A direct route to the levers of power

A direct route to the levers of power

Carlos Alba looks at the low-key link between Scotland’s politicians and commerce.

It may not be well known to everyone in the Scottish business community, but it’s the closest Holyrood has to a link with commerce and industry. The Scottish Parliament & Business Exchange has responsibility for encouraging greater knowledge and understanding among MSPs of the way business works and, reciprocally, to help business people understand better the powers and processes of the Scottish parliament.

Until now, its work has been fairly low key, restricted by the scope of the parliament’s existing powers to influence the recruitment or operation of businesses and industries north of the border.

With the majority of tax-raising powers domiciled at Westminster there are limited opportunities for companies to engage with politicians. Now, following the Smith Commission recommendations, responsibility for new tax-raising powers are to be transferred to Holyrood and, with them, a significantly greater requirement for businesses to engage with the parliament.

Lord Smith of Kelvin has recommended transferring to Holyrood responsibility for gathering Income Tax along with a share of VAT and Air Passenger Duty. It has also suggested that the Scottish Parliament should have all powers over support for unemployed people through employment programmes currently contracted by the Department of Work and Pensions, such as the Work Programme and Work Choice, when the current commercial arrangements expire.

While the commission decided that regulation of utilities and public services should remain reserved, it recommended transferring responsibility for the management of the Crown Estate’s economic assets in Scotland, and the revenue generated from these assets, to Edinburgh. These include the Crown Estate’s seabed, urban assets, rural estates, mineral and fishing rights, and the Scottish foreshore for which it is responsible.

The Scottish Government and Scottish Parliament will also have a formal consultative role in the process of reviewing the BBC’s Charter and Holyrood and Westminster are expected to work together on some matters including food labelling, to agree changes to the European country of origin rules so that a ‘Made in Scotland’ brand is recognised under EU law.

Following implementation of the proposals, it is likely politicians and business people will find themselves at meetings and in forums with individuals they’ve never met before and with whose processes and working practices they are unfamiliar.

“Most MSPs, with the greatest respect, don’t have a great deal of business experience,” says the SPBE’s chief executive, Arthur McIvor. “The majority of politicians don’t come from a business background and they don’t have significant business knowledge.

“Many come from professional and public sector backgrounds and they are not familiar with the skills and processes required to run a business. What we do helps them to move from a position of knowing a little about a lot to having a more detailed knowledge.”

Mr McIvor added: “Similarly, there are many business people who are unfamiliar with the powers and processes of the parliament and they find it useful, through us, to learn about these things.”

For the past seven years Mr McIvor, a former senior manager with Royal Mail and latterly business consultant, has been responsible for bringing these groups of people together for what the organisation calls ‘engagements’ .

They might include an away-day for politicians to visit the premises of a particular company or it could see a delegation of business people visiting Holyrood to learn about how the committee system operates, how the Scottish Parliament works or to hear about ‘a week in the life of an MSP’.

“The biggest attendance we have had was for an engagement with the CEO of Scottish Power Renewables, which is understandable because many politicians have an interest in that issue,” said Mr McIvor.

“We also had a large turnout for an engagement with the chief economists of two banks during the Eurozone crisis who helped MSPs to understand the implications of countries defaulting and the impact that might have on other economies.”

There was, in the early stages of the SPBE’s existence, a degree of suspicion in some quarters about its activities, according to Mr McIvor. Some people, wrongly, viewed it as a vehicle for lobbyists and McIvor has worked assiduously to distance the organisation from that perception.

“Lobbying is a legitimate part of the political process. If businesses want to lobby politicians, they are perfectly capable of doing it without the SPBE being involved and there’s a clear understanding among politicians that what we offer is purely an opportunity to engage with or to understand a particular sector,” he says.

“Likewise our member businesses are clear about our role as a facilitator and what they can hope to achieve from our engagements.  I attend all of these engagements personally and, if I think a discussion is going in a direction which is inappropriate then I will intervene and steer it away from that, but I very rarely have to.”

He added: “Every MSP who engages with a business is signed up to a code of practice. Every engagement through our business exchange is non-partisan and non-lobbying. I oversee every engagement to make sure these standards are upheld.”

According to Mr McIvor, the prospect of new fiscal powers for Holyrood means politicians may require to be better informed about the impact that their decisions would have on businesses and the economy. Similarly they will be required to be aware of developments in particular sectors to inform their decision making. Businesses, meanwhile, will see decisions affecting their operation transferred to Holyrood whose processes are different to Westminster, particularly with its use of the committee system.  

“Often we will bring a company into the parliament for a workshop on how the parliament works, including a formal welcome from a deputy presiding officer to a clerk of a committee coming in and explaining the parliamentary process and parliament’s powers and how to engage in the committee structure. It usually involves an MSP discussing the role of a committee or a week in the life of an MSP. We do these fairly regularly.”