Focus 'should be on small firms'
SNP government urged to appoint Minister for SMEs
A new Minister, focused on the sector, could tackle underlying issues such as late payments, says lobby group Business for Scotland.
A broad consensus is emerging with other lobbyists calling for a more positive approach to helping those firms that create the most jobs and can play a major part in stimulating productivity.
Andy Willox, Scottish policy convener of the Federation of Small Businesses’ said: “FSB’s strength comes from the importance of small firms to the country. We will judge this administration’s policies exclusively on whether they’ll help or hinder Scotland’s 300,000 small firms.
“During the next parliamentary term, we must see an unrelenting focus on Scotland’s economy from backbenchers and ministers alike. With new tax powers, reforms of business rates and a review the enterprise network on the cards, there’s a lot to get on with – and strengthening Scotland’s local economies must be the paramount consideration throughout.”
Business for Scotland, the nationalist-supporting group, has called for the appointment of a dedicated minister for SMEs.
It wants Holyrood to build policies that support SME based business growth and goes further by demanding control over all business taxation.
BfS wants to rebalance the business playing field away from big company dominance.
Gordon MacIntyre-Kemp, founder and CEO of the group, said: “Scotland needs a fully inclusive SME growth strategy, aimed at creating an economic advantage through the businesses that are the foundation stones of prosperity in Scottish communities.
“The new SNP Government could appoint a Minister for SME growth, someone with expertise in services, tourism, food and drink or the creative industries, and not a trace of a global company background.
“Or create a devolved Small Business Commissioner’s office for Scotland but with a wider remit than the UK Commissioner, so the scope of the role could be far greater in terms of support for SMEs and co-ordinating business support via the various agencies – SE, SDI, Councils even Creative Scotland – and partnering with private sector incubation service.”
He believes that one of the keys to unlocking the growth potential of SMEs is to legislate on late payment.
Getting late payment sorted could lift the ceiling on SME growth
“In a recent survey of BfS members, we learned the majority thought their turnover would increase – some by by up to 20% – if they were paid on time,” he said.
“Big companies and councils appear to be the major culprits and the target of paying within 10 days from the Scottish Government needs to be mandated to all public sector organisations, and the business community engaged to agree a solution as soon as possible.
“Getting late payment sorted could lift the ceiling on SME growth and remove a major barrier to SME exporting as cash flow worries keep trade local and easy.”
SMEs make up 99.4% of Scotland’s businesses, employing 1.2million (55.6% of all private sector employment) and representing the biggest opportunity for economic growth.
But Bfs points out that despite generating 39.4% of private sector turnover, the SME sector “seems largely unappreciated in the UK”.
Mr MacIntyre-Kemp says: “Big business dominates policy and political discussions despite the growing detachment of big business from the communities they operate in, their willingness to often unnecessarily cut jobs to maximise profit and to avoid tax for the same reason.”
He says the SNP should also demand control over all business taxation in order to introduce a corporation tax credit system allowing companies to earn discounts through activities that drive shared prosperity, such as:
- investing in environmentally sustainable practices
- paying the real living wage
- employee engagement
- increasing exports
- spending a target percentage of turnover on applied R&D and downstream innovation
- hitting equality targets, employing young people and apprentices, and (pre legislation) prompt payment, especially to SMEs
- making big businesses earn the tax cut would increase overall tax income whilst painting Scotland competitive position versus the rest of the UK.