Holyrood and Westminster must outline support for firms struggling to survive looming recession, says SCC

The Scottish and UK governments must make it clear how businesses struggling to survive a looming recession will be supported, the Scottish Chambers of Commerce (SCC) has today stressed.

The trade body has revealed its latest quarterly business survey, saying it shows the plight of organisations as they battle increased costs, inflationary pressure, and "misjudged" policies by the UK Government. The economic indicator report, conducted in August and September, surveyed 280 firms, and found that 92 per cent were concerned about inflation, marking a record high.

The main cost concern for businesses is from energy bills, with 80 per cent of respondents citing the issue as a top worry, followed by 72 per cent naming labour costs, and 63 per cent highlighting fuel expenses.

The survey found that a record number of respondents indicated that the price of goods could increase in the next quarter. Some eight in ten firms said they intended to charge consumers more, compared to 50 per cent 12 months previously, and on balance, all businesses polled reported a fall in confidence compared to the previous quarter and a more significant decline from to the previous year.

The top cost pressure is from utilities such as electricity and gas, cited by 80 per cent of firms, the trade body has found. Picture: Getty Images/iStockphoto.

Chancellor Jeremy Hunt has been urged to engage with firms to provide clarity on the proposed targeted support for energy bills beyond April amid fears the policy could be rolled back. The SCC has also urged the UK Government to set a clear, long-term, economic prospectus to provide a stable environment for investment amid rising inflation, and believes the Scottish Government should do more to ease the overall cost burdens on business in its forthcoming emergency budget, and cut non-domestic rates.

Stephen Leckie, SCC president, said: "Frozen investment, faltering confidence, falling cashflow and profits, and a pessimistic global outlook, paint a concerning picture for businesses in Scotland. There is more pressure to come in the winter months. The signs of economic bounce-back don't look promising, as more and more firms are telling us that they have been forced to cancel contracts, projects or plans to expand, due to soaring costs and difficulty in hiring people.”

Mr Leckie – whose other roles include captaining Crieff Hydro Family of Hotels – continued: "Whilst we recognise the strain that has been placed on public finances, governments in Edinburgh and London must make clear how businesses will be supported to survive through the difficult months ahead and what measures will be put in place to support long-term growth."

Mairi Spowage, director of the University of Strathclyde's Fraser of Allander Institute, said Westminster's mini-budget, which is now set to be reversed, had put "upward pressure on the cost of government borrowing".

'The Scottish Government’s emergency budget... must set out how it intends to protect businesses and industries from the worst effects of the mounting costs crisis,' says SCC president Stephen Leckie (file image). Picture: contributed. --

A Treasury spokesperson said: "We recognise the challenges businesses are facing in the months ahead, which is why we are helping with their costs through the Energy Bill Support Scheme and a £2.4 billion fuel duty cut, and small businesses will be fully protected from next year's rise in corporation tax. We also provided the Scottish Government with a record £41bn for the next three years at the recent Spending Review."

Additionally, Dr Liz Cameron, chief executive of the SCC, commented on Liz Truss resigning, saying: “The next Prime Minister must immediately set out how they will support firms with energy bills and reduce the rising costs facing businesses and households.”