Bringing back curbs ‘will spell disastrous job losses’
SCOTLAND’S economic recovery is under ‘significant threat’ from the energy crisis, inflation and tax, business bosses have warned.
Although the economy was given a kick-start when most Covid restrictions were lifted in August, fears have been raised over curbs being reimposed.
A new report claims that if restrictions are brought back in to deal with any spike in coronavirus cases over winter, it could lead to a ‘catastrophic loss of jobs’.
The Scottish Chambers of Commerce (SCC) has pleaded with governments not to be timid in offering support for struggling firms as they try to recover from the pandemic.
The SCC quarterly economic indicator report found an increase in confidence across all sectors in the third quarter of this year – but uncertainty continues, with fears the energy crisis could push prices up, as well as tax and inflation worries.
Tim Allan, president of the SCC, said that the latest survey indicates ‘confidence’, with domestic sales performing strongly.
He claimed economic forecasts expect the ‘Scottish economy should return to pre-pandemic levels in the spring of 2022’.
But he warned: ‘Progress is under significant threat with increasing concern over the emerging energy crisis driving up business costs, inflation and taxation, the cost of raw materials and shipping, all of which are fuelling uncertainty at a time when businesses urgently need confidence and certainty to continue their recovery from the pandemic.’
Businesses are also worried about labour shortages, with all sectors reporting difficulties in recruiting staff during the third quarter.
‘All sectors in the survey are reporting increased recruitment difficulties, in line with official statistics recently reporting record high vacancies for the Scottish and UK economy,’ Mr Allan said.
He added: ‘If Scottish businesses cannot get the talent that they need, they risk falling dangerously behind the curve on recovery and growth.
‘There is no time for timidity when it comes to action to support businesses and that’s why the Scottish and UK Government must urgently back business with a clear economic plan and budgets focused on business recovery.’
Mr Allan welcomed the opening up of international travel, but he said ‘going backwards domestically could lead to a catastrophic loss of jobs in these vital sectors of the economy’.
Mairi Spowage, director of the Fraser of Allander Institute – in partnership with whom the report was compiled – said the research signalled ‘an important boost in optimism across the Scottish economy’, but added that the end of furlough and the Universal Credit £20-a-week uplift may have a negative impact.
‘Despite this positivity, there are still a number of risks to the fragile economic recovery that we have seen to date,’ she said.
‘It is unknown how many of the workers who were on furlough at the end of September will become unemployed or unable to secure the type and level of work they want.
‘This uncertainty coincides with the cancellation of the Universal Credit uplift which will bring additional financial hardship to around half-a-million families in Scotland.
‘As well as the risk of joblessness, labour shortages are becoming clear in many sectors, threatening goods shortages and adding to wider inflationary risks.’
Last month it emerged that Scotland’s economy grew by 4.7 per cent in the three months to June.
Scottish Conservative economy spokesman Liz Smith said: ‘It is clear that the recovery in many sectors is precarious.
‘The SNP-Green Government’s full focus must be on our recovery and protecting vital jobs and livelihoods, rather than pushing for another divisive referendum.’
‘Risks to the fragile economic recovery’