Covid Edinburgh: Capital business leader calls for more support from government
The head of Edinburgh Chamber of Commerce has called on ministers to re-examine business taxes to help companies meet the "deeply challenging" times ahead.
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And she warned any further Covid restrictions on businesses must be accompanied by appropriate support.
Liz McAreavey, the chamber's chief executive, said large numbers of businesses expected their prices to increase because of the rising cost of raw materials, higher pay settlements and finance costs.
“While the recovery had looked promising, there is no doubt that a perfect storm of Omicron, Brexit and inflation threatens to blow growth and recovery off course,” she said.
“We need our policy-makers to help. Businesses want to grow and contribute to a stronger, fairer future but they need help to get there. In turn, successful businesses boost the tax revenue our government desperately needs to support our services and way of life.”
Her comments came after the latest British Chambers of Commerce quarterly economic survey found the recovery had stalled, with businesses worried about inflation and the prospect of a rise in interest rates.
"We need our leaders in the UK and Scotland to do all they can on two fronts. They need to match any further restrictions on businesses with appropriate levels of support. There can be no excuse for not doing so. And as a top priority they also need to look at what they can do to create a more supportive business environment right across the board – from re-examining the business tax burden right through to helping businesses get the people they need.
“In no sector is this more desperate than in our hardest-hit hospitality and tourism sectors, on which tens of thousands of jobs in Edinburgh rely.”
She predicted raw material costs, higher energy prices and the reversal of the VAT reduction for hospitality would push inflation above six per cent by April.
And she urged the Bank of England to “proceed with caution” raising interest rates to avoid undermining confidence and an already fragile recovery.
She said: “Rising inflation is likely to weaken the UK’s growth prospects this year by eroding consumers’ spending power and squeezing firms' profit margins and ability to invest.
“All of this paints a deeply challenging picture for the economy for the next few months.”