First Minister demands action
Sturgeon fast-tracks projects to tackle uncertainty
Capital spending on projects to support and create employment will be accelerated, starting with an additional £100 million of funding in this financial year.
The capital funding will be used to speed up delivery of health and other, unspecified, infrastructure projects.
Projects will be assessed for accelerated funding against a range of criteria including how quickly work can start, the number of jobs that will be supported or created, the likely impact on the supply chain and geographic spread.
The Scottish Government will also set up a new dedicated service to provide information and support to businesses affected by the EU referendum, while a new Post-Referendum Business Network will work closely with the main business bodies, the STUC and the Scotland Office.
The plans were announced at the Golden Jubilee which will receive an extra £5 million to bring forward expansion of its elective centre from 2018-19 to this year.
Further details of the Capital Acceleration Programme, including the projects to be supported by the initial additional funding and details of funding for future years, will be announced in due course.
The First Minister also called on the UK Government to give early certainty about EU Structural Funds and to urgently announce its own economic stimulus package, which would enable the Scottish Government to do even more to accelerate capital spending.
Ms Sturgeon said: “As I have made clear since the EU referendum, the Scottish Government will pursue all possible options to protect Scotland’s relationship with the EU and ensure that our voice is heard.
“However, it is also important to act now to support and stimulate the economy.
“Scotland is and remains an attractive and stable place to do business – however, there is no doubt that the referendum outcome has created deep and widespread uncertainty, with the impact on jobs and investment already being felt.
“The UK Government has not yet taken any meaningful action to alleviate uncertainty or to boost confidence, and there are very real concerns that the damage to the economy and to jobs will be severe and long lasting.
“It is against this background that the Scottish Government is announcing early action to boost confidence, stimulate economic activity and support business.
“Our Infrastructure Investment Plan is already delivering major infrastructure improvements, with projects worth almost £6 billion currently under construction – we will now inject a further £100 million of spending this year to accelerate planned projects.
“These three initial measures will help support new and existing jobs and alleviate business concerns at this difficult time”
“We will also provide business with wider support to help them navigate the uncertainty caused by the referendum result. Business organisations have asked for a single point of contact and we will shortly launch a new Business Information Service that will provide up-to-date information and advice, and answer questions from individual businesses, going some way to alleviate business concerns about the future.
“We will also establish a new Post-Referendum Business Network, to work more closely and collaboratively with the main business bodies, the STUC and the Scotland Office to help shape future policy and support for business.
“These three initial measures will help support new and existing jobs and alleviate business concerns at this difficult time.
“However, it is important that the UK government also acts and I am calling today for urgent action on two fronts – firstly, early assurance about EU Structural Funds and, second, a UK wide stimulus package which, through consequential funding, would enable the Scottish Government to do more to accelerate capital spending.”
Business responded positively to the package. Liz Cameron (right), chief executive of Scottish Chambers of Commerce, said: “This is a great example of the Scottish Government using devolved powers it has at its disposal to deliver a timely boost to the Scottish economy. However, it must be clearly targeted to provide a shot in the arm to Scotland’s businesses and to support jobs in the short, medium and long term.
“This is a very welcome first step in the process of supporting businesses. Businesses are looking for our Governments in Edinburgh and London to invest in infrastructure and skills in order to support business at this crucial time. We would also ask that the Scottish Government follows this up with action to reduce the cost base of businesses, including a reduction in the burden of business rates and an acceleration of the planned reduction in Air Passenger Duty.”
Regarding plans for a new dedicated service to provide information and support to businesses affected by the EU referendum, Andy Willox, the FSB’s Scottish policy convenor, said: “The current information gap presents a problem for firms trying to make medium-term business decisions. We support this move from the Scottish Government to combat this problem.”
On the infrastructure spending Mr Willox said: “We need to squeeze every drop of value from this new spending – and that means ensuring that a fair share of these contracts, and associated sub-contracts, go to local firms. “
“Progress on the Glasgow airport link, together with improvements to the A82, A96 and A9 are projects previously identified by businesses as vital, alongside advances in digital infrastructure.
“Firms will also be encouraged by the Scottish Government’s pledge to work closely with the Scotland Office as it engages with firms following the Referendum.
“Our members stand ready to work alongside both the Scottish and the UK Governments as companies seek clarity on trade, regulation, access to talent and protection for the economic and social benefits of EU funded projects.
“As options for the future take shape, it will be more important than ever for both governments to partner with businesses in navigating their approach.”
David Watt, executive director of the Institute of Directors in Scotland, said: “If there’s one thing businesses don’t like, it’s uncertainty, and following the Brexit vote that is something we have in abundance.
“Although we have still to see the detail of the stimulus package announced today, the First Minister’s assertive move to inject tangible economic action into the current business climate, and offer greater advice and support to Scottish companies, is to be welcomed.
“We hope that it will soon translate into real opportunities for both individuals and businesses in Scotland.”
Homes for Scotland chief Executive Nicola Barclay(right), said: “This £100 million funding boost is welcomed as a means to support and stimulate the economy in what are uncertain times for many industries, including the home building sector.
“With projects being assessed for accelerated funding based on key criteria such as the number of jobs that will be supported or created and the likely impact on the supply chain, those focused on the delivery of more new homes should be prioritised given the significant social and economic benefits this offers.
“Every new home built in Scotland supports four jobs and helps boost economic growth through the supply chain. The industry also contributes to improving health and education outcomes and fighting fuel poverty.
“We would therefore urge the Scottish Government to prioritise housing when considering how these funds will be allocated in order to secure the thriving economic future we all want to see.”
Scottish Retail Consortium director, David Lonsdale, said: “There is much in this announcement that the retail industry can support, especially the accelerated investment in infrastructure spending.
“As Scotland’s largest private sector employer the retail industry would have liked to have seen a stronger emphasis on policies which put money into people’s pockets, keep down the cost of doing business and encourage retail investment and expansion.
“After all, business rates rose once again this Spring, compounded by a troubling £62 million hike in the rates supplement levied on firms operating from medium and larger sized premises. This latter tax increase sits at odds with repeated claims that Scotland is pursuing the most competitive rates regime in the UK.”
First Minister in Germany talks
The First minister yesterday paid a surprise visit to Berlin where she met the deputy foreign minister and minister of state for Europe, Michael Roth with a view to maintaining a dialogue with EU states.
Ms Sturgeon insists that Scotland must retain links to the EU, but her visit to Berlin may irk some European countries, such as Spain and France, which fear that Scotland’s agitation may reawaken regional separatist movements in their own countries.
Mr Roth made it clear that Europe could only weather the coming trials by coming together and that the German government would work hard to boost capability and cohesion in Europe. He said the European Union was much more than an internal market and had to strengthen its role as a community of shared values.
Speaking after the meeting, the First Minister said: “Today’s discussion has been a welcome and constructive opportunity to strengthen our relations to discuss the way forward for the European Union and how all voices can be heard in that process.
Scotland chose to remain in the European Union, and the solidarity shown toward Scotland as an enthusiastic part of the EU – demonstrated once again in today’s talks here in Berlin – has been very welcome.”
Mr Roth said: “This has been a very pleasant and constructive conversation between two dedicated pro-Europeans and has demonstrated once again that a degree of Europe’s strength lies in its diversity. I hope that the UK finds a way forward that will benefit Europe as a whole in the end.”