Scotland business warning as firms could take years to recover from coronavirus lockdown

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A survey by the Scottish Chambers of Commerce found that eight in ten firms regard the threat of another national lockdown or potential local lockdowns as their most significant concern. The survey confirmed recent official employment statistics, with only a small proportion (11 percent) having made staff redundant since measures to stem the spread of pandemic came into force.

Almost three quarters (74 percent) expect they will retain their staff in the next three months but this reduces to 68 percent as the Treasury’s furlough scheme comes to an end in October.

The latest employment figures reveal the number of people in work in Scotland fell by 15,000 between April and June as the impact of lockdown hit.

The proportion of people aged 16 to 64 in employment north of the border fell over the quarter to 74.3 percent (2.651 million), data from the Office for National Statistics (ONS) indicates.

The unemployment rate rose over that period to 4.5 percent with 124,000 people out of work.

Meanwhile, the Scottish Chambers survey said that while government support will have supported levels of cash flow, over half of firms (56 percent) report lower levels of cash flow compared to one month ago.

Regarded with some concern was the topic of Brexit preparations with 40 percent saying that this is of some concern at this time.

A significant majority (63 percent) of businesses were concerned about the need to drive up demand, indicating ongoing challenges in restoring sufficient consumer confidence to boost the economy.

Over half (56 percent) have indicated rising costs of doing business, such as rental costs, business rates and general taxation as a significant concern.

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Dr Liz Cameron, Chief Executive of the Scottish Chambers of Commerce, told Express.co.uk: “We fear a reckoning as some companies, particularly in tourism, hospitality and retail decide it is no longer viable to restart or continue in the coming months.

“We must achieve a balance between looking at long-term ambitions and strategies for growth alongside concrete action in the months ahead to ensure we retain as many businesses and jobs as possible. It is not one over the other.

“For those sectors which remain closed or have just resumed operations recently, helping them back to work and restoring consumer confidence as quickly as possible is crucial to their immediate survival.

Dr Cameron stressed that there was a “need for more direct fiscal support in the form of targeted sectoral interventions” for those businesses most at risk.

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She continued: “We must also see tailored support to meet the need of businesses at an increasingly individual level.

“Scottish businesses have already demonstrated that we are adaptive, innovative and resilient, but the challenges we face over the next few months, potentially years, warrants a response from the government that is just as substantial.

“We cannot just play at the edges – we need to harness the resilience, the ambitions and the skills of business and political leadership to fundamentally rethink how we ensure Government at all levels become more interested in working with businesses.”

In response, Jamie Hepburn MSP, Scotland’s Business Minister, said: “We have provided a package of support to businesses that totals over £2.3 billion to keep companies in business and people in jobs.

“This provides long-term certainty for those affected by the coronavirus pandemic. However, we also need to ensure support for those who have already lost, or are at risk of losing their job, and those looking for work and have already committed a further £100 million for employability and training support.”

The survey asked 412 Scottish SMEs between July 16th and 30th.

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