to be in a hurry to get the whole thing over and out of the way. Businesses and opposition parties will not allow her to put it so quickly behind her. The repercussions of this failure in economic stimulus will be regular reminders of what was missing.
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
The failure of this government just goes on and on for everyone, it’s not just higher earners, it’s everything from education to clean streets.