Independence; the Small Business Question

Local party and day job business has crossed paths with more than a few leading SNP representatives and supporters in recent weeks.

Always very civilised (socially and economically, Labour and the SNP agree about much more than we think)  One thing we do agree on is that its good we are now engaged in debate about what independence will mean rather than all the arguments about process.

Having been working "down south" on business most of this week and last I'd like to talk about how small businesses might be affected by Independence.

After all, we know that small businesses drive 70% of the economy.  That's especially true in Scotland and in the Highlands in particular.

I run a small business out of Inverness and Edinburgh.  Most of my clients are SMEs. Well more than half of them are in England and Wales. As well as the small number of people I employ directly, I’ve a network of  professional colleagues who make a decent living from my company.  Between us we spend locally on the services we buy in as well as the taxes we pay (I don't have access to Amazons or Starbucks accountants)   A lot of the small Scottish companies I work and compete for business with have similar profiles.  

So how would independence affect my company and the many businesses like mine who between us employ so many people in Scotland, directly or indirectly?

I rely on easy travel links (train and plane), sterling billing, a common tax system and all the other things that make doing business in Cardiff (where I've been today) just as easy as in Dingwall (where I'll be on Friday)  

When we are working with clients in Dublin, there is just a lot more to sort out - for me and the client - even though we are all in the EU. If Scotland and England are separate EU states, then how many times will it just be easier to employ a "local" firm?  Procurement law gives big firms an even playing field, but its a lot more challenging for small ones.

I'm assuming here (ignoring some would say) that there is no risk that an independent Scotland would not be an EU state automatically, from Day 1.  The idea of trying to work across an EU border is a nightmare scenario.  It would destroy my business. 

We hear a lot from the SNP about how independence would be good for the Scottish economy.  Maybe it would for the big firms who have the financial muscle to work through the downsides.  Though Aggreko boss Rupert Soanes doesn't think so

But how will the promised land make business easier for the small businesses on which the economy actually depends?

New Ideas for a Devolved Scotland

I’ve made a resolution to myself that I will not just post arguments against independence, but will put up some ideas for what more we can do in a devolved Scotland.  Not so much Devo Max as Devo Mike. So here we go…..

Schemes to encourage firms to take on young workers through financial incentives often produce short term results with contracts not being renewed after the initial period when the subsidy runs out.  Nor does that encourage proper investment in training and development.  So how about making it n the interest of an employer to not only take on a young person but keep them for a second year?  A Scottish Government with more fiscal powers could offer SMEs a 50% NIC discount on each under 25 employed on a Living Wage or higher for the first 12 months but rising to 100% for a second period of 12 months with a taper off for Year 3. That sort of scheme incentivises worker development and retention not just short term recruitment.  Discuss?