Programme for government
Sturgeon unveils £500m package to help economy
The package of support formed one strand of an economic package at the heart of her government’s plans for the coming session.
The First Minister promised £4 billion will be spent on infrastructure next year alongside the new Growth Scheme for private businesses.
Ms Sturgeon said the scheme would offer individual investment guarantees, and some loans, of up to £5m to small and medium sized firms who would otherwise be unable to grow because of a lack of investment finance.
Other measures include integration of British Transport Police into Police Scotland and introducing gender balance to the boards of public bodies.
A new Social Security bill “will create a distinctive Scottish social security system based on dignity and respect”, said the First Minister. It will include a commitment to an increase in carers’ allowance, a new best start grant for low income parents, “a new and more humane approach to disability assessment”, and abolition of the bedroom tax.
Ms Sturgeon said the EU vote meant the work of the Holyrood government and parliament was more important than ever.
“We must do all we can to protect Scotland’s interests and retain our place in Europe.”
She said the economic policy would focus on investment, innovation, internationalisation, and inclusive growth.
She set out details of the projects that would receive £100m of accelerated funding. These include spending on energy efficiency measures, road and rail improvements, investment in hospitals, schools and colleges and maintenance of police and fire services. She said this would “bring immediate economic benefits” and support jobs, as well as supporting the infrastructure of public services.
European Structural Funds of £290m have been approved which means £650m will be invested. In all £4 billion will be spent on infrastructure.
The government intends to halve the overall level of tax paid by air passengers by the end of the parliament. An Air Passenger Duty bill will enable a replacement tax to be introduced from April 2018. Ms Sturgeon said it would support growth and improve connections with other countries, “priorities that are even more pressing as a result of the EU referendum”.
The Queensferry Crossing, the M8/M73/74 improvements and the Aberdeen by-pass will be completed and 50,000 affordable homes will be built.
There is to be a Climate change bill with a new target to reduce emissions by 50% by 2020.
Investment of £90m will ensure broadband coverage is raised from 85% to 95% by the end of next year with a target to hit 100% by the end of the parliament. She said this would be a “transformational investment in all of Scotland”.
As well as new advice units to help business deal with issues around the Brexit decision the government will introduce new hubs in Dublin, London and Brussels to help attract new business to Scotland.
On business rates she said that from next April the number of businesses benefiting from the small business bonus will increase to 100,000. A wider review of business rates is currently under way and she said the government would act on its recommendations “as quickly as possible”.
She said the government was keen to support manufacturing which employs 200,000 and accounts for half of exports. The government is setting up a national manufacturing institute alongside Strathclyde university and business focused on skills and excellence.
Her measures for stimulating the economy will be closely scrutinised, not least by the 13 business leaders who yesterday wrote to Finance Secretary Derek Mackay demanding he reverses an increase in the large business rates levy.
Businesses say this rise will add £62 million to costs and comes on top of other forthcoming additional charges for bigger firms, including the apprenticeship levy.
Federation of Small Businesses (FSB) Scottish Policy Convener, Andy Willox, (right) said: “The First Minister is right to focus on education and closing the performance gap between our richest and poorest pupils.
“Many small business owners and their staff will be relieved that small business rates relief is to be retained and indeed expanded. This has been a lifeline, keeping firms afloat, staff in jobs and investment on track.
“The First Minister’s pledge to honour her manifesto commitment to deliver superfast broadband to every Scottish home and business premises by 2021 is as welcome as it is essential.”
On the Scottish Growth Scheme, he said: “Despite the current economic headwinds, businesses are still ready to invest. Thus, we will be interested to see what sort of small businesses are eligible to take advantage of the £0.5bn Scottish growth scheme. We need to make sure that government initiatives back our business base.”
Jim Duffy, founder of business accelerator Entrepreneurial Spark, said: “The £500m Scottish Growth Scheme fund is an encouraging sign that the Scottish Government is committed to supporting and growing the entrepreneurial eco-system in Scotland.
“Over the past few years there has been a shift in focus towards startups and small businesses with initiatives such as Scottish EDGE, however, this latest announcement highlights the importance of retaining and building on this in order to create a strong Scottish business landscape in uncertain financial times.”
Claire Mack, director of policy & place, SCDI said: “Our policy Blueprint ‘From Fragile To Agile’ highlighted many issues which are now being proposed, and we are keen to see a strong, strategic focus on infrastructure. We have already identified the need for universal access to high-speed broadband connectivity and we must do more to ensure that we use that digital infrastructure to improve productivity.”
Hugh Aitken, CBI Scotland Director, (right) said: “Small and mid-sized businesses should be at the heart of Scotland’s long-term economic strategy, which is why we’re encouraged by the Scottish Growth Scheme.
“Breaking down barriers for firms adopting digital technologies is essential for unlocking productivity and growth in the economy. Businesses will therefore be enthusiastic about the Scottish Government’s pledge to extend superfast broadband to all homes and business properties by the end of this Parliament.”
On business rates, he said: “While this announcement addresses some of the concerns of smaller businesses, larger organisations will be disheartened by the lack of movement on the large business supplement. Currently, large firms pay double what similar firms pay south of the border, and this impedes rather than incentivises investment.”
David Lonsdale, director of the Scottish Retail Consortium, said: “There is much in this announcement that the retail industry can support, especially the measures on infrastructure, housing and skills.
“As Scotland’s largest private sector employer the retail industry would however 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.
“We will be looking to the upcoming Scottish Budget for further measures to improve competitiveness and promote productivity.”
Homes for Scotland chief executive Nicola Barclay (right) said: “Whilst we welcome the Scottish Government’s £3bn commitment to invest in affordable housing, it’s essential that we build enough homes of all tenures in order that our growing population can reach its full potential and make Scotland a better place in which to live, work and invest.
“We are encouraged by the announcements in relation to the Planning Bill which will be brought forward early in the Parliamentary session and await further details on this and the implementation of the recommendation of Simplified Planning zones and support to modernise compulsory purchase orders which would mean vacant and derelict land would be brought back into use.”
David Melhuish, director of the Scottish Property Federation welcomed the Government’s commitment to bring forward a Planning Reform Bill as part of its response to the independent review on planning reform.
“The planning system has a major role to play in assuring investors that Scotland is open for business and competitive and what we can ill afford is any perception that the planning system in Scotland is more difficult to engage and work with.
“The rollout of Simplified Planning Zones for housing is particularly welcome news and we hope that the Government will continue to engage with house-builders and the development industry as well as local authorities to make use of the best practice which has emerged in places such as Hillington Park where a commercially led SPZ has been particularly successful.”
Scottish Conservative leader Ruth Davidson (right) said: “The single biggest economic lever that the SNP could pull right now to help the country grow would be to remove the threat of a second referendum.
“That is what is holding us back, and stifling investment in our firms.
“She might have hid independence in a throwaway line at the end of her speech, but the bill sits in the Programme for Government as a direct threat to our nation’s economic growth.
“It’s time for a government and a parliament which deals with the real and present problems we face.”