There has been a further erosion of business confidence in Scotland’s elected leaders just a month since the start of the new parliamentary term.
Confidence in both the UK and Scottish governments is sliding despite promises to put the economy at the heart of policy making.
Daily Business noted that the Holyrood chamber was virtually empty as Economy Secretary Stephen Flynn delivered his maiden speech two weeks ago.
The latest quarterly edition of the Understanding Business survey now reveals that only two-in-five (41%) firms believe the Scottish Government is taking action to address Scottish business concerns, a six-point drop from the previous wave (47%).
Just over a quarter (28%) of respondents say the same about the UK Government, representing a drop of five percentage points since March (33%).
Most businesses (67%) also believe the Scottish Government works more in the interest of big businesses than small firms.
More than half (51%) of respondents said they have raised prices in response to rising business rates. More than a third (38%) have changed strategy (38%), while just over a quarter (27%) have delayed growth plans and about a fifth (22%) have dipped into savings or investments.
More broadly, two-in-three firms (65%) expect to increase prices over the next three months, which is the highest level recorded in the survey since June 2023, at the peak of the post-pandemic cost-of-living crisis.
These pressures have contributed to wider concerns over business survival, with two-fifths (40%) of businesses saying they are more concerned about survival than they were three months ago – the highest levels since March 2024.
As for alleviating costs, reducing business rates was the second-most cited intervention that respondents said would help business growth. At 32% – the highest level recorded since June 2024 – it ranks second only to reduced taxation overall (40%).
Understanding Business is produced by research consultancy Diffley Partnership and strategic communications firm Charlotte Street Partners.
Malcolm Robertson, founding partner at Charlotte Street Partners, said: “These findings should trouble any politician at Holyrood or Westminster who claims to support economic growth.
“The business rates regime is little more than a tax on employers of people, of those who work for them and on the things that might give us comfort in difficult times, like going to the pub or out for a meal or on holiday.
“It is also a tax that is not fit for purpose and endless reviews and tinkering around the edges will not get the economy moving.
“Business rates and UK-imposed taxes on employers must come down to give businesses the confidence they need to invest and create good, well-paid jobs.”
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