Speech on Small Business Bonus Scheme, Scottish Parliament 11 June 2008

I, too, declare an interest as an unwilling beneficiary of the bonus scheme.
I investigated whether it was possible to leave the money in the public purse, rather than keep it in my office, which was entirely reasonable, no matter how high the quality of the service presided over by my office.
I am concerned by the Government's approach to the small business bonus scheme, which is in sharp contrast to its approach to other areas of expenditure.
I am not anti-business—I am in close contact with businesses in my community—but it is the job of Government to reward good business and not simply to give a blanket reward to all business.
John Swinney recently explained that the small business bonus scheme could help those businesses in Edinburgh that are suffering disruption as a consequence of the Edinburgh tram scheme.
Of course, that proves my point.
It would reward them in the same way that it rewards absolutely every business.
The Government asserts that it is prudent and that it seeks best value and efficiency.
On the evidence, it does not apply any of those qualities to the scheme.
That is in stark contrast to other areas.
Only this morning, in the Local Government and Communities Committee, we heard housing associations' concerns about Government strategy.
Housing associations say that they will be driven out into the private sector.

Gavin Brown: We heard earlier that, according to its 2007 manifesto, the Labour Party was going to double small business rates relief. Would that have been applied in a blanket way?

Johann Lamont: It is clear that any Government expenditure has to be targeted, justified and evaluated if that Government is to be prudent in its approach.
This morning, in the face of those concerns from housing associations, we were told by an official that we need to make money work harder and go further.
Remarkably, that approach is not applied to the small business bonus scheme and we must ask why it is now being honoured in the breach.
Gain is asserted without evidence.
I cannot imagine any business saying that it does not want rates relief, but perhaps we could do other things to support businesses so that they thrive.
The scheme involves no conditions, no driving up of standards and no reward for good practices; all businesses are rewarded the same.
That lets down businesses that are connected and committed to communities, seek to employ local people, provide a safe environment for them to work in, offer good services and engage with the community.
I can understand that there is a debate about the merits of the SNP's approach as against other approaches.
If we were to target support, how would we do it?
If conditions were to be applied, which would they be?
However, it is surely remarkable that the SNP claims that it will evaluate spending for which it has no baseline, for which there are no constraints on whether and how money is spent, and for which there are no targets or goals, simply a remarkable faith that all businesses everywhere will do the right thing.
That faith does not apply to other critical operators in our communities and the Government needs to think about that again.
The reason why I find such laissez-faire largesse so remarkable is the context in which the choice was made.
The Government has actively chosen to spend £305 million on the scheme over three years with no conditions, but a lot of crossing of fingers.
At the same time, it is thirled to cuts in taxes and charges that, by 2010-11, will take £434 million out of the Scottish budget, which will have a cost for our capacity to deliver services.
The bonus scheme is without conditions, which is in stark contrast to our being reminded time and again of the tightness of the budget.
Yesterday, the Minister for Communities and Sport, Stewart Maxwell, said that child poverty is morally unacceptable and claimed that he had to fight poverty with one hand tied behind his back.
It is easy to reduce every challenging policy issue to an opportunity to make a constitutional point, even if it is depressing.
It is another example of government by alibi.
We must assert that ministers should not simply tell us what they cannot do and what powers they would like but must be held accountable for what they do and how they use the powers that they have.
Government back benchers need to seek more justification for how the powers over business rates are being used and what that says about the Government's priorities.
The fairer Scotland fund to tackle deprivation is being cut in real terms; projects to support communities in employment, child care, training and education—the ways in which our poorest people can get into work—are being cut; the Government is pressing down on community planning and local government budgets to improve efficiencies and best value with consequent and often invisible impact on the most vulnerable and claims that we cannot spend money everywhere.
What a contrast it is that that experience in local communities, which goes far beyond tough love, is not matched by any rigour in addressing the needs of business; instead, we are expected to rely on blind faith.
I recognise that members who have expertise on the operation of business say that the scheme might work. It might, but we should apply the same test across the board.
The scheme might be the Government's approach, but it is not a pain-free choice.
The Government must answer the charge that the way in which it treats different parts of its budget is inconsistent and unfair.
It is not good enough to say without any explanation that we need tax cuts and leave other people to live with the consequences.
It is entirely reasonable to ask the Government and its back benchers to justify its choices and be honest about how it can evaluate the scheme in the way in which we expect other organisations that spend public money to justify their spending.