News :

Chambers' 'blueprint for recovery' includes national insurance holiday

SCOTTISH business leaders yesterday unveiled their blueprint for economic recovery, including a "bold" six-month holiday from employers' national insurance contributions (NIC) and a temporary zero-rating of value-added tax (VAT) for building repairs and improvements.

In its Budget submission, the Scottish Chambers of Commerce (SCC) called for the UK and Scottish governments "urgently" to resolve funding arrangements for the new Forth crossing and for the simplification of research and development tax credits for the computer games industry.

Building a new Forth crossing must be "the single most urgent road transport priority in Scotland", the SCC said.

The business body – which represents more than 9,000 firms in 20 local chambers – also called on the two administrations to develop a high-speed rail link between Scotland and London.

Zero-rating VAT would stimulate the construction sector and encourage energy efficiency, the SCC argued, adding that an NIC holiday would help employers to retain key staff in preparation for the economic recovery.

Liz Cameron, the SCC's chief executive, said: "The Scottish economy has changed significantly since the time of the Chancellor's Pre-Budget Report last November. All of these measures would help mitigate the effects of the recession in the short term and grow our competitiveness in the longer term."

Other recommendations in the SCC's submission include:

• "refraining from adding to the fiscal burden" on the oil and gas sector;

• setting "ambitious" targets for public-sector contracts to be awarded to small businesses;

• investing further in UK Trade and Investment, the agency that helps firms sell their wares on the global stage;

• and providing clear information to banks and businesses about the steps it has taken to "encourage sensible lending".

The SCC said computer games – such as Rockstar North's Grand Theft Auto IV and Realtime Worlds' Crackdown – contribute £1 billion a year to the economy.

But the body warned the French had already introduced tax breaks for their games developers and that Scotland may slip behind its global competitors.

Paul Harris, professor of screen media at Abertay University, in Dundee, said: "Unless we enable the Scottish computer games industry to compete on a level playing field with subsidised overseas labour markets, then not only do we risk not expanding this successful industry but we risk losing our current position as a world leader.

"If this happens, we may never recover our opportunity to exploit the burgeoning market, which, in games alone, is predicted to grow to more than $46bn (£31bn]."


Resource:
http://business.scotsman.coml