Competitiveness and cross-UK collaboration key to getting Scottish economy growing - CBI Scotland

With the economy now showing green shoots of recovery following a prolonged period of stagnating growth and high costs, CBI Scotland is calling on the Scottish Government to use the forthcoming Programme for Government to support enterprise and go full throttle in the quest for long-term sustainable growth.

The Scottish Government must work closely with UK counterparts to give crucial momentum to Scotland’s economic recovery and use all available levers – both devolved and reserved – to build a more competitive, prosperous and sustainable economy that benefits businesses and consumers across the whole of Scotland.

In a letter to the First Minister, CBI Scotland urges the Scottish Government to prioritise policy competitiveness and policy stability, boost business investment, and seize on the amazing opportunities available to Scottish businesses both at home and abroad – particularly in areas like the green economy where Scotland already boasts a sizeable early mover advantage.

Mags Simpson, Interim CBI Scotland Director, said:

“With a new UK Government in place, there’s a real chance to re-set the relationship between Holyrood and Westminster because collaboration not confrontation is the only way to build a thriving economy that delivers for the people of Scotland. The two governments must now work hand-in-glove to break-down barriers to growth, crowd-in business investment, and build a high-skilled workforce.

“Giving certainty to investors is essential if we’re to capitalise on the amazing opportunities available to us. A thriving green economy is within our grasp, but we need to address the issues that are giving investors pause for thought. That means publishing long awaited net-zero strategies, addressing critical gaps in skills and infrastructure and cutting through burdensome red tape – particularly around planning.

“We also need to take stock of Scotland’s competitiveness, not just internationally but across the UK. In a fierce race for talent, it’s time to put business leaders’ minds at ease by committing not to widen the income tax gap between Scotland and the rest of the UK. We should also look closely at whether current income tax bands are helping or harming the Scottish economy overall.”

CBI Scotland’s Programme for Government focuses on three key areas:

(1) Deliver a competitive investment-focused tax regime 

• Commit to avoiding further income tax divergence with the rest of the UK.
• Commission an independent review to assess the impact of income tax divergence on Scottish competitiveness.
• Reverse the decision to introduce a business rates surtax for certain larger retailers that puts them at a competitive disadvantage compared to those in the rest of the UK.

(2) Create a workforce that’s fit for the future

• Better align skills funding to market demand and strike an improved balance between undergraduate learning, work-based learning, and short, sharp upskilling and retraining to ensure viable routes for all.
• Publish one single consolidated skills strategy and action plan to address Scotland’s growing skills demand, alongside key timelines and deliverables to ensure accountability.
• Work with the UK Government to deliver greater transparency around Apprenticeship Levy funding in Scotland, with a particular focus on overall income, spending, and Barnett Formula allocation.

(3) Breakdown investment barriers to unleash economic opportunities        

• Publish the delayed Climate Change Plan, Green Industrial Strategy and Energy Strategy and Just Transition Plan to give investors policy certainty and boost business confidence
• Work with UK Government counterparts to address long-standing barriers to growth, including burdensome planning processes and accelerating grid connections.
• Focus transport infrastructure investments on improving connectivity to key markets, including better rail connections with cities in the north of England and deep-sea ports in other parts of the UK.

Further recommendations are outlined in the full CBI Scotland Programme for Government submission.

Read the full report here https://www.cbi.org.uk/media/1b4ixy0u/seizing-opportunities-cbi-scotland-programme-for-government-submission-2024.pdf