Scotland business

Autumn Statement: Scottish business response

George Osborne giving his Autumn Statement
Image caption The chancellor's statement prompted a mixed reaction from business leaders

Scottish business leaders have given a mixed reaction to Chancellor George Osborne's Autumn Statement.

A new emphasis on infrastructure spend was broadly welcomed.

But transport alliance Transform Scotland attacked the statement as being "little more than a handout" to road users.

And there was concern over the chancellor's plans to press ahead with a business rate rise next April.

Institute of Directors Scotland

Executive director David Watt said the IoD hoped the increased spend on infrastructure would have positive implications for Scotland in terms of proportional spend.

He said: "We would support any initiative that improves vital transport links between Scotland and London, and would encourage the Scottish government to match the funds committed by George Osborne to improve the Caledonian Sleeper service.

"This is a vital service for the Scottish business community and particularly important in light of the frequent issues, and increasing costs, that air travel has experienced."

Mr Watt said his organisation welcomed the chancellor's initiative to force the banks to loan to small business and to reduce the interest rates that they will pay.

He added: "SMEs are the lifeblood of our economy and over the past few years have lacked vital lending support required from the banks to ensure survival and encourage growth."

Scottish Chambers of Commerce (SCC)

Chief executive Liz Cameron said the statement contained "much to welcome".

She said: "The decision to cancel January's planned 3p increase in fuel duty is good news, but an increase of 3p in August 2012 is still on the cards and it is time that the fuel duty escalator was abandoned once and for all.

"The National Loan Guarantee Scheme, intended to reduce the cost of borrowing by 1% for small and medium-sized businesses, is a positive initiative from government and could boost borrowing for investment.

"Similarly the Business Finance Partnership could present a welcome easing of the credit squeeze being felt by many mid-size businesses.

"Significant additional infrastructure spend in England ought to result additional resources for the Scottish government, as will the announcement of £1bn in England to tackle youth unemployment.

"With the Scottish government's draft budget for next year still out for consultation, this may open up the opportunity to further enhance the spending options for Scottish ministers, with a clear focus required on supporting Scottish businesses and creating employment opportunities."

However, Ms Cameron said the decision to continue with plans to increase business rates by 5.6% in April was "extremely disappointing", despite a new scheme allowing businesses to defer 60% of the rise over the following two years.

She added: "However, this presents the Scottish government with a superb opportunity to counter this damaging decision by the UK government and apply a lower increase to Scottish business rates next year."

CBI Scotland

Assistant director David Lonsdale said the statement contained some welcome announcements, including help to reduce the cost of growth capital and reductions in energy bills for heavy industry.

He added: "We look forward to early clarity from the Scottish government on whether it will similarly allow firms operating in Scotland to defer a portion of the hefty rise in business rates bills that is expected to come into effect next April.

"We will also be looking to the Scottish government to ensure that the Barnett consequentials emanating from the chancellor's statement are directed towards GDP-enhancing investments and reversing its two business rate tax rises on retailers and firms with empty premises."

The Scottish Federation of Small Businesses (FSB)

Policy convener Andy Willox said the cancellation of the proposed fuel duty increase was to be welcomed but added it would "hardly fill with confidence businesses and families struggling to pay at the pumps at the moment".

He said the intention behind the chancellor's proposals to boost lending to businesses was to be applauded.

He added: "It is a good thing that he recognises that there's still small and medium-sized businesses who cannot get access to flexible, affordable finance.

"However, some small firms will roll their eyes when they discover the banks will continue to be gatekeepers for much of this state-backed lending.

"The government must therefore go further to promote the emergence of alternative forms of finance and greater competition in the banking sector."

The Institute of Chartered Accountants of Scotland (Icas)

Icas assistant tax director Elspeth Orcharton said the stakes were high for the government to strike the right balance between the short, medium and long term.

She continued: "The chancellor placed his bets accordingly on two of the key economic growth drivers, infrastructure and small businesses.

"Cancelling the fuel duty increase originally planned for January will have a direct impact on employability and household spending.

"Thinking beyond the current election cycle, the main direction of travel is still firmly in the government's sat nav, albeit a longer route may be taken.

"Whether we like it or not it is probably that direction of travel that has stopped the UK government's debt market rating following those of Ireland, Greece and Italy."

Scottish Federation of Housing Associations (SFHA)

SFHA said it welcomed the new emphasis on infrastructure spend in the statement on the economy.

It urged the Scottish government to boost funds available for new-build affordable housing this year, using the extra funding made available to Scotland as a result of funding announcements contained in the statement.

SFHA chief executive Mary Taylor said: "By shifting the emphasis towards capital expenditure in his Autumn Statement, the chancellor has recognised the important role of building projects in boosting the economy.

"Building affordable housing provides a unique boost to jobs and struggling local economies, as well as tackling housing need.

"We urge the Scottish government, in the wake of the Autumn Statement, to reverse the 30% cut to this year's affordable housing budget.

"This would avoid the prospect of the number of new homes further plummeting, with construction activity and all the associated benefits stalling in communities across Scotland."

She added: "Our message to the Scottish government is - build homes, stimulate growth."

Transform Scotland

The sustainable transport alliance attacked the statement as being "little more than a handout" to road users.

Transform Scotland director Colin Howden said: "The fact is that the chancellor could, for a fraction of the price of the fuel tax handout, have avoided the public sector pay cap.

"The savings from public sector pay restraint announced today come to £1.75bn while the fuel tax give-away costs the Exchequer almost £5bn.

"It's welcome that rail fares are going to be capped at RPI+1%. This represents a victory for the 'Fair Fares Now' campaign.

"But, for Scotland, this will only benefit Anglo-Scottish travellers as Scottish rail fares are already capped at RPI+1% under the ScotRail franchise."

He added: "The £50m promised for new sleeper carriages is of course welcome -- and far more sensible than the suggestion by Transport Scotland, in its ongoing ScotRail consultation, that sleeper services be cut back."

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