Official Report 960KB pdf
Our final piece of business today is a members’ business debate on motion S6M-13753, in the name of Audrey Nicoll, on celebrating the Federation of Small Businesses’s 50th anniversary. The debate will be concluded without any question being put.
Motion debated,
That the Parliament congratulates the Federation of Small Businesses (FSB) on celebrating its 50th anniversary on 15 September 2024; understands that micro and small businesses comprise almost all enterprises in Scotland, at 98% of the total, and employ 900,000 people with a turnover of £82 billion; further understands that, since its formation in 1974 in response to what it sees as unfair increases in national insurance for the self-employed by the UK Government, which was later repealed, the FSB has gone on to become the largest direct business membership organisation in the UK, and recognises what it considers the vital non-profit, non-party-political business services that it offers, including advice, financial expertise, support and a powerful advocating voice to government at all levels, as well as its aim to achieve changes for 5.5 million small businesses and the self-employed.
17:09
I am delighted to bring to the chamber today this debate celebrating the 50th anniversary of the Federation of Small Businesses. I am grateful to colleagues for signing the motion, and to those who will speak today. I look forward to hearing their contributions.
First, I acknowledge that we are having this debate straight after members received an update on the closure of Grangemouth refinery. I was pleased to hear the cabinet secretary acknowledge the impact of that on small businesses, and I know that organisations such as the Federation of Small Businesses stand ready to offer as much support as they can.
Talking of the FSB, I am delighted that we are joined this afternoon by colleagues from the organisation—David Groundwater, Stacey Dingwall, Euan McGrory and, of course, Colin Borland. It is nice to see them in the gallery. I also extend my thanks to Mike Duncan, the north-east Scotland region development manager, for his invaluable support to me, particularly during my recent small business spotlight, about which I will say more shortly.
I shamelessly dedicate today’s debate to my dad. He was a greengrocer in Aberdeen who, like many small business owners, worked long hours, supported a local supply chain and, most of all, knew his community like the back of his hand. If you are listening, dad, I always thought that you massively undercharged for fresh Perthshire strawberries every summer.
Founded in 1974, the Federation of Small Businesses was established in response to an increase in national insurance for self-employed workers by the then United Kingdom Labour Government. That measure has since been repealed, and now, 50 years later, the FSB is the UK’s leading business campaigner and has proven to be a powerful voice in Government through its policy work and political engagement. FSB members benefit not only from the organisation’s cross-party campaigning but from other services that it provides, including tailored support, research, financial expertise and specialist advice.
Today, in Scotland, small businesses make up almost the entirety of the economy, accounting for 98 per cent of the business population. Those 335,000 businesses employ 900,000 people, with an annual turnover of £82 billion.
Scotland’s population of small businesses and self-employed people is resilient, diverse and innovative. From traditional retailers and grocers such as my father, to carbon capture technologists and spaceports, today’s small businesses are continuing Scotland’s long history of innovation and invention.
Almost half of small businesses now work from home in areas such as professional, technical and scientific activities. Digital nomads are increasing in number, offering business owners the flexibility to travel while being able to work remotely with access to technology and the internet.
My Aberdeen South and North Kincardine constituency has an amazing variety of small businesses and, over recess, my summer business spotlight was the perfect excuse to visit some of them. Those businesses included Farm Stop, which is an expansion of a busy working farm that offers animal interaction or lots of cuddles with piglets and lambs and is the inspiration of Christina and Tom. I also met Megan Falconer, who creates unique silver jewellery at the amazing Deemouth Artist Studios. Another business is the Bread Guy, which sells artisan breads and cakes across the city and was created by local lad Gary McAllister.
I now want to get into the detail of local businesses’ plans for growing and diversifying, what is working and what the challenges are. It was apparent that the Scottish Government’s small business bonus scheme was—and I quote—“a life saver” for many businesses. Having the confidence and means to diversify also enabled businesses to react to changing consumer behaviour and to adapt and expand their offering accordingly.
However, a reality for many small businesses is that Brexit has been extremely damaging, restricting export opportunities, increasing costs and forcing businesses to source materials from cheaper overseas markets. For one business, planning was creating a blockage to its expansion plans, while, for another business owner, a lack of access to affordable studio space to expand her Scottish knitwear business might mean her having to leave Scotland.
On a positive note, we cannot talk about support for small businesses without acknowledging their presence in the energy supply chain across Scotland, especially across the north-east. They create vital job opportunities and help grow our economy—and I am talking not only about those working in what I will call the hard-hat space but about events planners, lawyers, architects, programmers, digital content developers and many more.
I am particularly pleased to note that the programme for government outlines a commitment to supporting women starting and scaling businesses, and to supporting our universities in continuing with world-leading research and innovation that will lay the foundations for small business development across Scotland. Under the Scottish Government’s Scottish growth scheme, businesses can access financial support through a number of initiatives such as DSL Business Finance, Business Loans Scotland and Techstart Ventures. Initiatives such as those provided by the Scottish Government will help grow micro and small businesses, and will allow for innovation within their respective sectors.
Despite the economic conditions following Brexit and the Covid-19 pandemic, the small business index reports that in the first quarter of 2024, the number of Scottish businesses that expect their performance to improve over the coming quarter is at its highest level since 2022. That certainly shows encouraging signs of recovery, but the Federation of Small Businesses has made it clear that, in order to take full advantage of that, the Scottish Government needs to continue to prioritise measures aimed at economic growth. Even in the current challenging fiscal environment, I am confident that that will happen.
Scotland’s small businesses will always remain important to our economy and to local communities. The FSB recognises that, and it has been a great asset to small businesses across Scotland. For half a century now, the FSB has armed its members with necessary knowledge and tools to help them grow and create sustainable businesses. Likewise, the FSB has been a powerful voice in Government, championing positive change for small businesses. I very much look forward to working alongside it and to ensuring that I play my part in supporting my local small businesses, which I will join next month for a business networking event in my constituency.
In closing, I congratulate the Federation of Small Businesses on its 50th anniversary, and I look forward to its future contributions over the next 50 years.
17:18
I thank Audrey Nicoll for bringing this debate to Parliament.
For the past 50 years, the FSB has grown to become the United Kingdom’s largest membership organisation for small businesses and the self-employed. It provides its members with vital services, including access to finance, business banking, legal advice and specialist support to help their businesses flourish.
Last year, my Rutherglen constituency was home to around 2,000 registered businesses, the vast majority of which are small businesses of all varieties. Those small businesses are the lifeblood of Scotland’s economy and the backbone of our communities across the country. Many are flourishing, because of the uniqueness of what they offer, despite the competition from multinational companies and superstores. Small businesses keep our high streets alive and provide a variety of bespoke and artisan services and personal service that large companies cannot compete with. They are not just sources of employment but places where people can meet, socialise and form deeper connections within their communities.
The Control Panel in Rutherglen, which was established more than 24 years ago as a supplier of computer equipment, repair and upgrading services, provides a much-valued personal service, not only using its expertise to keep customers’ information technology equipment running smoothly but offering bespoke custom personal computers built from the case up. There is also Strachan Craft Butchers in Blantyre, which has been operating for seven years now. At the end of last year, it was named training partner of the year at the industry awards, honoured for its commitment to staff progression and supporting apprentices.
Finally, I would highlight the Wee Gurkha Curry House, a Nepalese restaurant that opened earlier this year in Blantyre. This award-winning, family-run business was previously based in East Kilbride but has now moved to new, larger premises, where it has quickly established itself as a much-loved and appreciated local business. Those are just three examples from my constituency—all at different stages of development—of the kinds of small businesses that make up our communities, and make those communities what they are.
Other small businesses are not only making an impact on the local economy and providing jobs in our communities, but making their mark on the world. Watt Laser, in my constituency, is a small business that is becoming a leader in its field. It exports all around the world, and it is so close to the cutting edge of technology that some of the equipment that it demonstrated when I visited the business recently is one of a kind.
SMEs are often embedded in the communities in which they operate. They range from non-profit-making entities such as credit unions, including 1st Class and Thistle credit unions in my constituency, to businesses such as MDH Recruitment—whose social values see it donate to many local good causes—that are working with local schools and supporting our young people, or are sponsoring local and youth sport.
Resilient, productive businesses are the bedrock of Scotland’s economy, which is why I strongly welcome the fact that helping businesses to succeed lies at the heart of this year’s programme for government. The programme includes specific actions around increasing the number of women who are creating and scaling businesses, and widening participation in business from other groups that are underrepresented. That is a cause championed by my constituent Bayile Adeoti, herself a successful entrepreneur, and those aims are priorities for the FSB, too, which further underlines the valuable role that the organisation plays in supporting its members.
Small businesses thrive when they are well supported, and our wider communities thrive when those businesses are doing well. I commend the work of the FSB in moving towards that aim, and I wish it well for the future.
17:22
I congratulate Audrey Nicoll on her motion and on bringing the debate to the chamber. I am sure that we will hear consensus among members on all sides of the chamber on the valuable work that is being done by the Federation of Small Businesses, which is celebrating a remarkable anniversary—50 years in business.
Scotland is well served by a range of business organisations including the Confederation of British Industry in Scotland and Scottish Chambers of Commerce, and a range of sector bodies such as the Scottish Tourism Alliance, the Scottish Licensed Trade Association, the Scottish Retail Consortium, the Scottish Grocers Federation and many more. We welcome the inputs from all those different trade bodies.
I think that it is fair to say, however, that few of them have achieved the reach, and have given us the policy contribution, that the Federation of Small Businesses has in the many years for which it has been practising. That includes, in particular, its contribution to the work of this Parliament over the past 25 years. It has been my pleasure to work over a number of years with the FSB and its changing members of staff. Like Audrey Nicoll, I welcome representatives of the FSB to the public gallery tonight, and I recognise the valuable work that they have done.
Audrey Nicoll was right to point to the importance of small businesses, which make up 98 per cent of the economy and are vital to our economic future as a nation. Over the years, members have been lobbied by the FSB—indeed, it has lobbied us in the contribution that it has made to this debate—on a range of issues including business rates, taxation, regulation, access to skills and the importance of infrastructure.
I was very interested to read that, as Audrey Nicoll mentioned, the FSB had its origins in lobbying against what it saw as unfair increases in national insurance for the self-employed by the UK Government back in 1974. That campaign was successful, because the provisions in question were later repealed by the Government.
I will just mention two issues that are relevant to the FSB’s work. The first is the small business bonus scheme, to which Audrey Nicoll referred. I well remember the genesis of that particular policy, for which the FSB campaigned over a number of years. Back in 2007, it was in the Conservative manifesto, and it was in the Scottish National Party’s manifesto, too, so we worked together on it. That does not happen very often these days, but at the time, the Conservatives, in Opposition, worked with the new SNP minority Government to bring in the small business bonus scheme. We were pushing the SNP to go further than it originally intended, but there was a shared ambition by two parties on different sides of the chamber to ensure that the scheme was introduced. It has been successful, and it has continued ever since; indeed, it has been worth thousands of pounds to small businesses across Scotland.
We have had many debates in the chamber on an issue that we will all recognise: the decline of retail and of the traditional high street. The situation would, however, be many times worse, were it not for the small business bonus scheme, which has allowed small businesses to continue to trade from retail premises in our local high streets in our towns and villages.
I know that there is debate about the scheme, and some members in the chamber will argue that it is not good value for money and should be scrapped. My view is that it is vital to small business and the health of our retail centres, and I would be very reluctant to see the end of the scheme, which has been a real success story for the FSB.
I will briefly mention the issue of regulation, because the FSB has been very effective in pushing back against excessive regulation of small business. We have seen new laws brought in to implement the deposit return scheme, the regulation of short-term lets and restrictions on alcohol sales and marketing, but there has been no rigorous assessment of their impact on small businesses. The FSB has quite rightly highlighted its concerns about that, and we—certainly those of us on the Conservative side of the chamber—will continue to articulate the issues and concerns that it has raised.
To conclude, I would say that it has been a very successful first 50 years for the Federation of Small Businesses, and I look forward to working with the organisation over the next half century ahead.
17:27
I, too, congratulate Audrey Nicoll on bringing the debate to the chamber, and I thank her for doing so, because it gives us a fantastic opportunity not just to celebrate the 50th anniversary of the FSB but to talk about the critical work that it does and, more broadly, the importance of small business to our economy and our communities.
At this point, I declare an interest: I am a one-time small business owner and I am currently a director, as well as a sometime member of the FSB. The debate is therefore important to me in terms of not just policy but personal interest. That is the most important thing that I want to say.
I thank Audrey Nicoll for highlighting her personal connection with a family business, as the daughter of a grocer. There are other daughters of grocers from parties on other sides of the chamber that we might not want to mention, but I share that sense of a personal connection with small business. Being the child of a small business owner often meant occupying myself in the stockroom; I enjoyed playing with price guns as a child.
I thank the member for his kind comments. I think that we have both made the point that there are people behind these businesses. Many members in the chamber will have friends and family members who work in small businesses, and it is important to recognise the hard-working people behind such businesses.
I could not have put it better myself. We can often make the mistake of thinking that business is all about big business. Big business has an important role, but small business is about people. Small businesses are often very personal—running them can be frustrating and lonely, and decisions can be difficult because there is only the owner there to make them. However, it can also be exciting and rewarding, because those involved get to work with other people, and critically—as we heard from a number of members, including Clare Haughey—small businesses are often at the heart of communities. If we take small business out of those communities, what is left? Small businesses provide people with what they need day to day; they provide human contact; and they are often a source of local information.
We need to take small business more seriously and look at some aspects again. For example, Scotland’s birth rate for businesses is slightly lower than the rate in the rest of the UK, and we should be asking how we can encourage more people to go into business. Likewise—this is an issue across the country—our growth rate for small businesses is slightly lower than that in many similar countries, so we need to ask ourselves why that is and what more we can do.
Murdo Fraser made a good point about regulation. We need to think about whether regulation is helping small business or whether it gets in the way. Critically, we need to think about whether small business has been at the forefront when regulation has been considered. Are our support mechanisms and agencies appropriate for small businesses? We could do much more to help small businesses to adopt technology and access the skills regime. We also need to look at investment.
Does Daniel Johnson agree that our Parliament could perhaps spend more time discussing the very questions that he usefully raises in the debate, and less time on some of the other issues that we discuss in this place?
I will give the half-full version in answer to that. We should absolutely be talking more about small business, because small businesses are not just at the heart of communities; they can also be at the heart of growth in the economy.
Investment is undoubtedly difficult for small business, and we need to look at whether we can do more to support businesses through Government-backed investment. In addition, we can consider doing things to help to bring in private investment and to help businesses to develop skills for self-investment.
Procurement also needs to be addressed. Time and again, we hear from the FSB that the current procurement situation is incompatible with the realities of running a small business. We need to provide access to procurement. Above all else—this is my overarching message—I encourage all members to engage with small businesses in their area and, as we pass laws and engage with policy, let us ensure that there is much greater understanding of small businesses. In that way, we can make sure that we have stronger communities and a stronger economy.
17:32
I take a moment to congratulate the Federation of Small Businesses on its 50th anniversary and welcome its representatives to the public gallery.
I thank all the organisations that have provided briefings for the debate, and I thank Audrey Nicoll for bringing such an important debate to Parliament. As with her family, my late father and mother also started from a small grocery business, in the west end of Glasgow in the 1970s, so I, too, know well the importance of small businesses not just to the economy but to communities.
Since the FSB was established in 1974, it has been the leading voice of 5.5 million small businesses across the United Kingdom. It helps small businesses and the self-employed to succeed by offering them advice, financial products and support. The FSB states that its
“mission is to help smaller businesses survive through these difficult times and ultimately achieve their ambitions.”
The FSB’s principal objectives include being
“fully representative of the whole UK small business community”;
providing
“support, advice and practical solutions to”
small businesses; advocating
“on behalf of small businesses”
by
“providing a powerful voice heard by Governments and key decision makers”;
and managing
“financial resources in a manner that ensures best value for members”.
Currently, almost 335,000 small and medium-sized enterprises are operating in Scotland, and they account for 98 per cent of private businesses. They employ around 900,000 people and account for a turnover of £82 billion annually.
I have been an MSP for more than three years and, throughout that time, I have championed small businesses in my area through making visits, asking questions, giving speeches, lodging motions and highlighting campaigns such as shop local, Scotland Loves Local week and small business Saturday.
Since last year, I have been running my own small business awards to celebrate the best small businesses locally. Last year’s winners included No1 Boutique, which is an owner-led business that sells unique clothing and went online for the first time during Covid to survive; Gavin’s Mill fair trade shop and cafe, which specialises in organic foods and home baking and has many volunteers supporting it; and many more great businesses that, unfortunately, I do not have the time tonight to mention.
The Covid-19 pandemic and the cost of living crisis have presented challenges for Scotland’s SMEs. A lack of access to cash and to financial support has meant that many SMEs have been forced to shut down or have been sold off.
It is disappointing that, instead of mirroring the previous Conservative UK Government’s provision of a 75 per cent business rates relief, SNP ministers in Holyrood have decided to punish businesses. Figures that the Office for National Statistics released show that, between September 2022 and September 2023, there was an 8 per cent fall in the total number of retail jobs in Scotland, which accounted for about 29,000 jobs. Had the Scottish Government passed on the rates relief to Scottish businesses, those losses could have been mitigated.
Some other actions that the SNP Government could undertake to help small businesses include maintaining the small business bonus scheme at its current threshold at least; ensuring that any further regulation does not stifle small businesses’ ability to grow; tackling late payments; and creating opportunities for further growth. I hope that, in his closing speech, the minister will offer much-needed support to small businesses across Scotland.
I again congratulate the FSB on its 50th anniversary and on the excellent work that it does. Here’s to another 50 years.
17:36
I, too, congratulate Audrey Nicoll on securing the debate and, most important, I congratulate the FSB on its 50th anniversary. As members can imagine, the vast majority of businesses in my constituency of Midlothian South, Tweeddale and Lauderdale are small and medium-sized enterprises, which reflects the situation throughout Scotland. Such businesses are, indeed, the backbone of our economy. They are embedded in the communities and employ people locally, their employees often spend in the local economy, and their commitment is local.
I celebrate small businesses, from the local Galashiels painter and decorator who painted my office and the glazier who installed the windows to the many other businesses and shops in the area. I suppose that I am also a small business in Gala, where I have been since 1999.
Austerity made the situation hard for all those businesses before Covid. Covid was dreadful but, thankfully, with help from the UK and Scottish Governments, many managed to stagger on. The Central Bar in the Northgate in Peebles—a free house—received no support, as the premises are too small to accommodate the hot food provision that was required to qualify for the support scheme. However, Roddy MacKay, the owner of that wee, friendly gem, buckled down, redecorated and smartened up the pub frontage—indeed, he recently won an award for the floral display. That demonstrates the resilience of a small business that is embedded in the community.
However, we still have austerity and the fallout from Covid, and many people’s shopping habits have changed. Further, businesses’ work patterns have changed—home working was an exception, but now it can be the norm. That impacts on how businesses operate, while they still have the same outlays in rental, heating and so on. Indeed, we know how retail has changed, with shopping online no longer an occasional or marginal activity—Covid changed that for good.
I will raise the impact of the small business bonus scheme, which Murdo Fraser and others referred to. I was here in 2007 when it was brought in, in agreement with the Conservatives, who supported the SNP’s budget. It was a good idea at the time, and I support it today. Figures from 2023 show that, in Midlothian, 1,060 businesses benefited from 100 per cent relief—they paid nothing—and another 870 had a measure of relief. In the Borders, 5,170 paid no rates under the scheme in that year, and 5,280 had a measure of relief.
The FSB provides support in the form of financial expertise and by speaking up for small businesses to the Governments here and at UK level. It also speaks up on their behalf to the local MSP, if required—my door is always open.
Local people can also do their bit. I note that Pam Gosal referred to Scotland Loves Local week, which began on 26 August. I shop locally anyway, so that was no challenge for me.
Among the local shops in my constituency, there is AilaBells, in the Penicuik precinct, which has a wonderful array of upmarket Scottish goods. The precinct has footfall, but I laid down the gauntlet to Shelley, the owner, about going online, where I am sure that she could increase sales. I told her that I would be checking on her progress. I also directed her to Business Gateway for assistance in setting up her website. That is the problem for sole owners—they are so busy that they sometimes cannot do the stuff that they need to do to expand. She needs help with that, because it would make a world of difference.
Then there is—wait for this name—Fifi La Bonk! at School Brae in Peebles. What a name, and it is apposite; exotic and idiosyncratic—that is just the owner—are the clothes that she makes and designs individually. Websites help with such esoteric and—if I may say so—even for me, offbeat designs; they are staggeringly interesting.
In both those shops, I made lovely purchases; I might wear them in here at some point. By the way, I pay for the items myself—just to put that on the record. I encourage communities to be mindful, even in these tough times, of supporting local businesses and shops as best they can. As others have said, the serious point is that they are the lifeblood of our communities. They are embedded in and feel indebted and responsible to their communities. We should keep our high streets and town centres, which are under such pressure today, alive and kicking.
Again, I congratulate the FSB on its special anniversary, my colleague on securing the debate and, if I may say so, all the small and medium-sized enterprises in my constituency.
17:41
I, too, congratulate Audrey Nicoll on securing this important debate. I was particularly keen to contribute today to thank the FSB for the support that it has given me—and, I know, all politicians—since I entered elected office. It has been a constant both nationally and locally, feeding in ideas for manifestos and making suggestions that we can take forward at a local level.
As a Government minister and as party leader, I would meet the FSB regularly to hear its members’ concerns, what its members were looking for and what it felt that parliamentarians across the political spectrum could deliver for it. That is why, over the past 50 years, the FSB has built itself into an organisation that every single political party respects and listens to and whose suggestions they hope to bring on board.
At national level, the FSB has played a crucial role, but I also want to speak about what it has done with me and others at a local level. I was reminded by Mike Duncan, with whom I spoke earlier today, about some of the FSB’s involvement locally in Moray. I know that the minister will touch on that as well. Back in 2010, we had the terrible decision to close RAF Kinloss and there was the potential for RAF Lossiemouth to close, too. When a task force was brought together, with Moray Chamber of Commerce, the council and elected representatives, the FSB was a vital part of that. It spoke for the small businesses, particularly those close to Kinloss, Forres and the surrounding towns, about the impact that the closure would have and the double impact if we were also to lose Lossiemouth. Not only was Lossiemouth retained because of the campaign that the FSB was part of, we also have Kinloss barracks—in fact, Lossiemouth has increased its presence in the local economy. That is thanks to the efforts of everyone on that task force, including the FSB.
The FSB also played an invaluable role during the Covid pandemic. We had weekly meetings online in Moray with various different organisations. I have to say that David Groundwater was an absolute force of nature. He seemed to be on every single call that we were involved in. In particular, he was looking at the impact that we were facing of decisions that were taken at a UK level or Scottish level that might have been slightly different, or even of decisions taken in the north-east, where some councils were doing things one way and others were doing them another way. Not only was the FSB quickly digesting new legislation, rules and enforcement practices and putting them out to its members, it was feeding back to members of Parliament at Westminster and Holyrood on what was going well and what could be improved. That was crucial.
Most recently, Mike Duncan, as our area representative and the development manager for Moray, Tayside and the north-east, has sat on the Elgin town fund, which is a £20 million fund from the UK Government to invest in Elgin. It has not been recommitted to by the current Labour Government, but I hope that it will be, because it is an opportunity to drive forward investment in Elgin, in which the FSB has a crucial role to play.
Finally, I could not speak in a debate about the Federation of Small Businesses here in Parliament without mentioning another person who has long been associated with the FSB in Moray and nationally: Pearl Hamilton. She has worked tirelessly on behalf of FSB members in Moray and across the country on policy development. Earlier this year, she was made a burgess of Forres. In the citation for her becoming a burgess of Forres, mention was made not only of the work that she does in her shop, Pearl’s Pet Care, and the work that she has done for local charities in helping old-age pensioners and getting volunteers to help out in the community, but of the fact that she has been and continues to be a major force in the Federation of Small Businesses.
It is right that we celebrate 50 years of the FSB nationally. We celebrate people such as Pearl, who have worked hard as business owners and in contributing to the work of the FSB, and we look forward to the next 50 years. Members will be unanimous in praising the FSB, but perhaps the greater gift that we can give to the federation is to encourage all our constituents to use their small businesses. They are the life-blood of our towns, our villages and our communities. We must encourage people to continue to use our small businesses, because they provide so much for us.
Due to the number of members who have still to speak in the debate, I am minded to accept a motion without notice, under rule 8.14.3, to extend the debate by up to 30 minutes.
Motion moved,
That, under Rule 8.14.3, the debate be extended by up to 30 minutes.—[Audrey Nicoll]
Motion agreed to.
17:46
I draw members’ attention to my entry in the register of interests: at the time of my election, I was working for Orbital Marine Power, which is a small tidal energy company that has about 30 members of staff.
I have a combined degree in electrical and mechanical engineering design, which, these days, would probably be called mechatronics. That was a reasonably new idea 30 years ago, when I started university. I cannot believe that that is how long ago it was. The idea behind it was to create engineers specifically to support smaller technical businesses that could not afford separate mechanical, electrical and software engineering departments.
I am a machine builder. Throughout the 20-plus years of my career, I worked for innovative small tech companies that, in many cases, were doing absolutely cutting-edge stuff, which included work on robotic telescopes, automation for the biomedical industry, the development of microelectronic mechanical systems and, most recently, work on wave and tidal energy. I know first hand how much small businesses contribute, not only to the baseline of our economy, jobs, investment and revenue, but to innovation, design and new technology, and I am delighted to participate in today’s debate to celebrate that contribution.
We all want our economy to thrive. A big part of that is finding ways for successful small businesses to scale up. There is significant benefit to the economy from a business of 50 people becoming a business of 150 people. More of our attention should be focused on businesses that are already doing well but need support to take that next step. I would like targeted support to be provided to help such businesses to grow, whether by setting ambitious regulation and legislation for net zero and low-carbon technology, providing financial support for new equipment, machinery and software or by inspiring more young people—especially girls and women—to study science, maths, engineering and technology. We need to encourage more people to learn to weld, to wire things up, to plumb things in and to write software, and we need to have more people who know how to build things, to repair things and to make things last.
Whether in designing, building or repairing, there are creative problems to solve, teams to be part of and change to bring to our country and the world. I want young people to know that that is work that makes a difference. Much of that work will be undertaken and led by small businesses. Small businesses are embedded in their communities. Their revenue is spent locally and on the wages of local people, rather than being squirreled away in tax havens. Small businesses contribute to our public services because they pay the taxes that the mega-corporations and multinationals are experts in dodging.
The Scottish Greens have long believed that one of the best ways to support small businesses is to make sure that big businesses have to play fair. Governments must ensure that big businesses pay fair taxes, pay living wages and clean up after themselves. The Scottish Greens know that small businesses depend on having good internet connections, good public transport links and affordable energy, and we will continue to work for more investment in those areas.
I look forward to meeting the FSB on Friday and congratulating it on its anniversary. The Scottish Greens want our economy to thrive, and we recognise the role of small business in that. We will continue to work towards that end and are grateful to Audrey Nicoll for the debate.
17:50
I agree with just about everything that Lorna Slater said. I can hardly believe that I am saying those words, but I absolutely agree with what she said. To the list of things that big businesses should do, I add that they should pay their bills on time, in full, and not make small businesses wait for 60, 90 or 120 days to have their bills paid.
I congratulate Audrey Nicoll on bringing the motion because, as I mentioned to Daniel Johnson, it provides us with an opportunity to talk up the importance of small businesses—and, indeed, medium-sized businesses—to our national economy. I can honestly say that, in my career in business, the greatest accelerated learning that I had was in working for a medium-sized business in central Scotland. There, on the rock face of business, people really learn what it means to be the backbone of an economy.
Small and medium-sized businesses have some strategic advantages, which were listed by Lorna Slater. They have advantages over larger businesses because they have the ability to adapt quickly to changing market conditions and to embrace innovation with a greater degree of agility than a larger business, which might find it more difficult.
Christine Grahame is absolutely right about the deep-rooted resilience that is in many small businesses. However, that is not to say that there are not, as others have suggested, real challenges for small businesses. In that respect, thank goodness for organisations such as the Federation of Small Businesses, because, not least among the challenges is that of running a business while investing time and energy in all the strategic things that go into running and growing a successful business: from recruitment and retention to staff training, managing the cash, managing inventory, and drawing up contracts and tenders. As was mentioned earlier, tenders are a nightmare for small businesses.
In the spirit of the debate, I say to Mr Kerr that I am in agreement with almost everything that he says.
Knock me over with a feather, we have unanimity—however, why not? The subject should bring us all together, because it is the meat and drink of how we will grow our country’s economy and become a more prosperous Scotland.
The owners, leaders and operators of the businesses that we are describing are both generalists and specialists. I congratulate everyone who is connected to the world of small business in Scotland, because I genuinely believe, from my own experience, that they are the heroes of our economy.
I will say something about the need for us to foster entrepreneurship in our country. So many young people—the current generations—have a flair for spotting opportunities and an almost intuitive grasp of how to make the most of them. They have the gene that is needed to be a successful entrepreneur. As a number of others have said, we need to support their aspirations by making it as easy as possible for them to set up a microbusiness, at whatever age they first have the idea of doing something. Again, as others have said, we should do everything that we can to encourage young entrepreneurs. They exist all around us, and we need to nurture them.
I have a friend whose son is barely into his teens and is already harnessing the power of social media to monetise some of his hobbies and interests. As a result, he has a growing, self-generated income. Thousands of young people have the capacity and the inclination to do exactly that, because of the nature of the technological environment in which we now live.
We need to encourage the creation of micro and small businesses, and we must make it easier and more possible for those businesses to be scaled up through support. Small businesses need our vocal and practical support as policy makers.
In closing, I praise the work done by many people. The FSB and the chambers of commerce have been mentioned, as has Business Gateway, which also deserves appreciation. There are many other forms of grass-roots support programmes. Let the Parliament resolve to become the greatest champion of Scotland’s entrepreneurs. Let us see more positivity on all sides of the chamber, as we have seen in this debate, to champion Scotland’s small businesses.
17:55
It is not often that we have Christine Grahame agreeing with Stephen Kerr and Stephen Kerr agreeing with Lorna Slater, so, first, I congratulate the FSB on achieving that major milestone. Secondly, and more importantly, I join all members—particularly Audrey Nicoll, who lodged the motion, for which I thank her—in congratulating the FSB on achieving its 50 years of supporting small businesses here, in Scotland, and across these islands.
I welcome the senior representatives of the FSB to the public gallery for this debate. As an MSP and as a minister, I have, like many members, engaged heavily with small businesses and the FSB over the years, which has been of enormous value. Douglas Ross mentioned some of the initiatives in Moray over the years. As the constituency MSP for Moray, I very much associate myself with his comments in tribute to the FSB and its representatives.
Other members have mentioned Mike Duncan, who is the north-east Scotland development manager for the FSB. Last year, he took me on a tour of small businesses in Keith. We visited Square Roots Cafe, J&E Kleaning, the Keith Motorist DIY business and the Ugie House hotel. It was very valuable to visit those important businesses in my constituency.
Audrey Nicoll and Lorna Slater mentioned small businesses in the energy sector, Clare Haughey mentioned a laser company in her constituency, and Stephen Kerr mentioned social media businesses in his area. That reminds us that, when we talk about small businesses, we are talking about businesses right across the Scottish economy; we are not talking simply about the retail businesses on our high streets that we visit to encourage people to shop locally, although I am sure that we all do so and that those are a valuable part of the debate. Small businesses are represented in all parts of the Scottish economy and are doing incredible things in relation to innovation and other areas.
As Pam Gosal mentioned, small businesses support communities, so they are not just about supporting the economy. Many small businesses are anchors in our local communities.
As Daniel Johnson mentioned, it can, at times, be very tough and lonely running a small business, and it is extremely hard work. People have to be determined and have grit, but it is rewarding, and we have a resilient small business community in Scotland. Those are important points to make.
As other members have mentioned, our small businesses have faced a number of significant challenges. Members mentioned the pandemic, and we know from speaking to local small businesses that rising energy bills have been a big challenge for them. In the past few days, Aston University has published a report on the impact of Brexit on small businesses and the difficulties of exporting and so on. Those are real challenges that the small business community has had to cope with. Inflation and the cost of raw materials and supplies have also increased dramatically.
The Scottish Government is not responsible for all those challenges, but there are some areas for which we are responsible and which can be challenging. A number of members mentioned the regulatory framework and the burden of regulations and how we have to get that right. One challenge was the role of the business and regulatory impact assessments that we carry out in Scotland, which are known as BRIAs. The new deal for business commits us to improving the regulatory landscape, which we recognise can have a real impact on small businesses.
The FSB played a central and constructive role in shaping the Government’s understanding of the cumulative regulatory impact, and it has contributed to improving the BRIA process. The FSB’s diligence and partnership working with the Scottish Government led to the publication of a revised BRIA—a revised impact assessment. That includes strengthening guidance for officials to consider impacts on small businesses when developing new policy or regulation. The FSB continues to offer balanced and considered leadership through the sub-group on regulation and business partnership, which is also part of that agenda.
Does the minister agree that small businesses can also be supported through regulation and legislation? For example, upcoming legislation on heat in buildings could set a level playing field for businesses in the construction industry, so that all builders of new homes and buildings have to meet the same high environmental standards on insulation and so on.
I agree with the important general principle that Lorna Slater has expressed. Quite often, businesses approach politicians and MSPs to seek policy interventions from Governments to ensure that there is a level playing field in particular areas, so it is good to mention that principle in this debate.
As a Government, we must continue to work with businesses to develop a process for identifying, considering and, if appropriate, removing regulations that are no longer required, and we are looking to identify new regulations that can support businesses in Scotland, especially our small businesses. The FSB is playing a crucial role in all those agendas.
Of Scotland’s 340,760 businesses, just over 98 per cent are small businesses, and 95 per cent of those are sole traders or microbusinesses. Vital sectors of the Scottish economy, such as the tourism and hospitality sector, are covered in that 98 per cent figure. In 2023, that sector alone comprised 13,495 registered small businesses, with 117,455 people or more being employed in the small business sector in 2022.
The retail sector is another important part of our economy, and small businesses are represented heavily in that sector. Many members have mentioned the importance of shopping locally and supporting our small businesses in the retail sector. In 2023, that sector alone comprised more than 14,000 registered businesses, which accounted for 8.3 per cent of Scotland’s total.
Members have emphasised the important role that shops and retailers play in our local communities and in our towns and cities, and they have mentioned some of the challenges that our high streets have faced, particularly during and following the pandemic. A lot of work, done in partnership with local government and other local and regional economic players, is under way to revitalise our town centres in Scotland for the benefit of our small businesses. Again, the FSB is playing a very important role in helping us to move that work forward.
I should point out that, when the Government has negotiations and discussions with small businesses and the Federation of Small Businesses, we clearly do not always agree on everything—that will be the case for all Governments—but we try to find solutions to common challenges when we can.
I will make a couple of final points. Murdo Fraser described the small business bonus scheme as a “real success story”, which, of course, it is. The policy has been in place for a number of years, and I have spoken to small businesses—as, I am sure, others have—that have said that they would not exist if it were not for that scheme, which has taken 100,000 businesses out of paying rates altogether. There are also the services that are offered by Business Gateway.
I reiterate all the powerful points that members across the chamber have made about the vital role that the Federation of Small Businesses plays in championing and giving a strong voice to the small business community in Scotland. I congratulate it again on achieving its first 50 years. I have been an MSP for 25 of those years, and I look forward to the next 50 years of the FSB supporting Scotland’s small business community.
Meeting closed at 18:04.Air ais
Decision Time