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A manifesto for growth

On the 5th May 2011, we go to the polls for the fourth Scottish Parliament election and all of the political parties in Scotland will be chasing our votes.

The last 12 years since devolution have seen eight years of coalition government and four years of minority government and given the current electoral system in Scotland, it seems unlikely that there will be a majority government in the next parliament.

Also in the last 12 years since devolution, the Scottish budget has swollen from £16bn to £33bn – an increase of 5% each and every year in real terms after inflation (Source: Scottish Office). There is plenty of money in the public coffers, and even after the current round of cuts, the Scottish budget will have increased well ahead of inflation. The public sector is not short of resources. This election should be about where to spend less money, not how to raise more tax receipts. (The under-funded local authorities in our region should get a fairer share of a smaller cake.)

If good husbandry is the central challenge of this election, there are a number of related issues which need attention if we are to change to a more balanced paradigm, and all politicians of every hue would do well to recognise these points and act accordingly.

Firstly “stability” is a prized economic condition, and business will pull us all out of recession faster if they can plan for the future with confidence, and in the knowledge that governments will not tinker constantly with the detail – adding cost and time to ordinary background functions which oil the economy. The first message to candidates is, therefore, before you introduce new wheezes “think hard, think again and do less”.

Secondly, the electorate in general, and businesses in particular, are not fooled by being tossed “sweeties” by politicians eager to be elected. Most of these new consumer products disguised as policies fall under the category of “nice-to” rather than “need-to”. All hard-up families when tempted by a new purchase will be familiar with the questions: “Do we want it?” and if the answer is (invariably) yes, “Do we need it?” to which the answer is (invariably) no, because it cannot be afforded. There is a graph on the Bank of England website which shows that the largest part of the public sector deficit is caused by government overspending over a generation (all parties, all governments, all parliaments), not by the credit crunch per se. When the banking crisis hit, the spending overhang cracked and fell – on us. In the jargon this is known as the “structural debt”. Our second message to politicians is to stop over-promising and under-delivering.

Thirdly, government should stop getting in the way of prosperity and wealth generation – this drives social equity in the long-run. Stop civil servants gold-plating new legislation; sort out the planning process so that it releases the potential for growth instead of stifling it; simplify the bureaucracy for small businesses; make it easier to create jobs; and simplify the operating environment for enterprise. Do invest in infrastructure, skills and success. The third message is get out of the way unless you are helping.

Finally, most businesses that we talk to want government not politics. In an electoral system where no one party will get overall control, business wants to see meaningful consensus, and the interests of the electorate held to be more important than the interests of any one party. Our last message to candidates is that what you think is an eye-catching policy is just eye-watering to businesses. If you do the right thing you will get the right result.

In short, we need a manifesto for growth, so that we can resolve the problems of the past, and lay down enterprise-led foundations for a future in which we take more account of our economic responsibilities to the next generation. We need good government.