80 FIRMS GO TO THE WALL EVERY DAY
Economy fears as 7,000 companies close their doors
EIGHTY businesses are closing in Scotland every day, the Mail can reveal.
In one three-month period alone, 7,000 self-employed Scots had to abandon the dream of being their own boss.
The worrying trend has been blamed on soaring business rates, government red tape and increased taxation.
But fears have also been raised over the state of Scotland’s economy as it lags behind the rest of the UK, and the crucial part that plays in business confidence.
Critics yesterday accused the SNP of having an ‘anti-business’ agenda, which was harming the chances of workers wanting to start out on their own.
Former head of CBI Scotland Sir Iain McMillan claimed that Scotland’s poor economic performance is hampering the chances of people who are hoping to start up or grow their own business.
He said the country is ‘just scraping by’,
with small businesses suffering the worst impact of a weak economy.
His comments come as the Office for National Statistics (ONS) also revealed soaring numbers of unemployed people north of the Border.
Scottish Conservative taxation spokesman Bill Bowman said: ‘When people go out on their own professionally, they should know they have the backing and support of the Scottish Government.
‘Instead, we have an anti-business SNP set on making life as difficult as possible.
‘It’s regrettable to see so many people give up on self-employment in this way.
‘People who run their own businesses like this are a crucial part of our economy and we need to see their numbers going up, not down.’
The ONS report shows that the number of self-employed Scots plummeted from 323,000 to 316,000 from January to March this year – with 7,000 businesses closing their doors.
Joiners, plumbers, taxi drivers and hairdressers as well as start-up internet firms, full-time musicians and business consultants have all been hit by the downturn.
The figures come after the Scottish Daily Mail launched a Save Our High Streets campaign in an effort to force ministers to step in and ease the growing pressures
‘The economic picture is not favourable’
faced by firms that are struggling with increasing rates and taxes.
Business bosses have claimed that business rates and taxation are a ‘major obstacle’ to their success and growth, with firms north of the Border forced to pay an additional £62million in non-domestic rates compared to their counterparts in the rest of the UK.
Sir Iain added: ‘Economic growth in Scotland remains very slow. We’re not in a recession but we are just scraping by. It is lower than it is for the rest of the UK.
‘Demand for services and goods from small businesses has almost certainly been affected be this, and it will be having a negative impact.
‘The economic picture in Scotland is not favourable at the moment for small and medium-sized businesses.’
The number of self-employed Scots had soared in recent years, but over the past 12 months that trend has been reversed, with an overall drop of 4,000 firms in the year from March 2017 to the same month this year.
Business chiefs have repeatedly spoken out against the ‘burden’ of non-domestic rates in Scotland, with retailers calling for a dramatic overhaul of the system.
Finance Secretary Derek Mackay has pledged changes to the system following a review carried out by former RBS chief Ken Barclay – but has stopped short of revamping the way rates are calculated.
Thousands of firms north of the Border appealed against their rate bills last year following the first revaluation in nearly a decade, which saw some facing rises of up to 400 per cent.
Despite initially refusing to step in, Mr Mackay was forced to make a U-turn, placing a cap on rates for certain sectors. Colin Borland, director of devolved nations for business body FSB, said: ‘While some Scots choose to start up on their own because it has always been their dream to start a business, others do so because of a change in circumstances.
‘Some people decide to become self-employed because they’ve been made redundant, or because they have caring responsibilities that don’t fit well around traditional employment patterns, or because they’ve moved away from their existing job.’
A Scottish Government spokesman said: ‘Scotland’s employment rate has increased to 75.5 per cent with 2,646,000 people in work in Scotland – 82,000 more than the pre-recession peak.
‘The longer term trend for the number of self-employed people in Scotland has remained largely unchanged in recent years, with current levels comparable with what they were in 2011.’
Endless squeeze – Page 16