Businesses, large and small in the Islands (where almost every business is small by mainland standards) have been left high and dry byThursday’s UK Government Autumn Statement, delivered by Chancellor of the Exchequer Jeremy Hunt.
The Federation of Small Businesses’ Highlands & Islands Development Manager, David Richardson, said:"Two concerns in particular stand out. The first concerns VAT. With vanishing margins it’s particularly alarming that the VAT threshold will be held at £85,000 – a real terms cut – which will see more small traders dragged into the system against their will.
“And second, there was no word on what will happen when the current Energy Bills Relief Scheme ends on the 31 March?
"Will businesses find themselves suddenly having to pay full whack for their fuel?
"Hopefully not, but if support is forthcoming it must be targeted according to business size and not sector.”
He went on: "Our FSB National Chair, Martin McTague, summed the situation up perfectly when he said, 'The Chancellor may consider that today’s Statement has steadied the economic ship after recent turbulence. But it is now time to raise the anchor, restart the engines, and set a course towards economic recovery, promoting enterprise and innovation, and future prosperity. Whether that direction is set in the coming months is a decision which will be make or break for many small businesses.'"
Mr Richardson said: “The economic problems facing the country are clear, and getting public finances back on an even keel without stifling all-important growth was never going to be simple. However, that doesn’t make today’s announcements any easier on the ear for Highlands & Islands businesses.
“Rather than enjoying a post-pandemic boost this year as had been hoped, many of our smaller businesses, the bedrocks of their communities, have really struggled in the face of historic debt, skyrocketing costs, staff shortages, shaky consumer demand and uncertainty about the future. No wonder business confidence is diving and that one in six Scottish businesses say that they will shrink, shut of sell up in the next year if things don’t improve.
“The FSB wants the government to focus on encouraging entrepreneurial activity; on enabling businesses to grow, innovate and overcome bureaucratic hurdles. That’s the key to getting local economies and communities out of this crisis and back to growth.
“So, while welcoming the additional £1.5bn in Barnett consequentials for Scotland and hoping that the money will be used to reverse some of the cuts to employability schemes and economic development, there is no doubt that the UK Government could be doing more to foster growth."