BUSINESS leaders in Scotland have said the next Westminster government must cut the cost burden on firms amid growing concern about the outlook for the economy.
While the new administration will have to deal with Brexit, ministers must maintain a focus on the domestic agenda and take decisive steps to help the firms that are the engines of growth.
The call for action comes as businesses find their efforts to deal with challenging trading conditions hampered by cost increases in areas ranging from business rates to employees’ pensions.
“With Scottish businesses facing the prospect of rising inflation and weak consumer demand, the threats to our economic growth, which lags behind that of the UK as a whole, are readily apparent,” said Liz Cameron, chief executive of Scottish Chambers of Commerce.
She thinks the Government could make a big difference by encouraging businesses to invest in new opportunities and jobs.
Noting the impact of recent legislation on pensions, the National Living Wage and the Apprenticeship Levy, Ms Cameron said the Government needed to reduce the fixed costs businesses face to compensate.
“That is why we believe that the UK Government must target reductions in business rates, rather than Corporation Tax, in order to produce the biggest boost to the largest number of businesses,” she said.
“Whilst this is a tax that is devolved to Scotland, clear strategic action on business rates in England would assist the Scottish Government in delivering long overdue restructuring of this tax north of the border.”
Scottish Chambers of Commerce also suggested a temporary cut in the Value Added Tax rate could help tackle rising costs while boosting consumer demand, which has been the major driver of growth in the Scottish economy.
It wants the VAT rate on the key tourism and hospitality sector reduced to five per cent permanently, to take it into line with the vast majority of European countries.
The Federation of Small Businesses said a survey found action to tackle high business costs was a key priority for more than half (56 per cent) of its Scottish members.
Fifty three per cent of respondents said delivering a good Brexit deal for small businesses was one of their priorities.
Some 44 per cent wanted action to tackle the problems the self-employed face accessing social security support and pensions.
Noting that hundreds of thousands of Scots are self-employed or run a small business, the FSB’s policy convenor in Scotland, Andy Willox, said: “These hardest of hardworking voters are looking for the next UK Government to keep on top of the domestic agenda, as well as deliver a Brexit deal which works for every locality and sector.”
In its election manifesto the FSB said the Government must protect the self-employed from being singled out for tax grabs, such as higher National Insurance, freeze Fuel Duty and Insurance Premium Tax and introduce measures to curb the bullying of small suppliers by big businesses.
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules here