By Russell Borthwick
IT FEELS like a long time, a very long time since I sat down to write my piece for Business Voices last month. The world has changed in such a short period of time as we all come to terms with this economic and public health crisis.
I wrote the last time about buzzwords – I have a new one this month and its ‘alignment’, something that we would like to see more of if we are to have a level playing field in restarting our economy.
At the end of April we sent a comprehensive open letter to our elected representatives both in the North-east and the Scottish and UK Governments to outline the concerns that continued to create uncertainty in regional businesses and member views on the guidance needed to support a future recovery.
Broadly, we split our letter into four main sections: improvements for existing support schemes, changes to business rates and grants, the need for sectoral support for the hardest hit industries; and the importance of comprehensive guidance for the recovery and safe operation of businesses.
We started seeing change only a week after the letter’s publication. The Scottish Government moved to publish a framework for recovery outlining the broad principles that government will be considering when they look to progress plans to restart the economy.
The UK Government also recognised concerns raised with the interruption loan scheme, which wasn’t delivering the finance to firms at scale that was promised, by creating a new ‘Bounce Back’ loans scheme designed to deliver small loans which are 100% backed by government with a streamlined application process.
Of course, we’ll need to see more in the weeks ahead. It’s always hard to predict what the world will look like by the time this column appears but there are a couple of key changes that we believe government should focus on next.
Firstly, clarity on the future of the critical jobs retention scheme. Government needs to commit to a phased withdrawal of the scheme as lockdown measures are eased and be ready to hold it in place for specific sectors – such as tourism, aviation or oil and gas – who face a more prolonged path to recovery.
Some clear packages of sectoral support have to be next on the list. Both our ambition to be one of the global centres of the energy transition and our regional connectivity are at risk as key industries try to weather this unparalleled economic event. Decisive action now from government is the best way to ensure we meet the climate challenge from a position of strength.
The Scottish Government also needs to take steps to expand business rates relief and reduce these upfront costs in the weeks ahead. Expanding grants above the current £51k threshold and ensuring that firms following social distancing advice and working from home get appropriate rates relief should be part of this. Our data shows that many firms have less than three months cash in reserve so reducing upfront costs and delivering cash injections has to be a priority.
Finally, a firm, detailed plan for the easing of lockdown measures needs to be drawn up collaboratively by the UK Government and the devolved administrations. Differentiated guidance on workplaces has caused some real confusion during this period and we have concerns about how support schemes would be deployed if different approaches were taken by individual nations.
Any plan should be transparent, honest and give businesses as much clarity as possible on how they should be supporting staff and customers if we are to avoid the further economic damage that an additional period of lockdown could incur.
Russell Borthwick is chief executive, Aberdeen & Grampian Chamber of Commerce.
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