SCC Reaction to Autumn Statement

Tuesday 29th November 2011

Commenting on the Chancellor of the Exchequer’s Autumn Statement, Liz Cameron, Chief Executive of Scottish Chambers of Commerce, said:

“The Chancellor has set out a stark picture of the challenges facing the UK economy over the next few years.  It is clear that even if the Eurozone crisis is resolved quickly and effectively, UK growth is likely to flatline for another year at least and there is a very real threat that the economy may dip into recession once again.  Whilst this is not uncommon following a deep recession, this underlines the need for Governments in London and in Edinburgh to get their policies right for business growth.

“This Autumn statement contains much to welcome.  The decision to cancel January’s planned 3p increase in fuel duty is good news, but an increase of 3p in August 2012 is still on the cards and it is time that the fuel duty escalator was abandoned once and for all.

“The National Loan Guarantee Scheme, intended to reduce the cost of borrowing by 1% for small and medium sized businesses is a positive initiative from Government and could boost borrowing for investment.  We hope that this will operate as intended and that it will be available to businesses as soon as possible.  Similarly the Business Finance Partnership could present a welcome easing of the credit squeeze being felt by many mid-size businesses.

“Significant additional infrastructure spend in England ought to result additional resources for the Scottish Government, as will the announcement of £1 billion in England to tackle youth unemployment.  With the Scottish Government’s Draft Budget for next year still out for consultation, this may open up the opportunity to further enhance the spending options for Scottish Ministers, with a clear focus required on supporting Scottish businesses and creating employment opportunities.

“On Business Rates, it is extremely disappointing that the Chancellor has continued with his plans to increase the business poundage rate by 5.6% in April, albeit with the introduction of a deferment scheme allowing businesses to defer 60% of this increase over the following two years.  However, this presents the Scottish Government with a superb opportunity to counter this damaging decision by the UK Government and apply a lower increase to Scottish business rates next year.

“The Chancellor did hold out the prospect of future changes to employment and health and safety rules which could benefit small businesses and these moves would be extremely welcome.

“Overall, the impact on Scottish businesses ought to be positive, with some welcome measures to support lending to business in particular.  The decision to ramp up Business Rates by 5.6% is one area of disappointing news, but the Scottish Government has the power to remedy this failing here in Scotland.”

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