Following the announcement of the creation of a £20 million SME Brexit Support Fund from the UK Government, Dr Liz Cameron, Chief Executive of the Scottish Chambers of Commerce, said:
“Many Scottish businesses have already encountered severe problems with the new EU – UK trading arrangements, particularly in our invaluable food & drink sector. At a time when they are already dealing with restrictions on how they can trade due to the pandemic, trade disruption threatens many of our flagship exports.
“While this announcement is a welcome start and recognition from the UK Government that SMEs need financial help, greater support will be needed if businesses are to successfully navigate the new administrative barriers to trade that they now face.
“The UK Government must act now and fast to distribute this fund as quickly as possible – SMEs cannot afford to wait weeks and weeks at this time.
“Local Chambers across Scotland and the UK are standing by to offer direct support with customs and trade.”
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Following the announcement of the extension of current lockdown measures in Scotland to at least the end of February, Dr Liz Cameron, Chief Executive of the Scottish Chambers of Commerce, said:
“It will come as little surprise to Scottish businesses that restrictions will be in place for at least the rest of the month. Many will be disappointed that non-essential shops will remain closed, not least because of the immense investment the sector has made so they are safe for employees and customers.
“We continue to urge the Scottish Government, local authorities and agencies to speed up the release of vital business support funds. This is essential to provide cashflow support to businesses that have been forced to close. Ultimately, the best route to support the economy is to re-open. That’s why we urgently need an economic roadmap to recovery, that outlines clear conditions and timelines for reopening sectors of the economy if we are to protect businesses and jobs.”
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Following the announcement of the Scottish Budget by Cabinet Secretary for Finance Kate Forbes, Dr Liz Cameron, Chief Executive of the Scottish Chambers of Commerce, said:
“The position of Scottish businesses has never been so precarious. The Scottish Government’s announcements today are welcome but do not go nearly as far enough to avoid risk of widespread business collapse and job losses.
“Yes, there is light at the end of the tunnel with the vaccination programme but restrictions to prevent the spread of the virus have been devastating. We understand that the Cabinet Secretary for Finance faces difficult choices in setting the budget particularly ahead of that of the UK, in a time when the country faces extraordinary challenges.
“Business will be disappointed that further details on an economic route map on how we will exit this crisis aligned with the roll out of the vaccine were not provided today. This is a critical component if businesses are to unleash the investment our country so desperately needs.”
On Non-Domestic Rates:
“The Cabinet Secretary has listened to us and has delivered a reduction in the Non-Domestic Rate (NDR) poundage rate. However, longer-term, we believe the system is rotten and needs significant reform.
“Plans for a three months extension of rates relief is a too short a reprieve. We need commitment to a 12-month reliefs package to provide the certainty business needs. Clearly there is more to do, and we await further announcements from the Chancellor to see what further support can be made available and expect Scottish Government to pass on the equivalent consequential funding to businesses.”
On Business Support:
“The doubling of the discretionary fund is good news particularly for those businesses who have fallen through the gaps of other support packages. However, it is imperative that the process for businesses is clear, transparent and quick across all local authorities to ensure funding is available for businesses quickly and immediately.
“Now is the time to pull out the stops and redouble efforts to ensure business support comes through. We need to see a significant ramping up to get those funds that have been promised out the door and to businesses.”
On Infrastructure:
“The Scottish Government’s commitment to infrastructure investment is absolutely necessary for Scotland and the UK to be in a position to build back better and meet net zero ambitions. Now is the time for a vision driven by ambition and a willingness to collaborate like never before. This must be put first and foremost ahead of any political point scoring this year.”
On skills and training:
“SCC welcomes these important steps to support jobs, employment and training. We called for training academies and we are pleased to see the Cabinet Secretary has acted on our recommendations, particularly the focus on green jobs. It is now critical that the government and academia works in partnership with the private sector to ensure benefits are fully realised.”
On Protecting Jobs:
“We maintain our call to the Chancellor of the Exchequer to extend the furlough scheme beyond April 2021 and outline further initiatives to protect business and jobs at the UK Budget in March.”
On mental health support:
“Business will welcome this as we understand the toll the pandemic has taken on our customers, employees and communities.
“Recovery of our wellbeing is just as important as economic recovery, with many employers investing in their own employee support programmes. This commitment from the Scottish Government will enhance these efforts.”
The year started in the way it ended, with further restrictions to combat COVID-19. While difficult but necessary, the national vaccination programme offers hope, and we can begin to look at how we build back the Scottish economy.
Further redundancies are looming, and recent analysis by Highlands and Islands Enterprise found that unemployment is increasing faster across the region than the rest of Scotland. This situation will exasperate long-standing challenges of depopulation and inward investment and is made more serious by the absence of scheduled air services from Wick John O’Groats (WJOG) airport since last year.
North Highland communities live in some of the most remote places in the UK. The airport and the connections it provides make the area a more attractive place for businesses to relocate, bringing jobs and valuable investment.
Prior to COVID-19, we saw a steady degradation of airline services, and so developed a business case for a Public Service Obligation (PSO), a robust document which remains with Scottish Government. In this, we argued for investment to help deliver twice daily flights to Aberdeen and Edinburgh to address this situation, one that now poses a significant risk to the region’s economic recovery and longer-term potential.
Without lifeline air services, investment in the region may be lost, as businesses chose to relocate to parts of Scotland with stronger regional connections. This is not an imagined reality, as one multi-national company recently decided to cease operations at Wick Harbour, citing the lack of scheduled air services as a major factor.
The PSO is a shovel-ready infrastructure project that aligns with core Scottish Government policy objectives. The forthcoming budget statement provides government with the chance to commit to playing its part in our regions’ post-pandemic future.
If Scottish Government were to commit to the PSO, it would help ensure the North Highlands has equity with the rest of Scotland in terms of connectivity, social inclusion, and inward investment.
This will be strategic investment, driving the economic recovery of the region, and helping achieve the Scottish Government’s net-zero targets in the Highlands and Islands. It would support our transition away from economic reliance on the Dounreay nuclear site, and into new growth areas such as renewable energy. This is the very type of energy and economic transition Ministers regularly talk about on a national level.
Such an opportunity can only be secured with the necessary investment, which is estimated to be £3 million, a relatively small figure given the future benefits it will accrue.
While many parts of Scotland are struggling right now, this initiative will give businesses critical support, regional links to the rest of the country and help secure future investment.
However, this can only become a reality if the Scottish Government commits to this future, and helps drive economic growth, invest in Scotland’s infrastructure, and deliver a green recovery – helping our region grow and succeed for years to come.
This article was published in The Scotsman on 26/01/21. See it here.
Commenting on the Scottish Government’s “green ports” proposals, Dr Liz Cameron OBE, Chief Executive, Scottish Chambers of Commerce, said:
“Scottish business welcomes the Scottish Government’s plans to develop sustainable green ports to aid economic recovery. Whilst we await further detail from the Government, it seems they have listened to the key asks from business including the provision of investment incentives and a package of tax and customs reliefs. Now, we will want to engage with Government on the design and delivery of green ports in Scotland.
“Businesses needs all the tools in our toolbox to enable us to grow and to compete with freeport models across the globe. Scotland’s green ports approach, which couples the incentives of a UK-freeport model and Scotland-specific initiatives, has the ambition to drive business growth and job creation. This is an important step to ensuring Scotland remains attractive and competitive to domestic and international investors.”
Responding to the announcement by the First Minister that the current lockdown restrictions will be extended to at least mid-February, Dr Liz Cameron, Chief Executive of the Scottish Chambers of Commerce, said:
“The extended lockdown restrictions will come as a heavy blow to much of Scotland’s business community who are already struggling to keep their heads above water and who now face further uncertainty over when they will be able to open their doors again.
“We cannot emphasise enough the importance of increasing the pace of distributing business support grants; this must be accelerated in order to prevent the significant collapse of businesses and jobs. We also call on the Scottish Government to use the Scottish Budget next week to outline measures to help restore much needed confidence and investment.
“We also urge the UK Government to seriously consider the clear need to extend the furlough scheme beyond April 2021 and outline further initiatives to protect business and jobs at the UK Budget in March.’’
Significant parts of the Scottish economy face worsening conditions due to the pandemic before restrictions are set to ease this year, according to the Scottish Chambers of Commerce (SCC) Quarterly Economic Indicator (QEI). Scotland’s largest business network has called on the UK and Scottish Government to put in place a sustained programme of business support, particularly for the hardest hit sectors, to support economic recovery throughout 2021.
Key highlights:
- Pre-Brexit manufacturing sales: A rise in demand from export markets ahead of end of year changes to trading rules boosted sales for manufacturers although domestic sales remained weak.
- Lockdown effects: Tourism sector businesses in fight for survival as confidence plummets and expectations for 2021 hit record lows.
- Business confidence: Although some sectors such as financial and business services and manufacturing saw confidence return to positive territory for the first time in 2020, all sectors remain negative on plans for investment dampening hopes of a
bounce-back recovery. - Employment faltering: All sectors have reported lower levels of employment. The extension of the furlough scheme continues to mask the worst impacts of the pandemic, but it is not a panacea to the real risk of mass unemployment over the spring.
Tim Allan, President of the Scottish Chambers of Commerce, said:
“Last year was the most challenging year in living memory for many of us. In addition to the risk to health we all face as a result of Covid-19, restrictions imposed have created an ongoing recession and a jobs crisis which will likely take years to recover from.
“We were hoping 2021 would be a better year than 2020 but it seems it is always darkest before the dawn. We fear the restrictions that have been imposed to prevent the spread of the new variant of the virus will continue to destroy more jobs and businesses unless government support can ease the impact of closures and deliver an environment to enable economic recovery.
“Investment, particularly in green jobs and energy transition, will be key if the economy is going to be built back better and sustainably. For this to happen governments at all levels must be prepared to work hand in hand with the business community to attract and focus
investment on where it will have the greatest impact.”
Commenting on the results, Mairi Spowage, Deputy Director at the University of Strathclyde’s Fraser of Allander Institute, said:
“We have discussed for some months the prospect of a “K-shaped” economic recovery in Scotland. This is the idea that different sectors have been impacted very differently by the lockdown measures and have experienced divergent pathways in recovery.
“We can see from today’s survey results that hospitality and tourism in particular has been badly impacted, with further lockdown measures likely to cause more hardship for the industry. Other industries, such as construction, have been able to adapt to the restrictions they face and operate almost at full capacity, but possible announcements on further restrictions for this sector are likely to act as a new blow. The length of any new lockdown on construction will be key to the ripple effects this has for the wider economy.
“In these challenging and uncertain times, the Scottish Government will set out their budget for 2021-22 on 28th January. The backdrop to the budget will be significant uncertainty around the economic and health outlook; ongoing intergovernmental tensions on a variety of matters including funding flexibility and certainty; and of course the Scottish elections in May.
“Businesses are likely to hope for a range of measures in the form of continued government support and practical proposals to stimulate economic recovery.’’
On the manufacturing sector:
“The return to business optimism is highly welcome but unlikely to be repeated in the first quarter of 2021, because the main driver was getting goods in and out before the trading rules to the European Union changed. Most welcomed the deal even if it was agreed at the
last minute and we are only now reckoning with challenges arising at the border. The sector must be adequately supported through the changes to trading rules with Europe, which will impact vital industries such as aviation and automobiles as well as their supply chains.’’
On retail and wholesale:
“On and off again restrictions on operations have taken a toll on these businesses as have sharp reductions in footfall driven by the working from home trend and the move to online sales. These will require a sustained strategy of government support and stimulation to aid
recovery. An extension of business rates relief beyond April will be key to preventing a destructive cliff edge scenario. A rethink of how we inhabit our town and city centres is also required, to ensure that in the long-term, businesses based in these centres have a longterm viable future.’’
On tourism:
“This sector contains a range of business operations across leisure, food services and events, and almost all face devastation until vaccines mean they can return to as normal trading as possible. As this now looks unlikely before well into the second half of 2021, government needs to take a long hard look at how it can support this key sector of the economy or risk setting it back decades with all the consequences for joblessness and poverty that entails.
“Steps must be taken to safeguard the future of our visitor economy, as restrictions gradually ease through 2021, we must see renewed effort by government and agencies to boost Scotland’s profile as a place to visit and invest in.’’
On the construction sector:
“Pent up sales demand released after the first lockdown has given the sector a little breathing space, but overall profits and cash flow are well below average trend. Even before the end of the Brexit transition period, concerns over higher raw material prices and other cost overheads including inflation and taxation reached record highs. To help mitigate some of the increased cost burdens that the sector is facing, we call upon the UK Government to scrap the reverse VAT charge altogether or at minimum, delay its implementation date for a further 12 months.’’
On financial and business services:
“The sector to have emerged from 2020 with the least damage is financial and business services, where most employees were able to adapt to working from home. Sales trends returned to a positive net balance albeit this remains subdued compared to last year.
“While these businesses have adapted well, it leaves our town and city centres in limbo and data shows that Scotland’s major city centres are suffering from massively from reduced footfall and investment. Office-based businesses in this sector are ready to start supporting the rejuvenation of city centres devastated by the lockdown. That’s why we must plan now for a safe and sensible approach for a phased return to the option of office working.’’