The Courier & Advertiser (Perth and Perthshire Edition)
Parliamentarians must make business a priority
As vaccines continue to be the source of hopeful news and springtime lightens our spirits, we can see the Covid-19 finishing line in the distance.
Albeit the race we have been on to outrun the virus has been long and gruelling and too many have fallen along the wayside. But look forward we must.
Before we get there, there will be Scottish elections at Holyrood.
With so many experienced MSPs retiring, nearly a quarter of them, the vote brings the potential for renewal and fresh energy to the Scottish Parliament.
That said, it is also important that we have experience and appropriately skilled parliamentarians across all the parties.
Renewal and fresh energy will be essential if we are to ensure the economy gets back up to speed following the damage inflicted by lockdown.
Parliamentarians, both new and those hoping to retain their seats, can support this by making business recovery and growth, jobs and skills their top priority. If they get this right, it will allow our social policies to be implemented and funded.
Positive partnership forged through dialogue will be key. We need to see the understanding of how businesses are at the heart of our communities fostered widely.
We need our parliamentarians to share our ambition to create good, sustainable jobs and to support a skills development system that works with employers to ensure that our people
are ready contribute.
Essential to this will be a coherent vision of what our economy will look like. Much has been said about “building back better” but this must be underpinned by practical policies.
By practical, I mean useful business incentives and an environment that makes a meaningful difference felt by businesses and their employees.
Support for the Scottish Budget in parliament has meant some welcome interventions for struggling firms, including the extension of business rates relief for those most affected by pandemic restrictions for the rest of to thrive and
the year. Budgets presented by Scottish Finance Minister Kate Forbes and Chancellor Rishi Sunak have offered useful lifelines and opportunities that businesses should grasp with both hands.
The chancellor’s new super-deduction, which allows an uncapped 130% capital allowance on plant and machinery, came as a pleasant surprise.
The UK record of investment is not as strong as we would like. Let us hope this bold incentive will provide a major boost for companies to invest and grow, which in turn should support economic recovery and productivity.
But the increase in corporation tax from 19% to 25% in April 2023 is likely to be a shock for many firms and risks sending the wrong message to inward investors.
The business community understands the fiscal response to the pandemic
has been extraordinary and someone needs to pay the piper.
The time-lag announced will give businesses time to trade through this crisis before the tax increases are applied.
However, it is essential the economy is firing on all cylinders before taxes hit to ensure that damage inflicted by the pandemic does not become permanent.
Our central call to the chancellor was to extend the Coronavirus Jobs Retention Scheme, recognising just how essential it is to protect jobs and support businesses.
Mr Sunak made the right decision to extend this support package to the end of September, as well as maintaining VAT reductions for the mostaffected businesses.
The UK Budget also provided an extra £1.2 billion in consequentials for Scotland. The challenge now is to make sure this funding is targeted not just at helping firms to recover but also to give them a chance to develop their business models so they can grasp future opportunities, including supporting ambitions for a net-zero economy.
Both governments must keep the door open to providing more support if the pandemic hits our economic reopening plans again. Let us not lose sight that for many there is still some way to go before we can get back to “normal” – whatever that means.
Effort must now be placed on how we kick-start and create an environment for growth.
An essential element of this will be smoothing the way for businesses to reach international markets.
Undoubtedly, Brexit has caused significant complications for exporters.
It should not be the case that companies have to give up on selling goods and services into the EU due to onerous red tape.
Ministers must do everything they can to fix the problems that are within the UK’s own control and increase their outreach to EU counterparts to solve the issues that are stifling trade in both directions.
The increase in corporation tax is likely to be a shock