Chamber
Plenary, 11 Jun 2008
11 Jun 2008 · S3 · Plenary
Item of business
Small Business Bonus Scheme
Small businesses are the lifeblood of our economy. The contribution that they make to the diversity, competitiveness and resilience of our economy is immense. In the Highlands and Islands, the extent to which small businesses provide the engine for the region's economy is perhaps even greater, helping to sustain communities in some of the remotest parts of the country.
There is no doubt that, wherever they are located, small businesses are experiencing the most challenging market conditions for several years. Like those of most members, my mailbag, surgeries and constituency meetings bear depressing testimony to the impact that high and spiralling fuel costs are having on individuals and households, and also on almost every small business. Added to the pressures created by a tight labour market, which inevitably pushes up the cost of attracting and retaining skilled staff in particular, the high cost of fuel has had a dramatic effect on business competitiveness. There is a case for saying that high fuel costs are likely to be with us for some time; there is even an argument that they present an opportunity—or at least a stimulus—for businesses to innovate. However, the short-term difficulties are serious; they should not, and cannot, be underestimated.
It is therefore not surprising that the small business bonus scheme has been welcomed. As pointed out by the Federation of Small Businesses—the principal architect of the scheme—the scheme has provided
"much needed breathing space during a difficult economic period."
It follows on, of course, from the rate reduction introduced by Nicol Stephen under the previous Executive—a scheme estimated to save Scottish businesses around £180 million a year.
As with the earlier reduction, the bonus scheme will enable small businesses to take decisions that best suit their specific circumstances and from which they will derive most benefit. There may well be common approaches, but—as Derek Brownlee said—the decisions will be individual decisions. I have no difficulty with that: Government starts to second-guess those sorts of business decisions at its own and the economy's peril.
However, the Government must have an accurate picture of the impact of its policy interventions on the economy. The Cabinet Secretary for Finance and Sustainable Growth has talked a great deal about his commitment to focusing on outcomes rather than inputs. I know that Mr Swinney is deadly serious about that, because the theme was picked up by Alex Neil in the Finance Committee yesterday—and echoed by Derek Brownlee. In a round-table discussion on improving the budget process, Mr Neil expressed frustration at what he said was a fixation with throughputs. He demanded that greater attention be paid to measuring impacts and outcomes. He was right. That is why I believe in an assessment of the impact not only of the bonus scheme that this Government has introduced but of the rate reduction introduced by the previous Executive towards the end of the previous session of Parliament. The Liberal Democrat amendment calls for such an assessment.
There is no doubt that, wherever they are located, small businesses are experiencing the most challenging market conditions for several years. Like those of most members, my mailbag, surgeries and constituency meetings bear depressing testimony to the impact that high and spiralling fuel costs are having on individuals and households, and also on almost every small business. Added to the pressures created by a tight labour market, which inevitably pushes up the cost of attracting and retaining skilled staff in particular, the high cost of fuel has had a dramatic effect on business competitiveness. There is a case for saying that high fuel costs are likely to be with us for some time; there is even an argument that they present an opportunity—or at least a stimulus—for businesses to innovate. However, the short-term difficulties are serious; they should not, and cannot, be underestimated.
It is therefore not surprising that the small business bonus scheme has been welcomed. As pointed out by the Federation of Small Businesses—the principal architect of the scheme—the scheme has provided
"much needed breathing space during a difficult economic period."
It follows on, of course, from the rate reduction introduced by Nicol Stephen under the previous Executive—a scheme estimated to save Scottish businesses around £180 million a year.
As with the earlier reduction, the bonus scheme will enable small businesses to take decisions that best suit their specific circumstances and from which they will derive most benefit. There may well be common approaches, but—as Derek Brownlee said—the decisions will be individual decisions. I have no difficulty with that: Government starts to second-guess those sorts of business decisions at its own and the economy's peril.
However, the Government must have an accurate picture of the impact of its policy interventions on the economy. The Cabinet Secretary for Finance and Sustainable Growth has talked a great deal about his commitment to focusing on outcomes rather than inputs. I know that Mr Swinney is deadly serious about that, because the theme was picked up by Alex Neil in the Finance Committee yesterday—and echoed by Derek Brownlee. In a round-table discussion on improving the budget process, Mr Neil expressed frustration at what he said was a fixation with throughputs. He demanded that greater attention be paid to measuring impacts and outcomes. He was right. That is why I believe in an assessment of the impact not only of the bonus scheme that this Government has introduced but of the rate reduction introduced by the previous Executive towards the end of the previous session of Parliament. The Liberal Democrat amendment calls for such an assessment.
In the same item of business
The Presiding Officer (Alex Fergusson):
NPA
The next item of business is a debate on motion S3M-2102, in the name of Jim Mather, on the small business bonus scheme.
The Minister for Enterprise, Energy and Tourism (Jim Mather):
SNP
I am delighted to open this debate on the impact of the small business bonus scheme. The introduction of the new scheme on 1 April marked an important stage ...
Johann Lamont (Glasgow Pollok) (Lab):
Lab
The minister said that, as a listening Government, it received the message from the business community that what was happening was a disincentive. Is he awar...
Jim Mather:
SNP
I have not heard that message directly from the housing associations. We deal with them in my constituency as a key sector in the economy. I look forward to ...
John Park (Mid Scotland and Fife) (Lab):
Lab
Will the minister explain how he can guarantee that there will be increased investment from smaller companies that will lead to more jobs and greater economi...
Jim Mather:
SNP
I regret that John Park has a zero-sum game mentality. The Government is putting business in the driving seat, and business has a sense of obligation. Let us...
Tavish Scott (Shetland) (LD):
LD
On the minister's point about his discussions with business, is his position on regulation still that it should be one in and one out?
Jim Mather:
SNP
We have a mature approach with the regulatory reform group. Better regulation is the objective and the process, and it has to be the focus. I can assure Tavi...
John Park:
Lab
Would it be appropriate for you to make available the names of the companies that you are talking about today? It would be useful for us in the wider debate.
Jim Mather:
SNP
There are plenty examples from around the country. I advise John Park to do what I did the other day, which was to walk around Oban and Rothesay and talk to ...
The Presiding Officer:
NPA
Before I call Elaine Murray, I remind all members that contributions should always be made through the chair, which means referring to members by their chose...
Elaine Murray (Dumfries) (Lab):
Lab
I ought to start by declaring an interest as one of the people who has received a small business bonus. That is probably true of many members who run offices...
Gavin Brown (Lothians) (Con):
Con
In 2000, Jack McConnell ended the uniform business rate that applied to both Scotland and England. Was that a good result for businesses in Scotland?
Elaine Murray:
Lab
As I was just about to explain–and as has been long rehearsed over the years—business rates comprise two factors: poundage, which at that point increased in ...
Derek Brownlee (South of Scotland) (Con):
Con
The minister is often attacked—not without cause—for bewildering people with management gobbledegook, but today I will forgive him his mention of Deming beca...
Elaine Murray:
Lab
I offer a brief correction. I said:"Tax cuts are always popular with the beneficiaries."
Derek Brownlee:
Con
I stand corrected. On the subject of correction, the establishment of a town centre regeneration fund was a policy in the Conservative manifesto, as Elaine M...
Liam McArthur (Orkney) (LD):
LD
Small businesses are the lifeblood of our economy. The contribution that they make to the diversity, competitiveness and resilience of our economy is immense...
Derek Brownlee:
Con
I accept the logic behind Mr McArthur's argument. Do the Liberal Democrats think that that logic should also apply to other Government interventions to assis...
Liam McArthur:
LD
I would not disagree with that point, but it does not seem to reinforce the point that Derek Brownlee has just made in his speech. Good governance and sound ...
Gavin Brown:
Con
Will the member give way?
Liam McArthur:
LD
I am sorry, but I must make progress.I am astonished that, amid their self-congratulation, Mr Brownlee and his colleagues cannot bring themselves to support ...
Gavin Brown:
Con
Will the member give way?
Liam McArthur:
LD
No.Our amendment also provides the basis on which to address the concerns that underlie the Labour amendment. Skills, energy efficiency and, of course, physi...
Roseanna Cunningham (Perth) (SNP):
SNP
I have looked forward to the debate for some time, and not just because I, too, can declare as an interest the fact that my constituency office is saving mon...
John Park (Mid Scotland and Fife) (Lab):
Lab
I have been consistent on this issue since entering Parliament last year and I made my views known in one of my first speeches. Reductions in business rates ...
Roseanna Cunningham:
SNP
Just exactly what size of business does the member think that he is talking about when he talks about fleets of cars? Most of the businesses benefiting from ...
John Park:
Lab
That is why we want to give those businesses more investment and ensure that the public infrastructure is there to support their businesses, rather than just...
Alasdair Allan (Western Isles) (SNP):
SNP
As other members have done, I declare an interest in as much as my office pays rates.Whatever our arguments today, there can, I hope, be no disagreement abou...
David Whitton (Strathkelvin and Bearsden) (Lab):
Lab
Just as the sun shines, I stand up. Does Mr Allan think that it is an economic benefit to the Western Isles that the minister turned down the Lewis wind farm...