ATTITUDES to business either side of the Border show which country is likely to grow its economy, argues Brian Monteith
You have to hand it to Nicola Sturgeon, if there was an Oscar for brass neck in politics she would win it hands down. Her accusing the Conservative government of being “anti-business” looks unbeatable for kant and hypocrisy.
The plot outline for Sturgeon’s greatest piece of cheek was written by the previous Conservative Energy Minister Michael Fallon as far back as 24 April 2014, when he announced that any onshore wind turbine project not receiving planning approval before the general election would no longer receive the substantial government subsidies that are funded by dearer consumer bills.
This commitment was repeated in the Conservative’s general election manifesto a year later. When Amber Rudd became the new Energy Secretary following her party’s historic victory, she wasted no time in following that unusual but welcome practice of delivering on a manifesto commitment by announcing that the ending of onshore subsidies would indeed happen, but granted a month’s delay by setting the cut-off for 18 June rather than 7 May.
This contrasts with the record of the SNP, where Fergus Ewing campaigned against onshore wind farms in the Inverness constituency up until 2007 as an opposition MSP – but as soon as he became Energy Minister became a disciple for their mass adoption across Scotland.
Ewing illustrated his personality change by calling Rudd’s principled and democratic decision “irrational” and “utter folly” while Sturgeon said it was “wrong-headed, perverse and downright outrageous” as well as writing to David Cameron accusing him of “taking such an anti-business approach on the issue”.
So, by contrast, we have one SNP government in Scotland where its politicians say they support one thing (restraining onshore wind farm development) but do the complete opposite when they gain power, and another government in the UK where its politicians say they will do one thing (ending onshore wind farm subsidies) and keep their promise.
Business craves predictability from governments. Politicians who do what they say they will do – even if businesses don’t like what they do – are much preferred to politicians who change their positions without warning and are utterly unreliable. By that measure, Rudd must surely be described as pro-business and Ewing and Sturgeon as anti-business.
That is only one example and to be fair to Sturgeon, we must consider a broader measure of what an anti and pro business government might look like before awarding her that statuette for brazen brass neckery.
As well as reliable predictability (so that businesses can plan ahead for any difficulties), business people have repeatedly argued for three things – relatively light touch regulation, low taxes and level playing fields.
I don’t know any business people that believe in no regulations, they accept that some regulation is required – if anything to create that level playing field that they crave. They look to offer competitive advantage through innovation, creativity, hard graft, applied experience and tighter margins than their competitors, but fear that regulations make all of these things harder. Finding the right balance that protects stakeholders such as customers, clients, employees and inventors is not easy – but examples of burdensome regulations are not hard to find. Many come from the EU when it applies a one-size-fits-all approach to all 28 member states, but these are often gold plated by our own governments too.
Governments that seek to review and cut back on the regulations and legislation that they churn out, and thereby help businesses produce the goods and services customers want, contribute towards the success that can bring new jobs and the spread of prosperity. This must be considered pro-business. Those administrations that seek to pile more and more regulations upon commerce, often ignoring the warnings of business representatives about the dire effects upon profitability (that allows sustainability and future investment), threaten jobs and reduce tax revenues – they are anti-business.
Governments that seek to reduce the taxes on businesses so that they can be more efficient and price-competitive, must be considered pro-business, while those that add to the costs of doing business through higher taxes and charges must be considered anti-business.
Governments that seek to treat all businesses equally, rather than favouring one group against another – so that there is a level playing field where they can compete by using their competitive advantages – must be considered pro-business. Likewise, governments that subsidise one group of businesses in the marketplace to the disadvantage of others distort that market, making it inefficient and putting enterprises at risk. The latter approach must be considered anti-business. How, then, do our two governments compare?
At Westminster we have a new government with a Business Secretary, Savid Javid, a self-made millionaire who knows a thing or two about success in business. On taking office he has set out to reduce unnecessary regulation, reduce the number of strikes and is all in favour of cutting taxation and hidden business costs. Including the period in coalition with the Liberal Democrats, Conservatives have cut Corporation Tax from 28 per cent to 21 per cent with a promise to take it to 18 per cent by 2020. Employers’ National Insurance contributions have been cut and the cost of employing staff reduced. It may not be perfect but that’s a fairly pro-business approach that Scotland benefits from.
At Holyrood we have an SNP government that lacks business experience, that favours unfair subsidies, has penalised business through increases in property rates and introduced taxes on empty properties. Its ever-flowing treacly tide of regulation makes doing business in Scotland more expensive than in England – this approach is anti-business.
Subsidising individual companies – such as Sturgeon’s disastrous investment in Prestwick – hurts other businesses in Glasgow and Edinburgh that could be more successful. With repeat anti-business performances undoubtedly still to come, Sturgeon’s Oscar for brass neck is overdue.
What next, a lifetime achievement award for hubris?