By Russell Borthwick
WE HAVE seen some terrific examples of community spirit in recent months and a fantastic sense of coming together in the face of adversity. As we start to move through the recovery phase, the vital question we now face is how do we re-fire our regional economy?
There has been an unprecedented level of stimulus packages made available since the start of the outbreak. The numbers are staggering with 9.3 million jobs protected at a cost of £25 billion, a further 2.6 million claiming from the self-employed scheme; and £40bn given out in government loan schemes, including £900m from the Scottish Government via the business support fund.
There has also been a significant volume of technical guidance available to help firms understand how to reopen but the Chamber network’s recent quarterly economic survey shows, despite this, many are facing a stark reality.
Business activity has reduced or ceased entirely for the majority of firms in this quarter and almost all of our key economic survey indicators are at the lowest level on record. Sales have dropped to a lower level than we saw during the worst of the 2008-09 recession, with 66% of firms reporting worsening cash flow and low recruitment, albeit this figure is marginally higher than it was during the global economic downturn which tells us the job retention scheme has limited the scale of the impact on workforce size for many businesses.
Set in this context, if people don’t want to go places and buy things there is a real danger that many of our local businesses simply won’t recover.
We must try to rebuild consumer confidence and demand, which is the only thing that will get our economy moving again and a strong regional economy is not just important for business owners, it’s vital for all of us.
In the Aberdeen city region we have launched a new initiative that seeks to use the power of the collective to make it easy for everyone to play a part and support local.
North East Now provides information on which local products are available in shops and supermarkets, making it easy for people to choose north-east brands in their weekly shop. It includes sections on local businesses and those promoting local provenance operating across the food and drink, health and wellbeing, lifestyle and fashion and beauty sectors; and links to a wide range of directories, news articles, blogs and inspirational stories from across the area.
We’ve seen lots of small cooperatives and similar initiatives happening in pockets across our area. We want to help amplify their voice and give them a platform to engage, promote and talk about what they’re doing while making it easy for north-east residents to know what’s out there and how they can help.
It’s not the only priority area however. We have made ongoing requests in discussions with the UK Government on economic recovery, including a targeted temporary reduction in VAT, longer-term support for those sectors hardest hit by Covid-19, and a need to accelerate investment in low-carbon infrastructure and the energy transition.
All levels of government need to work seamlessly together focusing on taking actions that will drive consumer confidence and demand. The policies put forward at the Chancellor’s upcoming fiscal event will be vital but so too will the Scottish Government’s response. We look forward to seeing equally ambitious plans to kick-start the economy in devolved areas, such as further reform of business rates, as governments and business seek to work in partnership to get our economy moving again.
Russell Borthwick is chief executive of Aberdeen & Grampian Chamber of Commerce.
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