Humza Yousaf resignation: Economy must be 'priority of priorities' for new FM, say business leaders

Responding to the resignation of the First Minister, the director of the Scottish Retail Consortium (SRC), David Lonsdale, said his successor’s preeminent priority should be economic recovery. Lonsdale said the retail sector trade organisation had valued its engagement with Yousaf and his government, noting that the SRC was an early supporter of his attempts to “reset the relationship with industry” through his New Deal for Business.

But Lonsdale added: “There is a pressing need to lift private sector investment, productivity and growth. After all, an expanding economy is good for living standards, job prospects and government revenues. If the economy recovers other policy challenges become more manageable, conversely a weak economy will exacerbate the existing pressures on households and public finances.

“Central to this should be a plan to ease the regulatory burden, and lower the tax burden on business by scrapping the mooted public health surtax on grocery stores, and finally delivering on the pledge to restore business rates parity with England for medium-sized and larger commercial premises. Ultimately, every policy should be tested against a simple benchmark - will it help or hinder Scotland’s economic recovery. SRC looks forward to engaging positively and constructively with the next First Minister and ministerial team to prioritise private sector growth and deliver that recovery.”

Tracy Black, devolved nations ambassador for the Confederation of British Industry (CBI), said: “While Humza Yousaf leaves office with our best wishes, firms will want to see the vacuum filled quickly to prevent further instability impacting business confidence. Whoever comes in as First Minister must put addressing Scotland’s faltering economy first. Without a competitive and resilient economy that prioritises investment, the ambition to deliver sustainable economic growth will fall short of the mark.”

Catherine McWilliam, nations director of IoD Scotland, described business confidence in Scotland as “low”, arguing that another change in leadership “will do nothing to remedy that”. She added: “Our members appreciate consistency and follow-through from leaders, and with the appointment of a new First Minister comes the possibility of more changes at ministerial and civil servant level. The priority for the next First Minister must be to restore business confidence, and to create a stable operating environment to enable economic growth.”

Liz Cameron, chief executive of the Scottish Chambers of Commerce, said: “We thank and recognise Humza Yousaf’s public service to Scotland. As we look ahead, the business community will seek assurances from whomever the next First Minister is to prioritise economic growth. We need to be confident that the Scottish Government is pulling in the same direction to support business, grow the economy and create jobs.

“The First Minister was right to mention Scotland’s place on the world stage and Scotland’s enviable international reputation. The next First Minister must work with business to turbo-charge our efforts to attract global investment and send out a clear message to the world that Scotland is open for business.”

Colin Wilkinson, managing director of the Scottish Licensed Trade Association (SLTA), said he looked forward to working with the FM’s successor and “indeed Mr Yousaf until that successor is in post”, as he flagged several demands.

He said: “We initially welcomed Mr Yousaf’s pledge to ‘reset’ the Scottish Government’s relationship with business in the wake of turmoil caused by the Covid pandemic, Brexit and misplaced legislation when he was named as Scotland’s new First Minister just over a year ago. However, that early enthusiasm clearly waned as hospitality businesses and the licensed trade have continued to struggle since his arrival in Bute House and there appears to have been no real understanding - or willingness to understand - the myriad problems and challenges facing what is one of the biggest employers in Scotland.

“One of the key asks of the new regime at Holyrood is to work with us to find a meaningful solution to change the current non-domestic rates system which is hugely outdated and in need of reform.

“And while we accept that VAT is not a devolved issue, a reduction in VAT would be a welcome move for everyone involved in hospitality and the licensed trade - we hope that Holyrood and Westminster can discuss this as an urgent measure to help businesses in this important sector given our major contribution to Scotland’s economy and its important tourism industry.”

Yousaf’s intention to resign as First Minister came just days after tearing up the power-sharing agreement the SNP had with the Scottish Greens. The collapse of that deal had seen the FM facing two votes of no confidence in the Scottish Parliament.

In the wake of last week’s decision by Yousaf to end the Bute House Agreement, Innes Smith, chief executive of Springfield Properties, one of Scotland’s biggest housebuilders, said: “We are very hopeful that this gives the SNP the opportunity to reconnect with businesses and implement policies that get us to net zero while encouraging lost housing investment back into Scotland and enabling the delivery of the quality homes across multiple tenures that are so desperately needed.”

The announcement of his resignation comes 13 months after Yousaf was sworn in as Scotland’s sixth first minister - at the time becoming the youngest person and the first person from a minority background to hold the post.

Interest rates, Brexit, recruitment - the triple headache keeping Scottish business owners awake at night