Scottish Conservatives call for Business Dividend Fund

Scottish Conservatives want to create a Business Dividend Fund to encourage new business start ups and help local economies grow.

The fund would reward Councils for creating new businesses in their area each year.

Gavin Brown MSP, Shadow Enterprise Minister said:

"For too long Scotland has lagged behind the rest of the UK and other countries in creating new businesses. We want to change that and turn Scotland into a real enterprise country. Every level of Government must play its part.

"Scottish Conservatives will incentivise local authorities to encourage new business start ups to help local economies grow. Local authorities will share in our new Business Dividend Fund for every new business above a set target, - providing incentives for growth and new ideas to boost the Scottish economy."

1) A target would be agreed between central government and each local authority for new business creation in their area. The total target at Scottish level would be higher each year until the number of new business start ups in Scotland exceeded the UK average on a per capita basis. Each local target would have to be higher than the previous year's performance unless the local authority exceeds the UK average.

The base date for new business creation would be taken from HMRC Data. The Scottish Government target is analysed by using VAT registrations and we would propose to use this measure to determine the number of new start ups in each local authority area. At the same time, Scottish and Local Governments would agree likely business rate income levels as usual on a local authority basis.

A local authority where new business creation was below the target would not receive a share of the fund. All other local authorities would share from the fund in two ways:

The central fund: local authorities will receive the same % of this fund as the number of new businesses in their area above target as a proportion of all new businesses in Scotland above targets in each local authority where the target is exceeded.

The local fund: to the extent that business rate income exceeds the expected local authority total, if a local authority has met the target in that year it will receive the excess in full.

Income from the fund would be available for local authorities to spend as they see fit, with no restrictions.

2) CBI Scotland and the SCDI are both supportive of this initiative.

3) Scottish Conservatives have already fought for and provided significant cuts in business rates, with tens of thousands of small businesses taken out of paying them altogether, as well as a Town Centre Regeneration Fund. The Federation of Scottish Businesses estimates that these measures have saved one in eight small businesses in Scotland from going out of business.

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