WITH the Budget less than a week away, Scottish companies are still
clinging to hopes of a slow but steady economic recovery while bracing
themselves for bad news from the Chancellor.
A wide-ranging survey of almost 200 leading firms found that
three-quarters were concerned that Tuesday's Budget measures would
adversely affect them, a figure that rose to 82% in the west of
Scotland.
However when asked if they felt that business confidence was
returning, 77% agreed, virtually all describing the process as ''slow''.
Only one in five disagreed.
The fragility of this confidence is highlighted by mixed responses to
another question which showed 41% viewing prospects for the next year
''with some concern'' and 7% downright pessimistic. 41% were optimistic.
Carried out in the three weeks to November 12, the poll was prepared
by Market Research Scotland for accountants Pannell Kerr Forster, The
Herald, and the BBC.
The results would appear to confirm a trend, detected by other recent
Herald polls and industry surveys, that Scottish business confidence is
beginning to wane after strong showings earlier this year.
The deepening recession in Europe, Scotland's most important export
market, has been cited as one of the main reasons. It was notable that
the introduction of tax incentives for exports was the most popular of a
range of suggested Government measures.
Extending the spread of VAT proved the next most popular, attracting
52% support while increased personal income tax scored 46%, higher VAT
rate (45%), abolishing mortgage relief (44%).
The controversial proposals to extend VAT to domestic fuel was
supported by only 43% of executives, one of quite a number of disturbing
results for the Government.
Almost two-thirds did not believe that the Government's economic
policy was benefitting business with discontent again highest in the
west where 71% were unhappy. Just over one-quarter favoured the policy,
a figure that rose to one-third in the east.
Concerns over the underlying strength of the recovery will hardly be
allayed by the finding that while 29% of companies expected to increase
their workforce, virtually the same proportion thought they would have
to cut staff numbers. 43% predicted no change.
The high level of unemployment was clearly worrying many businessmen,
according to the poll which showed overwhelming support for a slightly
higher level of inflation if that was needed to create more jobs.
Almost half the respondents favoured a combination of 4% -- 5%
inflation and unemployment below three million against 19% who preferred
a rate of no more than 3% with a consequent jobless total of more than
three million.
Asked if they favoured Government intervention to stop local jobs
being transferred to other countries, just under one-half said yes
against 39% who opposed it. Support was strongest among bigger
companies.
As in most of the specific questions, retailers came out as the most
upbeat as the Government banks on consumers to spend their way out of
the recession while the hard-pressed construction industry was the least
optimistic.
Fully one-quarter of the building companies polled said they did not
believe confidence was returning -- quickly, slowly, or at any other
speed -- and 60% viewed the next 12 months with some concern.
Not surprisingly, the construction trade is also the most concerned
about spending cuts with 71% saying they would be adversely affected
against only 42% of the retailers.
By regional breakdown, the north and east consistently scored higher
in the ''feel-good'' scale than the west where one quarter of the
companies reported no sign of any return in business confidence compared
with 21% overall.
The much-criticised local enterprise companies can take some comfort
from the finding that 54% of the executives questioned agreed that they
and Scottish Enterprise National ''added value to the economy''.
Just over one-fifth disagreed and 24% said they did not know, the
latter suggesting a communications problem somewhere along the line. Of
the regions, the north was the most in favour of the lecs while, perhaps
surprisingly, bigger companies (68%) shared its enthusiasm for
organisations which are geared more towards helping small firms.
Almost half the companies questioned were based in the west against
one-third in the east and 21% in the north. Manufacturing (40%)
dominated, followed by services (27%), construction (23%), and retailers
(10%).
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules hereComments are closed on this article