£500m new support for Scottish businesses

A new £500 million package of financial support for private sector business investment has been announced by First Minister Nicola Sturgeon as she set out plans to increase economic growth in her Programme for Government.

Addressing the Scottish Parliament at Holyrood, the SNP leader outlined a three-year Scottish Growth Scheme which she said will see the Scottish Government unlock investment for the private sector facing increased uncertainty as a result of Brexit.

Individual investment guarantees, and some loans, of up to £5 million will be available to small and medium sized firms who would otherwise be unable to grow because of a lack of investment finance.

The scheme will be open to new and early-stage high growth potential companies, with clear export growth plans, particularly in technology-intensive sectors and businesses in emerging markets, such as financial technology (FinTech).

As financial guarantees, the support will not come from existing spending plans, and will instead see the Scottish Government share some of the risk faced by small companies, when they make big investment decisions.

The announcement came as the First Minister revealed which capital investment schemes will benefit from £100 million of accelerated capital spending in this financial year.

In a programme designed to boost growth and equip Scotland’s economy for the future, the First Minister also announced steps to deliver on the Government’s commitment to 100 per cent superfast broadband and establish a National Manufacturing Institute for Scotland.

She also confirmed £290 million worth of European Structural Funds projects to support Scotland’s people, communities and businesses. With partner funding, this will deliver a total investment of £650m.

The announcement of new economic support came as part of wide-ranging legislative programme that will see 14 bills introduced, continuing to deliver on the Scottish Government’s priorities to create opportunities for all and transform public services. Four of the bills will be introduced as a result of new powers devolved to the Scottish Parliament including a Social Security Bill to establish a social security agency.

Setting out a major new economic initiative, the First Minister said: “The proposal for a Scottish Growth Fund is an exceptional response to an exceptional economic challenge.

“This is a half-billion pound vote of confidence in Scottish business, Scottish workers and the Scottish economy.

“We are determined to build an economy where everyone has a fair chance to contribute to growth, and where everyone can share in the benefits of growth.”

Craig Vickery, head of the Association of Chartered Certified Accountants Scotland, said that many businesses should welcome the support shown by Government.

He said: “The Scottish Growth Scheme will be a welcome reassurance to business, particularly SMEs, after the uncertainty of the past two months. With Brexit negotiations yet to begin it is vital that we continue to focus on and support Scotland’s strengths as a major centre for services and that we remain open for business with global trade partners as well as within the UK.

“The proposed cut in Air Passenger Duty will also be a welcome boon for business and tourism, coming so soon after the Edinburgh Festival has again offered a reminder of our desirability as a cultural hub.”

Yet Mr Vickery also stressed that the Government needs to focus on maintaining stability in uncertain times.

He said: “We still do not have reliable information on how the Brexit vote has impacted on the UK economy. Yet we do know that two years of political uncertainty, including two referendums and a general election, has caused significant uncertainty for business about long-term investment decisions and dented confidence.

“Now it is more important than ever for the Scottish Government to maintain stability and support for growth, whilst seeking to best represent Scotland’s interests on the global stage.”

Mr Vickery went on to express his support for apprenticeships.

He added: “It is positive that the First Minister has identified government support for apprenticeships as an important boost to the economy. Yet we should also recognise that they are not job creation schemes but should represent vital investments in developing the necessary skills for young people to compete in the global economy for years to come: not just in construction or manufacturing, but also leading professional positions in finance and business.”