One major challenge for SNP in 2025 amid discontent

This was in stark contrast to the message from Lorna Slater, co-leader of the Scottish Greens, who said in an interview with The Herald on Sunday in 2022 that economic growth was an area where her party had “a fundamentally different position to the Scottish Government”.

By the time of the interview in June with Ms Forbes, who is also Cabinet Secretary for Economy and Gaelic, the Scottish Green Party was no longer the SNP’s junior partner in government, with Humza Yousaf having ended the Bute House Agreement on co-operation in the spring when he was first minister.

Ms Forbes hammered home her belief, in the interview in June, that economic growth is crucial to delivering the Scottish Government’s “social justice” aims, including tackling child poverty and homelessness.

And her response, when asked about Ms Slater’s view on the economy, was strikingly frank but again not surprising.

Asked if she disagreed with Ms Slater’s comment on economic growth, Ms Forbes said: “Economic growth was an excluded area from the Bute House Agreement for the very reason that the SNP does believe in the importance of economic growth and economic growth is essential but not sufficient to deal with all of our aims and objectives so it cannot be ignored or dismissed but equally you can’t depend on it alone – that is where evidence-based government policy is also required, for example around the Scottish child payment, or whatever it is.”

Ms Forbes added: “But the way to deliver growth is of course if every business and enterprise and organisation is growing and creating success and households feel that they’re able to make ends meet through well-paid, secure jobs – then bringing those two together that’s essentially what economic growth is when you boil it all down.

“It’s the fact that individuals, households and businesses and third-sector organisations are all prospering, that’s what ultimately delivers national economic growth. And I don’t think anyone could disagree with the importance of households being able to make ends meet and businesses prospering.”

Read more

There was no doubting the challenges facing the SNP in its relationship with business when First Minister John Swinney and Ms Forbes took up the two most senior posts in the Scottish Government in May.

An exclusive poll by The Herald and the Institute of Directors in Scotland, published in early April, revealed that business leaders north of the Border believed the UK Government was doing a better job on business and the economy than the Scottish Government.

Asked if the Scottish Government was doing a better or worse job on business and the economy than the UK Government, or if the performance of the two was similar, 68% of the IoD Scotland members who responded said “worse”.

Read more

Meanwhile, 13% believed the Scottish Government was doing a better job and 19% thought the performance of the Westminster and Holyrood administrations on business and the economy was similar.

Asked what she saw as different in terms of policy on the business and economic front with Mr Swinney having become First Minister and her own appointments, Ms Forbes said: “Economic growth is unashamedly one of John Swinney’s four top objectives.”

On whether she saw it as difficult to balance maximising economic growth with social justice, Ms Forbes replied: “No, it is not difficult to balance at all. I have never seen even an iota of difference in our desire for resilient public services, for eradicating child poverty, for protecting our environment, and our economic objectives, for the very simple reason that we can’t achieve those objectives without economic growth.

“So when I look at our mission to eradicate child poverty, clearly we are investing substantially in the Scottish child payment. That investment comes through progressive taxation because of a growing and thriving economy but it can’t happen without the creation of well-paid, secure jobs, and that is where a growing economy creates the jobs.”

She added: “In terms of every single one of our public services, their resilience requires us to be generating public revenue that comes from businesses doing well, bluntly, and we are then able to reinvest that. So all of the Government’s social justice aims and objectives, from ending homelessness to ending poverty to dealing with the health inequalities that come from poverty, all of those can only be resolved in partnership with economic growth, and there is no path to resolving them without a thriving and prosperous economy. So I see no difference and I think those who create a difference do so by jeopardising their core aims.”

It was difficult to see what was not to like, from a business and economic perspective, in the clear message from Ms Forbes.

However, a poll from the University of Strathclyde’s Fraser of Allander Institute, published in October, made it plain that the Scottish Government faces a continuing major challenge in winning over business.

Only 9% of firms north of the Border agree that the SNP administration understands the business environment in Scotland, compared with 64% of businesses that disagree, according to this survey.

These percentages match those in a poll published by Fraser of Allander in August last year.

My column in The Herald on this topic on October 30 argued that the comments from Ms Forbes in the June interview were surely the “kind of sentiments you would think should go down well with business, notably the recognition that economic growth is crucial”.

It added: “However, the Fraser of Allander Institute survey indicates the Scottish Government has a mountain to climb regarding its popularity with businesses.

“That said, senior members of the SNP Government might be wondering just what more they can do to make those perception readings less bad.”

Read more

It will be interesting to observe the relationship between the Scottish Government and business through 2025.

Business has, of course, been making its annoyance plain over the £25 billion a year hike in UK employers’ national insurance contributions from the new Labour Government in its October 30 Budget.

My column published on the day of the UK Budget observed: “We have had a flurry of Budgets and other fiscal events in recent years amid much political volatility and upheaval but this one stood out – with the Chancellor highlighting early in her speech that Labour’s measures would increase taxes by £40bn annually.”

It noted that financial markets had taken Rachel Reeves’s Budget in their stride, in stark contrast to the mayhem which ensued in the wake of the “mini-Budget” from former Conservative chancellor Kwasi Kwarteng in autumn 2022 during Liz Truss’s brief spell as prime minister.

The Scottish Government’s December 4 Budget appeared, from a business perspective, to be significantly less controversial than Labour’s UK Budget.

It will also be interesting to watch how Labour’s relationship with the business community throughout the UK goes during 2025.

One sure thing is that there will be no shortage of things to write about on the interactions between government and business, at a Scottish and UK level.