Why businesses and voters may be sceptical of reboot

Pledges by John Swinney to dedicate 'every fibre' of his being to economic growth and by his new deputy Kate Forbes to get the economy 'firing on all cylinders' have come as welcome news by business organisations who have been fearful that neither Nicola Sturgeon nor her successor Humza Yousaf regarded this aim as a central objective.

The new First Minister has been keen to signal that his approach will differ from his two predecessors while his government will seek to stand "in the moderate centre-left of Scottish politics".

He made the points clear in his speech to supporters when he launched his bid to become SNP leader just earlier this month.

And on hearing his words, Ms Forbes stood aside from the contest, satisfied that Mr Swinney's approach to building the economy to fund public services and achieve social justice by tackling problems such as child poverty aligned with her own.

Mr Swinney is yet to give the details of how his government aims to deliver these important goals which undoubtedly are supported by parties across the Holyrood chamber and in broader Scottish society too.

Last weekend Ms Forbes set out some of her thinking laying out her aims to boost the renewable energy industry, tech start-ups and the export market and by doing so make Scotland the “obvious and only location” for global investment.

She also insisted that the way forward would have to include creating a more business friendly environment.

"Everything is an economic policy – tackling poverty, reaching net zero, raising the revenue to invest in our public services. The plan is simple. Get the economy firing on all cylinders, and it will power a better future," she wrote in an article in The Sunday Times.

"My message is simple: Scotland is open for business. My plan is to prove that, to reduce the hurdles to investment, to market the opportunities and to prioritise jobs and wages, not bureaucracy,"

Business organisations clearly support the words of Mr Swinney and Ms Forbes.

They are particularly enthusiastic about the need to get rid of "red tape" which they say firms struggle with.

"The First Minister and his Deputy are spot on when they say that everything is reliant on economic policy. From tackling child poverty to sorting out education, the NHS, housing or the state of the roads – none of that can happen without a functioning, growing economy. And that functioning economy relies on the small and medium-sized firms, who comprise 99% of all businesses in Scotland, being able to trade, generate revenues and create and sustain jobs," Colin Borland, of the Federation of Small Businesses, told The Herald.

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"At the same time, though, ministers can’t lose sight of the small and micro firms who make up the vast majority of our business base and the sort of daily bread-and-butter issues that affect their bottom line.  They’ve endured years of spiralling costs, shaky consumer demand and squeezed margins. On top of that, one in ten already spends eight hours a week on complying with red tape, so progress to improve business regulation in Scotland needs to be accelerated."

David Lonsdale, Director of the Scottish Retail Consortium, echoed the FSB's point.

"The First Minister should make economic growth the government's paramount priority. It's axiomatic an expanding economy is good for living standards, job prospects, and government revenues," he said.

"Central to this should be a growth plan that eases the regulatory burden."

The problem with removing "red tape" is that some sectors of the economy believe the Scottish Government has been responsible for adding to it – and – never mind removing it – has plans to add more.

From 2014, until March last year Mr Swinney was the Deputy First Minister, while from 2020 to last Spring, Ms Forbes was finance secretary (latterly on maternity leave) - and as such they were two of the main people responsible for government policy.

For up until now anyway, regulations on some enterprises were regarded by ministers as primarily measures to protect against some harms.

For instance, take the short term let (STL) licensing rules brought in by the Scottish Government last year.

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The law requires everyone such as bed and breakfast owners and others who lets out holiday accommodation to have a licence or face a ban and fine of up to £2,500.

It was brought in to ensure safety standards were in place in holiday lets, and to help tackle the proliferation of Airbnb properties blamed by some on reduced housing supply for local people – especially in STL hot spots such as Edinburgh – and also with an increase in anti-social behaviour.

However, there was strong resistance to the new scheme among B&B owners with some small enterprises run by people retired from other walks of life and only making tiny profits.

Already facing higher overheads because of rising energy and food prices, the extra £300 to £500 licence fee made it too difficult to operate and they pulled out of the sector, depriving themselves of a small additional income perhaps to supplement their pension and holidaymakers of somewhere to stay.

On a much larger scale property firms are blaming proposed plans for rent controls on a reluctance by businesses involved in the 'build to rent' market to invest in Scotland.

While proposed by the Scottish Government as measures to protect tenants from unfair rent increase, by business they are regarded as a 'regulatory burden' and risk which doesn't exist elsewhere in the UK.

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The Scottish Property Federation told The Herald today that Scotland could miss out on £5bn worth of housing, 17,000 jobs and a similar number of homes over the next decade due to the forthcoming housing bill.

A key challenge for the new FM and his deputy will be what, if any regulatory burdens, not to progress or even which ones could be removed.

That will undoubtedly lead to some difficult conversations with his own Cabinet, junior ministers and wider party, and also with voters who may reasonably wonder why they were ever then mooted in the first place.