By stewartb
The Scottish Chamber of Commerce (SCC) has published its response to the British Labour Party’s UK budget: ‘SCC Response to Autumn Statement – SCC call on Scottish Government to utilise consequential funding to support economic growth’.
Source: https://www.scottishchambers.org.uk/press_policy/scc-response-to-autumn-statement-2/
In it we find this: ‘… Chief Executive of the Scottish Chambers of Commerce (SCC) said: “We welcome the additional £3.4 billion of funding for Scotland but as always the devil is in the detail, and we need to see a full breakdown of how this will be utilised to support economic growth.”
Adding: “As we look ahead to the Scottish budget, we urge consequential funding to be utilised to support the business community, particularly on non-domestic rates and planning, to ensure a level playing field with the rest of the UK.”
Note the focus on what the Scottish Government must do in the SCC’s statement: whose budget is it responding to? According to the SCC, at least by implication here, the Scottish Government shouldn’t prioritise additional funding for health, social care, child poverty, social housing, local government services ….. No, the priority should be on supporting businesses survive and grow.. Why is this the priority?
One begins to realise why the SCC might consider the prioritising of support for Scotland’s businesses to be essential now given what we learn from the following extracts from its response to the actual Labour budget:
- “Firms are bearing the lion’s share of plugging the £40 billion fiscal funding gap cited by the Chancellor, with the increase in employer NICs accounting for half of this.” (my emphasis)
- “Many businesses will be unable to absorb these costs and will have no alternative but to pass onto consumers. The scale of this additional cost will mean that pay rises and additional staff hiring could go on hold, or new jobs won’t be created.”
- “Staffing remains the most significant cost pressure for businesses and impacts recruitment, retention and training and as the Office for Budget Responsibility’s highlighted the majority of any rise in employers’ NICs would be passed on to workers via lower pay rises.”
- “… Scotland’s national drink loses out on support. We urge the Chancellor to re-think this decision and provide the whisky industry with essential support to enable future growth and further investment.”
- “.. it is disappointing that the Windfall Tax on the North-East economy and beyond has been extended. This is a sector where major investment decisions require confidence and certainty about the future and we call upon the government to work with industry to design a new tax approach that secures billions of investment and tax receipts, while protecting the jobs of tens of thousands of working people.”
The SCC’s statement lays out what mounts up to a substantial ‘hit’ on business finances in Scotland. In this context, it is worthwhile repeating the headline chosen by the Chamber for its response to a Westminster budget: ‘SCC call on Scottish Government to utilise consequential funding to support economic growth’.
Is it calling on the Scottish Government to ease the pain being inflicted on Scotland’s businesses by Labour in Westminster? It seems to be arguing for the funding of compensatory schemes – for mitigations – for businesses rather than take the opportunity to increase funding for health, social care, reducing child poverty, reducing homelessness, local government services, police and fire services etc.
On November 4, the SCC published a statement on its website with this headline: ‘Scottish business call for more government support after challenging Autumn Budget’. We learn of the SCC’s views on the problem and the supposed solution: ‘Business will bear the brunt of Labour’s record tax raising UK budget and need more government support, Scotland’s business leaders have warned. The Scottish Chambers of Commerce has urged both the UK and Scottish governments to find additional solutions to ease significant cost pressures.’
The CEO of the SCC is quoted: “The increase in employer NICs and the reduction in the payment threshold will push costs even higher for our 12,000 member organisations. Combined with the rise in the minimum wage and the new Employment Rights Bill that’s likely to lead to cost cutting, lower pay increases, and fewer jobs at a time when we need more growth and investment.”
Tellingly, immediately after this, the SCC’s statement goes on: ‘The SCC called for the additional £3.4 billion of consequential funding for Scotland to be used to provide support for economic growth and the business community.’
A curious contrast
In the statement on October 30, the CEO of the SCC also welcomed the £750,000 in the budget for the Scotland Office in 2025/26 ‘to champion Brand Scotland’: “We welcome the funding to boost Brand Scotland and urge the UK Government to expand this further. We would welcome further engagement with UK Government on working in partnership with business to promoting Brand Scotland across the globe.”
In its statement of November 4 the SCC notes: “It is disappointing that despite the Prime Minister’s commitment to back Scotch producers to the hilt, we have yet another increase in alcohol duty. The last government’s hike cost the Treasury more than £300m in lost revenue while this latest rise takes the minimum UK tax burden on a bottle of whisky to over £12 for the first time – and the highest of any G7 country.”
With the SCC critical of the rise in duty on Scotch but supportive of Labour’s ‘Brand Scotland’ funding, it’s relevant to note what the Scotch Whisky Association’s CEO had to say about the budget, its increase in duty and ‘Brand Scotland’: “This duty increase on Scotch Whisky is a hammer blow, runs counter to the Prime Minister’s commitment to ‘back Scotch producers to the hilt’ and increases the tax discrimination of Scotland’s national drink.
“On the back of the 10.1% duty increase last year, which led to a reduction in revenue for HM Treasury, this tax hike serves no economic purpose. It will damage the Scotch Whisky industry, the Scottish economy, and undermines Labour’s commitment to promote ‘Brand Scotland’.
End note
It’s relevant for voters to be alert to the ways that organisations like the Scottish Chamber of Commerce and the Scotch Whisky Association seek to influence public opinion and government policies. They tend to have good access to BBC Scotland and others in the mainstream media.
It’s hard not to ‘reflect’ on this judgement published by the BBC News website on September 23, 2022 under the headline: ‘Mini-budget: How is Scottish business reacting?’ This is referring to the Truss/Kwarteng budget.
‘Scottish Chambers of Commerce said the string of policy announcements from the chancellor signalled “a bold start”. Its chief executive is quoted “The chancellor’s commitment to pro-growth and pro-enterprise policies will be eagerly welcomed by businesses.
“The specifics on reducing business costs, cutting red tape and boosting infrastructure development are exactly the levers the UK government should be pulling to support economic growth.”
She added: “As we look ahead to the Scottish government’s emergency budget, businesses and households now play the waiting game to see if the Scottish government opts to take similar moves. With control of powers such as income tax and land and buildings transaction tax devolved to Scotland, the expectation will be for Scottish government to deliver parity with the rest of the UK.”
I’ll leave readers to review expert views on the consequences of the Truss/Kwarteng min-budget set out for example here https://www.bbc.co.uk/news/63229204 . We know that the next Tory Chancellor reversed after just three weeks almost all of the tax measures outlined by his predecessor Kwasi Kwarteng. And we known that the mini-budget welcomed by SCC – which including £45bn of unfunded tax cuts – led to days of turmoil on the financial markets, a fall in the value of the pound, rises in the cost of UK government borrowing and substantial rises in mortgage rates for households. Evidence of a track record of good judgement?
Talking-up Scotland 'Albatraz' 
Remember, company directors must, by law ‘maximise shareholder return’. They do this by ‘driving down costs’. Usually, this means cutting staff, reducing wages, forcing compulsory overtime.’ In this case, they are asking the Scottish Government to give public money to private companies, thereby reducing the company’s cost and therefore contributing to ‘maximising shareholder return.’ So, public money is being transferred to private dividends – socialism for the rich. When government funding is spent on benefits it is ‘encouraging the something for nothing society’ [Johan Lamont, former leader of ‘Scottish’ Labour. Current Labour cabinet ministers Liz Kendal and Wes Streeting would say they ‘support strivers and not shirkers’.
Alasdair Macdonald
LikeLiked by 1 person
The chamber of commerce are leeches , imagine wanting the poor to suffer more austerity the children and the sick to be deprived further , that is what the chamber of commerce want the Scottish government to do they want them to divert money away from the poor the children the sick and give it to businesses.I say we tell these people at the chamber of commerce if your businesses cannot survive without money from the poor its time you were told to get on yer bike and look for work.
LikeLiked by 1 person
There is a place for public funding of some businesses at some times: this must deliver net additional economic, social and/or environmental benefit.
Funding from the Scottish Government’s constrained budget for the benefit of businesses in Scotland in order to offset – to mitigate – negative impacts caused directly by decisions made in Westminster is not an appropriate use.
It will not deliver optimum (if any) net additional benefits from the Scottish Government’s funding whilst reducing what can funded in other areas of responsibility.
The necessity of funding to mitigate negative consequences of Westminster policy decisions has become all too common.
LikeLiked by 1 person
Having had a look at companies house at just ONE member of the board of SSC…….a certain Bruno Leo Nello Berardelli he currently is listed as the director of 50 “appointments” ( businesses)….all registered to an address in London…..https://find-and-update.company-information.service.gov.uk/officers/D2CjignCehqFY1XXBEgJvGVy1R4/appointmen……….the rest of the motley board look pretty much similar….https://www.scottishchambers.org.uk/about-us/scc-board….people like Stuart Cresswell of Associated British Ports Scotland manager…so at a glance these people are very much only interested in themselves and definitely NOT Scotland…..probably all unionists supportive of the colonialist Whitehall paymasters they look to, to fill there back pockets.
JB
LikeLiked by 1 person