Boost for economic recovery as most Omicron restrictions withdrawn

18th January

The Scottish Government has confirmed that all but one of the measures put in place immediately after Christmas to stem the spread of Omicron will cease from 24th January. The exception is the guidance to work from home, but it has said that may change from 1st February. In a further boost, it has confirmed it will not be extending the vaccine passport scheme to more settings or events.

The announcement is timely as the latest Quarterly Economic Indicator from the Scottish Chambers of Commerce, covering the last quarter of 2021, reveals that covid restrictions continue to cast a shadow over business confidence and investment plans, and this is exacerbated by the rising cost of doing business, which is also dragging on growth, with increasing cost pressures for raw materials and goods driving down profitability. Surging inflationary pressures are a major concern for businesses, with rising costs of fuel, raw materials, and the removal of the VAT reduction for hospitality and tourism, increasing pressure on them.

Commenting on the Scottish Government’s announcement and the latest SCC QEI, Alan Mitchell, Chief Executive of Fife Chamber of Commerce, said: “These are worrying times for many businesses, whose ability to fully recover from the impacts of covid restrictions and Brexit is still at risk, with all the adverse implications that has for living standards and future Government tax receipts and spending.

“Many of the pressures that businesses are confronting, including raw material shortages driving supply chain inflation, are global in nature and cannot be ‘solved’ independently by the UK or Scottish governments. But that doesn’t leave those governments as helpless bystanders to what is happening. They can mitigate the pressures on business. One very simple solution is to have an unambiguous and accelerated timeline for removing all remaining Covid restrictions and removing for good the threat of further partial shutdowns of vital parts of our economy. We must have a unified 4-nation strategy to live with Covid, rather than under it. There has always seemed to be a greater willingness on the part of the UK Government to take this approach, with a much more cautious approach from the Scottish Government. But now more than ever all the UK nations need to move at the same speed.

“Other ways our governments can help business, includes the policy of not imposing additional taxes or other costs on companies when they are facing countless other cost pressures. Whether it is raising Employer National Insurance Contributions or introducing Workplace Parking Levies or city centre Low Emission Zones charges, they will hurt businesses who are very vulnerable. Nor should business cashflow, investment funding or profitability be put at risk by the imposition of more business charges or taxes to pay for tax cuts or other measures to protect households from the rise in the cost of living that they are facing too. ‘Robbing Peter to pay Paul’ is never a good idea. The mutual, long-term wellbeing of ‘Peter’ and ‘Paul’ depends on us having strong businesses that drive a dynamic and successful economy.”

Current Scottish Government Covid Financial Support Packages for Business

The financial support for Close Contact Services is still to be confirmed by the Scottish Government – despite being promised weeks ago.

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