Support needed

Firms cancelling contracts as soaring costs bite

Stephen Leckie
Stephen Leckie: more pressure to come

Companies are being forced to cancel contracts and plans to expand because of soaring costs and labour shortages, according to a business leader.

Stephen Leckie, president of the Scottish Chambers of Commerce, said the growing emergency facing businesses requires urgent attention from both the Scottish and Westminster governments to get them through the winter months.

Scotland’s Finance Secretary John Swinney will present his Emergency Budget review next week and – as things stand – this will be followed on 31 October by the Chancellor’s medium-term fiscal plan. Businesses will be looking to both for offers of help.

“Frozen investment, faltering confidence, falling cashflow and profits, and a pessimistic global outlook, paint a concerning picture for businesses in Scotland,” said Mr Leckie. 

“There is more pressure to come in the winter months. The signs of an economic bounce back don’t look promising as more and more firms are telling us that they have been forced to cancel contracts, projects or plans to expand, due to soaring costs and difficulty in hiring people.

“Whilst we recognise the strain that has been placed on the public finances, governments in Edinburgh and London must make clear how businesses will be supported to survive through the difficult months ahead and what measures will be put in place to support long-term growth.”

His statement, accompanying a survey undertaken in August & September, was issued ahead of the Prime Minister’s resignation which has added further uncertainty for business.

Chancellor Jeremy Hunt, who has reversed nearly all of Ms Truss’s botched £45bn tax-cutting mini-budget, is still expected to deliver the fiscal statement on 31 October. The new Prime Minister will take office just three days beforehand and is unlikely to risk upsetting the markets again by appointing a replacement or delaying the statement.

The date is also favoured by the Bank of England as comes ahead of the monetary policy committee’s meeting on 3 November to set interest rates.

Mr Hunt ruled himself out of the leadership contest, having being unsuccessful twice, and is focused on the fiscal plan which is expected to include widespread spending cuts and efficiencies, as well as some tax rises.

Leave a Reply

Your email address will not be published. Required fields are marked as *

This site uses Akismet to reduce spam. Learn how your comment data is processed.