Colin Borland

“SMALL businesses work so hard for us, so this government is working hard for them,” declared Chancellor Jeremy Hunt as he unveiled his Autumn Statement last week.

While there can be no hesitation in endorsing the first part of this statement, how does the latter part stack up?

Well, it was certainly clear that the Chancellor and his team had listened to us. Most importantly, he listened to us on late payment and his condemnation of this unacceptable behaviour – whereby big, powerful customers effectively use their small suppliers as a free overdraft by paying them whenever they feel like it – was absolutely correct.

Our latest figures show nearly six in 10 small businesses in Scotland are currently being forced to wait beyond agreed terms to be paid for work already done – and it’s getting worse.

So, it’s right to force those companies bidding for major UK Government contracts to demonstrate that they play fair by paying fair, right throughout their supply chain.

Colin Borland: Pressure on Scottish politicians to get 'tourist tax' right

The Chancellor also sought to give the self-employed – “the people who literally kept our country running during the pandemic” – some breathing space with his reforms of National Insurance.

Class II contributions are to be scrapped and the main rate of Class IV (which you pay on profits between £12,570 and £50,270) will go down by 1% to 8% from April 2024.

The abolition of Class II makes particular sense. As you know if you’re self-employed, if your annual profits are £12,570 or above, you pay Class II at a flat fee of £3.45 a week. Not only is it an extra complication to the system but, because it’s a flat tax, it’s disproportionate for those making the most modest profits.

By the Treasury’s calculations, around two million self-employed people will benefit from these changes, with a self-employed person making £28,200 saving £350 next year.

Elsewhere, there was some relief for our whisky and wider drinks and hospitality industries with the freezing of alcohol duty.

The other significant announcement is one that, while not directly affecting us here in Scotland, might nevertheless have an impact on the public debate.

Colin Borland: The blunt and frustrating truth about climate change schemes

Following representations from the Federation of Small Businesses’ Westminster team and others, the Chancellor agreed to extend rates relief for the retail, hospitality and leisure sectors south of the Border. This means that small businesses in those hard-pressed sectors will continue to see their rates bills reduced by 75% until at least the end of March 2025.

In Scotland, of course, targeted reliefs for these sectors have not been available since July 2022, so the Chancellor’s move is likely to intensify the debate on bringing them back.

After all, the particular mix of challenges the sectors face – from their exposure to energy costs, food price inflation, staffing availability, faltering consumer confidence and more – still apply in Scotland.

Further, there will be £545 million in consequentials coming to the Scottish Government as a result of the Autumn Statement, which should give Scottish ministers some headroom to act.

So, all eyes now turn to next month’s Scottish Government Budget and we’ll certainly be pressing the case for targeted reliefs with Finance Secretary Shona Robison as she draws up her plans.

However, these representations won’t just be about new measures that could be introduced.

We also need to guard against any shock moves that could upset business plans and give rise to adverse knock-on effects.

You’ll recall, for example, last year’s surprise decision to raise the qualifying threshold for the Small Business Bonus Scheme (SBBS), bringing some small businesses into paying rates for the first time. Indeed, we found that almost one-third of small businesses in the aforementioned retail, hospitality and leisure sectors have seen a reduction in their SBBS relief.

Colin Borland: Inflation and recession dangers to fore

As the effects of this change will continue to ripple through the economy as the transitional relief tapers off over the next few years, this is not the time to erode or tinker with the scheme any further.

The job of any finance minister is an unenviable one, with innumerable opposing arguments to be weighed up in a quest for the correct balance. But if you listen to those at the sharp end of the economy, you give yourself the best chance of striking it.

Colin Borland is director of devolved nations for the Federation of Small Businesses