The Courier & Advertiser (Perth and Perthshire Edition)
‘Make life easier’ plea as Scottish Budget due
BUSINESS: Brexit toll on SME confidence
Finance Secretary Derek Mackay has been urged to use his Budget this week to “make life easier” for small businesses whose confidence has “crashed” in the face of Brexit uncertainty.
New research by the Federation of Small Businesses (FSB) shows confidence among small concerns fell to its lowest level since records were first collated in 2011 in the past quarter.
The Scottish score of -32.6 represented a significant worsening of the position compared with the prior three-month period.
Business sentiment north of the border was also significantly more pessimistic than seen elsewhere across the UK, although the wider picture also showed a drop in confidence with the rating moving to -9.9 from -1.7 in the prior period.
Andrew McRae, the FSB’s Scotland policy chairman, said uncertainty over Brexit was fuelling concerns.
“These gloomy figures show that the uncertainty and confusion associated with Brexit is having a huge impact on business optimism,” Mr McRae said.
“It looks likely that confidence will only return when there’s a clear path beyond the March 29 deadline that safeguards smaller businesses’ interests.”
A previous low of -28.9 points was recorded in Scotland in the last quarter of 2016, while the UK low of -2.9 points also came in the aftermath of the Brexit referendum.
Across the UK, more than two-thirds of small firms said they did not expect to increase capital investment in the coming quarter, while 15% said they were planning cuts.
More than a third of companies also highlighted concerns about access to skills as a barrier to growth, despite a majority still hoping to expand their base in the coming year.
“Tumbling investment intentions should worry decision-makers as should skills shortages,” Mr McRae said.
“That is not a foundation on which to build a sustainable economy.
“But our figures show that half of our businesses still want to grow despite the obvious challenges.
“We want to see those in charge make life easier for these operators.”
Last month, FSB wrote to the Scottish Government outlining potential avenues for the finance secretary to go down in the year ahead.
Mr McRae added: “In our discussions with ministers we’ve stressed the importance of rates reforms, underlined the need for skills development and urged the Scottish Government to do what it can to prepare its agencies and business community for post-Brexit trading conditions. We’d urge Derek Mackay to gear his budget toward giving smaller operators a much needed lift.”