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Supporting Business and Enterprise - Taking forward our National Conversation

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Executive Summary

Introduction

  • This document describes options for new constitutional arrangements and how Scotland's business competitiveness and sustainable economic growth could be improved.
  • It takes account of National Conversation events and discussions which have taken place across Scotland. Discussion - with business, Trade Unions, the UK Government and others - will continue as an integral element of optimising Scottish Government support for business and enterprise.
  • Scotland's businesses are the primary driver of economic growth and increasing their size, competitive strength, productivity and ambition is a crucial challenge.

Scotland Today

  • In the last 10 years devolution has delivered some clear benefits for Scottish businesses and communities. Devolution was always expected to evolve further to meet Scotland's emerging needs.
  • Many of the key policy levers relating to supporting businesses and enterprise and improving business infrastructure are reserved to the United Kingdom at present.
  • Experience of the last 30 years demonstrates that the status quo will not deliver sustainable economic growth in Scotland which matches UK performance, or indeed the higher levels of long-term growth enjoyed by similar, independent nations.

The Commission on Scottish Devolution Recommendations

  • In terms of support for business and enterprise in Scotland, the Commission on Scottish Devolution's report featured recommendations on: tax and borrowing, including Air Passenger Duty; employment policy and industrial relations including health and safety and migration policy; and trade and commerce.
  • Most recommendations, although well-intentioned, continue to constrain the Scottish Government, businesses and economic growth. Others have the potential to damage the management of Scotland's public finances.
  • We believe the Commission has failed to recognise or address the comparative under-performance of the Scottish economy within the UK.

Enhancing and maximising devolution

  • The Scottish Government is keen to examine how the existing devolution model might be enhanced to include full fiscal autonomy and the transfer of a range of other responsibilities vested in the UK Government - and believes doing so would provide real business benefits for Scotland.
  • The Scottish Government is committed to making Scotland one of the best places to do business in Europe, by for example reducing the rate of corporation tax to significantly below the UK level.
  • However, under any enhanced devolution model, a range of rules and commitments imposed by the UK would continue to constrain the policy levers available to the Scottish Government, thereby sustaining factors which have historically impaired Scotland's growth performance and competitiveness.

Independence

  • Only independence allows Scotland the freedom to use the full levers of government to create a more successful country, with opportunities for all of Scotland to flourish, through increasing sustainable economic growth.
  • Business and enterprise benefits would emerge from outcome-focused reform of, for example: fiscal and tax policy and collection arrangements; competition and consumer policy; financial services regulation; promotion of international trade; skills and immigration; and transport infrastructure.
  • The rest of the UK would remain our closest partner and ally and an independent Scotland would clearly seek to focus policy to enhance trading and other economic opportunities within the British Isles.
  • An independent Scotland would enable government to be more responsive to local economic needs. There would be an opportunity for more effective and streamlined decision making processes, allowing government to work closely with the business community to create the conditions for successful businesses and for talented people to live, learn, visit, work and remain in a more prosperous nation underpinned by higher levels of sustainable economic growth.

Conclusions

  • The Scottish Government's considered position is clear. Only independence allows Scotland the freedom to use the full responsibilities of government to create a more successful country, with opportunities for all of Scotland to flourish, through increasing sustainable economic growth.
  • In moving forward, the Scottish Government would remain focused on fostering a supportive business environment and improving the competitiveness of businesses in Scotland. The aim would be to build on current areas of comparative advantage. Improvements to the business environment would be focused on supporting innovation and entrepreneurship with a view to fostering improved growth and productivity in the Scottish economy.