Scotland faces race against time for economic growth, say business leaders
CBI Scotland has said that the projected budget blackhole means the new Scottish Government must make economic growth a priority
Business leaders have warned First Minister John Swinney that he must make growing the economy the “defining priority” of his new government in a “race against time” to deliver economic growth.
CBI Scotland said the SNP leader should work “tirelessly” with firms and other political parties amid a near £5 billion budget black hole facing the country by the end of the decade.
The group has published a five-point plan to go “full throttle” on growth to fire up Scotland’s economy and put it “firmly back on a path to prosperity”.
Ahead of its annual business lunch in Edinburgh, CBI Scotland urged the First Minister to reform business rates, planning, deliver a national skills strategy, close the tax gap with the rest of the UK and carry out big infrastructure projects.
CBI Scotland Director Michelle Ferguson said: “Our message to the new Scottish Government, and to new and returning MSPs, is a simple one: against a backdrop of rising costs and global volatility, growth really is the ‘only game in town’ – so it’s time to roll up our sleeves and get on with it.
“That means using every lever available to boost productivity and unlock vital investment. Business stands ready to play its part, but urgency is key. We can’t afford to sit on our hands, or we risk a worsening fiscal position and the potential for great commercial opportunities to slip through our fingers.
“Yet, for all of the challenges that Scotland faces, the country stands on edge of huge opportunity – there aren’t many small economies that can boast our talent, innovation and knowhow. By backing our people and businesses, we can turn that economic promise into the kind of tangible, on the ground, delivery that can transform lives and communities across the country.
“Realising that potential doesn’t just mean doubling down on legacy strengths. It means being clear eyed about the opportunities of the future and staking our claim in the innovative, high value industries that are powering global growth – areas like AI, life sciences and the energy transition.”
Mr Swinney is a keynote speaker at the event, as is prominent Scots businessman Sir Tom Hunter.
The call from business leaders comes after a Labour MP told the House of Commons about how Scottish firms are facing “ridiculous” business rates increases.
Dunfermline and Dollar’s Graeme Downie told MPs about two businesses in his constituency that have seen their rates skyrocket since revaluation.
Campervan hire company Big Sky Campers in Rosyth saw its rates rise by 470 per cent, which is more than £10,000 a year.
And the family-owned Osborne Motors in Dunfermline saw its rates go up by 375 per cent - more than £6,000 a year.
Mr Downie said: “I have recently met with two local businesses who have been hammered by changes by the Scottish Government to business rates.
“Osborne Motors, who have seen their business rates increase from £185 a month to £695 a month.
“And Big Sky Campers in Rosyth, that have seen an incredible 470 per cent rise from £180 to £1,025 pounds a month, putting both of these businesses at risk.
“Will the minister please agree with me that these are ridiculous rises for small business to cope with?
“And will he assure me he will do everything in his power...”
Mr Downie was then interrupted by the Speaker for talking for too long.
Labour Business Secretary Peter Kyle responded: “He raises an incredibly important point.
“The UK government has a support package for England, £4.3 billion to protect ratepayers.
“The Barnett consequentials, of course, provide support for Scotland, but the UK government is supporting businesses, the SNP is choking off investment and risking jobs.”
Anne Osborne, who runs Osborne Motors alongside her husband, said the business was struggling because of the rates increase.
She said: “We didn’t have to pay rates before last year because we were under the rateable value, but they've put the rateable value up, but not the threshold for paying it.
“So now we've been hit with rates like last year, and then they said it would be a yearly increase.
“It was roughly 25 per cent the first year, and then going up gradually. So last year we paid £180 a month, and I've got a bill not that long ago for £695 a month.”
She continued: “It’s having a big financial impact on us. We’re going to have to try and find about another £7,000 a year.
“I just feel we're getting no help at all.
“I nearly had a heart attack when I opened the letter up.”
Ahead of today’s lunch, Mr Swinney said he was “delighted” to attend “my first formal engagement since being sworn in as First Minister – to outline that achieving higher levels of sustainable economic growth is foundational for my government”.
He added: “So much else that we want to achieve, from further reducing child poverty to investing in modern, responsive, flexible and citizen-centred public services, depends on increasing our collective national wealth.
“The cabinet and ministerial team that I have appointed sends a very clear signal of my intention in this area. The Government I lead will use all the levers at our disposal to ensure Scotland has the resources, ambition and people to succeed.”
Earlier this week, a new SNP and former special adviser to Mr Swinney said Scotland's business rates system must be reformed "as quickly as possible".
Jack Middleton, who represents Aberdeen Central, said rebalancing non-domestic rates must be a "top, top priority" for the new Cabinet.
He said it was clear “flaws in the system” had led to “extreme” rises for some firms.
“Through the course of my campaign in Aberdeen Central and across Scotland, there’s been evidence and situations where we’ve seen flaws in the system and people have seen extreme rises in business rates – that’s got to change,” he said.
“We committed in our manifesto to looking at rebalancing the business rates scheme.
“I’d like to see that done as quickly as possible, and whoever’s the economy secretary or the business minister, that’s got to be a top, top priority for them.
“It’s got to be the first thing in their in-tray.”
The re-balancing, he said, should target internet giants to ensure they “aren’t getting away with paying less tax and small businesses are being hampered”.
Catherine Sangster, the new Scottish Labour MSP on the panel, said the “ball is in the SNP’s court” on the devolved levy.
“Obviously, the UK Labour Government will do as much as they can to support business,” she added.
Max Bannerman, a Reform UK MSP, said “all available options” should be considered, adding he has already had businesses in his Highlands and Islands region get in touch about the issue.
Liberal Democrat MSP Sanne Dijkstra-Downie said the best way to influence business rates would be through the annual budget-setting process.
The Lib Dems secured relief for some firms through this year’s budget, and the party will engage with the Government on the issue before next year, the newly-elected MSP said.
Comments
Want to join the conversation? Please or to comment on this article.