Iain McMillan: Budget must put boosting business first

THE recent slew of economic data paints a picture of a still weak economy, held back by a lack of confidence and the problems besetting the eurozone.

Furthermore, with government implementing the largest spending cuts since the Second World War, it must also be recognised there is little new money available for any stimulus.

Yet there are things the Scottish Government can and ought to do to help stimulate activity. Central to this are its spending plans for the next three years.

Parliament has still to ratify the tax and spending proposals and will vote on the Budget Bill today. Among the proposals are a number of positive measures – relating to infrastructure, renewables, skills, business support, the council tax freeze, and prompt payment for suppliers – which business will welcome. The announcements on infrastructure are especially encouraging, particularly if they lead to a rebalancing of devolved spending so that a greater proportion is ultimately spent on investments that support wealth creation.

Less positive, though, are the premature cuts to the planning budget, as there has yet to be a significant and lasting improvement in the planning system. The lack of new thinking on the use of competition and choice to drive up standards in the delivery of public services is also a missed opportunity, as is the omission of any pump-prime funding to help establish more direct air connections to key overseas business destinations, crucial if we are to make good on our export ambitions.

A far bolder approach ought to be taken to reduce the costs of government, in order to protect and enhance spending that galvanises growth. This would also help avoid the budget’s sting in the tail – the £146m of new business rate taxes that are to be levied, on larger retailers and firms with empty premises. Given the state of the economy, government should be making it easier for firms to invest and create jobs in Scotland, not more expensive. Ministers should pledge to rule out introducing any further additional business rate levies or rises during the remainder of the current parliament.

• Iain McMillan is director, CBI Scotland