The UK coalition government’s failure to support Scottish businesses has been highlighted by SNP Candidate for East Kilbride, Lnda Fabiani, after it was revealed that less than 0.15% of small businesses in Scotland have benefited from a Tory flagship election pledge in the 2010 election.

During last year’s election campaign the Conservatives pledged that, for new small businesses, the first 10 members of staff would be free from employers’ National Insurance contributions.

This scheme, the National Insurance Holiday, was adopted by the coalition and came into effect on 6 September 2010. It is open to any new business set up from 22 June 2010 which meets the eligibility criteria.

According to Her Majesty’s Revenues and Customs (HMRC), by 28 March 2011, only 379 small businesses in Scotland had been granted this benefit. That is a take up of less than 0.15% of all small businesses in Scotland and less than 10% of the small businesses established in 2010, despite the eligibility period covering almost half the year.

There are 296,780 active businesses in Scotland (2010 figure), of which 290,780 are small businesses, with less than 49 employees. This was an increase of 5,445 small businesses compared to 2009.

Now, in response to a Freedom of Information request, HMRC has revealed that fewer than 400 Scottish businesses are benefitting from the NI Holiday.

This is less than 0.15% of Scotland’s small businesses and many fewer than the number of new small businesses that have started since the policy came into effect.

Linda Fabiani, who served on the Scottish Parliament’s Finance Committee, said:

“The fact that fewer than 400 small businesses in Scotland benefit from this scheme is a disgrace. It demonstrates that not enough has been done to make the scheme accessible to people struggling to set up a business.

“According to the influential Economist magazine, the scheme has been turned into a bureacratic nightmare, with 108 clauses of explanatory notes to wade through.

“This makes great work for the Tories’ buddies in the big consultancies, but does nothing to boost business or enterprise in Scotland.

“Once again, Westminster has demonstrated its ability to take the simplest idea and turn it into a job creation scheme for consultants, forcing struggling businesses to choose between exorbitant fees or just getting on with the job without the help they were promised.”

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