CBI Scotland calls on Scottish Government to make good on promise to prioritise economy

After eighteen torrid months for Scottish business, where jobs and livelihoods have hung in the balance, CBI Scotland is calling on the SNP to use the forthcoming Programme for Government to make good on their election promise to ‘put the economy first.’

With COVID-19 restrictions largely removed, and society entering a new phase of ‘living with the virus’, the Programme for Government offers an early opportunity for the Scottish Government to turbo-charge Scotland’s post-pandemic recovery, while also working to control case numbers.

In a letter to the First Minister, CBI Scotland outlines practical actions in three clear areas, skills, investment in the green economy and boosting connectivity, where the Scottish Government can turn ambitions for Scotland’s economy into immediate action.

Tracy Black, CBI Scotland Director, said: 

“During the election campaign we had parties of all stripes telling business that economic recovery was their number one priority. With skills shortages biting, stock levels dropping and the cost of materials soaring, it’s vital that the SNP, and their Scottish Green partners, use the Programme for Government to make good on their promise to prioritise our economic recovery.

“Part of that mission is to build confidence in the recovery by sending a clear message that it’s safe to go back to work and encouraging individuals to get out and spend money. The other is really focusing on the challenges and opportunities facing Scotland to build an economy that is fair, sustainable and competitive in the long-term.

“CBI Scotland has highlighted a series of concrete policy recommendations that can be actioned now to turn lofty ambition into economic reality. Without immediate steps to boost growth and competitiveness, Scotland risks squandering the platform given to us by the vaccine and in turn choking off economic recovery at source.”

CBI Scotland policy recommendations to the First Minister include: 

1. Invest in people’s skills to support future growth 

• Skills funding should be more closely aligned to industry needs and strike a better balance between undergraduate learning, work-based learning and short, sharp provision to support continual upskilling and rapid retraining.
• An individual training account should be created for everyone over the age of 25to incentivise lifelong learning by supporting people to invest in their own skills at key points throughout their career.
• Digital skills should be embedded across all learning and a target set for equipping all workers with basic digital skills by the end of this parliament.

2. Back business to deliver a greener economy 

• Reform the planning and non-domestic rates systems to support investment in low-carbon infrastructure(e.g. by de-rating green improvements such as the installation of solar panels and heat pumps).
• A rapid expansion of electric vehicle charging infrastructure, alongside an increased incentive package, would help boost demand for electric vehicles.
• Mandate that any new domestic gas boilers installed after 2025 are ‘hydrogen-ready’ to help create a mix of options for low-carbon heat.

3. Make Scotland’s physical and digital infrastructure fit for the future 

• The Scottish and UK governments should work together to rollout gigabit-capable digital connectivity across all of Scotland by the end of this parliament.
• Deliver a digital ticketing revolution across public transport with multi-modal fare options to help give customers a better experience and encourage greener modes of transport.
• Set a national target of building 25,000 new homes each year across all tenures and deliver additional resource to local authority planning departments to facilitate faster, more responsive decision-making.

FULL TEXT OF LETTER TO FIRST MINISTER 

Rt Hon Nicola Sturgeon MSP

First Minister of Scotland

Dear First Minister

Programme for Government: business has a key role in delivering shared objectives  

During the recent election campaign, it was widely agreed that the priority for the incoming Scottish Government must be to rebuild Scotland’s economy from the devastating impact of the pandemic. As you prepare to launch your Programme for Government, I wanted to share with you some key insights from the business community across Scotland that are pivotal to delivering a successful and sustainable recovery.

Businesses share many of your objectives for the future of the Scottish economy and are eager that we move quickly from ambition to action. I want to take this opportunity to highlight three priority areas where government and business can work together to deliver a strong and inclusive economy.

Firstly, we must ensure that workers have the right skills, not only for today, but for the next decade, to make the most of new growth opportunities. Secondly, delivering a greener economy, and reaching net zero targets, must be done in partnership with every business and every level of government. This will require the Scottish and UK governments to work together, alongside business, in a spirit of true collaboration. Finally, as businesses build back from the pandemic, now is the time to seize the moment and ensure Scotland’s infrastructure – both physical and digital – is the right fit for future economic growth.

Invest in people’s skills to support future growth 

As pandemic restrictions have eased, many firms are now facing the stark reality of labour market shortages. Those in manufacturing, logistics and hospitality are already struggling to recruit the talent needed to fill roles. In addition to this immediate challenge, nearly 400,000 workers in Scotland will need radical retraining as jobs fundamentally change, while nearly 2.5 million workers will require some form of upskilling in the next decade. Creating a flexible, demand-led skills system that supports lifelong learning will therefore be crucial to the longer-term success of individuals, businesses and the economy. Priorities for action include:

• Skills funding should be more closely aligned to industry needs and strike a better balance between undergraduate learning, work-based learning and short, sharp provision to support continual upskilling and rapid retraining.
• An individual training account should be created for everyone over the age of 25 to incentivise lifelong learning by supporting people to invest in their own skills at key points throughout their career.
• Digital skills should be embedded across all learning and a target set for equipping all workers with basic digital skills by the end of this parliament.

Back business to deliver a greener economy 

With the eyes of the world on Glasgow in just a few weeks’ time for COP26, our ambitious net zero targets have never been in sharper focus and success will require businesses to deliver the expertise, investment and innovation needed for a net zero future. This must sit alongside a whole system approach, where all policy levers point in the same direction and become enablers, rather than barriers, to a low carbon economy. Priorities for action include:

• Reform the planning and non-domestic rates systems to support investment in low-carbon infrastructure. For example, all green improvements made to properties, such as the installation of solar panels and heat pumps, should be de-rated and not be subject to rates liabilities.
• A rapid expansion of electric vehicle charging infrastructure, alongside an increased incentive package, would help boost demand for electric vehicles.
• Mandate that any new domestic gas boilers installed after 2025 are ‘hydrogen-ready’ to help create a mix of options for low-carbon heat.

Make Scotland’s physical and digital infrastructure fit for the future 

Over the past 18 months, the way people and businesses use infrastructure has changed considerably. While many firms relied on the presence of workers to keep our key manufacturing sectors operating, other businesses became wholly reliant upon digital networks to keep working. As employers work with their employees to shape the post-pandemic working environment, having the right infrastructure in place is critical. Priorities for action include:

• The Scottish and UK governments should work together to roll-out gigabit-capable digital connectivity across all of Scotland by the end of this parliament. Planning restrictions on new digital infrastructure should be eased at pace and legislation brought forward to ensure access to gigabit-capable connections in tenant properties, where providers are unable to gain access to land through written consent. This would help ensure everyone has the digital connectivity needed to work from home and no one is left behind.
• Deliver a digital ticketing revolution across public transport with multi-modal fare options to help give customers a better experience and encourage more people to choose greener modes of transport.
• Set a national target of building 25,000 new homes each year across all tenures and deliver additional resource to local authority planning departments to facilitate faster, more responsive decision-making.

The examples above are just a few of the areas where government and business can turn shared ambition into action as we recover from Covid and transition to a net zero economy. I would welcome the chance to discuss the above proposals and how businesses can continue to build a partnership with your government to deliver prosperity across Scotland.

All best wishes,

Tracy Black

CBI Scotland Director