BUSINESS leaders have told Holyrood ministers to be bolder in cutting Scottish public spending to free up money for vital investment.

CBI Scotland said it wants the SNP Government to guarantee any new or additional business tax rises over the remainder of the spending review period, and to rethink plans for a £36 million tax on empty commercial premises.

The submission to Holyrood's Finance Committee ahead of this autumn's budget process, copied to Finance Secretary John Swinney, also asks for more funding to help new air routes to overseas business destinations to back exporters.

It also suggests more contracting out of public services, greater use of private finance in new facilities, and that Scottish Water should be "made less reliant on the public purse" for its investment in infrastructure.

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.

"The Scottish Government should put economic growth at the very centre of its upcoming spending plans. 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."

The seven-page submission backs the UK Government's deficit reduction strategy, saying this "remains a necessity".

The Scottish Government welcomed the CBI's engagement last night, citing its support for infrastructure and youth employment, and pointing out: "Scotland remains the most competitive place to do business in the UK, with a comprehensive relief package worth over £500m a year in place – which has abolished or reduced rates for three out of five business properties in Scotland – and a range of other measures designed to support business at a time when economic conditions are challenging, including our plans to bring forward a further £105m package of economic stimulus to create jobs and growth."

But a spokeswoman added: "The Scottish Government and our agencies are doing all we can within our current powers to strengthen the economy, to create and bring jobs to Scotland, to stimulate growth, and to sustain the most supportive environment for business in the UK. There is no doubt that with the full fiscal powers of independence, the Scottish Government could do even more to strengthen our economy. But in the meantime, we call on the UK Government to help, rather than hinder, the process of economic recovery."

The CBI paper states: "The UK's public finances are in a critical state, and are being tested by several challenging headwinds, not least the plight of the eurozone. It is right that the UK and devolved public finances are put on a sound and sustainable footing.

"A bolder approach to making savings from the Scottish Government than has been taken previously would allow for greater levels of investment in GDP-enhancing measures and also avoid any new taxes on business."

The CBI insists there is "plenty that the Scottish Government itself can do" with its substantial remit and £35bn annual budget, and the freedom it has over how that expenditure is deployed "to play a further valuable and proactive role in stimulating economic activity."

The paper says: "We acknowledge that a number of policies and initiatives have benefited the business community over recent years, and we believe more can be done to enhance Scotland's prospects in the future.

"Our members' over-riding priority for the Budget is that it helps galvanise future growth."