TIME FOR THE VOICE THAT HAS NOT YET BEEN HEARD

BILL JAMIESON

Barely have the shock waves of the election begun to die down than raucous rows have broken out on where we go from here.

First Minister Nicola Sturgeon has lost no time in telling UK Prime Minister David Cameron she wants more powers on top of those promised by Lord Smith of Kelvin.

Former First Minister Alex Salmond continues to drop hints of a second independence referendum.

The Scottish Liberal Democrats are a party in desperate need of supporters while Scottish Labour has succumbed to the political equivalent of a nervous breakdown.

Its leader Jim Murphy has given notice to quit while a full scale row has broken out between him and UNITE union leader Len McCluskey on future policies for Scotland.

More powers, fiscal autonomy, an end to austerity, more Left wing policies, fewer Left wing policies, devo max, federal Britain – everyone’s having a say.

But there’s one voice we haven’t heard much from in Scotland so far.

We’ve almost forgotten that this is a country that needs to lift its growth rate. And the heavy lifters here are our 340,000 businesses, the vast majority of these small and medium sized enterprises (SMEs).

Together they employ more than two million people. And they account for ALL of the growth in employment since the depths of recession in 2009-10.

Business organisations from the Scottish Chambers of Commerce to the Institute of Directors, the Federation of Small Business to the Confederation of British Industry Scotland have all got plenty to say.

But for all the election was about the future of Scotland, political attention was almost exclusively focused on “more powers” and constitutional change.

And media coverage was tightly focused on the ferocious battle between Scottish Labour and the SNP – one that ended in an epochal defeat for the party that has dominated Scottish political life for decades.

The SNP promised all manner of benefits, from a massive increase in the budget for the NHS, to higher welfare and government spending, a huge increase in the house building programme and an end to austerity.

Yet throughout the campaign there was little discussion on how exactly this programme was to be funded and from where exactly a boost to economic growth was to come.

The institute for Fiscal Studies reckoned Scotland’s budget deficit under ‘full fiscal responsibility’ at £7.6 billion, forecast to grow to £9.7 billion by 2019-20.

But these figures were largely brushed aside in public discussion. Few wanted to hear.

Higher growth in Scotland could cut the deficit. But to close the deficit gap to UK levels in the next parliament, the IFS said the Scottish economy would have to double its growth rate.

Even to close the gap in 10 to 15 years would require “a step change” in growth.

The SNP argues that should be possible, using the levers of economic power, to grow productivity, exports and grow business investment.

But it’s not clear why all these things would get such a boost, when they are all being pushed under current arrangements – or a greater boost than achievable under current efforts.

And, bear in mind that in the 16 years since 1998 the average annual growth rate for Scottish GDP was 1.6 per cent. For the UK the equivalent figure is 2.2 per cent.

There was very little discussion in the election as to how exactly Scotland’s economic growth rate would be boosted. And those IFS figures just didn’t fit any political narrative.

But for any uplift to be achieved, Scotland will need a massive boost from the business sector.

That means listening to what business needs in order to encourage investment and expansion and a range of business friendly policies.

This is the voice that has not yet been heard – but one that will now need to be listened to – very closely.

This week business chiefs have called on Chancellor George Osborne to steer well clear of any new tax rises in his budget on July 8. The Institute of Directors has stressed the need to cut the budget deficit because borrowing costs will not stay at current low levels forever.

It also wants to see bold action on infrastructure, saying that the government must improve broadband and energy networks.

And John Longworth, Director General of the British Chambers of Commerce has already submitted a six point action programme to David Cameron to help lift the UK’s economic future.

These include proposals on investment and infrastructure spending, exports, young talent encouragement and measures to boost business expansion.

Greater detail will be needed in due course. But the broad direction of travel is clear. And many of these points will have to be driven much further up the Scottish government’s agenda if it is to achieve anything like the growth breakthrough required.

Scotland’s deputy First Minister and Finance Secretary John Swinney should convene an economic summit – and invite Scotland’s business organisation to put forward clear, practical, positive proposals Business will not get everything it wants. But it would be a useful first step.

There must be more to public debate in Scotland than a continuing relentless focus on constitutional politics – that there is a world beyond the endless debates over our relationship with the rest of the UK.

Remember that there are 340,000 businesses in Scotland 98 per cent of which are SMEs, and growing in 2013 by a record 21,500.

To achieve anything like the uplift in growth that Scotland now needs in order to deliver on expectations, we will need a business and investment friendly environment and policies to match.

The business voice has yet to be heard. And it is critical that ministers now listen closely.

 

 

 

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