'Tenacity and determination' of small businesses key to trading Scotland out of recession - FSB

The “tenacity and determination” of small businesses in Scotland will be key to trading the country out of recession, industry leaders said today.

Releasing its 2022 review, the Federation of Small Businesses in Scotland (FSB) said further government support would be needed to prevent more firms going bust in the year ahead. The business membership and lobby group identified business rates, late payment, regulation and net zero as key challenges to be addressed in 2023.

FSB’s Scotland policy chair, Andrew McRae, said: “2022 has perhaps not been the year many of us were expecting. After two years of pandemic restrictions, lockdowns have given way to price hikes and a full-blown cost of doing business crisis. Having made it through such a challenging year, our thoughts naturally turn to what lies ahead.

“Business owners will need to dig deep in what will undoubtedly be a tough 2023. But their tenacity and determination to continue overcoming the obstacles in their way - and ultimately trade us out of recession - can’t be underestimated. But they can’t do it alone.”

In his new year message, McRae cited upcoming changes to business rates as one key issue premises-based businesses will need to address, noting that some firms would benefit while others are likely to face an added cost burden.

“When the latest revaluation was published in November, some traders will have been pleasantly surprised to see their rateable value fall, leading to a lower bill,” he said. “For many others, however, an increase in the rateable value will leave them with yet another more expensive bill. We were relieved to see the poundage rate will be frozen and that there will be some transitional relief for those whose bills are set to rise. But we remain concerned at the lack of targeted reliefs for those sectors hardest hit by the pandemic and spiralling energy costs.”

He said proposed reforms to the small business bonus scheme, where some will lose their full relief, needed to be looked at “very closely”, adding: “It is imperative that the scheme can continue to operate in the way it was designed - to ensure that the smallest traders are the ones who are protected from unaffordable rates bills.”

McRae said the level of business regulation would also need to be examined. As a first step, he is calling for a pause on all new and forthcoming regulations that would “impact adversely on small firms - at least until we’re out of recession”. He added: “Beyond that, we’ll be looking to the Scottish Government’s new regulation taskforce to tackle some of the systemic issues about how regulations are made and implemented.”

Many smaller businesses failed to survive the economic fallout from the pandemic.

Meanwhile, the FSB policy chair is looking for “real progress” on the issue of late payment, which is said to have “plagued the smallest traders for too long”. He said: “Businesses are providing goods and services in good faith and being left unpaid for weeks and months at a time - effectively being treated as a free overdraft by their big customers. This is an issue with complex roots, and all spheres of government must come together to identify and enact solutions.”