AFTER some of the less thoroughly thought through measures in the last Budget unravelled so publicly, the mood this year was against eye-catching gimmicks.
Coupled with weak growth forecasts and eye-watering borrowing figures, we needed a sensible, no-nonsense Budget aimed at getting some life back into the economy.
Key to this is rebuilding confidence. And it won’t come back while unemployment and the fear of it casts a shadow across every business and family spending decision.
Encouraging as yesterday’s Scottish unemployment figures were, there’s a long way to go. If you’re worried about losing your job, you think twice before arranging a night out, never mind a weekend away. Then, with bookings down, the restaurateur or hotelier puts off investing in crockery or bedrooms and examines the wage bill. Their suppliers, in turn, faced with a drop in orders, will look at their own staff costs, which creates even more worried workers who won’t spend and the cycle repeats.
It is, therefore, most welcome that the Chancellor listened to the Federation of Small Businesses and made it more affordable for smaller firms to get hiring. By cutting up to £2,000 from its employer’s national insurance contribution (NIC) bill, a business can create four minimum wage jobs or one on £22,000. Some modelling done by the FSB suggests giving employers with fewer than four members of staff an NIC holiday for their next three recruits would create an extra 45,000 jobs and £1.3 billion in economic activity over three years.
Of course, these businesses won’t be employing anyone if they run out of cash and go bust. So, the announcement that the new Business Bank will run a £300 million investment scheme, to diversify the finance options available to small businesses, is welcome in principle, if hazy on detail.
Finally, it’s good, if not wholly unexpected, news that September’s planned 3p fuel duty rise has been cancelled. That said, simply postponing increases doesn’t give businesses and consumers the certainty they need to plan their finances and the sooner we take the politics out of fuel prices the better.
If this Budget marks a determination to harness small businesses’ job creation and growth potential, it could prove more significant than it first looks.
• Colin Borland is head of external affairs for the Federation of Small Businesses in Scotland