THERE has, to say the very least, been an intense focus in recent weeks on the Scottish Government’s relationship with business.
This has been fuelled to some extent by new First Minister Humza Yousaf himself, in response to a protracted period of discontent among some in the business community, which has been particularly pronounced in certain sectors such as hospitality, retail and drinks.
Clearly, there have been specific woes for some sectors north of the Border arising from Scottish Government policymaking, including the deposit return scheme and proposed restrictions on alcohol advertising and promotion.
Mr Yousaf has moved early to show a desire to resolve these problems. The deposit return scheme woe for the Scottish Government continues to rumble on, although we should not underestimate the additional problems created for the SNP and their junior partners at Holyrood, the Scottish Greens, by the Conservative Government having decided to wade in, waving the Internal Market Act. This intervention has looked a whole lot like political opportunism and might be viewed by many as an attack on devolution or at least sheer mischief-making.
Crucially, there is always a danger, in the context of devolution, that people get carried away and lose sight of how much on the business and economic front the Scottish Government can actually influence with its limited powers.
And we seem to have headed well down that path already, with the momentum continuing very much in that direction.
Lost in the noise are positives such as Scotland’s very strong foreign direct investment performance and figures last week from Scottish Enterprise showing record equity investment in companies north of the Border last year. Also often overlooked, in the context of intense lobbying for temporary business rates relief for sectors such as retail and hospitality like that which has continued south of the Border, is a generally advantageous permanent situation for Scotland’s small firms in easing the burden of this particular tax.
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There also seems to be a general lack of recognition among some in Scotland, albeit on occasion perhaps because of personal political leanings, that the big negatives for the economy north of the Border have been generated by the Conservatives at Westminster.
These enormous negatives, of course, affect businesses in Scotland and throughout the UK, and they are lamentable.
We have the UK Government’s abject failure on the energy price front, which has caused great misery for so many households and businesses and continues to do so.
Policy measures from the Tories which might promote growth remain conspicuous by their absence.
And, of course, there is the elephant in the room, which some politicians and others seem to think should not be talked about: Brexit. There is the pathetic and disingenuous messaging that Brexit is done and we must get on with it, which has not been helped by Labour leader Sir Keir Starmer’s volte-face on this front. The effects are, of course, very much ongoing.
The reality of Brexit for businesses and households, taking the ideology and politics out of it, is that it has exacerbated greatly the UK’s skills and labour shortage crisis. The loss of frictionless trade arising from exiting the single market has hammered UK exporters to the European Economic Area and those businesses which need to import from the bloc. And Brexit has also fuelled food prices and overall inflation.
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Prime Minister Rishi Sunak supposedly wants to make a belated effort to tackle the food price crisis (although many might understandably view this as tokenism) but he is not mentioning or proposing to address the major impact of Brexit in this regard.
In an objective sense, this burying of the head in the sand should be surprising given research has confirmed Brexit is a key factor in the woe over food prices he supposedly wants to ease. This detrimental impact could be addressed in a big way by moving to rejoin the single market or to a lesser extent by the Tories not being quite so thrawn with their determination to shun regulatory alignment. However, when you consider it was the Tories' tub-thumping on Brexit which won them the December 2019 general election and reflect on Mr Sunak’s passion for this cause, it is entirely predictable and in keeping with past behaviour that the Conservatives would not admit to the Brexit effects.
Although attention in Scotland in the context of the interface between politics and business has been so intensely focused on Mr Yousaf’s “new deal” pledge, Mr Sunak has been making a big song and dance over improving his administration’s relationship with business.
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That said, for those who have not noticed Mr Sunak’s drive on this front, they have not really been missing anything.
At least Mr Yousaf has taken some major and concrete steps in reconsidering the deposit return scheme and sending the proposed restrictions on alcohol advertising and marketing back to the drawing board.
Mr Sunak has appeared to favour gladhanding, organising an expensive Business Connect event in April to which he invited more than 200 leaders from the corporate world.
He has also shown a continuing penchant for the soundbite, declaring the Tories are “unashamedly pro-business”.
This phrase is obviously in stark contrast to what predecessor Boris Johnson was said to have declared in relation to business back in 2018, in the context of concerns about the impact of Brexit.
However, it has been impossible to see anything at all of substance in Mr Sunak’s efforts to show the Conservatives are pro-business.
Brexit continues to hamper the UK economy greatly, weighing heavily on growth. There is no sign of any backing down on the clampdown on immigration from EEA countries, which has proved so damaging to businesses in their efforts to hire the people they need.
Meanwhile, inflation continues to blight the UK economy, with a desperate real-terms squeeze on the incomes of so many households. Of course, this squeeze is sadly not new and has been something of a hallmark of the Conservatives over the period since they came to power in 2010.
So, while the SNP clearly has work to do on changing the narrative that it is not pro-business and it remains to be seen whether early steps on this front will bear fruit in the longer term, at least it seems to be making an actual effort.
Mr Sunak, in contrast, gives the appearance of someone who thinks all he has to do is talk a good game. Given the Tories’ track record, we should not be surprised about this. However, that does not take away from the fact it is simply not good enough.
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