Untitled - The Edinburgh Chamber of Commerce

In recent decades Scotland has suffered from low
economic growth, high public spending, low rates of
business formation and low public sector productivity.
These problems are interconnected, and so must be the
solutions to them.
As the leading business organisation in Scotland,
Chambers of Commerce urge Scotland’s political
leadership to use this election as an opportunity for
reform. This document sets out the changes we believe are
necessary to set Scotland and its capital on a road
towards accelerating our ambition to have a more
dynamic, innovative and prosperous future.
This document offers a radical set of ideas to revitalise the economy of
Edinburgh and Scotland. It focuses on policy that is devolved to the Scottish
Parliament, particularly provision of infrastructure and public services.
However, the Scottish Government must work closely with its counterparts in
local government and at Westminster and Brussels. We believe in all these
institutions policy must be underpinned by commitment to deliver growth in
the current economic climate, ensuring recovery. Their roles overlap, and the
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scope of this document correspondingly covers matters such as tax, planning
and economic development. It addresses five main areas:
A new approach to government in Edinburgh and Scotland, reforming
public sector pay and conditions and introducing new structures in
public services;
A public/private partnership for growth, including tax cuts, less
regulation, and fundamental changes to education and skills provision;
The infrastructure of growth, supporting ten transport priorities
including High Speed Rail and completing the Edinburgh tram project;
The engines of growth, with ideas to promote Edinburgh’s key industrial
sectors.
Realising our ambition to be the European leader in renewable energy
and achieving a low carbon future.
Introduction: Global aspirations for Edinburgh and Scotland
The 2011 Scottish election is the most important since devolution. The financial crisis
and subsequent recession inflicted severe damage on the economy. How we
accelerate our ambition to recover from that is the issue at stake at the polls.
It is not simply a question of tightening our belts and waiting for growth to resume.
We must learn from the mistakes of the past. In particular, we must use the
necessity of restoring our public finances to reshape the way our economy is
structured. The interest charges on the UK government‟s borrowing are currently
one and a half times the entire Scottish Budget (£46.2bn in 2010 vs. Scottish Budget
peaking just under £30bn in 2010, and now falling). Our unfunded pensions' deficit
sits at over £66bn (figure for 2008/9) and an annual contribution of some £2.2bn or
9% of the Scottish budget. (Figures from Audit Scotland April 2010). These are not
sustainable burdens.
Edinburgh is a city with unique strengths and a global outlook. Our membership
competes with the best from around the world and aspires to be world-beating. We
believe that Scotland and its government should do the same.
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Growth and Recovery
Prosperity comes from wealth creation and innovation by business in the
private sector. To recover fully from the recession we must encourage
Scottish business to flourish and generate the jobs and growth to pull the
Scottish economy and Scottish society into a new era.
There is no doubt that the biggest opportunity for growth is the export market.
Whilst we struggle to achieve 1-2% growth China has already bounced back to
10%. And there are Reasons to be Cheerful: Germany and France are enjoying
significant growth rates. International trade is the great hope for Scotland’s
economy.
The City of Edinburgh can play a major role in this. Edinburgh has many of the
attributes to flourish in the modern globalised economy – high tech, high
skilled and high value industries, superb cultural amenities, and good
education at both the research and schooling levels. Edinburgh and the
Lothians account for 21% of Scottish GVA, with a contribution per capita 60%
above the national average. The city has the potential to act as a beacon of
high achievement in Scotland, Europe and the wider world.
The Holyrood elections of 2011 provide an opportunity for our political
leadership to set an ambitious new agenda designed to promote private sector
led growth and civic reform. This document offers ideas to reshape Scottish
society so that the necessity of reform becomes an opportunity for a wealthier
and more harmonious Scotland.
It looks first at prospects for reforming the public sector, which we believe is
essential if we are to improve service provision while resolving our budget
difficulties. The opportunity exists to reshape government in the interests of
the service user while at the same time allowing greater space for private
sector growth.
We then turn to creating a new partnership between government
and business in Scotland to mould policy to maximise business
potential. Thirdly, we address the crucial questions of infrastructure
which are essential to a modern economy on the geographic fringes
of its key marketplaces. Finally we look at some of the key
industries that offer such promise for Edinburgh and
Scotland in the future.
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Section 1: A new approach to government in Edinburgh and Scotland
The recession and government measures to rescue the financial system led to
severe budget deficits and high levels of public debt. We believe that these need to
be tackled to reduce interest payments and maintain confidence in our economy.
The UK government‟s plans to balance the budget over the next four years are a
sensible framework for achieving stable public finances.
Within that period, the Scottish Government must find savings of at least ten per
cent. Edinburgh Chamber of Commerce believes that this target is moderate and
achievable. The right approach is to seek productivity improvements in the public
sector which will allow savings to be made without raising taxes or cutting investment
in vital economic infrastructure.
Public spending in Scotland is already 15% higher than the UK average after a
decade of increased spending. Meaningful reform of public institutions would allow
front line services to be maintained at a higher level than elsewhere in the UK while
still leaving room for capital investment and low taxes. Within the public sector there
are good examples of how to do this, and we encourage the adoption of best
practice. The opportunity is there for a rebalanced economy with lower overall public
spending allowing higher growth and more efficient services in the future. In any
business- private or public there are always efficiency gains to be made.
It is vital that within this mix the Scottish Government retain political engagement
with the business community. The private sector cannot be expected to lead the
recovery (which it is very willing to do) without the listening ear of our legislators.
Edinburgh Chamber of Commerce has a good record of engaging with all political
parties, and would like to see this reinforced in the next parliament, with increased
committee engagement and meetings where necessary.
The Scottish Government‟s response: UK Budget 2010
The draft budget presented by the Finance Minister, John Swinney in November set
out public spending cuts of £1.2bn for the year 2011/12. Edinburgh Chamber of
Commerce believes that the budget sets out a sensible path towards fiscal
retrenchment, with its emphasis on efficiency savings and pay restraint. In particular
we support the continued emphasis on a council tax freeze.
However, we believe that government should invest more in economic development,
skills and infrastructure, as key factors for stimulating economic growth. If we do not
invest in the things which grow the economy we will miss the opportunity to
accelerate the recovery.
New opportunities
The budget did not set out in detail the Scottish Government‟s approach to achieving
the efficiency savings required in most departments. Much of this will be the subject
of the Christie Commission and also debate in the run up to the election. Edinburgh
Chamber of Commerce believes that this presents new opportunities to remodel our
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approach to public service delivery. We recommend four overriding principles that
must guide the Scottish Government‟s approach to public sector reform:
1. Public sector pay and conditions must be brought into line with those
in the private sector.
Edinburgh Chamber of Commerce welcomes public sector pay restraint as one of
the ways to minimise job losses as a result of spending reductions. We recommend
that individual institutions be given greater independence to negotiate pay and
conditions in response to market circumstances. In addition, the public sector
unfunded pension liabilities are unsustainable and result in private sector employees
paying additional tax to fund public sector pensions. The Scottish Government
should work with its UK counterparts to develop an affordable model of self funding
public sector pension arrangements.
2. Public sector institutions must be given the professional independence
to experiment and seek out best practice.
The Scottish public sector model is too centralised. Individual schools, hospitals and
other government bodies need to be granted greater institutional independence so
that they can develop new ways of delivering services (education is discussed in
specific detail in Section 2 below). Private and third sector expertise should be
accessed for delivering services while keeping them free to the end user.
There are good examples of best practice which should be disseminated and copied.
It is recognised that such support can be more flexible and at low or no cost to the
public budget- e.g. volunteer reading assistants in classrooms, patient transport to
local destinations and „friendship services‟ connecting the house bound to regular
contact. „Time banking‟ co-ordination- the swapping of available skills is another way
that people‟s needs can be met without large cost to the public purse.
3. Public companies such as Scottish Water and the ferry companies need
new corporate structures
to allow them to raise private capital. This can be achieved whilst keeping these
assets in community ownership. Such an approach would save the Scottish
Government up to £200m annually in debt capital.
4. Public sector institutions must be made more accountable to users.
Global evidence and the experience of business -shows that service providers,
public or private, that are accountable to users have better incentives to improve
performance. The users of public services – the people of Scotland – need to have a
direct input into public service performance, either by being able to choose between
competing service outlets or by oversight over management.
Where public services currently have good engagement through public boards,
patient councils etc, these models should be emulated where such consultation does
not exist. The greatest level of local self- determinisation should be fostered where
possible to encourage local knowledge to match services to local need and spotting
and enacting efficiency savings which might be missed by centralised management.
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At the same time the Scottish Government needs to measure the performance of key
services such as health and education against those in other countries.
Section 2: A Partnership for Growth
Edinburgh Chamber of Commerce advocates a new partnership between
government and business in Edinburgh and Scotland that promotes higher economic
growth while strengthening the social fabric of the country (One that seeks to lower
the overall cost base to make Scotland a more attractive destination for inward
investors. Lower taxes and lower public sector expenditure reflecting higher
productivity are beckoning signs for welcome investors. Lowering the cost base is
an essential attractant to inward investors.)
There are key areas of government activity which interface with business in the city
and across Scotland. Policy should always take into account the need to promote
business and economic growth. This is often stated by elected members, but needs
to be delivered as a matter of course, which is not always the case. In the globalised
economy where skilled labour is highly mobile, Edinburgh and Scotland must
compete in key areas such as tax, development, housing, cultural amenity,
education and infrastructure if it is to produce, attract and retain the human capital
needed in a flourishing economy.
Taxation and regulation
The Scottish Government should aim to create a competitive tax and regulatory
environment for business in Scotland. Scotland suffers from lower economic growth
than the UK average and comparable EU economies. Creating competitive
advantages in tax and regulation would help to attract investment and encourage
local businesses to grow. It is remarkable that even the health service comments on
the need for simplified taxation and benefits as a key issue in ensuring minimum
incomes for healthy living for all.
Despite the budget cuts, public spending in Scotland is still 15% higher than the UK
average, (only law and order comes cheaper) with no indication of improved
performance as a consequence. There is therefore considerable scope for reduced
taxes.
The Scottish Government should avoid increases in Non Domestic Rates
such as that proposed for large retailers in the draft 2011/12 budget.
Edinburgh Chamber of Commerce welcomes the Scottish Parliament vote
against this measure.
It should reintroduce transitional relief to smooth any increases in Non
Domestic Rates on revaluation.
The Scottish Government should set a target to reduce council tax and Non
Domestic Rates by 15% over the life of the next Scottish parliament, giving
the Scottish economy a real competitive advantage. Such a measure, costing
£600m in the final year, could be paid for from additional efficiency savings
coming from public sector reform.
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Government at all levels in Scotland should not use charges and fees on
activities such as parking, planning applications and trading licenses as a
proxy for tax rises. The Scottish Government should ask an independent body
such as Audit Scotland to conduct an annual assessment of such levies.
Regulation plays an important part in moulding business practices in the interests of
society. But Government needs to ensure that the costs of regulation in terms of job
losses and lost investment do not outweigh any benefits. The British Chambers of
Commerce Burdens barometer suggests that legislation over the year 2008/9 has
added 260 new regulations at a net one off cost of £466m to business and recurrent
costs of twice that. Cutting unnecessary regulation is a vital strategy for enabling
business to flourish.
We wish the Scottish Government and its agencies (including Scottish
Enterprise) to set clear targets annually for growth rates. This would give
a defined commitment to achievement which would enable measurement
of success levels.
Scottish Government agencies need to include a remit to enable business
expansion in their dealings with business.
There should be a clear code of practice in areas such as environmental
protection, planning and heritage for agencies to enable timely decision
making.
The Scottish Government should implement the recommendations of the
independent Regulatory Review Group, including instituting a Business
Regulatory Impact Assessment (BRIA) to allow a proper understanding of
the costs and benefits of regulation.
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Planning, housing and development
The development of property in the City of Edinburgh and beyond, for both
commercial and residential purposes is an essential element in economic recovery.
Edinburgh Chamber of Commerce has led the way with City of Edinburgh Council in
creating its 2010 Planning Concordat. More needs to be done so that Edinburgh
becomes a UK leader in planning practice and encouraging investment. Future
governance of the planning system must focus on enabling the process and ensuring
smooth and timely processing of applications. Both developers and local and
national government must co-operate to deal with issues arising.
The rejuvenation of the construction industry is a crucial foundation for economic
recovery. It generates jobs and expands the skills base, as well as attracting new
businesses and skilled employees to locate where the development is happening.
The sector lost 15% of its output in 2009-10, worth £1.7bn to the Scottish economy
and thousands of jobs. Reversing this will provide a powerful stimulus to growth.
Affordable housing supply is a key issue for health of the population and for the
attraction and retention of key workers. There need to be agreed standards and an
enabling planning process. This should include help to applicants to ensure their
applications comply with requirements (as happens in many other countries.) The
responsible body would be the local authority planning department, but this also
requires a Scottish Government commitment to ensure positive outcomes through
their overseeing role.
Our recommendations are that the Scottish Government should work with planning
authorities to achieve:
Ongoing joint training sessions with developers and planning committees to
develop mutual understanding.
Regular meetings between developer groups and planning officials to ensure
better communication and quicker decision making.
Objectors to proposed development should be able to demonstrate a genuine
interest in the development.
A three year moratorium on Section 75 agreements to encourage
development until the market recovers.
The affordable housing requirement should be dependent on project
profitability, with a ceiling of 10% of value with the option of off-site provision.
More sales of unused local authority property to stimulate the market.
Education
Top class schooling is essential to a competitive economy to generate skilled human
capital. Good schools are also important in attracting skilled workers to Edinburgh
and Scotland – an essential ingredient in a global marketplace for highly skilled
labour.
Some state schools, despite their good reputation, are in some respects going in the
wrong direction. International and UK comparators show little improvement and
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elative decline despite major investment over the last decade. Last year saw a
particularly worrying fall in performance in Edinburgh. There needs to be a much
greater focus both on overall performance and key disciplines. Skills Development
Scotland needs to build greater collaboration with industry.
The experience of Chamber members is that school leavers are too often
unprepared for the workplace in terms of basic skills, self confidence and motivation.
Edinburgh Chamber of Commerce recommends a new approach:
1. The Scottish Government should ask Audit Scotland and HMIE to conduct
annual appraisals of Scottish schools compared to other UK and international
jurisdictions. Scotland should rejoin the international PIRLS and TIMMS
studies.
2. Policy on schools needs to learn from international experience. There is too
much emphasis on inputs such as class sizes where then there is little
evidence of their relevance. Instead, the Scottish Government should study
school education in a number of comparable countries in Europe and the Far
East to establish how the best systems work. The evidence suggests that
much more independence of action for schools is required, in terms of
curriculum and management, along with more accountability to parents and
local communities.
3. It is vital that interest in the key subjects of Maths, English, Sciences and
Modern Languages is encouraged.
4. The Scottish Government should encourage the International Baccalaureate
in state schools as an alternative to home grown qualifications that is more
easily comparable globally.
5. The Scottish Government and local authorities should encourage sponsorship
of schools by business, allowing greater funding for projects such as holiday
work placements for pupils, business awareness and enhancing workplace
skills.
6. Claims by the Scottish Futures Trust to be lowering the cost of building new
schools are welcome. The idea that using standard models, and other cost
saving strategies can bring a 40% reduction in construction costs cannot be
dismissed. Meanwhile it is certain that budgets for capital investment must
be found, and we welcome innovative strategies to deal with that challenge,
whilst reminding the next Scottish government of the key role the private
sector has to play.
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Higher education, further education and skills training
Scotland needs workers with the full range of academic and practical skills. In
particular there is an insufficient supply of workers with key technical skills in IT,
engineering and construction. This means that all types of training and further
education must exist on a level playing field in terms of financial access and social
esteem. To achieve the right balance of skills in the economy, Edinburgh Chamber
of Commerce recommends that:
All post school training and education should have parity of funding.
Prospective students would then be more likely to choose courses to find a
better match between education, skills and the needs of businesses in the
economy. Funding should be available throughout a career, and not restricted
to one block of time.
Meanwhile all students or trainees should pay a proportion of the cost of
courses during their four years entitlement. This would help universities in
particular to close their funding shortfall and compete internationally.
Graduate contributions are a key input to ensuring our universities can
compete with the best in the UK and internationally. Bursaries, supplied by
the Scottish Government or private institutions (whether philanthropic of
commercial) could still be available to those from low income backgrounds.
Funding should also be available to access training or education from
accredited private providers, including employers, to encourage new types of
courses to supply the skills required by an ever changing economy.
Funding for Colleges of Further Education should be on the basis of assessed
future demand for essential skills in new technologies (such as renewable
energy), rather than on past performance. This avoids an area with growing
population (e.g. Edinburgh) being disadvantaged by a funding system that can
never catch up with demand.
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The promotion of industry
Economic Development sits at the heart of the agenda of the Edinburgh Chamber of
Commerce. Edinburgh Chamber of Commerce operates programmes across the
range of business needs, from start-up to high growth, intellectual property to
training, consultancy and export advice.
A range of partners assist in creating this platform, including Scottish Enterprise, City
of Edinburgh Council, the Scottish Government, the European Union, Edinburgh‟s
Universities and Colleges of Further Education, and professional members of the
Chamber.
Our Resilient City agenda is designed to bring such groups together to work towards
economic recovery.
To build on these relationships, Edinburgh Chamber of Commerce calls for:
Improved co-ordination of economic development policy, including increased
investment, a streamlined and simplified service with a single point of contact
for business.
Urgent reform of government procurement procedures with an emphasis on a
simplified system designed to suit small, local businesses.
Renewed investment in air route development
Greater co-ordination in the promotion of exports between governments at all
levels, including foreign representation, Scottish agencies and business
group. Exports are a leading element of Scotland‟s economic recovery.
The Scottish Government needs to be prepared to consider alternative
models for supporting business growth.
Finally we seek a relationship where government understands the need to
hear the voice of business. If the private sector is to lead the recovery, then
we must have frequent and attentive political engagement between the
government and the wealth creators who are so charged.
Section 3: The Infrastructure of Growth
Economic growth relies on a connected network of infrastructure that promotes the
free movement of goods, services and ideas. A global city like Edinburgh needs to
minimise the costs of accessing its markets. Investment in infrastructure generates
returns that drive higher prosperity. Edinburgh Chamber of Commerce believes that
public spending on capital projects must remain a priority of the Scottish Government
if we are to return to healthy growth. There are a number of specific issues that must
be addressed.
Transport
If the future of the Scottish economy is keying in to
global markets, we need to be well connected.
Flights from Edinburgh airport, ferry destinations,
high speed rail links - all are vital parts of the
infrastructure which will facilitate trade and attract
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inward investment and tourism. Edinburgh Chamber of Commerce believes that
good progress has been made on starting a number of projects, but we need further
progress if we are to build an integrated network that will help to pull Scotland‟s
economy forward. Our priorities are:
1. Completing phase 1 of the Tram and developing the network.
The tram is a well researched and attested solution to alleviate levels of congestion
offer quicker transit times in Edinburgh. It is not in Scotland‟s interests to have a
major investment incomplete in the capital‟s infrastructure. The initial and most
difficult phases (of moving utilities and then laying the track in the City Centre) are
well advanced. As Audit Scotland reported in February, Government must support
the completion of this phase. This will then provide the basis for a light rail network
linking across the Lothians and Fife through the City Centre.
2. A new Forth Crossing is vital to not just Edinburgh’s economy but
Scotland’s as a whole.
The present Forth Road Bridge carries twice its design capacity every working day of
the year. This is not sustainable. The Scottish Government‟s plan must be properly
funded and carried out. The plans on the table would benefit from better Western
access links, better park and ride facilities and clearer bus prioritisation, but our core
concern remains delivery of the overall project.
3. Completion of the Borders Rail Project
This should go alongside a full plan for the utilisation of Tweedbank as a Borders rail
hub. As well as extending the Edinburgh travel to work area in the direction of
Midlothian and the Borders, this project will improve access to the South East
Edinburgh development area around Shawfair.
Deliver High Speed Rail (HSR) for Scotland Having launched the campaign to
support High Speed Rail we were delighted by all party support when the Scottish
Government‟s Transport Committee conducted an inquiry on the matter. Return on
investment has been measured at thirteen fold.
We welcome the Westminster government‟s stated commitment to extend HSR to
Birmingham and its next phase development to Manchester. To offer lower grade
service further north makes no sense as it is the stretch Manchester to Edinburgh
and Glasgow which offers thirteen-fold payback.
We look to the next Scottish Government to get behind funding the sections north of
the Border and to ensure that the plans for a High Speed Rail system which goes „all
the way‟ are included from the outset.
We have the real opportunity to make global connections and economic and
environmental benefits through High Speed Rail and call upon all parties in the next
Scottish Government to find active means to achieve a policy they have previously
supported.
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4. EGIP: The Edinburgh - Glasgow Rail Improvement Programme
Network Rail‟s commitment to electrify the Central belt rail routes is an essential
building block in improving Central Belt Connectivity with the rest of the UK and
beyond. Rail remains a key building block in public transport provision. Reducing
journey times (and, perhaps, more importantly, improving reliability) between
Edinburgh and Glasgow has great benefits for Scotland‟s economy. We welcome
the Network Rail investment programme and look for early delivery of a finished
project.
5. Continued investment in Edinburgh Airport.
As Scotland‟s busiest airport with over one hundred international destinations, the
airport is a key platform for Edinburgh‟s global competivity. We support renewed
investment in encouraging new direct flights, including a non-stop route to the Far
East and more European routes.
As a high quality operator in terms of both inward bound and outward bound traffic,
we support the resistance to the Competition Commission‟s attempts to force BAA to
sell Scottish airports.
Edinburgh Airport is a crucial hub for the whole of Scotland, not just the capital. The
rises in Air Passenger Duty (APD) in 2010 also threaten tourism levels in Scotland
with a predicted loss of over a million passengers over the next three years, and a
dent in tourism income of £77m.
The fact that UK APD is much higher than the few other European countries which
charge this tax is entirely counter-productive to growing the economy.
We also support BAA‟s arguments regarding the West Edinburgh plan and call for an
M8 extension to the heart of the airport to support the free flow of traffic from
elsewhere in Scotland. The plan is vital for growing a core of world class
headquarters premises in the area, augmenting the existing cluster of the Gyle with
an expanded hub acting as a magnet to other European and world headquarters.
6. Waverley and Haymarket Stations urgently need improvement as high
quality transport hubs.
The provision of escalators and lifts at Waverley and Haymarket stations are details
in the long process of modernising two of Scotland’s busiest stations seeking to
future-proof the improvement of the stations' environs. It is vital that Edinburgh City
Council is enabled to deliver at Haymarket a high-quality ambience worthy of what
will be the main city-centre interchange between train and tram. We support the
development of both stations as top class office and retail premises in their own right
with the benefits that will bring for redevelopment on adjacent sites.
7. Boosting road freight transport
We endorse the proposed fuel regulator. High prices are causing immense damage
to road hauliers and we urge the Scottish Government to work with Westminster to
ensure that fuel price rises are offset by a balancing mechanism in fuel duties.
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We support the conversion of Park and Rides to secure overnight lorry parks, in the
evening hours when cars have left. This depends on improving the strength of hardstanding
and improvement of toilet/shower facilities, but offers income from hauliers
and a proper facility for working drivers, avoiding on-street parking. We also call for
adequate consolidation depots to offer retail and construction supplies on demand in
the city centre with reduced road traffic.
8. The Port of Leith and River Traffic opportunities need to be maximised.
We support the creation of a world class liner terminal in the harbour. We also
believe that cross Forth ferry traffic and the hovercraft option would both be
beneficial to supporting the Fife economy and Edinburgh‟s needs for connectivity
serving both tourism and commuter traffic. The improvement of the port facilities
promised under the National Renewables Infrastructure plan offers significant
benefits for freight traffic.
9. We welcome all means to integrate transport policy.
There is no doubt in the minds of our membership that National Regional and Local
Transport policies require a coherent level of integration. This is not apparent at
present and we welcome the opportunity to work with any future administration
towards this goal. This includes provision for pedestrian and cycle transport. It
peaks when it creates substantial new attractants for inward investment, such as
Little France and the South East Quadrant, West Edinburgh, the Gyle and the
Airport, and the Waterfront and Leith Docks.
Such developments can only realise their potential when they are well connected.
It also recognises the significant role played by the freight industry in servicing
people‟s everyday demands for products and services that sustain their quality of
life.
Edinburgh‟s public realm
Edinburgh urgently needs a drastic uplift to make it look and feel like a world class
capital. The removal of street clutter, the improvement of pavement surfaces and
the massive refurbishment of Scotland‟s roads- a bill currently standing at £2.5bn
nationally, are not “nice-to haves|”- they are essential to the running of a modern
world class economy.
Edinburgh Chamber of Commerce has supported the Business Improvement District
initiative from the outset. The highest quality environment is needed for the City
centre of what we aspire towards. - Edinburgh as a leading destination, cultural
capital, home and workplace in Europe.
The willingness of businesses to part fund the process is dependent on moving
swiftly to tangible outcomes from the initiation phase. Continuing government
support for future BIDs after the pilot phase is a must. The proposed extension into
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new BIDs at West End and Grassmarket should be supported, with their significant
ability to advance Edinburgh‟s retail and tourism sectors.
The police must continue to work with business groups to provide a safe, crime free
working environment.
Broadband
.
Edinburgh Chamber of Commerce seeks a step-change
in the introduction of superfast broadband. We call on
the Scottish Government to recognise the reality of what
is happening elsewhere in the world. For example
South Korea is currently upgrading from 100Mb to 1 GB
nationally, whilst our ambitions for improvement are
only aiming to deliver half their existing capacity.
Global competivity is dependant in our geographically marginal position on the best
possible connections, digitally as well as through transport.
Section 4: The Engines of Growth
Edinburgh is a centre for innovative businesses capable of generating economic
growth and prosperity for Scotland. This section highlights some of the most dynamic
sectors, the challenges they face, and how government can facilitate their
development.
Biotech
With four universities contributing learning and ideas, and a range of existing science
parks home to dozens of spin-out companies there exists a strong basis for
Edinburgh as a world centre for Life Sciences.
The continued output of quality graduates in appropriate disciplines is needed to staff
this growth, and effective private sector co-operation with universities in funding and
managing spin-out companies.
Early stage innovation support remains important from a government perspective.
It is particularly important that the infrastructure necessary to support the South East
quadrant in general and Little France Bioscience hub in particular is in place.
Tourism
Scottish tourism generates 10.4% of Scotland‟s GDP
(£11.1 billion) and sustains 270,000 jobs. However, it
needs recognition and support from the UK and Scottish
Governments. The highest levels of VAT in Europe and
Air Passenger Duty that adds almost £300 to the cost of
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an air fare to Scotland from China, for example, are serious impediments.
Tourism's contribution to recovery in Scotland cannot be over-stated. Improving the
quality of service and hospitality, attracting visitors and developing new air routes are
all critical paths in developing still further the ability of the industry to generate wealth
and employment.
In Edinburgh, ETAG (Edinburgh Tourism Action Group) has led the way by
forming meaningful partnerships across public and private sectors and
delivering projects that have a made a significant difference to the
quality of the capital's tourism offer.
The reduction in VisitScotland‟s budget, of 10% is a not a good sign ECC urges a
more helpful approach that includes:
The need for a real vision for tourism in Edinburgh and Scotland
We need a new approach to bring private and public sector together in tourism. The
2015 Ambition for Scottish Tourism should be replaced with a flexible and dynamic
statement of intent for cooperative action by a series of small empowered project
groups of industry leaders who could cut to the chase and deliver creative solutions
very quickly. A similar approach was recommended for the city to try to clear the
clutter caused by the plethora of tourism organisations/bodies in Edinburgh.
Cultural Events
Edinburgh Chamber of Commerce recognises the contribution that cultural events
make to the City‟s economy, our festivals alone benefitting Scotland to the extent of
£184m in 2006, drawing in tourists and making Edinburgh an attractive place to live
and work. We recognise that this market has continued to grow through the
recession and is a flagship industry showcasing our Capital City to the world. We
encourage the development of resilient private/public partnership in ensuring
appropriate funding to maintain the sector‟s momentum.
Marketing Edinburgh
Edinburgh Chamber of Commerce led the debate that prompted public and private
sector partners to form Marketing Edinburgh. We believe this can and should
develop as a model for other cities in best practice. It is essential that the Scottish
Government invest in destination Marketing organisations especially Marketing
Edinburgh, to continue to grow tourism markets
We need to find an equitable funding mechanism for it to leverage private sector
involvement, avoiding duplicate funding. The new body must offer a full menu of
commercial marketing opportunities, using electronic media to the full and very
specific ROIs to attract and retain high levels of private income and support.
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Transfer the Winter Festivals and Events Budgets and resources of the
Council into the new body. Develop much closer links with the summer
Festivals and look for every opportunity for mutual reinforcement.
Transfer the Association Conference marketing function of EICC across
to ECB. This would not only provide additional funding by reducing
duplication of staff and resources but would also simplify the interface with
customers and clients.
There should also be a fundamental review of VisitScotland's Business
Tourism Unit to determine the extent to which it duplicates the role of ECB
(and other CBs throughout Scotland)...
Develop joint marketing plans with VisitScotland on a matched funding
basis for major campaigns which will clearly identify mutual benefits for
Edinburgh as a specific destination as well as the gateway to the rest of
Scotland.
Manufacturing
Manufacturing sits at the heart of wealth creation in any economy, with the
electronics sector contributing £4bn of exports and engineering and metals £2.5bn.
The drinks industry weighs in with £2bn of exports. Data shows
that this sector is making a big contribution to economic
recovery.
It is vital that government supports our manufacturing
companies through export credit protection, innovation grants,
skills initiatives and overseas marketing.
In competitive industries the ability to move from concept to
realisation with an attested product as soon as possible is crucial to gaining market
advantage. So it is not just delivery, but timing that is at stake. The government has
a role to play in encouraging investment and innovation, protecting intellectual
property and marketing and financial support, to bring new players to the
marketplace.
Financial sector
Governance and regulation of financial services is a reserved matter, but there is an
important role for the Scottish Government in providing a supportive framework for
high value businesses such as investment management and banking. Recently
arrivals in the city, such as Tesco and Virgin financial services, indicate that recovery
is happening and that Edinburgh is still a sought after destination for this sector.
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High standards in
education, housing, leisure
opportunities and national
and international
connectivity are vital in
attracting and keeping
highly skilled people
working in the city and
providing a welcoming
outward face to potential
investors.
We believe that Edinburgh
is the perfect destination for
the new Green Investment
Bank, having the skills base and the location in proximity to major renewable energy
developments.
Renewable energy
The Chamber welcomes the Scottish Government‟s commitment to a Low Carbon
Strategy and in particular the development of renewable energy as a key industry for
Scotland‟s home and international benefit. Nonetheless, the sector faces some big
challenges, in particular overcoming planning delays, securing investment in
infrastructure, overcoming skills shortages and the technical problems of marine
development.
Scotland‟s green energy programme must be part of the wider UK commitment.
Scotland is an energy rich nation, internationally recognised as having vast
renewable energy, oil and gas resources. The great majority of the UK‟s oil
production and over half of its gas production comes from fields around Scotland
with a quarter of the European offshore wind and tidal resources and 10% of the
European wave resource with world leading technology and research resources in a
wide range of specialisms.
Scotland and Edinburgh have the opportunity to consolidate their position as the hub
of Europe‟s green energy. We believe locating the UK Green Investment Bank near
the source of the country‟s most significant assets in wind and wave energy and
using the limited funds available from the government is essential to mobilise the
private finance we need to transform the UK‟s energy system. The geographical
location and the skills available in our Capital City would kickstart debt markets for
energy efficiency and enable the development of the offshore technology that will
make the UK world leaders in harnessing nature‟s resources and engineering a lowcarbon
economy. Edinburgh Chamber of Commerce would therefore like to see the
following measures implemented:
1. Details of how the National Renewable Infrastructure Plan will facilitate
funding ports improvements. We believe matters must be advanced in the
next eighteen months if we are to maintain international competivity and win
the bulk of the twenty seven thousand jobs on offer from marine installations.

2. The allowances in Non Domestic Rates for renewable energy generators
should be extended to manufacturers of renewable energy equipment
3. A clear and ongoing role for The Crown Estate in facilitating the groundwork,
development and delivery of offshore renewables at arms‟ length from
government
4. Improvements to strategic planning to allow rapid expansion of the
transmission grid.
5. Reducing carbon emissions requires a much more rigorous policy of
managing the existing building stock. A programme is needed for retrofit of
energy reduction measures in the existing building stock
6. The prioritisation of Leith Harbour as the preferred hub for the launch of
offshore wind energy as the next building block in Scotland‟s renewable
energy development plan. The investment required represents 50% of the
Scottish Government‟s capital fund for renewables, and we need to enact the
redevelopment urgently if we are to maintain home economic advantage from
the opportunity. The role of Forth Ports and the ability to use innovative Tax
Incremental Finance (TiF) solutions are both crucial elements of achieving this
goal.
Envoi:
Edinburgh Chamber of Commerce remains committed to working with all
levels of government and with all political parties to enable the best economic
advantage to be gained for the Capital City and for all of Scotland. We
welcome specific responses from Scotland’s political parties as to which of
these policies they endorse (or don’t) and how they will be implemented (or
statements of alternative approach).
All images courtesy of www.edinburghinspiringcapital.com
Written and published by:
Edinburgh Chamber of Commerce, Capital House, 2 Festival Square EDINBURGH EH3 9SU
0131 221 2999 http://www.edinburghchamber.co.uk/
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