Commenting on the Chancellor’s Summer Budget Statement, Liz Cameron, Chief Executive of Scottish Chambers of Commerce, said:

“This has been one of the most densely packed Budgets of recent years, which shifts the goalposts completely in a number of key areas. For businesses, there are pluses and minuses: good news in terms of future further reductions in Corporation Tax rates and the extension of the annual investment allowance but of course what will be uppermost in many businesses’ minds is the creation of a new mandatory National Living Wage and the implications this has for employers. This is a Budget where the full implications may take some time to digest. However the UK Government has missed a clear opportunity to secure future growth opportunities by failing to deliver a clear answer on airport capacity expansion and by failing to act to reduce VAT for our tourism businesses.”

Mrs Cameron went on to comment on specific aspects of the Budget:

On the National Living Wage:

“The creation of a new National Living Wage which will apply to all employees aged 25 and over will come as a bolt from the blue for many employers. Businesses aspire to the best for their employees and most businesses already pay this rate or more, however for some businesses, and especially smaller businesses in some key sectors such as retail and hospitality, wages of this level do not fit within current commercial models. Ultimately, consumers will dictate what is affordable and what is not. That is why transition arrangements are important and, in this case, appear to fall somewhat short. The rate of £7.20 per hour applicable from 2016 is more than 10% higher than the current National Minimum Wage and, whilst the National Insurance Contributions Employment Allowance rises to £3,000 next year, it will be a further year before any other benefits to businesses arrive in the form of a cut in Corporation Tax. Businesses need assurance from Government that their genuine concerns over transition to the new scheme will be listened to and acted upon accordingly.”

On Corporation Tax:

“It is welcome news that the downward path in Corporation Tax is to continue over the next five years. Having an economy with a low corporate tax rate is important not just for existing businesses but as a component in the package we offer to those in other countries looking to invest in Scotland and the UK. That said, for many businesses, the real problem at the moment is the high levels of other business taxes, such as Business Rates, which show no signs of abating. It is time that the Scottish Government took advantage of its new powers to help facilitate a change in Business Rates that would benefit Scotland’s businesses.”

On the Annual Investment Allowance:

“It is good news that the Annual Investment Allowance has been increased and extended. This is vital in order to incentivise business investment and to cement growth in our economy and in productivity.”

On the Apprenticeship Levy:

“This new scheme is being used to fund apprenticeships in England and it will be interesting to monitor this and its effectiveness as Scotland looks to extend its own apprenticeship programme.”

On welfare cuts:

“The Chancellor has now provided some detail around his plans to cut the welfare budget by £12 billion and it is clear that much of this will come from in-work benefits. We will be monitoring the knock on effects that this policy will have both on employers and in terms of the wider economy, as this could result in falling consumer demand, which until now has been one of the key drivers of economic growth.”