Scottish Small Business Group Calls on Government for Action
Tuesday, July 5, 2016
Even before the Brexit vote in the United Kingdom, Scottish small business confidence was in decline, according to the Federation of Small Businesses’ (FSB) latest study.
For the second quarter in a row, the FSB’s confidence index shows that Scottish business owners who expect trading conditions to deteriorate outnumber those who believe they will improve. FSB argues that governments in Edinburgh and London need to take action to reverse this trend.
Last week at a post-referendum business summit convened by the U.K. government, FSB pressed for clarity in key areas of importance for the small business community such as access to European markets.
Now, FSB says that Scottish government ministers may need to deploy extra advice and help for firms grappling with the consequences of Brexit. The FSB proposes a new specialist unit that would advise businesses and monitor their feedback. If it picked up on widespread problems—with business credit or staff recruitment, for example—his unit could also propose solutions to ministers.
“These figures show that small business confidence was already shaky ahead of the EU vote,” said Andy Willox, FSB’s Scottish policy convenor. “Now that the UK is set to leave, businesses need to know what it will mean for them in practice.”
The FSB’s Scottish Small Business Confidence Index fell to -5.5 points in the second quarter of 2016, down from +28.5 points this time last year. The UK figure also dropped sharply to +4.3 points this quarter, compared to a high of +37.9 points in the second quarter of 2015.
The study also reveals a declining proportion of businesses expect profits and revenues to grow, while hiring intentions for the next quarter are very subdued. Further, while a net balance of 7 percent of Scottish companies expect to increase their capital expenditure over the next year, this is well down on the equivalent figure of 19 percent recorded at the start of 2016.