Reaction: Autumn Statement's 110 business-boosting measures receive mixed response from Scottish trade bodies

Business groups north of the Border have given a tentative thumbs-up to the latest Autumn Statement, which has laid out measures to help boost productivity and investment, and cut tax and red tape burdens for small businesses and the self-employed.

However, several have highlighted where they feel more action is needed, including calls for Scotland to take key business-supporting steps when it reveals its 2024-25 Budget in December.

Chancellor Jeremy Hunt in his Autumn Statement speech announced the creation of 110 measures to boost business investment by £20 billion a year within a decade. “That is the biggest-ever boost for business investment in modern times,” he said.

Vishal Chopra, head of tax for KPMG UK in Scotland, said: “Businesses will welcome Hunt’s 110 new growth measures, including making full expensing for [capital expenditure] permanent and others designed to remove planning red tape, support entrepreneurs, unlock foreign direct investment, and cut business taxes.”

Chancellor Jeremy Hunt has unveiled what he says is 'the biggest-ever boost for business investment in modern times. Picture: Stefan Rousseau - WPA Pool/Getty Images.

And Andrew McRae, the Federation of Small Businesses’ (FSB) Scotland policy chair, said: “It was good to hear the Chancellor’s strong recognition of the contribution small businesses and the self-employed make to our economy and communities,” he stated. The FSB executive also welcomed a crackdown on the longstanding bugbear of late payments, with the Chancellor – who himself ran a small firm for 14 years – obliging any company bidding for large government contracts to as of April 2024 show that they pay their own invoices within an average of 55 days, and this will reduce progressively to 30 days.

McCrae said: “He has listened to us on late payment... Nearly six in ten businesses in Scotland are being forced to wait to be paid for work already done – up from five in ten the previous quarter. We’re also pleased to see some breathing space on National Insurance Contributions for the self-employed. We’ve long campaigned for the abolition of the Class II element of National Insurance and the reduction of Class IV, and we are therefore pleased that the Chancellor has acted.”

He also addressed the continuation of targeted rates reliefs for smaller retail, leisure, and hospitality players in England for another year, a move he deemed “great news for our fellow small business owners south of the Border in these hard-pressed sectors” – and which Hunt said followed extensive talks with the FSB.

McCrae added: “The particular inflationary and other economic challenges these firms continue to face underlines the case for the reintroduction of similar reliefs in Scotland, where they’ve not been available since July 2022. We’ll be pressing this case with the Scottish Finance Secretary as she draws up next month’s Scottish Budget.”

Chancellor Jeremy Hunt and Prime Minister Rishi Sunak at a recent visit to a college. Picture: Daniel Leal-WPA Pool/Getty Images.

This was echoed by Dr Liz Cameron, chief executive of the Scottish Chambers of Commerce, who said the UK Government extending its 75 per cent business rates discount for retail, hospitality, and leisure firms was not replicated by the Scottish Government in this past financial year “to the great disappointment of these sectors”. She added: “We urge the Scottish Government to now listen to the urgent calls of industry for this measure to be replicated in the upcoming Scottish Budget so that Scottish industry is not left behind.”

David Lonsdale, director of the Scottish Retail Consortium, also commented on the issue: “The Chancellor has flubbed the chance to freeze the business rate. This short-sighted decision means the medium-sized and larger retailers across the UK who underpin the vitality of our town and city centres and employ the vast majority of retail workers are now staring down the barrel of a hefty £540 million hike in their business rates bills from next spring. Hopefully, the Scottish Government’s Finance Secretary will take a more enlightened approach and go further and freeze the business rate or at least blunt any uplift in next month’s Scottish Budget.”

However, Scotland had some applause for Hunt’s steps to support start-up and investor communities. David Ovens, joint MD at Edinburgh-based business angel syndicate Archangels, said the merger of the existing research and development (R&D) Expenditure Credit and SME schemes “provides some simplification” to the tax regimes of R&D-intensive, innovation-focused businesses. “We’re also pleased to see a ten-year extension of the sunset clause for the Enterprise Investment Scheme (EIS) to 2035,” he continued.

Arran Dewar, executive director of Scottish impact investor SIS Ventures said: “It’s encouraging to see the UK Government prioritising investment into start-ups, scale-ups, and spin-outs. Within today’s broad package of investment for innovation, we’d also like to see further consideration given to prioritising investment for those ideas and businesses which are delivering positive impacts for people and planet, not just profit.”

Another measure Hunt outlined was extending “full expensing”, whereby for every £1 million a company invests, it get £250,000 off its tax bill in the same year. SCC boss Cameron said: “Our latest research indicates that the number of firms pausing investment decisions in Scotland has reached the highest levels since 2016. It was welcome that the Chancellor chose to follow our call to make the extension of full expensing permanent to give business much-needed long-term certainty. This will be key to unlocking investment across the economy.”

However, Claire McCracken, partner at law firm Weightmans based in Glasgow, was less effusive, stating: “Making the full expensing scheme permanent is a classic case of putting the cart before the horse. In an environment of high-interest rates, weak demand and expensive input costs, the reality is that many firms simply don’t have the money available to make sizeable investments that would help shrink their tax bill under this relief. Overall, given the strength of the headwinds buffeting UK Plc, this Autumn Statement feels like window-dressing, and not the ambitious action that businesses really need.

Cameron said in summary that the Autumn Statement brought “some welcome measures to incentivise investment and bring people back into work”. However, she added: “The Chancellor today has nudged the dial in the right direction – but business needs more.”