By Colin Borland

LAST week’s news that consumer price index (CPI) inflation remains stuck at 6.7%, halting a three-month run of consecutive falls, was greeted with some dismay.

Regardless of whether this stalling of the downward trend is a temporary blip, or a sign of tougher times to come, it’s not great for anyone trying to balance their domestic or business books.

The fact that September saw food prices fall for the first time in two years does offer some encouragement – although, at 0.1%, the fall is marginal and food prices are still up 12% year on year. Basic staples are still far too expensive and putting real pressure on households and businesses alike – as is the sharp rise in fuel costs, to which some of the stubbornness of the headline inflation rate can be attributed.

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Against this backdrop, it’s little surprise that our member feedback from the back end of the summer suggests that small business revenues in Scotland have been under pressure and confidence again seems to be slipping back.

This is all the more concerning as we’re now well into the “golden quarter” – the run-up to the festive season which is crucial for retail and other sectors which rely on discretionary consumer spend.

The phrase “make or break” is overused, but in this instance, I think justified.

All eyes, then, will be on the Chancellor’s Autumn Statement on November 22 and the Scottish Finance Secretary’s Budget on December 19. Neither will be under any illusions about the need to use the levers they have at hand to reduce overheads and give firms some financial breathing space.

The Chancellor could, to pick one example, look at easing costs and bureaucracy for smaller firms, while at the same time boosting economic activity by raising the VAT threshold from £85,000 to £100,000. He could help ease cashflow by condemning the pernicious practice of big customers using their small suppliers as a free overdraft by paying them whenever they feel like it.

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At Holyrood, pressure will mount on Finance Secretary Shona Robison to reinstate the business rates relief for small firms in frontline sectors like hospitality, retail and leisure, which were axed north of the Border last June.

Longer term, though, Scotland needs to become a better, easier place to do business. And, last Thursday, we took another step towards this with the launch of the Scottish Government’s implementation plan detailing how recommendations from the New Deal for Business Group will be put into action over the next 18 months.

The first thing to say is that this isn’t as boring as it sounds. As we’ve argued repeatedly for years, getting better at how government makes the policies that shape our business climate will pay real dividends.

For example, to return to business rates for a minute, the plan commits to keeping rates reforms under review to ensure the system delivers the most competitive environment in which to do business.

There’s also a promise to, by February, develop a new way of assessing the impact of regulations on businesses’ bottom lines. This new Business and Regulatory Impact Assessment toolkit will be developed with business and will, importantly, include stronger focus on the specific impacts on small businesses.

More fundamentally, by next April, there will have been a full, in-depth review of how the Scottish Government develops policies that impact on business. This will reinforce the need for – and develop a capability to carry out – engagement with the right people at the right point in the policy cycle. That includes looking at whether regulation is essential in the first place.

There are also other measures, such as developing a formal process for assessing the cumulative business impact of the legislation outlined in the annual Programme for Government, set to be delivered early next year.

These are real, concrete actions – and it will be our job to ensure they are completed on time and in such a way that they deliver what was promised.

If we’re now facing a longer period of doing business in a high-cost economy, with sluggish growth and expensive finance, every last government interaction needs to be as low-impact as possible.

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