Business Comment
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by Stewart Nicol, chief executive, Inverness Chamber of Commerce.
LAST week’s UK budget statement and the Scottish government’s announcements surrounding it will have a significant impact on the future of the economy in Inverness and the Highland and Islands.
Those living and working in the Highlands breathed a huge sigh of relief when they heard that the proposed fuel duty increase had been scrapped.
There are few regions across Europe with a heavier reliance on cars as a means of transport because of our geography and the lack of an adequate public transport infrastructure. Any increases in fuel, through duty or market pressures, have a worrying impact on our standard of living.
From a broad business perspective the national loan guarantee scheme, which will reduce borrowing for small to medium sized firms by 1 per cent, must be welcomed. Similarly, the business finance partnership will assist many medium sized business.
But these positive announcements are dwarfed by the decision to increase business rates, and one must hope the Scottish government counters this decision in its announcement next week.
The UK government pledged to invest heavily in major infrastructure investments on the same day as Holyrood made the unexpected, but very welcome, announcement that the A9 will be dualled by 2025.
Cutting more than 20 minutes off the journey between Perth and Inverness makes this region significantly more accessible for central belt companies.
Major developments like the Inverness Campus and Inverness Airport Business Park will immediately be more attractive to investors. Equally, trading with customers in the south will be a much easier experience for Highland companies.
With further announcements concerning the development plan due soon, we must make sure momentum builds. Thirteen years may seem like a long time to most of us, but concerning such a complex road development, with many compulsory purchases, delivery of the A9 highway on time will be tight.
On the railways, George Osborne’s comment during the budget statement that he will “save” the cross-border sleeper service with a £50 million announcement is, I fear, not as promising as it first seems.
As well as this just being a drop in the ocean when it comes to the actual investment needs of our rail links, this announcement may have more to do with politics than infrastructure improvements.
The £50 million comes with a catch — the Scottish government must match it or it will be withdrawn. We do not know yet whether John Swinney will agree to this match, but we do know it will not be an easy sum to find given other recent Scottish infrastructure announcements.
It is hard not to agree with the thoughts of many political commentators that this is just the next instalment in the ongoing “debate” between our Westminster and Holyrood governments.
Whatever the result of the above wrangle, it will not make a huge difference to the lives of most businesspeople in the Highlands. If the sleeper service continues or even improves it is positive, but it does not help our connectivity with Aberdeen, Edinburgh and Glasgow.
At Inverness Chamber we are currently preparing our responses to Transport Scotland’s Rail 2014 public consultation, which closes in February next year.
We will continue to push hard for increases in the speed and frequency of the rail links between the Highlands, the central belt and Aberdeen.
The Scottish government’s budget announcement is imminent. That will give us further opportunity for ?reflection.
A clear focus is required on supporting Highland businesses and helping us create employment opportunities. The Scottish government also has a superb opportunity to counter the damaging UK government decision on business rates.
