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SECTION 4 - A WEALTHIER AND FAIRER SCOTLAND
A Wealthier and Fairer Scotland - Enable businesses and people to increase their wealth and more people to share fairly in that wealth.
Scotland's economic growth rate has lagged behind that of the rest of the UK for far too long. And over the last few decades the rapid increases in wealth in small, independent countries such as Ireland, Iceland and Norway have not been matched in Scotland; poverty and disadvantage remain stubbornly persistent.
Yet Scotland has the people and assets to create a much wealthier and fairer nation. Our education system is one of the best in the world. Our financial services, life sciences and tourism industries have a global reputation. Our land and seas are renowned for the quality of their produce and stewardship of the high quality natural and built environment attracts visitors and investment. Scotland's natural resources give us the potential to be the green powerhouse of Europe and show global leadership on climate change and use of natural resources. Our culture is exceptionally rich, supporting an international reputation for creative talent, unique heritage and contemporary innovation.
Since May 2007 we have taken action to drive the economic and social transformation of Scotland. We have:
- Introduced the Small Business Bonus Scheme to save Scottish businesses up to £165m in business rates - money these businesses can now invest to grow and expand. This will be fully implemented, through local authorities, by 2009-10;
- Announced the creation of the Scottish Investment Fund as a long-term investment fund for the third sector to build capacity, capability and financial sustainability in the sector;
Small Business Bonus Scheme |
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Businesses across Scotland are already benefiting from the Small Business Bonus Scheme and using the money saved to invest in growing and expanding. For example: - A Glasgow-based aquarium and aquarium supplies business is investing in shop refurbishment and new products.
- An ambitious design marketing firm in Leith is providing more support for local community initiatives.
- An auto workshop in Angus is investing the savings in the installation, maintenance and upkeep of a waste oil and chemical waste processing system.
- A computer games shop in Aberdeen is investing in shop refurbishment and increasing expenditure on advertising and marketing.
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- Offered councils the resources to freeze their council tax rates - and all local authorities made the decision to do so - giving hard-pressed families some respite amidst rising fuel and food costs;
- Connected Scotland better for people and businesses - starting work on the M74, removing tolls on the Forth and Tay road bridges, and piloting fairer ferry fares to the Western Isles;
- Driven forward previous legislation on planning reform, consulted on a draft second National Planning Framework for Scotland, and begun further steps to ensure our planning system is an aid not an obstacle to sustainable economic growth; and
- Brought the programme design and development of the next year's Homecoming project into EventScotland, with a new team of specialists recruited, resulting in clearer accountability and closer links with the power of VisitScotland marketing.
Scotland's Renewable Energy Potential |
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Scotland's immense potential in renewable energy is central to shaping our future prosperity, our capacity to respond to the pressing threat of climate change, and to secure energy supplies. We have incredible opportunities in almost every aspect of renewable energy, a world-leading scientific research base and North Sea oil and gas fields that will continue to yield their precious contents for decades to come. Working with partners we can establish this country as the green energy capital of Europe. Already we have taken action towards securing that accolade for the people of Scotland: - Building on increases in wind, hydro and biomass we launched the Saltire Prize, the world's largest ever innovation prize focused on marine renewables - and tripled funding for community and micro-renewables.
- We commissioned research into the feasibility of an energy "supergrid" linking Scotland both to Ireland and across the North Sea, giving Scotland the potential to export its huge resource and to improve security of supply.
- We made an unanswerable case for OFGEM to end the unfair electricity transmission charging regime which could deter investment in Scotland, and also pressed the UK Government to transfer oil and gas revenues to Scotland so we can set up an Oil Fund for Scotland's future. Discussions on this are continuing. Many other oil producing nations have developed such a fund, where a proportion of the revenue gained from oil and gas activity is placed into an investment fund. The fund is then managed to ensure that it can be used to generate wealth for future generations. In the case of Norway, the most recent estimate places the value of their fund at around £186bn, and by 2010 this could stand at a minimum of £250bn. In the case of Alberta in Canada, the latest estimate is £8.8bn. The build up of such funds reinforces the compelling case for such a fund to be developed for Scotland.
- We brought partners together to establish a Scottish European Green Energy Centre in Aberdeen to raise Scotland's energy profile in Europe and to support government, industry and universities in working more effectively with European partners.
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Listening to and working with the people and organisations who create wealth, as well as those who should be sharing in Scotland's prosperity, is central to our approach. For example, we have:
- Established a National Economic Forum - a social/ economic partnership bringing together business, trade unions, government, the wider public sector and the third sector to improve our approach to economic growth;
- Established a Rural Development Council - to ensure that rural Scotland plays its full part and that our three Golden Rules of growth are respected;
- Engaged in dialogue and debate about how we can work together to tackle poverty, deprivation and inequality;
- Ensured Scotland takes its place on the world economic stage with more joint public sector activity on a 'Team Scotland' basis, including, for example, Scottish Development International and VisitScotland, in the context of the Government's International Framework, such as the successful Global Financial Services Week and Scotland Week; and
- Revitalised the Scottish Fuel Poverty Forum to advise on achieving our target of eradicating fuel poverty.
Over the next year, we will consolidate this approach, getting to grips with issues that hold Scotland back or are unfair for many.
- Following the public consultation, we will introduce a Bill to abolish Council Tax and introduce a fairer Local Income Tax, based on ability to pay. Our proposals for the biggest tax cut in Scotland in a generation mean four out of five households will be better or no worse off.
- With regard to an Oil Fund, we will conduct an independent study to assemble the evidence from other hydrocarbon producers of how such arrangements create direct and long-term benefits for their economies - and the key advantages an Oil Fund offers Scotland in terms of powering our economy forward for generations to come, and helping with the impact of high fuel prices.
- We will introduce a Legislative Reform Bill to revise and replace the law on aspects of procedure and interpretation of legislation.
- We will introduce a Bill to modernise arbitration, ensuring arbitration fulfils its potential as an alternative to going to court to resolve disputes.
- We will continue to improve transport connections, with announcements on the Forth Replacement Crossing due in December 2008.
Our approach to creating a wealthier and fairer nation is based on making much better use of what we have - and the belief that we must work in partnership to deliver real and lasting improvement. At the same time we know Scotland could achieve much more, much faster, if equipped with the responsibilities and levers that provide the opportunity to improve our economic performance:
- Devolution of responsibility for economic and fiscal policy would allow a Scottish Government to create a competitive tax regime - attracting investment and funding public services that meet the needs of Scottish people;
- Responsibility for Scottish oil and gas reserves would support making the best of long-term production and give Scottish people a say in how this massive resource could be re-invested for current and future generations;
- Further devolution of employment policy would improve accountability and provide a better fit between economic and employment policy;
- Greater Scottish representation in Europe would allow Scottish interests to be promoted and protected more effectively in the development of European policies; and
- Greater control over immigration would enable the Scottish Government to boost Scotland's population and meet the skills needs of the Scottish economy.
These issues will all be explored in greater depth in the course of the National Conversation.
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