‘Golden opportunity’ for Scottish business’: More reaction to Labour landslide

The new UK Government has a ‘golden opportunity’ in its first 100 days to support business growth in Scotland – that’s the message from one lobby group in Scotland as the business world continues to react to Labour’s landslide victory.

Groups representing sectors from finance to renewables and hospitality spoke out as the new Government began its work, and after the appointment of key Cabinet ministers including Rachel Reeves as Chancellor, Ed Miliband as Energy Secretary, Jonathan Reynolds as Business Secretary and Ian Murray as Scottish Secretary.

Scotland policy chair of the Federation of Small Businesses (FSB), Andrew McRae, said: “This very clear result gives us hope that political stability can lead to economic stability and recovery.

“Any new government needs to hit the ground running and the first 100 days of this new administration offers a golden opportunity to lay the foundations of sustained small business growth.

“There are many levers the UK government can pull to make Scotland a better place to start and run a small business – easing the cost of doing business and supporting cashflow, employment and investment. These range from tackling poor payment practices by big businesses to their smaller suppliers to giving smaller firms a fairer crack of the whip when bidding for UK Government contracts.

“The upcoming King’s Speech should include a Small Business Bill to enshrine in legislation much-needed changes to better support small firms and the self-employed.”

Sandy Begbie CBE, chief executive, Scottish Financial Enterprise, said: “We congratulate Sir Keir Starmer and the Labour Party on their election victory and look forward to working with the new UK government on our shared ambition of driving economic growth.

“It’s clear that the new Prime Minister will have a daunting in-tray with the country facing a litany of serious economic challenges, but with the right interventions there are also huge opportunities to be unleashed.

“As we highlighted in our election manifesto, sustainable growth must be the government’s guiding ambition. To achieve this, Starmer must demonstrate good government, foster a thriving business environment, champion green and sustainable finance, and invest in our people and their skills.

“Policy alignment within and between governments is key, and we would like to see the UK and Scottish governments working together to remove barriers, empowering industry and helping to deliver economic growth.

“Scotland has a fundamental role to play in delivering the economic growth that the UK so desperately requires, and our world class financial services industry is ready to play its part. Our sector is already worth £14.3billion GVA to the UK economy each year, employing almost 150,000 people in high-wage, high-skill jobs.

“We look forward to working closely with the UK and Scottish Governments to unlock further growth in our sector, adding an additional £4bn -£7bn to the UK economy by 2028.”

Claire Mack, chief executive of Scottish Renewables, said: “As we welcome the new UK Government, Scotland’s renewable energy industry stands ready to play our part in a new era of collaboration and delivery.

“The time to secure our clean energy future is now. Maximising the enormous socio-economic potential of our renewable energy resources calls on the UK Government working in partnership with industry and the Scottish Government.

“This means delivering a coherent policy environment that says to investors and our supply chain that Scotland is the best place in the world to build the renewables projects that will deliver cleaner, cheaper and more secure energy.

“Scottish Renewables looks forward to working closely with the new UK Government on their clear mandate to unleash our full clean energy potential in the crucial years ahead.”

Stephen Montgomery, director at the Scottish Hospitality Group, said: “We would now encourage Sir Kier Starmer to immediately start putting in place the promises made in the Labour Manifesto, and bring forward his party plans for Brand Scotland, which hospitality will play a major role in.

“Immediate concerns are around issues such as VAT for hospitality, and labour shortages, where we would welcome discussions on a working visa for hospitality workers. Further discussions are required on the ongoing concerns on the legislation on Tronc due to come into effect in October.

“The Scottish Hospitality Group have always had a good working relationship with Scottish and UK Labour, and we look forward to working further with Anas Sarwar and his team, to promote hospitality, and to help bring positive change to policies which will allow the sector to grow.”

The Scottish Licensed Trade Association (SLTA) has made a wish list of demands for the new UK government, including a reduction of VAT for the licensed hospitality industry and a review of the commercial rating system.

SLTA managing director Colin Wilkinson said: “Nothing on our wish list is new – it’s what we’ve been calling for over many years now. However, the General Election presents us with an opportunity to reiterate to the new UK Government that the licensed trade and hospitality sectors really do need some help.

“We particularly highlight the need for the UK Government to reduce VAT for licensed hospitality businesses. The temporary reduction of VAT from 20% to 5% introduced in July 2020 gave support to around 150,000 businesses in the UK and protected over 2.4 million jobs in the overall hospitality and tourism sectors and saved many businesses from going under during a very difficult trading period.

“While we are now past the Covid-19 pandemic, the unprecedented rises in inflation, business operating costs – particularly food and energy costs – and severe staff shortages mean that the current trading conditions are seen as just as challenging, if not more challenging, than during the pandemic.

“For many businesses, a cut in VAT would have an immediate, positive impact on sustaining business viability, maintain job security for over 228,000 people who work in the hospitality sector, and provide new jobs in a sector which is a key driver of Scotland’s economy, supporting £1.6 billion of economic activity.

“It would be proportionate, easy to administer and would bring the UK into line with our European neighbours, improving our competitiveness in attracting both domestic and foreign visitors.”

The SLTA said that in Scotland “licensed hospitality businesses are disproportionately burdened with commercial rates charges in comparison with other business sectors north of the Border and in comparison with licensed hospitality businesses in other parts of the UK”.

With the commercial rating system devolved to each nation, Mr Wilkinson said: “An urgent and complete review of the system in England would give impetus for the Scottish Government to do likewise under its somewhat stalled ‘New Deal for Business’, introduced to renew its relationship with the business community in Scotland.”

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