DAVID RICHARDSON: Helping businesses today is right way to grow the economy

Business Comment by David Richardson, regional development manager at the Federation of Small Businesses

With political instability in Westminster and threats to everything from world peace to household budgets, it’s no surprise that FSB Scotland’s newly published results for the third quarter of 2022 reveal that business confidence has plummeted yet again. Indeed, at -45.7 per cent, it’s much lower than at any time during the pandemic.

More specifically, increased costs, falling revenue due to shaky consumer demand, political uncertainty and significant staff shortages have all taken their toll. Nine in 10 businesses in Scotland have seen costs increase over the past 12 months, driven mainly by fuel and utilities price hikes, while for many, income has not kept pace with costs, forcing a growing number to seek debt funding to help them manage their cashflows.

The result? One in six Scottish small businesses expects to shut, sell or shrink in the next year, and many have cut back or cancelled their investment plans.

So, what can be done to help? We need stability and for the UK government to deliver on its promise to help small firms with their energy bills now, to tell them what help will be available from April 1, and to reverse the National Insurance contribution increases. We also need more support for growth as things stabilise, and more to be done to stamp out very damaging late payments.

FSB Scotland also wants the Scottish Government to adopt some simple, workable, affordable and helpful measures in its next Budget on December 15.

Any unspent Covid-19 business support funding should be targeted at the neediest businesses, assisting with energy and other key overheads; the Small Business Bonus Scheme should continue; and all non-essential regulatory changes that would place additional strain on businesses like the hugely expensive Short-term Lets Licensing Scheme should be postponed.

The Scottish National Investment Bank should be obliged to direct at least 20 per cent of its annual investments to small and micro businesses, while under Community Wealth Building, much more of the vast public sector procurement budget should be spent with micro businesses.

Businesses can and really must be helped today if we want to regrow the economy tomorrow!

Do you want to respond to this article? If so, click here to submit your thoughts and they may be published in print.