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.’’
Read the report in full using this link.
Responding to the latest changes to lockdown restrictions on Scottish businesses, Dr Liz Cameron, Chief Executive of the Scottish Chambers of Commerce, said:
“Today’s announcement will be very disappointing to those who have carefully adapted their businesses to be COVID safe and continue the trading that has kept them afloat up to this point. The lack of any certainty over when currently closed shops would be allowed to re-open added to the importance of Click and Collect services propping up many small and independent retailers.
“The Scottish Government must provide detailed evidence on how these new measures will support public health restrictions and urgently provide sufficient finance to support Scottish businesses if they are to get through yet more rules suddenly imposed upon them without prior consultation. Otherwise, it will only add to the growing desperation of businesses who have put finance and time aside to make their business COVID compliant, only to have to close anyway, with no clear route back to reopening.’’
Commenting on the additional business support announced by the Chancellor, Dr Liz Cameron OBE, Chief Executive, Scottish Chambers of Commerce, said:
“Given the new lockdown measures are as economically restrictive as March 2020, the additional business support from HM Treasury is needed and to be welcomed.
“However, it does not go far enough to mitigate the costs of shutting down our businesses. At a time when employees are anxious about their jobs and business owners are struggling to plan ahead, with cash running out, we ask that the Scottish Government allocate every penny of this additional funding to supporting businesses and saving our jobs.
“Billions have already been spent helping millions of businesses – we cannot allow businesses to fail at what we all hope will be our last hurdle.’’
Responding to the latest measures to tackle Coronavirus in Scotland, outlined by the First Minister today, Dr Liz Cameron, Chief Executive of the Scottish Chambers of Commerce, said:
“Today’s news is another blow to the private sector’s recovery from this pandemic. Whilst we fully appreciate the need for the Scottish Government to act in response to the worrying rise in COVID cases, we cannot ignore the direct impact this will have on business and livelihoods.
“The welcome news today that the Oxford vaccine has started to be rolled out reminds us that there is hope and we must focus all our efforts and resilience towards 2021.
“What is equally vital is that the Scottish Government also puts in place measures which will provide a springboard to private sector recovery when this latest round of restrictions is lifted. Support for businesses which have already been through so much and survived 2020, must be expanded and all cash support paid out urgently.
“I look forward to being involved in the discussions on what more will be done to drive this recovery in the coming weeks.’’
With 2020 having brought a range of unforeseen and pressing challenges for businesses in the North Highlands, we can perhaps be excused this year for losing sight of some of the longer-term issues. Yet the release recently of the UK Government’s Energy White Paper and promise that the nation will “build back cleaner” has reminded us that sustainability remains a pressing concern not just for the North Highlands, but across the whole of the UK.
Too often, as businesses, we look at issues like sustainability as a burden – more regulation, more paperwork and, too often, more money – and it is hard to deny that the shift to new ways of working that these issues require do bring with them all of those challenges.
However, as I have said repeatedly over the course of this year, the COVID-19 pandemic has shown us more than ever how much businesses are at the heart of their communities. As part of that, we have a responsibility to our friends, our colleagues, our neighbours, to be the best we can be and to lead the way on issues that affect our whole community.
It has become clear that the climate emergency is one of the most pressing social and political issues of our time. As businesses, we have a key role and responsibility to play in addressing it, even if that brings with it some short-term challenges.
We must also remember that if we are active, willing participants in the climate discussion, we can help to shape the policies that will be coming. Not in a way that avoids our responsibilities, but in a way that helps us ensure the burden is fairly balanced and that the needs and concerns of businesses are considered as we build a new, greener economy.
On that note, it is also important that the benefits of the national push towards a sustainable economy are spread evenly, and that regions like the North Highlands see their fair share. We are well on the way to this already, with a strong skills base and supply chain experienced in areas like offshore wind and tidal, but the next few years will be key in ensuring that we receive the support we need from Government.
We also need to work hard to remind Government that, while an economic transition is needed, this cannot happen all at once and that there will be occasions where seemingly counter-intuitive investment decisions will have to be made to enable a transition that is fair for all.
Aviation, for example, is undoubtedly a contributor to global greenhouse gas emissions, yet without access to lifeline air services in the North Highlands, it will be hard or impossible to develop other key parts of the green economic recovery in this region. Government support now for air services to the region will pay huge dividends in green development years to come, as well as unlocking the potential for the North Highlands to be at the forefront of exciting developments in low/zero-carbon aviation.
As a Chamber, we have been involved in discussions as part of the Scottish Government’s Just Transition Commission, and have been alarmed at some suggestions such as punitive measures on car drivers which would unfairly impact remote and rural regions like ours. We need to ensure that decarbonisation measures take into account these impacts and involve investment in transport modes, like aviation, that work for the remoter parts of Scotland and aren’t just focused on the Central Belt.
Businesses in the North Highlands have faced more than their fair share of challenges over the years, and it is clear that we will be feeling the economic effects of the COVID-19 pandemic for many years to
come. The coming years and decades, and the inevitable shift to a green economy will undoubtedly bring their own burdens to the region.
There is an opportunity, however, for us to look past those burdens, grasp the sustainability agenda with both hands, and ensure that this region sees the investment it needs to rebuild stronger and better than before. As a Chamber, we will continue to be at the forefront of fighting for businesses in the North Highlands and helping them to build a better, cleaner, greener future for everyone.
The recipients of the inaugural Pride of Scotland Awards 2020 have been announced in the Daily Record today. Charandeep Singh will receive a Special Recognition Award for his work with The Sikh Food Bank which delivered 100,000 meals to families in need through the Covid-19 pandemic. Charandeep Singh, who is deputy chief executive of the Scottish Chambers of Commerce, formed ‘The Sikh Food Bank’ at the start of lockdown to provide support for shielding and vulnerable households. Supported by a 50-strong team of Sikh volunteers, Charandeep has led the delivery of meals and food parcels to families across Glasgow as well as in Edinburgh, Dundee and Aberdeen.
Commenting on the announcement, Dr Liz Cameron OBE, Director & Chief Executive of Scottish Chambers of Commerce said:
“Charandeep is a truly influential force in Scotland breaking barriers in business and in charity. His incredible passion, dedication and commitment to helping others has made a real difference to communities across Scotland. On top of his day job, Charandeep spearheaded the delivery of over 100,000 meals to people in need across Scotland throughout the pandemic.
“Charandeep is a true role model and inspiration to us all. We are immensely delighted he has received this tremendous recognition.”
Charandeep Singh, Deputy Chief Executive, SCC, and Founder of The Sikh Food Bank commented:
“I am so very humbled to receive the Pride of Scotland award. This has been an exceptionally tough year for us all and I am honoured to have played my part in helping our communities. “I couldn’t have done this on my own and I dedicate this award to all the volunteers, supporters and donors who continue to support The Sikh Food Bank.”
On the First Minister’s speech today outlining the outcomes of the sixth review of the Covid-19 Strategic Framework, Dr Liz Cameron, Chief Executive of the Scottish Chambers of Commerce, said:
“Businesses across Scotland are now facing the worst possible situation. Hampered by the stop-start implementation of yet more lockdown restrictions, together with the continued travel ban effectively cutting off the majority of Scotland, is not the news we were hoping for. For hospitality businesses across Scotland, today’s decision will be devastating at what would have been a time of hope and opportunity for vital trading in the lead up to the festive period.
“Compensation has not been enough to keep our doors open. The Scottish Government needs to substantially increase the level of financial compensation for the increasing loss of trade for businesses and our employees. This is needed even more urgently than before and paid out now. The longer this continues the more jobs are potentially placed at risk. Government needs to pull out all the stops to ensure businesses can come through this crisis – behind every job loss or business closure are real people and families.
“Scottish Government must pro-actively take steps to re-open the economy and urgently publish clear timetables for the re-opening of vital sectors such as live events. It is becoming increasingly difficult for business owners and our employees, who have worked so hard through this pandemic, to see the ‘end destination’ which will place our communities on the road to recovery.”
Russell Borthwick, Chief Executive of Aberdeen & Grampian Chamber of Commerce, said:
“It’s businesses, the economy and the jobs they support that will pay the price for this. And although support schemes remain in place for now, they do not begin to cover the costs of businesses forced to mothball or remain open with limited custom.
“Christmas is now cancelled for large parts of our business community. We are already hearing that after Friday many bars and restaurants plan to remain closed until at least February or longer. Some might never re open at all. And retailers in our city centre and towns had been planning for far from normal but passable Christmas shopping numbers but now find around half of their catchments cut off as people cannot travel between Aberdeen and Aberdeenshire.’’
“Given that the economic and social eco-system of this region does not recognise local authority boundaries, this makes little sense.’’
Responding to the Scottish budget update announced by the Cabinet Secretary for Finance Kate Forbes MSP today, Dr Liz Cameron, Chief Executive of the Scottish Chambers of Commerce, said:
“A further £185million to support the hardest hit businesses in Scotland is welcome but will be cold comfort to many businesses who have so little cash left they have only weeks to survive. We are not convinced that the urgency of the need to pay our rent and other costs are fully understood.
“For many, January will be too late to save business owners, their families and their employees from economic ruin. This should be the top priority for all organisations who are going to be involved in supporting businesses.’’