Alex Salmond slammed by business over growth

Published on Monday 28 December 2009 21:35

SCOTLAND'S most prominent business leader has attacked the SNP's record in government, warning ministers that they must change direction in 2010 to meet their key economic target. In his New Year's message, released today, CBI Scotland director Iain McMillan warns that the Scottish Government will fail to meet First Minister Alex Salmond's goal of Scotland matching the UK's growth rate by 2011.

• Iain McMillan wants a change of ideology Picture: Donald MacLeod

Mr McMillan's broadside reflects growing disquiet among business leaders over the direction the SNP is taking on the economy.

The head of the employers' organisation is one of a group of leading business figures who believe that members of Mr Salmond's cabinet are hostile to the involvement of the private sector in the provision of public services.

In his message, Mr McMillan called on ministers to support a raft of policy initiatives which he claimed would promote growth north of the Border.

Top of his demands for next year was the reinstatement of the Glasgow Airport Rail Link (Garl), which the business community see as vital for Scotland's future growth, but was cancelled by finance secretary John Swinney.

Mr McMillan said: "In 2010, the Scottish Government must do more for business and the economy if it is to have any real chance of achieving its primary goal of raising Scotland's growth rate to the UK level by 2011.

"This means that ministers must put in place policies that promote, rather than hinder, economic growth.

"They have substantial powers to do so in significant areas of public policy that businesses in Scotland regard as priority – education and skills, transport infrastructure, business support and innovation, public procurement, planning, regulation, some taxation, environment and water, health and justice."

He went on: "There were undoubtedly some public policy successes in 2009, for which the Scottish Government deserves credit from the business community; for example, retaining business rate parity, improvements to planning, speeding up supplier invoice payments, and construction of new rail and motorway infrastructure.

"However, it was a year that witnessed too many policies that will not help the economy – for example, canceling Garl, banning the private sector from delivering some public services and refusing to use PPPs to fund vital infrastructure projects."

Last night, however, a spokesman for Mr Salmond launched a strenuous defence of the SNP's record, insisting that the administration's record in the face of a massive global recession had been hugely beneficial for businesses.

He said: "The Scottish Government is absolutely clear on the scale of the economic challenge we face – and that is why we acted quickly and decisively to put in place a comprehensive economic recovery plan. Delivering that plan will continue to be our focus over coming months.

"Key elements, as the CBI rightly acknowledge, are our ongoing measures to improve the planning and regulatory systems, ensuring they are an aid and not a barrier to economic growth."

He suggested that the problems over Scotland's economic growth were the fault of the Labour government at Westminster and Chancellor Alistair Darling.

The spokesman added: "The Chancellor's refusal to allow Scotland to bring forward further accelerated funding next year in his Pre-Budget Report was a reckless decision that threatens our economic recovery.

"In addition, the Treasury's unprecedented 500 million reduction in our capital budget has seen the reluctant cancellation of Garl as a direct result."

Opposition parties said the message was a "vote of no-confidence" in the SNP in government by the business community.

Labour economy spokesman David Whitton said: "The SNP government is not doing enough to support business and create jobs.

"Under Alex Salmond's watch, the number of inward investment projects in Scotland has fallen by a quarter, whilst the number of companies investing in Wales and Northern Ireland has increased."

Mr McMillan's attack comes amid growing concerns over the direction being taken by the SNP government.

In 2009, Mr McMillan and the leaders of other business organisation – including the Institute of Directors and Scottish Chambers of Commerce – were damning of Mr Salmond's public role in the protest against Diageo's decision to end its historic link with Kilmarnock.

Even though there was a net loss of 500 jobs, the drinks giant was still investing 100m in Scotland and Mr McMillan claimed the behaviour of Mr Salmond would put off other companies coming to Scotland.

There was also criticism of an SNP conference speech by Mr Salmond's deputy, Nicola Sturgeon, which condemned private-sector involvement in the NHS.