Autumn Statement: Scottish business leaders give their reaction

By Keith Findlay

November 17 2022, 6:42pm

Mike Duncan, development manager in the north-east for the Federation of Small Businesses. Image: Ian Forsyth

Fears about VAT, sky-high energy bills, alcohol duty and hefty business rates emerged in Autumn Statement business reaction from throughout Scotland.

Federation of Small Businesses (FSB) Scotland policy chairman Andrew McRae, said: “Getting the public finances back on track while not stifling growth with tax hikes was never going to be an easy balance to strike.

“But that didn’t make the announcements any easier to hear.

“Small businesses have spent months watching their margins vanish due to rampant inflation.

“It’s alarming, therefore, 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.”

FSB Scotland policy chairman Andrew McRae. Image: Mhairi Edwards

Mr McRae added: “Businesses, like households, are extremely anxious about sharp, unaffordable rises in their energy bills.

“The government must publish details about what support firms can expect when the initial term of the Energy Bills Relief Scheme comes to an end in April.

“Any targeting has to be based on business size, not particular sectors.”

All eyes on Holyrood response

Scotland will get an extra £1.5 billion under the Barnett formula, which dictates how much cash the devolved administrations receive from any new UK-wide funding.

Business chiefs north of the border are now waiting to see what impact this will have on the Scottish Government’s plans, especially around December’s Budget.

FSB north-east development manager Mike Duncan said: “At the very least, they should now be able to reverse some of the cuts to employability schemes and economic development announced in the Emergency Budget Review at the start of November.

“It’s vital that all spheres of government enable businesses to grow, innovate and overcome bureaucratic hurdles.

“That is the key to getting local economies and communities out of this crisis and back to growth.”

Jeremy Hunt delivers his Autumn Statement in the House of Commons. Image: UK Parliament/Jessica Taylor/PA Wire

Lobbying by the whisky industry over a much-feared increase in alcohol duty delivered the desired result, with Chancellor Jeremy Hunt deferring any decision until next year.

Scotch Whisky Association chief executive Mark Kent said: “Over the next few months we look forward to working with the chancellor, who was true to his word and listened to the industry… as we made the case for reinstatement of the duty freeze.

“Previous freezes have consistently delivered more revenue for the exchequer, and have enabled the industry to invest in our supply chain, create jobs and support hospitality – boosting the UK economy.”

Scotch Whisky Association chief executive Mark Kent. Image: SWA

Mr Hunt, who became chancellor after Rishi Sunak took over as prime minister, unveiled business rate reliefs worth £14 billion over five years for firms in England.

Industry body UKHospitality Scotland hopes the Scottish Government’s Budget on December 15 will deliver similar help for the hospitality sector north of the border.

UKHospitality Scotland chief executive Leon Thompson said: “Today’s statement underscored the severe difficulties faced across the economy.

On the front line

“Hospitality remains on the front line of these challenges, hit by increases in the cost of doing business and the cost-of-living crisis experienced by customers.

“With a third of our members concerned about business survival this winter, it is imperative that the Scottish Government allocates support on business rates quickly.

“This move will make the difference between survival or closure for hospitality venues across Scotland. This vital support in the Scottish Budget can help to secure the future of businesses and the jobs so many people depend on.”

No quick fix

Scottish Chambers of Commerce chief executive Liz Cameron said: “Business confidence will not shift overnight.

“The biggest worry facing businesses right now is rising energy prices which have eroded profitability for many sectors.

“We encourage the chancellor to widen the net of support available.”

Liz Cameron, chief executive of the Scottish Chambers of Commerce. Image: Mhairi Edwards

Vishal Chopra, partner and head of tax for Scotland at professional services giant KPMG said: “This was a statement that focused on tackling the immediate issues in public finances – giving stability and confidence to business and the City, while ensuring the entire country is aware and prepared for the potential stormy months ahead.

“It was, as expected, both serious and in line with the narrative the chancellor had been outlining since taking up the role.”