Two of Scotland’s leading entrepreneurs have welcomed the increase of the living wage in the Autumn Statement but warned the move is a “double-edged sword” for the Scottish business community.

Lord Willie Haughey said: “The lift for just over two million people sounds great but that burden is not on the Government – it’s on small business. I’d say to anybody thinking this was a great thing that was done by Chancellor Jeremy Hunt, it was not. This was a tax on small businesses and big businesses.

“So, yes, it’s great we’re lifting the living wage but don’t, as the Chancellor tried to do, stand up there and take the credit for it.”

Sir Tom Hunter agreed, adding: “For people to get the increase – and it’s going to be about £11.44 for somebody over 23 – on the face of it has to be a good thing.

“But it’s mainly small businesses who employ these folks and the one thing you have to ask, if you’re running a small business, is: ‘Can I afford to pay somebody that or am I going to have to cut back?’

“So, it’s never as easy as it seems. It’s never as straightforward as it appears. For those getting the raise: well done! For those having to pay it: my goodness, you’re going to have to dig deep.

“At the end of the day, who ends up paying? It has to be customers because the Government doesn’t have any money.

“It’s a double-edged sword.”

Lord Haughey went on to say he considered the Chancellor’s reduction in National Insurance contributions paid by 27 million workers as a positive step.

“I welcome the reduction for employees of those two percentage points. That’s good news and it has to be welcomed.”

Sir Tom added a note of caution, however, saying: “This is where the Chancellor actually played a sleight of hand because he has frozen the bands where income tax comes in.

“What we really have, ultimately, is an income tax increase for everybody. He takes it with one hand and he gives it back with the other.”