Press & Policy

The following was published in the Scottish Daily Mail – 20/05/2020

By Dr Liz Cameron, Chief Executive of the Scottish Chambers of Commerce

Dire figures showing a dramatic rise in job losses in Scotland released yesterday show just how brutal the necessary measures to curb the virus has been on the economy.

However, the data emerging from April only tells the beginning of the story.

The shock caused by the lock down at the end of March is still resulting in companies failing and jobs being destroyed despite government support on offer. These figures also reflect conditions before a number of the announced schemes went live.

The good news is we have caught glimpse of some light at the end of the tunnel.

A survey by Scottish Chambers of Commerce (SCC), which takes in more recent data than that provided by the Office for National Statistics (ONS), shows that government support programs have been taking effect and are beginning to staunch the worst of the damage.

The most popular of these has been the Treasury furlough scheme, which 65% of respondents to our survey said they had signed up for.

This, as well as Scottish Government business support grant funds which 37% of firms in our survey have used, are among the reasons why there has been a reduction in the number of businesses in fear of imminent collapse compared to previous surveys.

However, employers still face real risk. We are by no means out of the woods.

As the need for social distancing measures extends to the horizon of our foreseeable future and the virus continues its spread both in Scotland and around the globe, the outlook remains fragile.

In the current situation, 87% of businesses told us that loss of income is their chief risk to survival. And while numbers are lower, it is still deeply concerning that over one in five businesses (22%) said they face imminent collapse in the next two months, while 43% fear they won’t be able to survive if lock down conditions persist. This represent a small decrease compared to our previous survey which found that catastrophic declines in income and cash caused by lock down conditions meant almost half (48%) of companies said they faced collapse in coming weeks.

Which is why we have welcomed the Scottish Government’s latest intervention, a further £33milion, which provides a cushion for those who it is predicted are most at risk of losing their jobs – young people, the disabled and single parents. It is fitting that a fund aimed at the vulnerable end of the workforce was announced in Mental Health Awareness week which puts a spotlight on the need to take care of those made vulnerable in these difficult times. These are the people for who the loss of paid employment will have severe knock on effects that could lead to a deterioration in skills and confidence that would make it harder long-term to fight back to previous levels of health and wellbeing.

These and other individuals laid low by the crisis will need extra support. Because the truth is that no matter how many bazookas the government can deploy to support the economy, some businesses will still fail. Others will not be able to employ the same number of people as before the lock down. Both of these consequences mean joblessness will continue to be an issue even as lock down starts to slowly ease.

This is particularly a concern for businesses in rural areas, where so much of the economy is dependent on tourism and hospitality. The extension of the furlough scheme to October, for example, was welcome and will help, although we are mindful that it still may not reach key businesses in these areas before it’s too late. We have called on the Scottish and UK governments to remain flexible. Some of these businesses will continue to need financial support until they can start generating sufficient income to sustain crucial jobs.

Scottish businesses are bruised. But in all this doom and gloom, those that are ready and able to get back to work are showing some signs of confidence.

According to our survey of 444 Scottish businesses, 58% of responders said that they would only need a week or less to be back in business if a date for the lifting, or partial lifting of some lockdown measures is put in place by the Scottish Government.

It has been very difficult for businesses in Scotland to see counterparts in Europe and England start to open back up again while our lock down remains.

No business wants to risk lives. But they are clamouring for thorough, practical guidance from the Scottish Government over when and how to return to work in a manner that is safe and protects the health and wellbeing of our employees and customers. We are hopeful that announcements tomorrow shed some more light to show the way.

The vast majority (69%) of businesses in our survey said clear advice and guidance from government is what they want to see in order to make a recovery. This need was even greater than calls for further financial support, which was still deemed necessary by 54% of respondents.

Clear guidance will play a key role in saving as many jobs as is possible. And for those jobs that will no longer exist, the extra £33million announced yesterday will also go some way to help.

There will need to be sustained effort from government, working with business, to support those affected back into work quickly with employment and skills support programmes.

And while it may be impossible to save all employers and all jobs, we need to continue to work together to mitigate the worst of the damage.