Bosses ‘losing sleep’ over Scots economy, business chief warns

OWNERS of companies based in Scotland are having ‘sleepless nights’ about the state of the economy, it was claimed yesterday.

The Federation of Small Businesses’ Scottish policy convener said there is growing ‘anxiety’ among private sector decision makers – and urged ministers to listen to their concerns.

Andy Willox pointed out that business owners’ worries about income tax rises were ignored by the Scottish Government.

Mr Willox’s comments, contained in his New Year message, came as figures show that Scotland had a lower rate of company start-ups than other parts of the UK, while the number of firms disbanding was higher north of the Border.

The Scottish Conservatives yesterday raised concerns about a decline in the number of startup companies that are provided with Government funding.

Mr Willox said effort is needed to improve the economy, with many Scottish entrepreneurs ‘gloomy about the country’s prospects’.

He added: ‘Over the course of last year, those in business in Scotland reported that they felt less and less confident about the future. Little wonder as rising overheads ate further into profit margins, consumer confidence remained shaky and the Brexit talks left us uncertain about the longer term economic outlook.’

Mr Willox said the business community’s problems were com- pounded when the Scottish Government announced a major income tax shake-up.

He added: ‘It takes more from middle and higher earners, despite a majority of business owners wanting rates to stay the same.

‘But why does this business anxiety matter? Why should we care if private sector decision makers are having sleepless nights?

‘Well, as [Finance Secretary] Derek Mackay unveiled his draft Budget, the Scottish Fiscal Commission projected that Scottish GDP would barely grow by a percentage point every 12 months for the next five years.

‘That’s about half of Scotland’s historic rate – which was hardly supercharged.’

Mr Willox said that ‘bullish businesses could drive investment’ to improve economic prospects, and urged Scottish and UK ministers to give the business community cause to believe the country ‘is heading in the right direction’.

He added: ‘While more change is inevitable, ways and means can be found to minimise disruption and instil confidence. And those in charge should expect and welcome perspectives from those not in the political bubble.

‘This year, no one asking questions of our governments’ plans should be denigrated for searching for reassurance. Those in power have a duty to prove their plans are robust and grounded in fact.’

The Scottish Conservatives raised concerns about business figures after Office for National Statistics data showing that 22,000 firms were ‘born’ in Scotland in 2016, a ‘birth rate’ of 12.5 per cent, compared to 14.6 per cent across the UK.

In addition, 21,000 Scottish firms disbanded, giving Scotland an 11.8 per cent ‘death rate’, compared to 11.6 per cent across the UK.

Anxieties were also expressed about a decline in the number of firms receiving support at the offices of the Scottish Governmentfunded Business Gateway scheme. Figures show that 8,746 new firms were helped by the organisation last year, a 15 per cent drop from 2009 and an eight-year low.

Scottish Conservative finance spokesman Murdo Fraser said: ‘Business Gateway provides essential support to many start-up businesses, firms we hope will create jobs, boost growth and create a stronger economy for Scotland.

‘So it’s extremely concerning to learn fewer have been using the free support of Business Gateway, and it’s yet another indication of the cost of having an anti-business SNP government.

‘If you take these findings along with the fact more Scottish businesses are dying, while fewer are being created, it paints a grim picture. But instead of seeking to improve this situation in the Budget, Derek Mackay went against the wishes of the business community and hiked taxes for hundreds of thousands of Scots.’

A Scottish Government spokesman said the figures only take into account businesses which start up after visiting Business Gateway offices, and added that the scheme is operated by local authorities, not the Scottish Government.

Responding to the FSB’s comments, the spokesman said: ‘Scotland’s business community can rest assured that we are committed to supporting business and growing Scotland’s economy, particularly in the wake of Brexit uncertainty and UK Government austerity.

‘And our investment per head on economic development dwarfs that of the UK Government.’

He added: The draft budget we presented in December is good for business, for investment and for taxpayers and will ready Scotland for the future. But it is vital that the UK Government commits to remaining in the EU single market and the customs union to protect jobs and investment in Scotland.’

City – Pages 57-60

‘Less confident about the future’