Finance sector can help drive economic growth
The recent publication of Scotland’s latest gross domestic product (GDP) estimates was overshadowed by the political maelstrom that ensued following the collapse of the Bute House Agreement and the resignation of the First Minister. But those top-line economic figures should make for sobering reading. Scotland’s GDP is estimated to have contracted by 0.3 per cent in February. Despite a small rise in January, the economy is now said to have fallen by 0.5 per cent over the last three months of 2023.
The Scottish economy has been struggling for too long. To really grow and thrive, we will require policy prescriptions that prioritise economic growth and create a more conducive environment for business. Now, as the government attempts to reorient itself in challenging circumstances, it could improve confidence and restore credibility by opting to play to Scotland’s strengths.
The financial and professional services sector is ripe for the kind of productivity growth needed. We have the ambition to add between £4 billion and £7bn gross value added (GVA) to the Scottish economy over the next five years, but to do so we need the help of government to attract talent, secure investment, and overcome regulatory obstacles.
There needs to be a proper debate on tax strategy and how best to increase the size of our tax base. We would echo Sir Tom Hunter’s call for a realignment of tax with the rest of the UK, ideally going further to become the lowest-taxed part of the UK to attract even more wellpaid jobs and investment.
Likewise, we want to see a different approach to business regulation that removes unnecessary complexity and increased costs. Business is not looking for any favours from government, but rather a framework based on simplicity, certainty, proportionality and efficiency.
Working together to drive growth will not only strengthen our economy and create jobs, it’s vital to expand the tax base. We all want to see betterquality public services, but there needs to be a recognition that this can’t be achieved without sustained economic growth.
John Swinney put economic growth front and centre when announcing his SNP leadership bid. As he now steps into the role, he’ll find Scotland’s financial services industry a constructive partner in helping to realise that goal.