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Business urges action to tackle flagging economy

Andy WilloxBusiness has called on the Scottish government to ditch independence and tackle underlying issues of rising costs in order to boost the flagging economy.

The Scottish Chambers of Commerce and the Federation of Small Businesses have demanded a renewed focus on business rates and improving the skills base.

In its quarterly report published today with the Fraser of Allander Institute, the Scottish Chambers’ Neil Amner says:The underlying challenges facing a broad spectrum of businesses are around lower expectations of profitability and tightening margins which, in turn, are impacting on the ability of businesses to invest. 

“This is a clear reason why our UK and Scottish Governments must use the opportunity presented by the Autumn Statement and Scottish Budget to deliver a clear commitment to investing for growth and to lowering the costs of doing business.”

Mr Amner, who chairs the Chambers’ economic advisory group, adds: “The Scottish Government is currently undertaking a series of reviews, including our business rates regime and the enterprise and skills services.  The business expectation is that this will result in radical change, not just more of the same.”

The Federation of Small Businesses is concerned about talk of abolishing rates help for smaller Scottish firms.

It says this would result in thousands of cancelled investments and business closures. 

The FSB has published a new survey of almost 1,000 business owners to test their opinion of the Small Business Bonus scheme – a rates relief worth up to £4,000 per year.

About a fifth of small firms (18.9%) reported they would close the business, with similar proportions arguing that they would have to cancel investments (19.9%) and amend their plans for growth (18.3%). The scheme has close to 100,000 recipients. 

Andy Willox (pictured), the FSB’s Scottish policy convenor, said: “The Scottish Government’s Small Business Bonus scheme has helped smaller firms ride out almost a decade of turmoil.

“With Scottish communities and firms now facing yet more economic uncertainty, it is not the time to even consider hiking smaller firms’ bills.”

Asked how they used the savings from the relief, 37% of respondents said they used them to invest in their business, while 35% used the break to offset other cost increases. 19 per cent pointed to investment in their staff.

The survey forms part of the small business campaign group’s submission to the independent review of the business rates system, commissioned by the First Minister and led by Ken Barclay, former chair of RBS in Scotland.

The FSB submission also makes the case for modernising the tax, which they argue would decrease bureaucracy, improve collection rates and lower collection costs.

Further, FSB argues for a new investment allowance, which would introduce a grace period between firms investing in their property and facing an increased rates bill.

Mr Willox said: “The wider Scottish rates system is overcomplicated, old-fashioned and unaccountable. Addressing this shortcoming should be the Barclay review’s key objective.” 

The Scottish Tories say Nicola Sturgeon should use this weekend’s SNP conference to “prove she’s listened to the people and businesses of Scotland and rule out a second independence referendum at her upcoming conference”.

The party notes that Scotland’s economy is still performing worse than the UK average and there is a call for greater attention on boosting the economy.

Scottish Conservative chief whip John Lamont said: “There is one thing Nicola Sturgeon can do to support Scotland this week and that is to dump her threat of a second referendum on independence.

“Failure to do so will only confirm that this First Minister puts the minority interest of her party supporters before the majority will of people across Scotland.

“We need a government in Scotland which is 100 per cent focused on the day job, and which puts an end to the uncertainty hanging over Scotland’s place in the UK.

“Scotland has spoken on independence. This week, the First Minister must show she has listened.

“It’s deeply disappointing that instead of setting out a constructive plan on how she intends to manage the Brexit process, Nicola Sturgeon is intent on using her party conference to play to the SNP gallery.

“Cheap rabble-rousing in front of the party faithful won’t obscure the First Minister’s failure to speak for the majority of Scots – by taking her threat of a second referendum off the table.”


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