LIZ CAMERON
Three years, three major elections, and three rounds of uncertainty for Scotland’s businesses. Not to mention two referendums, ongoing negotiations over Brexit, the prospect of a second referendum on Scottish independence, and last week’s council elections. This isn’t exactly the kind of stability that businesses have been looking for in order to create the best possible environment for investment, growth and success.
However, when it comes to the question of elections and referendums, businesses must play the hand they are dealt. The Prime Minister has called an unexpected General Election for a variety of political and practical reasons, mainly derived from the outcome of last year’s EU referendum. Businesses will get on with their day to day operations and will deal with the result in due course, whatever that may be. Businesses will also be looking for opportunities to emerge and will be keen that the next UK Government gets on with its job of getting the best possible deal for our economy through the negotiations to exit the EU. This must include an early deal on the rights of EU citizens who live and work in the UK and for UK workers based in the EU. There must also be a defined role for Scotland and Scotland’s businesses in the negotiating process, to ensure that our own specific needs and challenges are addressed.
The General Election process will also provide an opportunity to focus the attention of all political parties on the needs of business and the Scottish economy. Scotland’s rate of economic growth has been significantly underperforming the UK as a whole for the last two years, whilst businesses across the UK are this year gearing up to expectations of rising inflation, higher costs and threats to the buoyancy of consumer demand. It is possible that a decisive outcome to the General Election could deliver greater certainty and confidence, which could, in turn, boost sterling and dampen the spectre of inflation. However, if this effect is not apparent, then it may be time for the new government to look to the lessons of the last recession and deliver a temporary reduction in the rate of VAT. This could not only have the effect of relieving pressure on inflation but could also effectively deliver continued growth in real earnings and increase consumer spending power, bolstering demand – a key driver of economic growth.
We have come to expect the unexpected, but we must always seize the opportunities this presents.
Liz Cameron is chief executive of Scottish Chambers of Commerce
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