SCOTTISH businesses trust the SNP more than Labour as nearly half of firms believe John Swinney’s government understands their concerns, researchers have found.
According to a quarterly survey, conducted by 56° North and the Diffley Partnership, 48% of businesses believe the Scottish Government understands their concerns.
It was the highest level recorded since the survey, which more than 600 companies responded to, was first published in 2023.
In comparison, the Labour Government polled only slightly up on the previous Tory administration at 31%.
The Understanding Business survey showed that Scottish companies are concerned about the rise in employers' National Insurance contributions, which will come into force in April next year.
Research from the survey also indicated that the UK Government’s budget announcement in October has worsened perceptions of Labour among Scottish businesses.
Mark Diffley, the founder and director of Diffley Partnership, told The Times that almost half of Scottish businesses have reacted negatively to the announced UK Budget.
He said: “Our new survey reveals some modest uplift in optimism in Scotland’s business community, but this is tempered by their reaction to the UK budget and how that may impact on business conditions in future.
“A plurality of businesses, 46%, have reacted negatively to the UK budget, compared to 29% reporting positivity and the increase in employer’s national insurance has gone down particularly badly.
“The fact that four in 10 businesses think the budget will increase their overall business costs will be of particular concern and may impact on future confidence and growth.”
The majority of respondents, 57%, warned that rising costs will cause them to increase their prices and that they may also look at reducing workforce numbers.
The survey stated that the proposed rise in prices is largely driven by the increase in costs related to employees, utilities, and taxation.
Operational costs were the top concern among Scottish firms with 40% of respondents saying it is their main barrier to growth along with difficulties recruiting skilled staff.
When Scottish businesses were asked what they would like Holyrood ministers to do, more than 30% of respondents called for discounts on business rates and specific grants or subsidies for small and medium firms.
John Penman, the managing partner of 56° North said: “While it is reassuring to see Scottish businesses be positive about the economic outlook, it’s clear that Labour’s tax changes are causing some concern and may hamper investment plans.
“As growth is such a key factor in Labour’s strategy to build a strong economy, the chancellor [Rachel Reeves] many have to look again at the impact her measures are having, especially on small and medium size businesses.”
