CBI urges water sell-off and end to local tax plan

Published on Saturday 25 October 2008 15:19

CBI SCOTLAND will this week renew its calls for the privatisation of Scottish Water and abolition of the Scottish Government's plans for a local income tax.

The recommendations, to be delivered to ministers ahead of the next spending round, are aimed at reviving the flagging economy.

Selling Scotland's water industry could raise up to 3bn, according to some estimates. For some time the CBI has urged the Government to consider an outright sale of Scottish Water or turning it into a mutual company. It says privatisation would save 180m a year in support costs that could be invested in other GDP-enhancing measures.

With public finances now under pressure, CBI Scotland is expected to take advantage of an opportunity to press ministers for radical measures. As an over-arching objective, it has repeated its demand that the Government assesses all new policies and spending decisions in terms of whether they help economic recovery.

More specifically, it will present eight recommendations in its response to the Government's consultation on the draft budget and spending programme for 2009/10.

Three of these proposals are new: bringing forward infrastructure plans, such as the Forth Road bridge; targeted cuts in business rates; and incentivising councils to support economic development.

It repeats calls for the public sector to extend the range of services it buys from private firms, and for more encouragement for young people to study subjects needed by industry.

CBI Scotland will also reaffirm its opposition to use of the tax-varying powers

CBI Scotland's director, Iain McMillan, said: "Business has a crucial interest in the budget of the Scottish Government, both as significant funders of Government through taxes, but also as beneficiaries of spending decisions, for example on skills and transport.

"We recognise that all tiers of Government are operating within a tighter financial climate, as is business, and as such are having to cut their cloth accordingly. However, their significant remit and budget means the devolved Government has a valuable role in helping firms and the economy through the current economic slowdown."

Action plan

• Review new policies and spending decisions against a single benchmark: will such policies aid economy recovery?

• Accelerate infrastructure projects

• Alleviate cost pressures through targeted reductions in business rates

• Enhance the range of services the public sector buys from the private sector

• Incentivise councils to support economic development

• Privatise Scottish Water

• Incentivise young people to study subjects industry needs

• Scrap plans for a Local Income Tax