WHEN John Swinney delivered his keynote speech on Scotland’s public finances and priorities last week, the venue could hardly have been more appropriate.

The Futures Institute in Edinburgh is part of the city’s old Royal Infirmary that has been beautifully renovated as a prestigious facility for the University of Edinburgh. Given what’s at stake in the coming weeks for the economic direction of Scotland and the UK as a whole, a building named for “the future” seemed entirely apt for focusing minds.

The message from the First Minister was “invest to grow”, as he called on Wednesday’s looming UK Budget to change fiscal rules, thus allowing for more borrowing to invest in public services.

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It was interesting, incidentally, that questions from the business representatives in the audience were about how any such investment would be tied to public sector reform – not just in terms of levering in private capital, but tapping into the expertise of Scotland’s innovative small firms, who could perhaps deliver better, more efficient customer services.

That’s one to watch in the longer term. But, in the immediate future, all eyes and ears are on Wednesday’s Budget. And it’s fair to say the mood music so far has definitely been in a minor key.

You won’t have failed to notice there have been weeks of speculation about business tax rises – most notably a hike in employers’ national insurance contributions (NICs). Given how clear the UK Government has been on the importance of economic growth, and its status as a prerequisite for many of its other policies, I would be surprised if they really want to make it more expensive to hire or even retain staff.

If we’re going to grow our way out of this financial hole, you don’t make it harder for the very businesses you’re relying on – the nimble, smaller employers – to expand their workforce.

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When employing staff becomes more expensive, your options are limited. You have to either raise your prices – not a viable option for many in the current climate – or cut from somewhere else, perhaps shelving plans for investment or pay rises.

Fortunately, there are things the government could do to support small firms looking to expand, such as increasing the employment allowance – effectively an employers’ NICs tax threshold. If you then indexed this to match future increases in the National Living Wage, you’d help small employers maintain the number of entry-level roles we need to get those further from the labour market into work, without incurring NICs.

The Chancellor could also give small businesses the confidence to invest by clamping down on the inappropriate use of personal guarantees when they apply for finance. Demanding you put your house on the line if you want to grow your business through even a modest loan is an obvious brake on investment that the government can release, at zero cost to the public purse.

Talking about giving small firms confidence, we also need to remember that whatever is unveiled at the Budget will be considered in light of the proposed Employment Rights Bill, which has now embarked on its parliamentary journey.

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There is, of course, a long way to go and much debate to be had before anything reaches the statute books. But there’s already a great deal of concern among smaller employers about the cumulative impact these employment law reforms could have on them.

The government’s own analysis shows these concerns are well founded. Its impact assessment warns small and micro businesses will be disproportionately hit by compliance and admin costs, estimated at up to £5 billion a year.

Another thing to look out for on Wednesday is whether business rates relief is further extended for retail, hospitality and leisure operators in England. The cost and cash issues facing hospitality businesses in Scotland are the same as those throughout the UK – a fact starkly highlighted by Begbies Traynor’s recent Red Flag Alert report, which showed one in 10 bars, restaurants, and food and drink firms “on the brink” and showing “significant” signs of financial distress.

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So, while Rachel Reeves’s decisions on business rates will not apply in Scotland, whatever she unveils will give us some context for the Scottish Finance Secretary’s own Budget decisions in about five weeks’ time. And any continuation of the rates relief scheme in England will only strengthen the case for some form of sector-specific support north of the Border.

That, however, is a question for December. Let’s see what Wednesday brings first.

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