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CBI lukewarm on new pledges

Aitken highlights divisions between SNP and business

Hugh AitkenThe SNP today put small firms, continuing EU membership and boosting investment in infrastructure at the heart of a series of pledges to support business.

But its attempt to foster a new era of “close working” with business sailed into choppy waters when its manifesto for business received a less than ringing endorsement from one business leader.

The party is calling for new prompt payment measures, the devolution of air passenger duty and a commitment to extending the high speed rail link to Scotland.

Together with demands for fairer transmission charges on electricity suppliers and an expansion of the broadband network, First Minister Nicola Sturgeon said her aim is to “strengthen and grow our economy and create the fairer and more prosperous country”.

But new CBI Scotland director Hugh Aitken (pictured) responded by stressing the need for “UK-wide taxes” and a focus on tackling the deficit and cutting borrowing – implicit backing for the coalition’s austerity measures which the SNP opposes.

Mr Aitken said he supported any measures that “help make Scotland more competitive and support them in creating the jobs and growth we all want to see.”

But without overtly criticising the SNP he took the opportunity to remind the party of the benefits of the cross-border tax system, and the need to get the public finances in order.

“All political parties should prioritise deficit reduction in order to maintain the UK’s credibility in international markets, which will keep the cost of borrowing down for growing Scottish businesses,” he said.

He described the national housing shortage as “a serious headache for businesses and those wanting to get a step on the housing ladder” but once again he said this was pertinent to the debate on public finances.

“Further bold action will need to be taken to improve the supply of affordable housing to rent and buy, but boosts in capital spend can only come about once we are on top of the deficit,” he said.

On taxes, he said: “The UK is one of the leading locations for investment and that is in part due to a competitive UK-wide tax system, and corporation tax in particular. It is one of the key pillars of our single market, so we await further detail on any proposed targeted action on business taxation.”

The organisation is in agreement with the SNP on continued membership of the EU. Mr Aitken said: “Most businesses agree that our economic future is best served by our continued membership of a reformed EU, so we must get down to work with our allies to achieve this.”

However, he cautioned over the devolution of air passenger duty saying it could create a situation that would favour Scotland over other parts of the UK.

“With APD due to be devolved to Scotland, it’s important we guard against creating regional imbalances and ensuring we promote export routes and trade from all corners of the UK,” he said.

He said there was no doubting the need for businesses to recognise that maintaining good supplier relationships is vital for success. “Challenging poor practices by improving payment performance from all firms will help meet the needs of small businesses,” he said.

Ms Sturgeon said the SNP is committed to working closely with the business sector and had used the devolution powers to support businesses and their employees.

“But the cuts agenda of the Westminster parties is holding our businesses back as it stifles growth and hampers recovery. And the threat to take Scotland out of the EU against our will also looms large,” she said.

“A strong team of SNP MPs will make the case at Westminster for more support for our businesses. Pushing for measures such as the early devolution of APD, an increase in infrastructure investment, a Universal Service Obligation for broadband and the inclusion of Scotland in Westminster’s HS2 plans will improve connectivity and remove barriers for businesses in remote and rural parts of the country.

“The SNP wants to create a stable and balanced economy that is outward looking, confident, innovative, based on the core strengths of our people and supported by investment – and SNP MPs at Westminster will do everything in their power to support our businesses every step of the way.”

>> Daily Business Comment

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