Submitted by Bill Fernie
23rd October 2026
As the Chancellor prepares the Budget, the question for Caithness is whether the measures announced in Westminster will make it easier for local businesses to invest, employ people and build a stronger economy.
Businesses across Caithness will be looking for more than promises about economic growth. They need practical changes that make it worthwhile to invest, take on staff and expand their operations.
For a small business in Wick or Thurso, the decision to employ another person can be a major commitment. The employer must consider wages, National Insurance, pension contributions, training, insurance and the possibility that business will slow down. For a business operating in a remote rural area, transport costs, access to suppliers and difficulties recruiting suitable staff can add to the challenge.
The question is not simply whether the Chancellor can reduce taxes. It is whether the Budget can remove some of the obstacles that prevent otherwise viable businesses from growing.
The cost of employing people
One of the most direct ways to encourage employment would be to reduce the additional cost to employers of taking on staff.
Employers have faced higher National Insurance costs, alongside increases in the National Living Wage and other employment expenses. Higher wages are important to workers, particularly when household bills are rising, but smaller employers must find the money to pay them.
A targeted reduction in employer National Insurance for new recruits, young people entering work or additional employees could make a difference. The strongest case would be for measures that reward businesses for creating genuine new jobs rather than simply subsidising existing employment.
For Caithness, this could be particularly relevant to small manufacturers, hospitality businesses, shops, garages, construction firms and other employers who might take on another member of staff if the financial risk were lower.
The Government would need to ensure that any scheme was straightforward to use and did not create a fresh administrative burden for the very businesses it was intended to help.
Business rates: build on the relief already available
Scotland already has a range of business rates reliefs, including the Small Business Bonus Scheme, which can remove the rates bill altogether for eligible smaller premises. Additional support is available to qualifying retail, hospitality and leisure businesses, alongside transitional arrangements for some firms affected by the 2026 revaluation.
The question for Caithness is therefore not simply whether business rates should be reduced further. It is whether existing arrangements are reaching the businesses that need help, whether the system is sufficiently predictable and whether firms can afford to expand when they become more successful.
Some businesses will already receive substantial relief, while others may face significant bills because of their premises, rateable values or individual circumstances. A blanket call for lower rates would overlook these differences.
Business rates can still influence decisions about opening premises, improving buildings or expanding a business. For Caithness town centres, the aim should be to make it viable for independent retailers and service businesses to occupy premises, attract customers and contribute to local employment.
Responsibility for business rates policy in Scotland rests principally with the Scottish Government, rather than the Chancellor. The UK Budget should therefore concentrate on the tax and economic measures Westminster controls, while Holyrood considers whether its existing reliefs are working as effectively as possible.
Energy and transport costs matter in the Highlands
Caithness businesses cannot always shop around for suppliers or transport services in the same way as companies operating close to major cities and distribution centres.
Fuel costs affect tradespeople, delivery businesses, farms, tourism operators and companies moving goods over long distances. Electricity and heating costs can be significant for businesses operating workshops, accommodation, hospitality venues and other premises.
The Budget should consider whether targeted support for business energy costs could help firms remain competitive without making them dependent on permanent subsidies.
There is also a wider infrastructure question. Reliable roads, transport connections, digital communications and affordable premises are essential to economic growth. Investment in these areas can help businesses reach customers, recruit staff and operate more efficiently.
For Caithness, where distance from major markets is a practical disadvantage, infrastructure spending should be judged partly by whether it improves the prospects for local businesses and employment.
Make investment easier
Businesses are more likely to expand when they have confidence that the rules will remain reasonably stable and that investment will pay off.
A small engineering firm considering new machinery, a food producer hoping to increase output or a tourism business planning to improve its accommodation needs to know what its tax position and operating costs are likely to be over the next few years.
Investment allowances and accessible finance can help, but complicated schemes may discourage the smallest firms from applying. A business owner who spends hours navigating forms and eligibility rules has less time to run the business.
The Government should make existing support easier to find and use, while ensuring that public money helps generate additional investment rather than rewarding expenditure that would have happened anyway.
Highlands and Islands Enterprise and other business support organisations have an important role here. Local firms need practical advice, help with new markets and assistance with expansion, not just another directory of schemes.
Skills, apprenticeships and young people
Caithness cannot build a stronger economy without developing the skills employers need.
Businesses may be willing to expand but unable to find people with the right technical, digital, engineering, construction or hospitality skills. At the same time, young people need opportunities to begin careers locally without feeling that leaving the area is their only route to a worthwhile job.
A stronger apprenticeship system, support for workplace training and better links between employers and local colleges could help address both problems.
Support should be designed around actual vacancies and future business needs. Employers should have a meaningful role in identifying the training required, while colleges and training providers need enough certainty to plan courses and recruit staff.
Helping young people gain skills in Caithness could also benefit the wider community. People who can find secure employment locally are more likely to consider staying, forming households and contributing to the local economy.
More housing could mean more jobs
Housing is not always seen as a business issue, but in rural areas the two are closely connected.
An employer may find a suitable candidate but discover that the person cannot find an affordable home within a reasonable distance of the workplace. This can make recruitment difficult and discourage people from moving into the area.
More housing, including homes available at rents that local workers can afford, could help employers recruit and retain staff. Construction itself can create work for local trades and suppliers, provided local firms are able to compete for contracts.
The same applies to infrastructure and regeneration projects. Public investment is most useful to the local economy when it creates lasting improvements and gives local businesses a realistic opportunity to participate.
Government contracts should offer opportunities locally
Public bodies spend substantial sums on construction, maintenance, catering, transport, professional services and other activities.
Caithness firms cannot reasonably expect to win contracts simply because they are local. Value for money, quality and fair competition must remain central. But procurement arrangements should not unnecessarily exclude smaller businesses through oversized contracts, disproportionate paperwork or requirements that favour organisations with large administrative departments.
Breaking suitable contracts into manageable packages, publishing forward plans and making tendering procedures easier to understand could help more small firms compete.
Winning work can provide the confidence a business needs to invest in equipment, recruit apprentices and employ additional staff. The benefits can extend through local supply chains.
Government support must work for rural Scotland
There is no single measure that will transform the Caithness economy. Nor can every local difficulty be solved by the UK Budget.
Some important decisions, including business rates and many aspects of skills and enterprise support, lie with the Scottish Government. Others, such as employer National Insurance and much of the wider tax framework, are reserved to Westminster.
Both governments need to recognise that economic conditions differ across the country. A policy designed for a large urban economy may have different effects in a rural area where businesses face longer journeys, a smaller customer base and a more limited pool of potential employees.
The answer is not to ask for special treatment without evidence. It is to identify where the costs of operating in a remote area create genuine disadvantages and then design support that delivers measurable results.
For example, tax incentives for investment, help with staff training and better transport infrastructure could have a greater impact when considered together. A firm may have the opportunity to expand but still be unable to do so because it cannot recruit staff or afford the investment required.
The real test is jobs and investment
The Chancellor has an opportunity to show that economic growth means more than improving national statistics.
For Caithness, the practical test is whether businesses find it easier to invest, whether employers feel more confident about recruiting, whether young people can build careers locally and whether more of the money spent in the area circulates through local firms.
Business owners do not necessarily expect government to remove every risk or guarantee their profits. They do need a tax system they can plan around, reasonable operating costs, access to skilled workers and a fair opportunity to compete.
The Budget will inevitably involve difficult choices over public spending and taxation. But measures that help viable businesses grow and create sustainable jobs should be judged as an investment in the country's productive capacity, not simply as a cost to the Treasury.
For Caithness, the question is simple: will the Budget make it easier for a local business to take the next step, employ another person and contribute to a stronger local economy?
That is the kind of result against which its promises of growth should ultimately be measured.