Unleash the potential

IT’S CLEAR that small and medium-sized firms play an absolutely critical role in the Scottish economy. Looking at the numbers, businesses with under 250 employees account for 55% of employment in Scotland, and around 40% of total turnover. These firms also make up the vast majority of the business base in Scotland, with fewer than 1% of firms operating in Scotland with over 250 employees, according to Scottish Government data.

Alongside their critical role in the Scottish Economy, we also know that the current environment of heightened uncertainty is bringing even more difficulty to the already herculean task of trying to build a successful small business.

Chamber data shows that SMEs are facing some real challenges across the business environment. As just one example, our recent UK-wide Brexit survey, of which 94% of respondents were SMEs, illustrates that a number of businesses are weighing some really difficult decisions right now. In the event of a no-deal exit, over a fifth of firms are poised to reduce investment or recruitment plans, with around 18% considering moving parts of their business overseas to mitigate the disruption which would follow a no-deal exit. This was also reflected in the most recent Quarterly Economic Survey from the Scottish Chambers of Commerce, which has showcased that business are ‘treading water’ and restraining investment as they wait for the outcome of the Brexit process.

As a voice for the SME community, our role as Chambers in this uncertain environment is two-fold. Firstly, to relentlessly push for clarity around events such as Brexit, whether that’s nationally through our No Deal Dashboard, highlighting areas of concern to Government, or in the North-east through our regular roundtable events with Ministers, providing members with the opportunities to directly raise their concerns.

Secondly, and perhaps much more critically, is the key task of keeping our respective Governments focused on the challenges of business regardless of the political environment we find ourselves in. Our overarching focus at the Chamber is how we make the business environment work for our members of all sizes. Whether it’s our continuing engagement with the Scottish Government to reduce the business rates burden and free up vital cash for our firms to invest, or fighting for stronger connectivity for the North-east so that firms have access to new customers and vital markets.

This focus on issues at home will be of utmost importance in the coming months. In early November, we expect to see the Chancellor unveil the UK Government’s budget, and we hope to see detailed proposals to reduce the cost of business to encourage SMEs to bring forward their investment plans. The British Chambers of Commerce network scored a major victory in last year’s budget, with the then Chancellor taking forward our ask to raise the annual investment allowance to £1m, a welcome step to encourage investment. Regardless of how the Brexit process ends, we’d call on Government to take forward these principles to this year’s Budget. In such uncertain times, it’s even more important for the government to focus on issues at home and drive forward business investment.

Let’s hope we see that this November so we can push past the uncertainty and unleash the potential of our fantastic small businesses.

Shane Taylor

Shane Taylor