Interview: Andy Willox, the Scottish policy convenor of the Federation of Small Businesses

THE figures are stark. More than 24 Scottish businesses a week are going bust because money is tight – no-one is paying their bills on time, the banks aren’t lending and the tax man remains unrelenting in his demands.

Most of these failing enterprises are small businesses: the local shop, a design firm, a construction company, a hairdresser a small factory, a cleaner.

Andy Willox – the Scottish policy convener of the Federation of Small Businesses (FSB), which represents 20,000 of these firms in Scotland – is nervous.

“Most small businesses would say that, when the downturn came, it was like falling down a well and then they thought they would have to climb back up again,” muses Willox. “But they have had to climb along the bottom ever since, never thinking it was going to be so difficult.

“A lot of businesses have suffered greatly, but a lot of businesses are growing. But to grow you need help,” he adds. Willox, who owns and runs a cleaning firm that employs 160 people, lists the main issues that are dragging on the fortunes of his members: cost of finance and access to finance, the rising costs of fuel and energy – even before winter has started – and the burden of regulation.

And, as the amount of money available dries up, there is the problem of late payment, which Willox says is a “huge reason that companies are going down”.

While other business lobby groups have both small and large members – with membership often more dominated by the major firms who pay the largest fees – the FSB claims that only it can speak on behalf of the little guy, sometimes highlighting the friction that occurs in the David and Goliath world of UK plc.

Willox points his finger at big firms that are becoming increasingly reluctant to pay the bills to smaller suppliers on time. And when big customers don’t pay, the small firms get stuck between three bullies when they can’t pay HM Revenue & Customs (HMRC) or their bank.

“Normally it is big business to small businesses,” says Willox. “A sale is not a sale until it is paid for. It just needs a couple of big ones not to pay you, or to take a long time to pay. Late payment has been a big blow. The bank isn’t being flexible and nor is HMRC.

“If everyone would get out of this late payment situation, the loss of business would be a lot less – and there would be more jobs created and more businesses growing as well.”

So should legislation be brought in to bend the arm of late payers, if the benefits to the economy would be better?

No, he says, because more rules, regulation, directives and legislation are shibboleths that the FSB fights tooth and nail.

“We don’t need more regulation, thank you very much,” says Willox. He sighs when I point out the coalition government came to power on promises to cut red tape – a term that Willox himself thinks is “horrible”.

“Every government promises to tackle regulation,” he says wearily. “Yes they have tickled it, but it is just the sheer fact there are things that still come out every year.”

Willox is just as wary of the Scottish Government, which has won a number of fans such as transport tycoon Sir Brian Souter, industrials giant Jim McColl and former bank chief executive Sir George Mathewson.

Yet the SNP government is also viewed with increasing suspicion by other businesses, particularly over its recent health levy, which will cost large firms that sell both booze and cigarettes, such as Tesco, Sainsbury’s and Morrisons, £110 million over the next three years.

Willox guardedly says the FSB supports some of the Scottish Government’s policies and admits one of the benefits of working at Holyrood is that the lines of communication are shorter.

When the Scottish Government introduced its first attempt at a “Tesco tax” last year, the FSB’s stance was notably at odds with the other lobby groups representing the supermarkets and large retailers being targeted, such as the CBI and the Scottish Retail Consortium.

With several of its members being small retailers, there is seldom much love lost between local shops and the supermarkets, where the arrival of a Tesco Metro in a town often spells the end of local businesses.

But this time, after finance secretary John Swinney announced the much-more significant £110m “health levy” branded as the “son of Tesco tax”, Willox is more circumspect.

With the levy being targeted at major sellers of alcohol and cigarettes, there is a fear this sort of approach risks bringing with it “unintended consequences” that could open the way to the Scottish Government putting a tax on anything it simply doesn’t like, from fast food franchises to sweet manufacturers.

“By setting it in one direction will probably have unintended consequences, and go in a direction that nobody had thought,” says Willox.

I get the impression the FSB is leaving the fight over the health levy to the big boys’ lobby. The FSB will instead focus on other matters, such as the next round of tenders for business support organisation Business Gateway.

The FSB hopes the Scottish Government will use next year’s tendering exercise as an opportunity to reshape the gateway into an organisation that puts more resources to supporting existing businesses rather on start‑ups – and make more funding available.

“Business Gateway needs a bit more flexibility. They have targets to meet for start-ups, and most businesses would say if they have used them they have done a good job. There is a space between the start-ups and the current managed businesses. That space could be filled if the government contracts focused on delivering some one-to-one business support.”