Nicola Sturgeon announces £500m Brexit lifeline for businesses

Nicola Sturgeon has announced a £500 million package to prop up business following the Brexit vote, with the Scottish Government offering guarantees or loans of up to £5 million per enterprise.

Nicola Sturgeon. Picture: PA

The new Scottish Growth Scheme is a key aspect of a Programme for Government which included legislation to trigger a second Scottish independence referendum.

The First Minister also promised to use new Holyrood powers to deliver a new Scottish security system with an increase in Carers’ Allowance and a new Best Start grant for low income parents.

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The Scottish Growth Scheme, which will target small and medium businesses over the next three years, was one of the more eye-catching measures in a 14-bill programme which will be implemented between now and June next year.

But it was her inclusion of a draft Referendum Bill in addition to the 14 bills that met with anger from the opposition parties.

Ms Sturgeon said that in the aftermath of the Brexit vote she wanted to ensure all options were open. “This Programme for Government makes clear that we will consult on a draft Referendum Bill so that it is ready for immediate introduction if we conclude that independence is the best or only way to protect Scotland’s interests,” Ms Sturgeon said.

Her apparent suggestion that independence might not, in fact, prove to be the best way to protect Scotland’s interests drew laughter from the opposition benches.

But later Scottish Conservative leader Ruth Davidson urged the First Minister to ditch the “threat” of a second referendum and focus on governance, adding that she was disappointed by the SNP’s “failure to listen” on the economy.

Energy is being “diverted into an endless political campaign”, she said, with Ms Sturgeon’s list of legislation serving as “a warm-up act to nudge the independence caravan another few inches along the road”.

“I do not subscribe to the view that we are helpless to act in the face of Brexit – nor do I think that breaking up a union worth four times more to Scotland than the EU is going to help matters very much,” she said.

“I said two weeks ago I wanted a new type of Scottish Government and what I mean is one which no longer asks – how will this boost independence? But one that asks – how are we growing the country?”

Ms Davidson said her party wanted to see more opportunities for Scottish firms to export abroad, major new investment in home-energy efficiency, a “genuinely ambitious” housebuilding programme and cuts to business rates.

On the new Scottish Growth Scheme, Ms Sturgeon said it would be targeted at Small Medium Enterprises with “significant growth or export potential but which find it difficult to access investment finance on the necessary scale”.

Under her proposals, the Scottish Government hopes to stimulate investment at a time when financial institutions are reluctant to lend.

Some risk will be transferred on to the shoulders of the Scottish Government, which will guarantee some or all of the value of the loan the business needs from the bank.

The half a billion pound package will also include some Scottish Government loans, which may be issued on their own or alongside the guarantees.

Ms Sturgeon said she hoped the scheme would receive the backing of the UK Treasury, which has to authorise an extension of the part of the Scottish budget allocated to unpredictable spending.

“The guarantees will appear on our balance sheet as contingent liabilities – so will not come from existing spending on public services – but they will help us to remove some of the uncertainty and share some of the risk,” Ms Sturgeon said.

Ms Sturgeon’s plans included legislation designed to close the education attainment gap, increase childcare provision, cut Air Passenger Duty and a Domestic Abuse Bill that will explicitly criminalise psychological abuse.

Ms Sturgeon said her Social Security Bill would “take the first steps towards a distinctive Scottish social security system based on dignity and respect”.

With improving education the “defining mission” of her government, Ms Sturgeon said an Education Bill would be brought in to target the most deprived areas with cash coming from council tax reforms.

In addition, a governance review to be published by Deputy First Minister and Education Secretary John Swinney next week will look at how to “empower schools and decentralise management”.

Ms Sturgeon described the Child Poverty Bill as “arguably the most important piece of legislation we will introduce this year”. Scotland will be the only part of the UK with statutory income targets on child poverty.

A Gender Balance on Public Boards Bill will require positive action to be taken to tackle gender imbalances on the boards of public-sector organisations.

Other legislation includes a Housing (Amendment) Bill; an Islands Bill, creating a national islands plan and the Railway Policing Bill which will pave the way for the integration of the British Transport Police in Scotland into Police Scotland.