Inverness Business Briefing - when uncertainty's a certainty
In a speech in Cape Town in June 1966, Robert F Kennedy said: “There is a Chinese curse which says 'may he live in interesting times.’”
While there seems little evidence this is a genuine curse, with days to go until Theresa May triggers Article 50; persistent uncertainty around an evolving political landscape at home and abroad; together with other economic and commercial concerns, we are indeed living in interesting times.
As such, before last week’s Inverness business briefing (hosted by the Press and Journal, and sponsored by Ledingham Chalmers), I said I expected a lively debate on these issues.
And that’s exactly what we got.
Brexit and the movement of people
The impact of Brexit is the topic of much discussion.
But of all the issues around Brexit - from currency, trading terms, taxation and regulation — it’s the movement of people that we, as a business, are hearing most about.
People in Inverness and the Highlands are statistically getting older: more so than other parts of Scotland.
At the same time, the area boasts a particularly vibrant tourist economy.
According to Small Business Gateway figures, business start-ups are higher this year than in the last three, and business assistance inquiry levels are the 3rd highest in Scotland after Glasgow and Edinburgh.
It seems then there is an obvious need to attract, support and retain people to make the most of these opportunities; to realise the considerable entrepreneurial potential that exists.
But the big question is, with a strong reliance on immigration in the region, where is the next wave going to come from in the run up to, and after Brexit?
Employees from Europe, in particular, are looking to their employers for reassurance.
Yet, where do employers find that? As a law firm, we’re already seeing procurement processes for clients operating in Europe changing. Even before Article 50 has been triggered, some are being asked to enter into long-term contracts guaranteeing they’ll only employ EU nationals.
Others are looking carefully at where they have existing contractual obligations, and considering whether they can meet them.
They now have to quantify what the risk is to them if they can’t get people and goods to their clients on the continent within contracted timescales.
Some are even looking at moving their presence outside Scotland, and indeed the UK, as a result.
Another concern is the apprenticeship levy: viewed by some as a payroll tax that takes funds away from a business’s training budget to go into a pot from which the company may not directly benefit.
Simply put, employers pay the levy, then are able to apply for government funding to pay for modern apprenticeships.
What’s more, how this is being implemented in Scotland is different from the rest of the UK.
Arguably, the Scottish Government’s application of the levy funds is wider and more flexible than in England: here, half of the levy funds will go directly to modern apprenticeships with the rest to be spent on workforce development and pre-employment support programmes.
Flexibility is a plus for some; for others it’s seen as siphoning off funds for other priorities.
Either way, it’s not helpful for UK wide organisations to have to account for such a variance north and south of the border.
Business rates revaluation
The rates revaluation is certainly a contentious issue in the north east, but also further north in Inverness as well.
The tone date, used for ascertaining rateable value, for this year’s revaluation was 1 April 2015: a time when the full effect of the oil industry slump had still to be felt in the property market.
With some movement towards caps and local authority support for those worst affected, the message is clear: with a deadline of 30 September, ratepayers should waste no time in appealing against their new valuation if they feel it’s incorrect, or excessive.
Meanwhile, it seems uncertainty will likely remain a constant as businesses, governments and individuals watch to see how things play out. Businesses should continue to keep themselves informed, engage in the discussions and focus on what they can control. Taking stock; spreading risk; making sure processes are robust; and asking for help and support are all going to be key strengths for successful businesses.