Gordon MacIntyre-Kemp: Five policies that could save us from recession

If Corbyn has pulled off a surprise win (a majority would be massive surprise) then a soft Brexit is back on the table including single market membership, and that means that the scare stories around a Yes vote creating a hard border, damaging trade, resulting in tariffs or customs paperwork, would all disappear. So in the long term even that result would be good for independence. Possibly the best scenario though is Corbyn needing SNP support to be PM, with the SNP demanding federal level powers, single market membership and an indyref at the time of Holyrood’s choosing. Many think a Tory victory with a 100-seat majority would be best for independence but that would cause so much hardship and economic problems, and ironically there really could be hard border after independence, so it’s not the best option. A smallish SNP reduction is on the cards but only a fall to below 40 MPs would slow progress towards independence and that’s as unlikely as a Corbyn majority.

For me, this election was noticeable for the language similarities in both Labour and Tory manifestos. The Tories used the language of socialism and even recognised the damage of low wages. It was a clear attempt to steal Labour and the SNP’s clothes and it might have worked were it not for the dementia tax and their past record that made it all a little unbelievable. What was missing, though, from all the manifestos was a plan to deliver the business and economic growth that would pay for the social promises. There was very little emphasis on policies that would help the small to medium sized (SME) business sector, who are the primary drivers of wealth creation in Scotland. It is only through a balance of social protection and wealth creation that a truly shared prosperity can be reached and so here are my top five overlooked policies to create a shared prosperity that must become a priority for both our governments if recession is to be avoided.

1) Late payment is a major drag on growth for SMEs and we need legislation against late payment, imposing a time limit to avoid larger companies taking advantage of small businesses and to accelerate cash flow investment in SMEs. Business for Scotland’s research shows that 67 per cent of Scottish SMEs would crate rapid growth in jobs and turnover and therefore increased tax revenues if late payment wasn’t an issue. And 22 per cent even suggested that ending late payment would lead to over 10 per cent annual growth, with 7 per cent saying they would achieve over 20 per cent growth.

2) Scotland’s prosperity relies upon maintaining membership of the single market and customs union. Any bad Brexit deal can be dressed up as access, but what is needed is full single market membership with freedom of movement, goods and people and no hard borders, tariffs or customer barriers. The right election result could put this back on the table.

3) Tax avoidance has led the Tories to promise tax cuts to stimulate growth (they won’t) and the LibDems have said they would just roll back the Tory cuts. This demonstrates that the political parties have a short-sighted, unimaginative and even defeatist view on corporation tax. A benefit corporation tax credit system would involve raising basic corporation tax to 22 per cent, with up to seven per cent targeted tax credits available to firms increasing youth employment, increasing exports, investing more in close to market R&D, reducing emissions, hiring and training more young people, paying the Living Wage etc. This would increase overall tax revenues, cut benefit costs, lower unemployment, improve Scotland’s balance of trade, lay the foundations for future growth and create a uniquely competitive corporate tax environment where those big companies that are beneficial to our economy pay less tax while generating higher overall revenues. Our initial scoping work demonstrated that this could save over £1 billion in benefits payments and generate over £12bn in additional GDP for Scotland over five years.

4) Simplifying public sector procurement would remove the burden of bureaucracy that makes bidding more difficult for SMEs. The cost and effort required to bid for public contracts creates an uneven playing field and favours bigger companies and multinational rather than local SMEs suppliers.

5) Its a little known fact that the EU provides 50 per cent funding for many skills and employment-based schemes offered to SMEs by Scottish councils and this is under threat from Brexit. It is vital that we increase incentives for companies to train and recruit younger employees through apprenticeship-style schemes. Good work has already been done in this area but what’s needed is more of an emphasis on targeting incentives to where skills shortages exist in traditional trades, transportation and skilled manufacturing jobs that are less at risk from automation.

And finally, Scotland’s farming communities need protection from Brexit more than any other sector, although ironically, the older demographic means that rural Scotland might return a few extra Tory candidates and secure a hard Brexit. Eighty-five per cent of Scottish farmland is classed as “less favoured areas” compared to only 15 per cent in England and so qualifies for extra support.This means that the rest of the UK gets very little in Common Agricultural Policy payments, but Scotland, with a population share of 8.4 per cent, gets over 17 per cent of the UK’s EU farm subsidies. Without EU subsidies as much as 73 per cent of Scottish farming businesses operate at a loss and if these subsidies are not matched post Brexit then not just farms but the communities and rural business clusters they support will be bankrupted by a Brexit that people in Scotland resoundingly rejected.

Regardless of who the PM is as you read this, neither will have won in Scotland and both are Unionists who don’t understand Scotland while thinking Westminster is the answer, when it’s really the problem.