Sandy in The Telegraph | Government and industry now need to consult and cooperate
Sandy Begbie, Chief Executive, Scottish Financial Enterprise
The dust has settled from the hotly contested SNP leadership contest and Scotland’s new First Minister, Humza Yousaf, has appointed a cabinet to take forward his programme for government.
Both Kate Forbes and Ivan McKee drew upon their own professional experience before entering politics and established largely positive and constructive relationships with the Scottish business community so their departure from government is disappointing. However, politics, as with business, is always subject to the forces of change so I welcome Neil Gray to his new role as Cabinet Secretary for Wellbeing Economy and look forward to working closely with him, on behalf of our sector, and hope we can reset toward a more pro-active and dynamic relationship between government and industry.
The term ‘wellbeing economy’ is often thought to encompass dignity, nature, purpose, fairness, and participation, which are all clearly laudable aims and crucial to our future economic system. However, this high-level definition on its own is not sufficient to provide a clear direction of travel and deliver the long-term, sustainable economic growth our country needs. We need to ensure ‘wellbeing economy’ also encompasses classic economic values of competitiveness and productivity, and that there is a relentless focus on encouraging and incentivising sustainable, inclusive growth, which has sadly proved stubbornly low over recent years with a knock-on effect on living standards. This focus on business success, innovation and growth is vital not only to create high-wage, high-skill jobs and deliver net zero but also to support public services. Financial services have a vital role to play in achieving those aims, and I hope the industry will be a key focus of Mr Gray’s new cabinet portfolio.
Scotland’s economy has many internationally renowned sectors, including financial and related professional services, but in recent years the relationship between government and business has made achieving growth more challenging. For understandable reasons, the COVID-19 pandemic created a new dynamic between government and business with high levels of focus on day-to-day operations of business, but this now needs to be urgently reset. Scotland’s businesses want to see greater emphasis on collaboration rather than intervention, working in partnership with government to help solve our big collective challenges. We urge the new First Minister to commit to a refreshed relationship with business, putting cooperation and consultation at its heart.
Equally, we need to create an economic environment in Scotland that encourages businesses to grow and invest here. The reality is a lack of capital spending over recent years, coupled with an increasingly uncompetitive tax landscape, has held back productivity. While it was welcome to see some commitments from the Chancellor of the Exchequer to incentivise business investment in Scotland in his recent budget, we need to see both the UK and Scottish governments adopting a bolder and more joined-up approach. Scotland, for instance, has huge potential to be a world-leader in net zero technologies and green energy, but that will not be achieved without business backing. This is something that has been recognised by both the US and the EU in the creation of, and response to, the Inflation Reduction Act, and we need a coordinated effort to ensure Scotland is not left behind.
Investment in skills is also a key priority, particularly if government is serious about improving productivity. The current apprenticeship levy is one example of where current policy is not fit for purpose, while there is more that can be done on areas such as upskilling and reskilling at all levels of the workforce. This should be another area of focus for the new First Minister.
We are ready and waiting to support sustainable, inclusive growth that delivers for Scottish society. All we ask is for a truly collaborative relationship with government that prioritises encouraging investment, boosting skills, and delivering net zero. With that, we can collectively work together to create the high-skill, high-wage jobs, and economic growth that Scotland’s public services and its people truly deserve.
As seen in The Daily Telegraph