The SNP government can’t afford not to boost business support - Richard Jacobs

The recent UK Government budget is a useful case in point. Yes, it is true that many of the measures announced by Rachel Reeves were not as bad as Whitehall briefings had indicated.

Maintaining the Business Asset Disposal Relief, as well as not hiking capital gains tax as significantly as many had feared, will be welcome news to Britain’s businesses, but there is little else to celebrate.

The daunting hike in employer national insurance contributions, which accounts for more than half of the £40 billion in tax rises announced by the Chancellor of the Exchequer, will be particularly harmful to profitability, wages, headcount – or all three.

Above all, placing such significant burdens on business will hurt the UK Government’s primary objective – improving economic growth.

The great frustration here is that there are many measures that could be introduced with little or no cost to the public purse, particularly to help entrepreneurs scale up and grow their business.

Firstly, we need to see a coalescing and streamlining of the government support available for small businesses. As it currently stands, the landscape is extremely fragmented, complex and multi-layered.

Simplifying the methods through which businesses can access government support would go a long way to boosting growth. Equally, we need a step change in business culture in Britain, which currently condones delayed and late payments, often sending start-ups to the wall.

Secondly, we need greater government support to recognise innovation and encourage disruption, including more favourable tax credits for research and development. This will not only give smaller firms the opportunity to compete with larger, more established businesses, but will also keep the UK at the forefront of the technological revolution.

Thirdly, we need to see greater government support for small businesses to access and exploit international markets. This is particularly the case for Scottish firms, who have many natural strengths in the global marketplace. To deliver this, we must prioritise a closer economic relationship with the EU, while also taking advantage of the opportunity to strike new trade deals abroad, particularly in east Asia and the Middle East.

Such changes would support economic growth by helping businesses themselves to grow – and this is an area where the UK has traditionally struggled. According to a recent study by the University of Warwick Business School, half of all new businesses fold within three years, and those that do continue to operate find themselves increasingly unable to scale up. In fact, the proportion of small firms expanding their workforce fell by an extraordinary 40 per cent between 2012 and 2022.

With an additional £3.4 billion in Barnett consequentials, it is now over to the Scottish Government to see if they can do more to support businesses here to grow and expand. As a company with our global headquarters in Scotland, Alba Partners knows the strength of Scotland’s start-up community in sectors as diverse as renewable energy to fintech, and how many of those businesses are ready to expand if only they receive the right support.

By implementing the measures outlined here – and generally treating business as a partner – the Scottish Government can use its budget on December 4 to take a major step towards unlocking the growth our economy and public services so desperately need.

Richard Jacobs, CEO of Alba Partners