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The Latest news from Dumfries and Galloway Chamber of Commerce -

Keep up to date with the latest news and stories from across Dumfries & Galloway.

 

Scottish business confidence grows for second consecutive month

Bank of Scotland’ Business Barometer for February 2019 shows:

  • Overall confidence for firms in Scotland rose four points in the past month to five per cent
  • Firms’ confidence in their own business prospects was 17 per cent, compared with three per cent in January

Overall business confidence in Scotland rose four points during February to five per cent, according to the latest Business Barometer from Bank of Scotland Commercial Banking.

Companies in Scotland report higher confidence in their business prospects, up 14 points to 17 per cent. When combined with their views on the economy overall, this gives an overall confidence figure of five per cent. 

Businesses’ hiring intentions show a net balance of 11 per cent of Scottish businesses expect to hire more staff during the next year, up 11 points on last month.

The rise in overall confidence in Scotland contrasts to the UK figures which show confidence fell 15 points to just five per cent as both firms’ optimism about the economy and their confidence in their own prospects slumped.

Across the UK, firms’ confidence in their own trading prospects fell 14 points to 13 per cent while economic confidence fell by 15 points to minus five per cent.

The Business Barometer questions 1,200 businesses monthly and provides early signals about UK economic trends both regionally and nationwide.

Fraser Sime, regional director, SME banking, Bank of Scotland Commercial Banking, said: “It’s promising to see the rise in confidence among businesses about their own prospects and recruitment plans.

“As they plan for growth, we will always be by the side of business to help firms reach their full growth potential.

“We recently committed to lend up to £1.6 billion to Scottish firms, just one of the ways we continue this support. I hope to see this upward trend continue and confidence continue to rise in businesses across Scotland.”

A net balance of 15 per cent of Scottish businesses said they felt that the UK’s exit from the European Union was having a negative impact on their expectations for business activity, down two points on a month ago.

Regional picture

Businesses in the North West showed the most confidence, at 12 per cent, ahead of the West Midlands (11 per cent) and the North East (seven per cent).

Those in Wales were the least confident, with an overall confidence of minus two per cent, six points below the national average.

 

 

Hann-Ju Ho, Senior Economist, Lloyds Bank Commercial Banking commented: “Political uncertainty has clearly affected business confidence across the UK, but the underlying economy remains resilient and is able to absorb short-term volatility.

“The modest rise in optimism at the start of the year was no more than a blip as uncertainty continues to impact on business confidence. The results suggest that near-term economic growth prospects have moderated further, but there is potential for a recovery further out should uncertainties subside.”

The possible impact of a No Deal Brexit on the Scottish Economy

A ‘No Deal’ Brexit could have a dramatic impact on Scotland’s economy, with the potential for national Gross Domestic Product (GDP) to fall by up to 7%, according to a new report by the Scottish Government’s Chief Economist.

 

 

The paper, ‘No Deal’ Brexit – Economic Implications for Scotland, sets out two potential ’No Deal’ scenarios, one of which would see short term disruption to supply chains lasting for a number of months, with the second scenario looking at an extended period of disruption.

Potential impacts to the economy of these two scenarios include:

  • Scotland’s trade with the EU would be significantly impaired, with a potential drop in Scottish exports by 10%-20%
  • Heightened economic uncertainty, which could reduce business investment in Scotland by £1 billion in 2019
  • A fall in exports and overseas investment, coupled with a broader economic slowdown, could result in a 10% - 30% depreciation in sterling
  • International net migration into Scotland, currently +13,000 a year, would be expected to fall, and potentially turn negative, as a result of a depreciation in Sterling and wider economic slowdown
  • An economic slowdown would be expected to result in the rate of unemployment increasing to between 5.5% - 8%, from current the current rate of below 4%. The top end of this rate would be equivalent to unemployment rising by around 100,000
  • Collectively, these pressures could push the Scottish economy into recession during 2019, with the potential for GDP to contract by between 2.5%-7%

Scottish Government research has already shown that the UK Government’s proposed Brexit deal could see a 6% fall in GDP by 2030, worth over £1,600 per person in Scotland.

Commenting on the publication of the report, Economy Secretary Derek Mackay said:

“This paper confirms that all forms of Brexit will harm Scotland’s economy and result in lower household incomes.

“People in Scotland voted overwhelmingly to stay in the EU but our interests are being ignored by a UK Government that wants to take Scotland out of the European Single Market, which is eight times the size of the UK alone.

“However, the economic harm of Brexit will be exacerbated if the UK Government decides to crash out of the EU without a deal. Such an outcome, which the Prime Minister refuses to rule out, represents a clear and present danger to Scotland’s economy.

“There will be severe impacts for the economy, and for people and businesses across Scotland, under a ‘No Deal’ Brexit and these impacts have the potential to push the Scottish economy into a deep recession, similar in scale to the financial crash of 2008.

“When I met with the Chief Secretary to Treasury in Cardiff last week, I urged her to rule out a ‘No Deal’ Brexit and give me a cast iron guarantee that all lost EU funding would be replaced in full after Brexit. She could do neither.

“We will continue to call on the UK Government to immediately rule out the possibility of a ‘No Deal’ Brexit and extend the Article 50 process. As a responsible government we are also continuing - and indeed intensifying - our work to prepare for all outcomes as best we can. However, whilst we will do everything we can to prepare, we will not be able to mitigate all of the impacts of the UK Government’s approach.”

The report also sets out the regions and sectors which will see the greatest impact of a ‘No Deal’ Brexit, including agriculture and fishing, transport, chemicals, pharmaceuticals, food and construction. However, all sectors would be negatively affected.

Ronnie Nicholson Resigns from Local Labour Group

Long time Labour Councillor Ronnie Nicholson has announced his decision to resign from the Labour Group of Dumfries and Galloway Council,

 

 

"This was an incredibly difficult decision for me to make but in all conscience I could not support a proposed SNP Labour budget which made such draconian cuts in teachers.

Given the reduction in funding from the Scottish Government, the council has an impossible task to make over £15m of savings without impacting negatively on services. But the decision to axe at least 40 teaching posts is a cut too far and one that is avoidable. The budget proposes over £500,000 of spending on new proposals such as a Community Initiative Fund and the council also propose to increase the reserves held.

I wanted to suggest that we used this money to retain teaching posts instead but I was prevented from even making this suggestion at the last Labour Group meeting before the budget. After decades as a Labour Party member, I simply cannot be involved in a decision that will damage ours kids education locally, therefore regrettably I had no choice but to resign from the Labour Group"

Training and IT grants to help you prepare for Brexit

The UK Government has released £5 million funding for training and IT improvements to help UK businesses complete customs declarations to trade with EU member countries - deal or no deal.

Processes and software for submitting customs declarations are both changing at the end of March, regardless of Brexit outcome. A new Customs Declaration Service will replace the existing CHIEF service.

According to the Institute for Government report, there are 180,000 UK businesses trading goods between the UK and the EU who will need to complete customs declarations for the first time.

Read more on what you need to know about the Customs Declaration Service

Looking beyond the EU

The EU will remain a vitally important market for Scottish businesses after Brexit. In addition, businesses should also consider market opportunities outside the EU to help strengthen future growth and meet demand.

With growing interest in quality goods from Scotland around the world, knowledge of customs procedures and documentation will be a necessity if your company is looking to seize those opportunities.

Grants to improve your software

Businesses can apply for IT grants up to the maximum amount of state aid (€200,000)

To apply for the IT improvements grant, your business must:

  • Currently complete customs declarations for importers and exporters
  • Have 250 employees or fewer
  • Have an annual turnover of less than €50 million

Funding can only be used to buy software that will help your business to complete customs declarations more efficiently. It must be a ready-made solution - you cannot use the funding to commission bespoke software.

You can also use the funding to:

  • Buy hardware that’s needed for the software to run
  • Install and configure the software and hardware
  • Buy the first-year licence
  • Train employees to use the software

You cannot use the funding for unrelated networking costs.

Applications are managed PwC for HMRC.

Read full terms and conditions before applying

We suggest you register early. Closing date for applications is 5 April 2019 – or sooner depending on demand.

Register online via PwC

BREXIT - Import & Export Training

Ensure your staff are trained on the latest legislation. To help with this, you can apply for a training grant to attend the Institute of Export’s one-day training course on Customs Procedures and Documentation.

This course will be available in Glasgow and Edinburgh in the coming weeks and months. It will cover everything that you’ll need to know to enable goods to be imported and exported after Brexit. It also looks at the differences between EU and non-EU trade.

Upcoming dates

  • Edinburgh – 25 February, 4 March, 20 March
  • Glasgow – 14 February, 25 February, 7 March, 19 March

REGISTER FOR THE TRAINING EVENTS BY CLICKING HERE

Delays, fines and inspections are things that no company wants to endure. This course will equip you with the right information to be able to understand what’s required to comply with customs. And, should at any time an audit be required, you’ll be prepared.