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SCC SETS OUT BUDGET AGENDA
[ 02-04-2009 ]
Scottish Chambers of Commerce have today published their Budget recommendations in advance of the Chancellor of the Exchequer’s Budget Statement on 22 April. The report identifies key measures which the UK Government could introduce to respond to the developing economic situation and help create the right climate for Scottish businesses to take full advantage of the opportunities that will accompany recovery. Liz Cameron, Chief Executive of Scottish Chambers of Commerce, said:
“The Scottish economy has changed significantly since the time of the Chancellor’s Pre-Budget Report last November. Since then we have officially entered recession at a UK level and the effects of the downturn, including the spectre of rising unemployment, have really begun to hit home for many businesses, communities and individuals.
“The Chancellor’s Budget later this month will be a vital opportunity for the UK Government to take stock of the effects of its economic interventions to date and to further tailor its policies to bolster viable businesses across Scotland, to stem the potential loss of key skills from our workforce and to set us on a path to take full advantage of the opportunities arising from the inevitable recovery.
“That is why we believe that a broad package of measures aimed at supporting businesses in the short term and retaining skills in the longer term are necessary to see the Scottish economy through a challenging year ahead.
“A bold statement should be made by announcing an immediate 6 month holiday for Employers’ National Insurance Contributions. Not only would this directly reduce costs for many businesses but in reducing the cost of employment, it could help employers retain key staff in preparation for future growth. In addition, the Chancellor should scrap his plans to raise the rate of Employers’ NICs in 2011.
“The VAT cut which came into force last December has had a minimal benefit to Scottish firms. We have therefore called on the Government to introduce a more targeted cut by introducing a zero VAT rate for building repairs and improvements. This would have the dual benefit of stimulating spending in the construction sector and encouraging the upgrading to more energy efficient products, such as doors, windows and boilers, thus contributing positively to our international carbon reduction commitments.
“Scotland’s video game industry has enjoyed enormous success in recent years, with products such as Realtime Worlds’ Crackdown and Rockstar North’s Grand Theft Auto IV amassing global sales in the millions of units and the industry as a whole contributing £1 billion to our economy. However if we are to grow our creative digital media clusters and attract new major industry players to our shores, we must ensure that our fiscal regime is internationally competitive. That is why we are also calling for the UK Government to adopt a tax credit system for the digital media industry which is at least as generous as that which has been introduced in France, together with a streamlining of the existing R&D tax credit scheme.
“All of these measures would help mitigate the effects of the recession on our businesses in the short term and grow our competitiveness in the longer term. As the Chancellor prepares to set out his fiscal plans for the year ahead, Scottish businesses will be looking for a clear plan which ensures that economic recovery remains at the very heart of the Government’s agenda.”
A copy of SCC’s Budget Submission is available below for download.
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