FSB Scotland: heat in buildings proposals must be redesigned with small business in mind

Press Releases 11 Mar 2024

The Federation of Small Businesses (FSB) in Scotland has called on the Scottish Government to ensure its proposals for the transition to zero-emissions heating systems are designed with the needs of small firms placed front and centre.

Responding to the Scottish Government’s consultation on its proposed Heat in Buildings Bill – which will set out how all building owners will need to have ended their use of polluting heating systems by 2045 – the small business representative body flagged concerningly low levels of awareness among its members over what they will be required to do.

FSB’s consultation response states:

“It is incredibly important that a ‘one size fits all’ blanket approach is not applied to business and that specific consideration is given to how the legislation will impact smaller businesses … We strongly urge that, prior to implementing legislation, the Scottish Government develops a clear delivery plan which includes running pilot schemes and case studies with small businesses.”

FSB’s Scotland Policy Chair, Andrew McRae, said:

“Scottish small businesses recognise that significant changes must be made over the next 20 years if we’re going to meet our net zero commitments. Indeed, they are supportive of government ambition in this area. However, what is currently missing is a clear idea of what support government will provide to them in order to make this transition actually happen.

“Last year, almost a third (31%) of small businesses told us they had already taken actions to reduce their carbon emissions. But only a small proportion (7%) had made the move to a zero or low emissions heating system. Given almost two thirds (62%) also told us they do not feel enough support is available to them to cushion the impact of the transition to net zero on their business, you can see why so many businesses are not yet sufficiently confident to spend lots of time and money overhauling their heating system.

“Indeed, one member told us during the development of our consultation response that they had recently installed a new heating system, but were unsure if it would be suitable under the Heat in Buildings proposals. They then went on to explain how difficult it had been to recruit a suitable tradesperson for the work.

“The net zero transition bill is predicted to run into several billions, but government has so far only been able to commit to providing a small portion of that cost. But, at a time when small businesses are also facing the full force of economic challenges, not least through rapid hikes in costs and shrinking margins, it’s out of the question to expect them to bear the lion’s share of the costs themselves.

“The latest Businesses in Scotland data revealed that we lost more than 20,000 small firms last year – roughly the same amount lost during the first year of the pandemic. There’s a real concern that if government does not provide adequate financial support alongside legislative obligations, that number will only increase over the coming years.”

Speaking to members in preparation of its consultation response, the small business group also heard concerns about gaps not only in the supply chain for materials but, crucially, in the existing and future skills supply chain.

Mr McRae continued:

“While it is good to see the Scottish Government set out its intentions in this document, there’s still not enough here to offer Scottish small businesses the certainty they need in order to make significant investment decisions. As a member of the New Deal for Business group, we have been clear that all proposed legislation must be subject to more extensive assessment in terms of its impact, particularly on small businesses, before it can be passed.

“That’s why we’re calling on the Scottish Government to rethink some of these significant proposals, and ensure sufficient support is made available for small businesses, financial and otherwise. Time is of the essence here. We can’t afford to risk the survival of those businesses which make up almost all our economy in a race to 2045.”


Notes to editors

  • FSB offers a wide range of vital business services, advice and financial expertise, to protect and support small businesses and the self-employed. It also gives them a powerful voice heard by Government and all of the main political parties. More information is available at www.fsb.org.uk.
  • FSB is a non-profit, non-party-political organisation, founded in 1974.
  • You can follow us on X (formerly Twitter): @fsb_scotland
  • You can read the full consultation response here

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