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Businesses call for a Scottish Budget to support firms and stimulate economy

Business groups are urging the Scottish Government to put the country's economic growth at the heart of its upcoming Budget.

The Scottish Confederation of British Industry's (CBI) submission to Holyrood's Finance Committee is calling on ministers to channel Government spending into measures which will protect and enhance the economy and stimulate business growth.

Although it is keen to see the council tax freeze continue, it is urging the Government to rethink any new or additional business tax rises in the near future.

This includes the proposed £36 million tax rise on firms with empty commercial premises and a new £95 million tax on large retailers, as unveiled in the last Budget.

Scottish finance secretary John Swinney is due to set out his draft Budget for 2013-14 next month.

It said that recent devolvement in power and a shift in the annual £35 million Budget to the Scottish Government means it needs to play a 'valuable and pro-active role in stimulating economic activity more effectively.'

In its seven page submission, the CBI also called for greater investment into infrastructure and export assistance such as providing prime funding for new air routes to overseas business destinations.

Elsewhere it also encouraged increased competition in the delivery of public services.

The CBI Scotland's director, Iain McMillan, said: "Despite the fiscal stringency which will be required from the public purse over the next few years, there remains a pressing need for the devolved government to sustain investment in and support for the economy."

"A bolder approach to making savings and promoting competition is needed in order to keep business taxes down and protect important GDP-enhancing investments in infrastructure, skills development, and export support."

Further devolvement of power is expected to see the Government take over the financial responsibilities for setting its own rate of income tax, stamp duty land tax, landfill tax, and borrowing for capital infrastructure, and the power to introduce new specified taxes from April 2016. The CBI said it was looking forward to working with the Government in these areas in the coming years. 

"We fully recognise that the Scottish Government is facing leaner financial times over the next few years, however the right way to address this is by keeping a tight lid on spending and reforming public services," it submission reads.

"The wrong approach would be to use this expanding arsenal of taxes to levy new or higher taxes on firms which could act as a barrier to investment and innovation, and affect firms' cash flow. We would be concerned if any proposals for new taxes made Scotland a more expensive and less attractive place to invest, live or visit."