Fury after Scots small business tax break attacked by unions

A WAR of words has broken out between trade unions and the SME community after the STUC called for the abolition of Scotland’s small business bonus scheme (SBBS).

The body yesterday renewed criticism of the tax break, accusing it of failing to improve business performance relative to England and Wales. The STUC called for funding to be focused instead in areas such as the Scottish Investment Bank and research and development incentives.

Grahame Smith, STUC general secretary, said its analysis of official data showed that the performance of Scotland’s small businesses relative to their counterparts in England, Wales and Northern Ireland had deteriorated “since this expensive scheme was introduced”.

Smith said: “If significant sums of money are being spent in the name of economic development, it is only fair to expect the investment to genuinely expand the capacity of the Scottish economy to grow in the longer-term.”

The Federation of Small Businesses (FSB) in Scotland hit back, warning that now was not the time to even discuss hiking taxes on small firms.

Colin Borland, the FSB’s head of external affairs, said it was “amazing” that the STUC could make such a report “without apparently gathering evidence from a single business or talking to a single small business owner”.

He added: “Their report states that it would like to see the small business bonus abolished – an action that would see more than 85,000 businesses’ rates bills increase by an average of £1,400.

“The small business story since the credit crunch has been one of rising overheads, late payment and declining footfall. Survival is the key and our members in communities across Scotland tell us the small business bonus has made a critical difference.”

Smith denied that the union was making an “attack on small businesses”.

He said: “It is nothing of the sort. Our analysis is intended as a positive contribution to the ongoing debate over the development of the Scottish economy. If others disagree with our findings it is incumbent on them to produce evidence which supports their position; something the SBBS’s advocates have singularly failed to do”.