Rather like the ground coming up to meet you when you’re falling from a tall building, the inevitability of last week’s 40-year-high inflation figures didn’t make them any less painful.

The longer these relentless price rises drag on, the clearer it is that we need to tackle the problem at source – or as close to it as we can get.

There’s obviously a limit to what we can do domestically to influence global energy and commodity prices. But we can do something about costs and margins for producers, as the former rise and the latter disappear.

So here’s one suggestion.

We know that the cost-of-living crisis is being driven by a cost of doing business crisis, which has input prices at its root. Last week’s ONS figures show input prices up 22.1% in the year to May – the highest since records began in 1985.

We also know that businesses are trying to absorb these costs wherever they can, which is why “factory gate” prices aren’t rising quite as steeply. That said, they are still up again this month, now at 15.7%. Official Scottish Government data tells broadly the same story. Over half of businesses saw prices they paid for materials, goods or services in April increase from the previous month, but just over a quarter passed these increases on.

So, rising input costs are feeding through to customers, or at least to the next level in the supply chain, but not yet as severely as they could be.

It follows, then, that the more we can help firms absorb these cost increases now, the less they will be forced to pass on to customers, thus taking some heat out of the inflationary cycle.

And there are ways we can do this.

For instance, we learned from Audit Scotland the other week that, of the £15.5 billion allocated to emergency government Covid support measures, both local and national, just short of £12bn was spent up to December 2021.

Exactly how much of this cash is still available to spend is subject to debate. But there’s no question that whatever does remain unspent needs urgently redeployed to help small businesses weather this latest storm.

Not only could this help address the immediate crisis, it offers an opportunity to help businesses protect themselves against future shocks – while generating extra economic activity – by funding investments in energy efficiency measures.

We should also look at changes to the tax system – such as easing the cost of hiring by reversing the hike in employer’s national insurance contributions, which only came into effect in April.

And is this the time to ask questions about VAT? It’s not exactly the most progressive tax as it is – being paid by everyone from richest to poorest at the same rate – and now it’s levying an extra 20% onto already inflated prices. A nice earner for the Treasury, but adding fuel to the inflation fire.

Also, VAT is a tax on consumption and trade – something we want to encourage not penalise. And, if it was reduced to a level where it simply kept prices slightly more stable, the cut wouldn’t be inflationary.

At the very least, we need to think about VAT on business energy bills. Smaller firms, of course, pay VAT on their bills at the full 20%, whereas you and I as consumers enjoy the 5% rate. A reduction could give many modest business users the breathing space they need. Of course, you can have all the margin in the world, but that won’t make any difference if you don’t have any turnover. That’s why we also need a concerted effort on the revenue side of the balance sheet.

Many businesses in sectors from tourism to hospitality to retail are banking on a strong summer period to help them bounce back from two years of Covid. The last thing they need is a summer of strikes and transport disruption scaring away customers.

Stable revenues plus reduced costs equals business survival. It’s not an equation with an easy solution right now, but we do have the power to go some way to solving it.

Colin Borland is director of devolved nations for the Federation of Small Businesses