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Last Updated: Thursday, 17 January 2008, 00:12 GMT
'Challenging' business year ahead
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Businesses hope to see their rates cut early
Business leaders are demanding action from ministers as they predict the next year would be "extremely challenging" for firms.

The Scottish Chambers of Commerce has called for planned reductions in business rates to be speeded up and for improvements in the planning system.

Chief executive Liz Cameron made the plea after a business survey showed declining confidence in all sectors.

The study found expectations were at their lowest for three years.

Retailers expect turnover and profit to weaken during 2008, while small firms employing fewer than 25 people also predicted a drop in profitability over the coming 12 months.

'Barrier to business'

Ms Cameron said: "Since the summer there has been a significant deterioration in businesses' expectations in turnover and profitability in both the manufacturing and retail sectors, while in construction businesses are reporting a decline in new orders."

She said retailers reported a number of factors were affecting confidence and sales, including declining growth in consumer spending.

Ms Cameron also called on the government to implement reductions in business rates, planned to be phased in, in April.

She said: "The Scottish Government has announced a staged reduction in business rates over the next three years but we believe that the full reduction must be introduced this April if we are to ensure the maximum benefit for Scottish businesses."

There is no shortage of talk of difficult times ahead economically, but Scotland appears to be in confident mood
Manus Fullerton
Lloyds TSB Commercial

She added: "Firms in both the construction and tourism sectors are reporting problems with the planning system as a barrier to business.

"This is one area where the government can act in order to reduce the burden on our businesses by introducing a nine-month time limit on planning applications and creating an independent body to rule on applications of national importance."

Ms Cameron also urged Holyrood and Westminster to work together to boost manufacturers' confidence and to create incentives to encourage firms to invest in Scotland.

While the SCC survey found declining confidence among businesses, another survey reported Scottish businesses were in confident mood.

The Business in Britain survey carried out by Lloyds TSB Commercial found that 56% of businesses had reported an increase in turnover in the last six months - higher than the UK figure of 47%.

This study also found that only 13% of Scottish firms were suffering from strains on their cash flow, below the national average of 21%.

Manus Fullerton, corporate and commercial director with Lloyds TSB Scotland, said: "Across the board Scottish businesses have presented stronger results than the UK average, suggesting they are in robust shape.

"There is no shortage of talk of difficult times ahead economically, but Scotland appears to be in confident mood."

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