The Scottish Chambers of Commerce welcomes the thrust of the Scottish Government’s 2017-18 Programme for Government, and applauds its ambition “to be the inventor and the producer, not just a consumer, of the innovations that will shape the lives of our children and grandchildren.”

With the Scottish economy still fragile, the Chambers wholeheartedly concur with the First Minister’s statement to the Scottish Parliament on the need for bold measures to help our industries adapt to the future and to adopt emerging data and digital technology to make our economy more competitive, productive, innovative, fair and profitable.

We look forward to seeing the detail to support these announcements, particularly those with no timescales attached, and further clarity on key announcements including the Scottish National Investment Bank and how it will operate in reality.

Nevertheless, the Scottish Government can rely on the support of the Scottish Chambers Network in its plans to increase government investment in business R&D by 70% to generating an estimated £300M of additional R&D spending over the next three years.

Likewise, we support the investment of £9m in a new lightweight manufacturing centre in Renfrewshire to help companies develop global competitive advantage in the manufacturing of lightweight, environmentally friendly materials.

The Scottish Government has wisely recognised that scaling-up businesses requires support as well as starting them, and we look forward to working with them on the new “Unlocking Ambition” challenge, to provide intensive support for up to 40 of the most talented entrepreneurs.

On the enterprise and skills agenda, we welcome the new Strategic Board, led by Nora Senior, past-President of Scottish Chambers of Commerce, and look forward to working with the Board to improve the strategic alignment of the public and private sectors.

On business rates, Scottish Chambers of Commerce has already made clear that the requirement to deliver “revenue neutrality” has limited the benefits of the Barclay Review’s reforms, and we note the critical role the Scottish Government has in matching the business momentum for change.

Finally on the circular economy, we would like to see more consultation with business on the proposals to design and introduce a deposit return scheme for drinks containers, to ensure that the scheme can be effective in achieving its aims without imposing extra costs on businesses and consumers. We would hope that no scheme will be implemented without the full buy-in of retailers.

Commenting on the Conservative Party Manifesto, Dr Adam Marshall, Director General of the British Chambers of Commerce (BCC), said:

“A number of the headline commitments in the Conservative Party’s manifesto will be welcomed by business communities around the UK. If delivered, pledges to overhaul the broken business rates system, to deliver better digital and mobile connectivity, and to focus more systematically on unlocking the growth potential of cities, towns and counties around the UK would respond to some of the key concerns of the business communities we represent.

“However, the positive reception to some elements of the manifesto will be tempered by proposals that would increase up-front costs, regulatory obligations and uncertainty for businesses. The Conservatives’ proposed approach to immigration, at a time when many firms are already doing everything they can to train up and employ UK workers, will worry companies of every size, sector, region and nation. Some of the Conservative proposals for additional market intervention and new employment regulation will be questioned, even by firms that are not directly affected themselves, because of the signals they send.

“The Conservative manifesto recognises that the UK needs a strong economy, stable public finances, a strong domestic business environment and outward-looking trade policies to weather the Brexit transition and develop a new model for growth. However, the document includes few specifics on how these important goals will be achieved.

“Over the coming weeks, business communities will want to see much more detail on how the manifesto’s pro-enterprise elements would be implemented, and their concerns on its more interventionist elements clearly addressed.”

With three weeks to go until the UK General Election, one of the most important issues for Scottish businesses will be the next Government’s approach to taxation. This week, Scottish Chambers of Commerce has called for the new administration’s first Budget to take decisive action to reduce key taxes to ease the burden of business costs and promote investment and growth. Liz Cameron, Chief Executive of Scottish Chambers of Commerce, said:

“With Scottish businesses facing the prospect of rising inflation and weak consumer demand, the threats to our economic growth, which lags behind that of the UK as a whole, are readily apparent. However, Government has the opportunity to develop policies which will help shape a more fruitful business environment where businesses are freed up to invest for new opportunities, future growth, and new jobs.

“One of the current challenges many businesses are facing is that of rising costs through higher prices and through government legislation on pensions, the National Living Wage and the Apprenticeship Levy. By tackling some of businesses’ fixed costs, this could help to free up valuable resources for business investment and job creation.

“That is why we believe that the UK Government must target reductions in business rates, rather than Corporation Tax, in order to produce the biggest boost to the largest number of businesses. Whilst this is a tax that is devolved to Scotland, clear strategic action on business rates in England would assist the Scottish Government in delivering long overdue restructuring of this tax north of the border.

“At a national level, a temporary reduction in the rate of VAT, last implemented in 2008-09, may also be a useful tool to tackle rising costs, whilst at the same time encouraging a boost in consumer demand, which has been the major driver of growth in the Scottish economy. In addition, the permanent reduction in VAT to 5% for tourism and hospitality activities would bring the UK into line with the vast majority of other European nations and deliver a timely boost in competitiveness to one of our most important and iconic sectors.

“A closer and more productive working relationship between the UK and Scottish Governments could also make possible co-ordinated action between reserved and devolved activities, for example to incentivise and reward in-work training through the National Insurance Contribution system. Scotland may have two Governments but they must work together more effectively to deliver the right results for business.”

Sixty per cent of organisations in the renewables sector believe the Scottish Government is likely to achieve its target of meeting half of Scotland’s energy needs from renewable sources by 2030, according to a survey by Brodies LLP.

The survey, which canvassed the views of organisations and individuals active in the renewables sector, found that a substantial majority believe the target is achievable, despite challenges including recent changes to the UK Government’s renewable electricity subsidies regime and the absence of any subsidy regime of similar scale in the heat sector.

Asked to identify the policy measures that the Scottish Government should take to help it achieve its target and overcome the current challenges facing the sector, respondents identified giving priority to new developments such as energy storage, encouraging the development of district heating and the continued deployment of the most efficient onshore wind technologies.

Earlier this year the Scottish Government published a draft Energy Strategy for the period up to 2030. It sets out a vision for a low carbon economy that is to be achieved by transitioning away from oil and gas and placing greater reliance on renewable energy sources. The strategy also proposes a shift away from electricity being the primary focus to one in which all energy sectors contribute, by setting an “all-energy” target.

More than three-quarters of respondents (77%) identified storage technologies as the priority to “keep the lights on” by balancing the supply and demand for electricity produced from renewable sources as part of a new “energy mix”, which aims to cut carbon dioxide emissions. Energy storage can provide back-up power to meet peak demand and boost supply when renewables output falls due to weather conditions. Eleven per cent of respondents said low carbon peaking plants should be the priority, followed by gas fired plants (8%), and coal fired plant and importing electricity from England (both 2%).

One of the principal areas of focus of the Scottish Government’s draft Energy Strategy is moving the agenda on from electricity to the decarbonisation of heat, which still accounts for more than 50% of Scotland’s energy supply. This could be achieved in a number of ways, however the only approach over which the Scottish Government currently has policy control is district heating. Asked which single policy measure might facilitate the creation of new district heating schemes, half of respondents said requiring developers to install district heating in new developments, 18% said requiring energy consumers to connect to such schemes, 15% said providing business rates relief for developments with district heating schemes, 13% said public sector capital contributions and 4% said granting developers the power to compulsorily purchase land for networks.

The Scottish Government’s strategy also sets out an ambition for Scotland to be the first part of the UK in which onshore wind energy schemes thrive without subsidy. Asked to identify the single most useful change that the Scottish Government could make to promote onshore wind development, respondents identified three key policies which the Scottish Government could introduce: public sector power purchase agreements, facilitating increased turbine tip heights and introducing a legal presumption in favour of re-powering existing sites (28%, 24% and 24% respectively).

Commenting on the survey results, Keith Patterson, Co-Head of Renewables at Brodies LLP, said: “The energy sector is accustomed to change – it has lived with it for the past decade. Economic and technological changes are transforming the electricity sector, seemingly by the day. Much of this change has been spurred by policies seeking to drive the decarbonisation of our energy supply. Yet, despite all the change, we have only touched the surface of what is required if we are to decarbonise our energy supply –Scotland is transforming its electricity supply but we are only at the starter’s gun as far as decarbonising transport and heat are concerned.

“Perhaps the most important aspect of the draft Energy Strategy is that it signals that heat will now be the focus of Scotland’s decarbonising efforts. Again, the draft strategy does not say how heat will be decarbonised, but climate change targets published around the same time imply that Scotland’s domestic and commercial heat supply will be approaching carbon free supply by 2032. Even if Scotland does not hit this target, it promises a truly transformative future for Scotland’s heat supply.”

To read the full report on the survey’s findings, visit http://brodi.es/allenergy17.