Economy 12 June 2020 Why Scottish businesses are losing patience with the SNP As firms nervously await the consequences of lockdown, there is pessimism and even rage with Nicola Sturgeon’s administration. Getty Images Nicola Sturgeon entering the Scottish parliament. Sign UpGet the New Statesman's Morning Call email. Sign-up Nicola Sturgeon seems to be emerging from the coronavirus battle with honours – her dignified and heartfelt leadership through the crisis has certainly impressed the public. A recent YouGov poll found that 74 per cent of Scots think her government is doing a good job, including 70 per cent of Labour and Conservative voters. In contrast, just 47 per cent believe Boris Johnson’s administration is on its game, with 48 per cent taking the opposite view. But it is possible to win the battle and still lose the war. As we emerge from the public health moment, which plays to the First Minister’s strengths, to meet the economic challenge, which doesn’t, these figures may yet be revised. Significant parts of Scotland’s business community are caught between frustration and anger at the SNP’s approach – or lack of it – to kick-starting the economy. In the past week, in conversations with some of the nation’s leading business figures, I’ve been taken aback by the pessimism and even rage expressed as they nervously await the consequences of lockdown. The Scottish government’s behaviour has variously been described as “patronising”, “fucking horrendous”, and “a dialogue of the deaf”. This is not just from the Unionist refusenik side of the debate. Temperate business leaders who are perfectly open to the idea of independence are close to losing their rag. “There’s a real lack of belief that they will deliver what the economy needs,” says one pro-indy entrepreneur. Major companies, including banks, speak of being “unable to get a call” with ministers and civil servants. Those who have managed to secure a conversation have been unimpressed with the quality of the individuals at the other end, particularly at civil servant level. “From fairly early on it was clear to us how bad it was going to be,” says one high-profile businessman. “Come the winter, as the furlough scheme runs out [at the end of October], as creditor goodwill disappears, the number of job losses will go through the roof. There’s been a lot of short-term borrowing and the piper will have to be paid. I’m not sure they understand the scale of it all. What’s the plan? There’s deafening silence.” “We’re going to need jump leads, wielded by people who know what they’re doing, to get things restarted,” says another. “But it’s not clear they have those people, the interest or the courage to do this in a meaningful way.” Sturgeon is a social justice first minister and the cabinet is shaped in her image. This is not necessarily a bad thing, but there is little obvious sympathy for the private sector among her ministers. Fiona Hyslop, the long-standing Culture Secretary who recently had the economy added to her brief, is viewed with particular scepticism. Fergus Ewing, one of the few ministers with a pro-business agenda, has been somewhat side-lined with the Rural Economy brief. A contrast is often drawn with Sturgeon’s predecessor, Alex Salmond, who, whatever his failings, worked for the Royal Bank of Scotland as an economist for seven years and had a natural affinity with and interest in business. Perhaps to counter this view, the First Minister has asked the respected ex-banker Benny Higgins to chair an advisory group on economic recovery. The body has received plenty of submissions – its deadline was on Friday and it will produce its final recommendations in the next few weeks – and Higgins is viewed as having his head and heart in the right place, but there is little faith that truly impactful policies will see the light. “I bet Benny’s report is heading for the shelf,” says a chief executive. “It’s not that there is a lack of ideas, but it comes down to implementation, and that’s where the government will fail.” There has been little focus on the economy in recent months, with public health understandably dominating the agenda. But business figures wonder why no economy-focused experts from within government have been allowed to join the First Minister’s daily press conferences. “There should be enough bandwidth for people to give parallel briefings on the economy,” says a disillusioned SNP-minded chief executive. “In the past ten weeks we’ve seen five years’ worth of acceleration by businesses on the use of tech etc, but there’s been no real public discussion of that.” There is concern that the public sector rather than the private sector will continue to be the government’s priority. Better pay and conditions for key workers are often mooted, but how would this play if hundreds of thousands of Scots are losing their jobs, businesses are shutting their doors, and tax revenues are plummeting? If wealth creators are struggling to create wealth, a well-stocked public sector will not remain well-stocked for long. The problem facing the risk-phobic SNP is that there are precious few good or easy choices ahead of them. Weak businesses, including those in ministers’ constituencies, will have to be allowed to go to the wall. Economic renewal may rely on some tax cuts and reliefs, which would go against the party’s instincts and track record and anger their left-wing support. Some sectors would perhaps be best-served by the government liberalising the rules then simply getting out of the way. The new Scottish National Investment Bank is mentioned by business leaders – that its budget should be boosted, but that ministers should then allow its team to invest where they see fit, without political interference. The “social good” rules that circumscribe its activities should be relaxed in this crisis. This commercial view of economics seems alien to the worldview of Sturgeon and her administration – they are more commonly seen as being obsessed with state direction. One of Sturgeon’s key policies has been to add wellbeing metrics to economic considerations. “We all think wellbeing matters and are interested in those discussions,” says a CEO. “But they seem to have an allergic reaction to companies making profits and perhaps even gaining a bit of power through their success.” Which brings us back to Boris Johnson, who leads a party that has sympathy for business and wealth creation, and that has a history of taking hard and sometimes controversial decisions in the interests of economic growth. For both the Prime Minister and the First Minister the coming months will be about delivery, hard truths and saying no as well as yes. The data and the outcomes will not lie, and millions of Scots rely on both leaders making the right, and perhaps unpopular, choices. This is the next weighty challenge facing Nicola Sturgeon. If she gets it wrong, those polling numbers may not prove to be the final word on the subject. › EU digital chief Margrethe Vestager: “You need regulation to promote innovation” Chris Deerin is the New Statesman's contributing editor (Scotland). Subscribe To stay on top of global affairs and enjoy even more international coverage subscribe for just £1 per month!