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Supporting Business and Enterprise - Taking forward our National Conversation

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1 Introduction

Chapter Summary

  • 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.

1.1. This document forms part of the ongoing National Conversation, which aims to promote an inclusive, open and full debate about available constitutional options. As the culmination of this engagement, we will publish a White Paper on St Andrew's Day 2009. We will then introduce a Referendum Bill to Parliament in 2010 so that a referendum can be held on Scotland's constitutional future.

1.2. It outlines some of the main options available to Scotland and illustrates whether and how Scotland's business competitiveness could be promoted:

  1. Within the current arrangements since the Scottish Parliament was established in 1999;
  2. By incorporating the minor adjustments recommended in this area by the Commission on Scottish Devolution;
  3. Through the opportunities which could be available to Scotland under a highly decentralised model, still within the United Kingdom, but with increasing rights and responsibilities falling to the Scottish Parliament and Government;
  4. Under independence.

1.3. In each context a key test is improving the capacity of Government to create the best possible environment for competitive businesses, entrepreneurship and innovation to flourish.

1.4. The document is therefore focused on business and enterprise, and the transport and other infrastructure which supports them. It does not have a sectoral dimension, although it takes account of the diverse series 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. It also builds on the series of National Conversation documents published in 2009, and in particular:

  • Fiscal Autonomy in Scotland: The case for change and options for reform
  • Europe and Foreign Affairs - A new and better way for Scotland
  • The Scottish Government Response to the Recommendations of the Commission on Scottish Devolution
  • Employability & Skills: Taking Forward our National Conversation
  • Energy: Taking Forward our National Conversation

1.5. These options are also considered in the context of the strategic priorities set out in the Scottish Government's Economic Strategy, which focused central government and the wider public sector on supporting businesses and individuals to deliver a shared Purpose:

creating a more successful country, with opportunities for all of Scotland to flourish, through increasing sustainable economic growth.

1.6. The Strategy, though focused on what can be achieved within the existing responsibilities of the Parliament, forms a key part of the Government's National Conversation because of the extent to which a broader set of economic levers would promote increasing sustainable economic growth.

Figure 1: Characteristics of Growth

Figure 1: Characteristics of Growth

Source: Scottish Government's Economic Strategy (2007).

1.7. The broader benefits of delivering the Government's Purpose will be shared by all of Scotland, enabling people and businesses to prosper through more and better-paid employment and making Scotland a more attractive place to live, work and invest. Through the generation of resources that delivery of the Purpose will bring, government in Scotland will be empowered also to provide better quality public services and additional choices and opportunities for Scotland's people.

1.8. In order to deliver increasing sustainable economic growth and meet the Government's targets, the Government has identified five Strategic Priorities that are internationally recognised as critical: infrastructure and place; learning, skills and well-being; a supportive business environment; effective government; and equity. Sustainable economic growth means building a dynamic and growing economy that will provide prosperity and opportunities for all, while ensuring that future generations can enjoy a better quality of life too. The Government's Purpose is underpinned by a set of challenging targets that track progress in boosting the long term drivers of economic growth - productivity, population and participation - and in delivering on the desired characteristics of growth - solidarity, cohesion and sustainability (see Figure 1).

1.9. Each of these is critical to the delivery of the Purpose and they are embedded in and emphasised throughout the Government's approach. The remainder of this document is focused on the potential additional opportunities associated with available constitutional options and specifically how to support businesses better. Scotland's businesses are the primary driver of economic growth and increasing their size, competitive strength, productivity and ambition is a crucial challenge. We all want Scotland to be wealthier and fairer. We all want to live in a Scotland that is one of the most attractive places for business in Europe.

Overview

1.10. The report is structured as follows:

  • Chapter 2 discusses the current devolution settlement, the benefits delivered for Scotland and remaining constraints on economic and business growth;
  • Chapter 3 considers the relevance and impact of the Commission on Scottish Devolution recommendations in the context of business and enterprise, and transport infrastructure;
  • Chapter 4 examines options for enhancing business and economic performance by maximising devolution and limitations likely to remain;
  • Chapter 5 outlines options available to an independent Scotland to better support the business environment, boosting competitiveness and accelerating sustainable economic growth; and
  • Chapter 6 presents conclusions.