The dust is now settling on the Chancellor’s Autumn 2021 Budget.
Businesses had wanted to see a financial outlook that recognised the challenges and pressures which have been placed on them over the past 18 months, acknowledging the dual pressures of the Covid-19 pandemic and Britain’s departure from the EU, whilst underpinning economic recovery.
To an extent, Rishi Sunak delivered that with an extraordinary package of fiscal measures that few would have expected in the current economic climate, however, some businesses operating in the hardest hit sectors are continuing to question if the Budget really went far enough, and crucially fast enough, to support those immediate challenges they are facing.
There are winners and losers from every budget, and in these uncertain times, it’s vital that the Chancellor remains agile and responsive to the UK’s economic reality. And that reality is that there is deep unease amongst businesses over continued uncertainty when it comes to the increasing costs of doing business; rising inflation, challenges in the supply chain, skills shortages, increases to NI contributions, all of which are putting the brakes on business growth.
Equally, consumers are also facing tough times, with creeping tax rises, increasing mortgage and rent costs, and a rising cost of living, it’s little wonder that there is little progress in restoring business and consumer confidence.
The week leading up to the budget saw many of the major announcements trailed in the media, denying the Chancellor the well-rehearsed ‘rabbit out of the hat’ moment.
Freezes to fuel duty for the twelfth consecutive year and a freeze on alcohol duty, which will mean that whisky benefits from the lowest real terms tax rate since 1918, were welcome gestures, but not significant economic shifts.
Scotland’s businesses instead were focussed on the bigger ticket items, including the commitment to invest £200 million into Scotland to boost our post-pandemic recovery and enhance the Scottish economy.
Much of the funding will come in the form of the Levelling Up Fund for projects across Scotland including the redevelopment of Inverness Castle, the renovation of the Westfield Roundabout in Falkirk, and a new marketplace in Aberdeen City Centre, and it is essential that Scotland’s small and medium sized enterprises, get their fair share of the cake from these projects and access to the new £150m fund available from the British Business Bank.
International trade is also vitally important to Scotland and the expansion of the existing trade and investment hub in Edinburgh along with the new £1.4 billion Global Britain Investment Fund is a major boost to Scottish companies, and SCC stand ready to play our part in facilitating the UK Government’s trade ambitions through our global Chambers of Commerce Network.
These positive measures however can’t plaster over failures. The Scottish Cluster Carbon Capture and Storage bid, which was overlooked by the UK Government last month, would have supported thousands of jobs and brought in huge investment into the Scottish economy, so whilst Levelling Up Funding for Scotland is welcome, it can’t come at the cost of support for other strategic investment opportunities. Finally, with the budget delivering Barnett funding for the Scottish Government to a record £41 billion per year, the next big test for Scotland’s businesses and economic recovery will be next month’s Scottish budget.
Our message to the Scottish Government is a clear one; put business growth first and reduce the cost of doing business in Scotland to drive investment, create jobs and deliver a prosperous economy that works for us all.
Liz Cameron is chief executive of Scottish Chambers of Commerce.
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