17 Mar 2021
By Stuart Patrick, Chief Executive of Glasgow Chamber of Commerce
I was hoping this would be the very last time I mention the need for a Scottish road map out of the Covid19 crisis.
Yesterday the First Minister’s announcement to the Scottish Parliament further explained the process she hopes we will go through to reach the end.
This is enormously welcome although it does still leave some businesses in international travel, aviation and major events with damaging uncertainty and it only goes so far on the reopening of offices which is vital for the resurgence of our city centres. One might say that we have been given an extended road map but not one that reaches the final destination.
Her original February plans fell far short of the map businesses were needing with only the 26th April as a milestone for non-essential retail and for hairdressers. Businesses in so many sectors like hospitality, events, the arts, sport, travel and tourism were largely left to wait and see. In contrast the UK Government laid out aspirational time frames that gave business leaders something to aim at even if there was no certainty they could be delivered.
The attitude amongst businesses has never been an ignorant dismissal of the central importance of public health. Very few businesses have been arguing for a map that doesn’t take into account the movements in health data. But without some sense of timelines business owners and managers had very little with which to plan how to stretch out their finances. This has been especially difficult for our small businesses with much more limited options for finding cash. We have repeatedly argued that the existing support frameworks don’t fully cover the costs that businesses are incurring whilst they are closed and the prospect of an open-ended lockdown risked being impossible for many small businesses to manage.
Brewgooder founder Alan Mahon made a very powerful case in his recent Herald interview that the mental health impact on small business owners and managers had been relatively overlooked. A survey by ACCA and the Corporate Finance Network last week put some figures on the extent of the issue. Around 1 in 7 small business owners in the survey’s March tracker were finding it difficult to cope with the pressures involved in keeping their business going and another 1 in 13 were having negative thoughts or even suicidal feelings. That was a dramatic shift from the summer when the comparable figure was 1 in 200.
The importance of our small business community should never be forgotten. They are the bedrock of our economy. The overwhelming majority – by which I mean 99% – of companies in the UK are SMEs, employing 60% of the private sector workforce. That’s some 16 million jobs depending on the entrepreneurial drive of small business owners. As far back as September, the CityUK’s Recapitalisation Group was estimating that by March this year SMEs would have taken on around £70 billion of debt funding to survive the crisis which they would not be able to repay. One wonders how much higher that debt mountain has grown during this current lockdown.
That helps to explain the reaction I was finding amongst the Chamber members most affected by lockdown restrictions whilst consulting on the work of the Glasgow City Centre Taskforce. Whilst every business rates bill cancelled, cash grant received or tax bill deferred is welcomed, nothing matches the prospect of fully reopening the business, securing jobs and regaining control over the company’s future.
That prospect is now more concrete albeit a few weeks away and although we can’t yet see the final destination we can sense it is getting closer.
This article was first published in The Herald on Wednesday 17 March 2021
