LONDON offers benefits as well as significant challenges to Scotland’s economy, Nicola Sturgeon has said in her first major economic speech since becoming First Minister.
She said the UK capital has a “centrifugal pull” on talent, investment and business from around the world and the challenge is how to balance that in Scotland’s best interests.
Ms Sturgeon has announced she is strengthening the Scottish Government’s Council of Economic Advisers (CEA) to help make the country more competitive.
She said the CEA will continue to be chaired by Crawford Beveridge and take advice from Nobel Laureate Professor Joseph Stiglitz, while Sir Harry Burns, former chief medical officer to the Scottish Government, will join the council to help look at the issue of inequality.
She made the announcement in an address to business figures in Glasgow, her first speech as First Minister outside the Scottish Parliament.
She said: “A key part of this debate will always be about how we compete with London. In looking at that we need to recognise both the economic value of London and the benefits to our business and economy that come from our proximity to it, as well as the significant challenges it poses.
“London has a centrifugal pull on talent, investment and business from the rest of Europe and the world. That brings benefits to the broader UK economy. But as we know, that same centrifugal pull is felt by the rest of us across the UK, often to our detriment. The challenge for us all is how to balance this in our best interests - not be engaging in a race to the bottom, but by using our powers to create long-term comparative advantage and genuine economic value.”
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Ms Sturgeon said she wants to work with business to address inequality, saying: “Equality and prosperity shouldn’t be seen as enemies of each other, but as partners. One reinforces the other.”
She said: “We believe - in common with many economists across the world - that equality and cohesion are good for growth, as well as good for individuals.”
The First Minister said she wants to work with business to create a society where the benefits of economic growth are shared more equally.
She said: “What I want to do is strengthen that sense of partnership. Government will be supportive of business, so that Government and business together can support a fairer, stronger, more prosperous Scotland.”
In an interview with the Financial Times (FT) ahead of her speech, Ms Sturgeon told businesses they have ‘’nothing to fear’’ from her administration, insisting her radical land reform plans do not represent a form of class warfare.
Scottish Conservative enterprise spokesman Murdo Fraser MSP said: “We predicted before Nicola Sturgeon came into office that she would be Scotland’s most left-wing First Minister.
“She hasn’t been in the job two weeks and already she’s proven us right.
“The scorecard so far is a home-buyers tax on aspiration, a proposed income tax hike, and a ridiculous land tax which she unveiled last week.”
“Whatever the warm words to business, that adds up to a socialist agenda which sets a course back to the 1970s.”
Scottish Labour finance spokesman Iain Gray MSP said: “The SNP Government constantly trumpets the small business bonus, which they introduced to secure Tory support for their budgets when they governed as a minority.
“After seven years, it really is time they came up with something for those businesses which do not benefit from that small business bonus. They have been hit by swingeing business rates increases, with transitional relief axed.”
Liz Cameron, director and chief executive of Scottish Chambers of Commerce, said: “The First Minister specifically focused her attention towards ensuring that Scottish business not only has a competitive environment to work in, but world-leading. We share that ambition.
“However, the proof of the pudding is always in the eating. We need to see policies being developed and emerging which match what business needs to enable us to continue to compete, create jobs and increase our investment.”
“My plea is that business is actively engaged at the ideas stage so that we can truly influence and work in an effective partnership with Government. All too often, business is at the end of the government cycle when it is often too late to make any substantive changes in key areas. Perhaps now is the opportunity to change that culture.
“Our Chamber Network looks forward to working with the new First Minister and her team.”
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