The Scottish Chambers of Commerce has warned the UK and Scottish governments that unless they take urgent action to support business, many will not survive 2025.
Chief Executive Dr Liz Cameron CBE said: “With the economy stagnating and the full impact of the rise in NICs still to be felt, many businesses, particularly in retail and hospitality, will be forced to either close or cut jobs.
“The biggest danger is our politicians will start to focus more on the Scottish election in 2026 instead of addressing the immediate concerns of those who create the employment and growth we so desperately need.
“Voters go to the polls just over a year away and, as we have seen with the UK election, the months of soundbites and promises of change creates a sustained period of inertia for business and investment never mind a failure to fully live up to those promises after the votes have been counted.
“While we do need a fix for 2026 the priority is to survive 2025. Our 12,000 members have shown dogged resilience in the face of huge challenges but there is only so much their remarkable entrepreneurship and innovation can protect against rising costs and falling demand.”
More than 10,000 retail jobs have been lost in the last year according to the latest data in the Scottish Government’s Business in Scotland report with figures showing retail employment in Scotland at their lowest level since at least 2010.
Almost 170,000 UK retail jobs went last year in data produced by the Centre for Retail Research. That included major collapses of major chains including The Body Shop, Ted Baker and Homebase. Figures released by the Centre for Retail Research revealed that 13,479 shops, including 11,341 independent retailers, shut last year with more than 17,300 closures expected this year.
The hospitality trade will shortly report on their festive trading but initial indications from SCC members indicate it will not be strong enough to balance the escalating employment and energy costs.
“As an organisation we have repeatedly called for hospitality rates relief to be increased in Scotland in line with the rest of the UK and support to be extended to cover the retail trade,” said Dr Cameron.
“The worrying impact of the lack of help for the retail sector has clearly been demonstrated in the latest data and that situation is unlikely to improve without direct action from government.
“And whilst we welcomed the additional relief for hospitality in the recent Scottish budget the worry is it will not go far enough to sustain those businesses over the quieter months following the festive period.
“Measures to support growth and investment in the recent UK and Scottish budgets were positive but there are still major concerns about the impact of taxation, rates relief, and public spending. We need greater targeted support and policy clarity.
“Pre-election soundbites and cosy conversations with business will be meaningless without steps being taken now rather than the promise of a fix for 26.
“That includes the Scottish government delivering a long overdue review of the Apprenticeship Levy which is clearly not fit for purpose. Business has made its voice clear across a number of sectors – we need more apprenticeships and skills development programmes if we are to upskill our future workforce and remain competitive on a global stage. It must also address the critical labour shortages in sectors such as construction, engineering, hospitality, manufacturing and many more.
“With one in ten UK firms unable to recruit to meet demand and a fifth of Scottish companies asking staff to work longer hours to cope, according to the Office for National Statistics, the staffing crisis is having a huge impact on our ability to deliver growth never mind simply meet existing demand.
“Scotland’s economy stands at a pivotal moment and this year must be one of bold leadership with policy alignment aimed clearly at enabling businesses to grow”.
I hope that 2025 will be the year of real partnership with business and politicians from all parties. We can face the challenges with trust, collaboration and a shared sense of purpose.
