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New poll underlines concerns

Fear of IndyRef2 and low oil price holding back confidence

scot refDepressed oil prices and fears over a second independence referendum are holding back business confidence in Scotland, according to a survey of senior business leaders.

The state of the economy is the biggest worry for entrepreneurs in Scotland, with 22% citing macro-economic factors – such as the price of oil – as their main concern, compared with 15%for the UK as a whole.

Concerns is also running high over the possibility of another poll on splitting from England, with 85% of Scottish respondents saying another vote would be bad for British business.

The survey by the Business Growth Fund (BGF) also revealed that support for the European Union is strong throughout the UK with 82% of respondents in Scotland think membership is good for business, in line with the 80% figure for the entire UK.

In Scotland, 90% of those questioned believe the EU is an important export market, echoing the 87% for the UK.

This the first survey of its kind conducted by the BGF, a provider of growth capital backed by five of the UK’s main banking groups – Barclays, HSBC, Lloyds, RBS and Standard Chartered.

It found lower confidence among Scottish firms with 66% of respondents in Scotland believing that conditions for growth will improve in the coming quarter, against 76% figure for the UK as a whole.

Over the past quarter, 78% of Scots think that growth conditions have improved, compared with 83% across the UK.

Recruiting staff with the right skills was the largest factor for 21% of Scots, compared with 27% across the UK, while access to finance was the biggest worry for 17% in both Scotland and the UK.

Upgrading infrastructure such as railways, roads and runways ranked first among the business issues that need to be prioritised by the UK Government, followed by a desire to see simplified employment policies and an improvement in the quality of apprenticeships to make them more attractive to businesses and young people.

North of the border, members of the Talent Network believe that 96% of the businesses with which they work plan to grow in the coming quarter, with only 4% expected to consolidate their position – none of the entrepreneurs are looking to sell their businesses.

Iain Pittman, part of the executive team of Arran Aromatics that received £2.8m of BGF funding in August 2013, said: “The situation for owners of small and mid-sized businesses in Scotland is still sticky. Thankfully, many appear to be trying to ignore distractions – and the continued noise around Europe – and concentrate instead on running their companies. Access to skills and money remains a hindrance, but I don’t think this has dampened ambitions.”

Simon Munro, BGF Regional Director Scotland, said: “Although Scotland’s economy is much more diverse than it was during previous oil price dips – with sectors such as food and drink and renewable energy becoming increasingly important – the oil and gas sector still employs thousands of people and has extensive supply chains.

“Rather than withdrawing, many businesses appear to be acting more robustly by looking for ways to adjust to the low oil prices.

“Businesses want a quick and decisive outcome from Britain’s EU referendum to remove uncertainty – and they don’t want a second independence referendum adding to uncertainty in Scotland.”

* The inaugural BGF Growth Climate Index polled BGF’s Talent Network, a proprietary network of Board Directors with wide-ranging experience across the spectrum of UK and international business, from non-executives of high-growth small and mid-sized companies through to FTSE 100 stocks.

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