Think it’s hard to make ends meet now? Just wait till summer 2023

Business chief fears looming hardship on ‘horrif ic’ scale

BUSINESS leaders have warned a winter of discontent will be followed by a ‘summer of horror’ in Scotland unless drastic steps are taken to tackle the cost of living crisis.

Industry chiefs say that without urgent government action, a ‘tsunami’ of job losses looms with whole sectors devastated as a ‘brutal recession’ engulfs the country.

As politicians prepare to return to Holyrood on Tuesday following the summer recess, Scottish Labour has demanded emergency legislation to tackle the growing crisis, accusing the SNP government of only offering ‘empty rhetoric’.

Businessman Donald MacLeod, a senior member of trade body the Night Time Industries Association, said: ‘The situation is dreadful and the fact there is no energy cap for businesses means they are being held to ransom. Not a day goes by without places having to hand back the keys. It’s tragic.

‘It’s going to be a winter of discontent followed by a summer of horror next year with the tsunami of jobs that will be lost.

‘We are all asking when the brakes will be put on this. The problem for leisure and night time sectors is people are not going to have enough disposable income to spend on discretionary items.

‘But we also need government help with business rates, an energy cap, VAT levies reduced and a reduction of the green levy – or there will be no future.’

As the situation worsens, a poll for Citizens Advice Scotland (CAS) released today shows one in ten people has no money left after covering essential monthly expenses, even before the spike in energy bills next month.

CAS chief executive Derek Mitchell said: ‘People are facing a financial cliff-edge as energy bills soar and inflation shows no signs of slowing down. Half a million people have nothing left after covering essential bills.

‘Over a million have less than £125 left over each month at the moment and next month average monthly energy bills are going up by £169.’

On Tuesday, Scottish Labour will table a motion for a Cost of Living Act. The emergency measures will include a temporary rent freeze, a ban on winter evictions and changes to laws on debt. Labour MSP Neil Bibby said: ‘After a long summer of empty rhetoric from the SNP, this is a chance to take real action.

‘We cannot ask people struggling to put food on the table to listen to a talking shop of empty ministerial statements. Every party must back these plans to use the powers here in Holyrood to freeze rent, ban winter evictions and offer a lifeline to those snowed under with debt.’

Scottish Retail Consortium chief Ewan MacDonald-Russell said his members are ‘gravely concerned at the economic maelstrom ahead’.

He added: ‘There is a huge risk that with all the extra costs coming and the downturn in spending, we are looking at a brutal recession.

‘A lot of shops clinging on at the moment aren’t going to make it through the next six months.

‘Customers just aren’t shopping. They are cutting back and it’s going to get worse with the huge energy cost increases. A lot of retailers just made it through the pandemic but they won’t make it through what lies ahead. The biggest single issue is business rates which, with inflation, could mean an extra £60 million a year for retailers in Scotland.

‘In terms of helping customers, the Scottish Government could rule out increases in income tax.’

Colin Borland, of the Federation of Small Businesses Scotland, said: ‘What we need is action, on a VAT cut, on national insurance increases and extending the energy price cap. One in six small businesses tells us they are going to close, downsize or be sold in the next 12 months. Something needs to be done and now.’

The Scottish Government said: ‘We are doing everything possible within our limited powers to help address the cost of living crisis. However, most key policy levers are held by the UK Government.’