Edinburgh lunch

CBI’s Soames urges unity to help UK regain its mojo

Rupert Soames
Rupert Soames: working together is key

CBI chairman Rupert Soames today urged Holyrood and Westminster to work together and with business to help the country get its “mojo” back.

In a speech to 200 business and political leaders in Edinburgh he said a “good start” would be a long-term business tax roadmap from Westminster – matched by a parallel, long-term strategy from Holyrood.

He called for a competitive tax regime and measures to simplify and speed up the planning process. He demanded a “clear-eyed” immigration policy and changes to the apprenticeship levy to help tackle skills issues.

Mr Soames, whose career included more than a decade as chief executive of the Glasgow-based power company Aggreko, and nine years in the same role at outsourcer Serco, said a UK economy “with less than one percent growth is not thriving – it is merely surviving.”

The event was attended by Scotland’s Deputy First Minister and Economy Secretary Kate Forbes together with shadow business and economy ministers Murdo Fraser, for the Conservatives, and Daniel Johnson for Labour. Christine Jardine, Liberal Democrat candidate for Edinburgh West, was also in attendance.

Mr Soames, who became CBI chairman in December, told guests: “I am convinced that this election, and how both Holyrood and Westminster work with business – and with each other – in the five years after the election, will determine whether or not our country and economy thrive for the next twenty.

Kate Forbes at Barclays
Kate Forbes: attending lunch event (pic: Terry Murden)

“And let’s all agree that less than one per cent growth is not thriving. Underperforming business investment is not thriving. Seven out of 10 businesses struggling with labour shortages is not thriving.”

He added: “The exam question for all parties this election must be – how to get that mojo back. How to create a new narrative for the UK and for Scotland, which can once again get our economy firing on all cylinders, and deliver the long-term, sustainable growth we urgently need.

“Instead of the sugar rush of short-term politics, businesses want to hear all parties speak to how they can work with business – and each other – to deliver in the long-term and in the national interest.”

Mr Soames reflected on the difficult last eight years, during which business has suffered some of the toughest times since the three-day week in the 1970s.

“Brexit, Covid, the energy crisis and the inflation that followed. Three shocks to our economy, one after another, which have left us with anaemic growth, stubbornly persistent labour and skills shortages, and a bruised international reputation,” he said.

“One thing is crystal clear: Scotland will have a pivotal role in how we reclaim that reputation and set the economy back on the path to growth.

Murdo Fraser
Murdo Fraser, above, and Daniel Johnson, will join the lunch event
Daniel Johnson

“We have heard time and again how Scotland will be decisive for this election, but business knows that its role will, if anything, be even greater afterwards.

“Scotland is an energy powerhouse, with natural resources that are the envy of the world, the best-educated workforce in the UK, the home of two green freeports to supercharge our exports.

“But we cannot unlock Scotland’s potential for growth without facing the fact that Scottish productivity underperforms the already dire performance of the rest of the UK.”

Mr Soames said that skills remains a major concern for business, and that there needs to be changes to immigration and reform of the Apprenticeship Levy north and south of the border.

“As our members tell us time and again, businesses can’t operate, let alone grow, without the people and skills they need,” he said.

“From Westminster, we need a clear-eyed conversation about where immigration is necessary to tackle the most immediate shortages. Holyrood, meanwhile, must forge an education and skills system that is agile, flexible and responsive to business.

Sir Vince Cable and Christine Jardine at Diageo
Christine Jardine pictured with ex-LibDem leader Vince Cable (pic: Terry Murden)

“Both governments must also look again at the Apprenticeship Levy – and reverse the foolishness of Scottish businesses not getting back in value what they pay in.

“We need a business environment that will give great Scottish businesses the confidence to invest for the long-term.

“That calls for Holyrood and Westminster to work together to deliver a more competitive tax system, with regulators who are world-class.

“A good start would be a long-term business tax roadmap from Westminster – matched by a parallel, long-term strategy from Holyrood.” 

Turning to the green economy he said that the UK “must seize the immense growth opportunities from Net Zero, which CBI research values at up to £57 billion.

“Scottish energy is a key part of this. At the end of 2023 there were over 500 renewable energy projects in the Scottish planning pipeline – with a potential capacity of over 25 gigawatts.

Renewables growth depends on the right conditions for deliver, says Rupert Soames

“The trick is delivering them: a problem right across the UK because of planning systems fraught with snags, tripwires and skills shortages.

“In fact, the devolved planning system is now Scotland’s lowest funded local authority department.

“Business needs Holyrood to urgently address this. Growth requires it. Net zero requires it.

“We need a simplified process – and one which works efficiently and at pace – with regular funding and urgent steps to plug the shortage of skilled planners.”

Mr Soames stressed that governments north and south of the border must understand where growth comes from and the role they can play.

“Whatever happens on the fourth of July, one thing of which I am certain is that neither Holyrood nor Westminster will be able to do this by themselves. Not without business – and not without each other.

“Governments cannot deliver growth. Only business can. But business needs government to provide the institutional scaffolding that supports growth.

“Only government can set the rules for regulators, create balanced employment laws, manage an efficient and effective civil service, and invest in the infrastructure business needs to succeed. Business relies on government to deliver this and many other things.

“And, because of the complex interaction of reserved and devolved powers, business also relies on Holyrood and Westminster continuing to work together – in collaboration not confrontation as they have with such great success on green freeports like Inverness and Cromarty Firth.”

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