Liz Cameron: Yes (first) minister, it is time for a 'reset'

There are few moments which I would class as era-defining in the political world but Nicola Sturgeon’s resignation is surely one of them.

Having outlasted four UK prime ministers and navigated Scotland’s response to the Covid-19 pandemic, we can all agree – regardless of political persuasion – the first minister has been a committed, dedicated and passionate public servant for Scotland.

As we look ahead to whoever becomes the next leader, a full in-tray of issues requiring immediate attention awaits them.”

While we agreed and disagreed on economic policies, we always found common ground on the importance of promoting Scotland on the world stage.

Our passion for “brand Scotland” and increasing exports to the world became our shared mission, and we shifted the dial in getting more Scottish companies seeking out global markets and securing new orders.

But there is much more to do and the chambers of commerce network will continue to build on this important progress with the soon-to-be-agreed new first minister.

Nicola Sturgeon announced she will quit. Image: Shutterstock

So, as we look ahead to whoever becomes the next leader, a full in-tray of issues requiring immediate attention awaits them.

The business community will be closely watching the contest for the next leader of the SNP and eventual first minister to assess their abilities on understanding the economic performance of Scotland and the UK, and to find out what levers they believe are required to correct its course.

Economy ‘flatlining’

After UK GDP (gross domestic product) shrank by 0.3% in the third quarter, the economy registered zero growth in the final quarter of 2022. There is a clear imperative to prioritise economic growth and jobs, as the economy registers flatlining performance and inflation remains high.

Earlier this year the Bank of England said it expected the UK to enter recession during 2023, but this would likely be shorter and less severe than it had previously anticipated.

‘Growth has ground to a halt’

But the analysis remains pessimistic.

The National Institute for Economic and Social Research, an independent think-tank, has warned a large fall in living standards caused by surging inflation will leave millions of people struggling with their bills.

While the economy has technically managed to continue to stave off recession to date, growth has ground to a halt.

For many people, this year will feel like a recession regardless. Meanwhile, the pressures on businesses will remain and could threaten the survivability of many firms.

Scottish businesses face increasing cost pressures and dwindling business confidence.

Investment is largely on hold if not being paused entirely. Cashflow and profits are under strain.

Firms are struggling to find avenues that lead to survival other than raising prices and trying to see it out.

Energy bill. — The help businesses are currently getting with their energy costs is being scaled back. Image: PA

The excessive cost-of-doing business and impacts of high inflation are likely to persist.

Despite government support, energy costs will also continue to trouble businesses and households, particularly when that support is rolled back this spring.

Challenges around the labour market will also linger. Recent figures put employment in Scotland at a record high of 76.6%, but recruitment difficulties are persistent as businesses struggle in a competitive job market and often can’t find the skills they need.

Ongoing labour shortages

A recent survey by the Chartered Institute of Personnel and Development found that despite strong hiring intentions, more than half (57%) of employers had hard-to-fill vacancies. Many expected this problem to endure to either a significant (29%) or minor (36%) extent during the next six months.

The survey also suggested the tight labour market will increasingly feed through into price rises for organisations’ goods and services.

We are ready to work with the government on issues that matter to us all.”

These issues will not be solved overnight. They certainly cannot be solved alone.

Urgency, action and partnership will be watchwords the next first minister will be assessed on. These are the essential parameters for creating a business environment in Scotland which is growth-led, competitive and world-leading.

We are ready to work with the government on issues that matter to us all, including:

Ensuring quality jobs for all.
A just transition that builds on our massive potential for net-zero.
Making sure economic growth is tied in with improving social equality and prosperity.

Only by working collectively as genuine partners can policy ambitions translate into practical delivery on the ground.

I was struck by Ms Sturgeon’s use of the word “reset” (of Scottish politics) in her resignation speech.

Since 2021 the business community has called for a “reset” of the relationship between business and government after clear strains during the Covid-19 pandemic and policy announcements where unintended consequences hit Scotland’s prized industry sectors.

All eyes on the new first minister

Perhaps this is the moment where a genuine reset is possible.

While the business community stands ready to work openly and constructively, the onus is on the next first minister to demonstrate their willingness and openness to work with us so we can collectively grow Scotland’s economy.

Liz Cameron is chief executive of the Scottish Chambers of Commerce.