Page last updated at 00:55 GMT, Wednesday, 21 January 2009

Human cost of economic slowdown

By Jo Perry
Central Scotland reporter, BBC Scotland news website

The latest unemployment figures have shown another increase as the economic slowdown takes its toll.

Among those being added to the tally is small business owner David Balfour, from Grangemouth, who told the BBC Scotland news website in August that he feared for the future of his IT firm.

He started Greyrigg Systems Scotland Ltd in 1998 and until last year was making more than 50,000 a year undertaking contracts for companies such as British Aerospace and Norwich Union.

David and Freya Balfour
The IT consultant and father to nine-month-old Freya is out of work
However, less than five months after he spoke to the BBC his worst fears were realised when work for the business dried up completely - leaving the IT consultant unable to pay himself a wage.

After spending more than 9,000 of his savings trying to keep the business afloat, David has now run out of money.

In December the father of nine-month-old daughter Freya signed on with his local Job Centre Plus office but has yet to receive a payment after an administrative error meant his claim for Job Seekers Allowance was cancelled.

David, 40, said the hard times continued into the new year when a demand for more than 2,000 for corporation tax arrived.

He said he has been left with a choice between folding the business and waving goodbye to the money he invested in it or trying to struggle on.

Mr Brown is always telling us that he is doing everything he can to help small businesses but cutting a small amount off VAT did nothing to help people like me
David Balfour

He said: "There must be a lot of people who are struggling like me or who are in an even worse position.

"I've sent letters to Gordon Brown and Alex Salmond telling them about my situation but have not heard anything back.

"Mr Brown is always telling us that he is doing everything he can to help small businesses but cutting a small amount off VAT did nothing to help people like me.

"If the government really wanted to help business they should cut corporation tax and income tax. They could also have reduced the cost of fuel but instead they are just putting obstacles in the way as far as I can see.

"They have put billions into the banks to get them lending but I cannot afford to take out a loan.

"If I thought I could take out a loan to keep my business going for another year then I would, but there is absolutely no way I could afford to get into more debt."

'Working constantly'

David said he was now in the process of trying to find work to pay his mortgage and the costs of looking after his new baby.

However, problems with his application for benefit have added to the stress he feels.

"I am desperate for help but it just does not seem to be there. I have had to call lots of different phone numbers trying to get my claim sorted out and after a month I'm still waiting.

David Balfour who own GSS
GSS was generating more than 50,000 before the slowdown
"I'm looking for a full-time job to keep a roof over my family's head but unfortunately that means that I will have no time to spend looking for contracts for my business.

"We've only had two short contracts in the last year when normally I would have been working constantly.

"As far as I'm concerned the recession started more than a year ago. It's been really bad. I have never seen anything like it. I've got 15 years experience in this field but it doesn't seem to matter."

The latest figures show that unemployment in the Falkirk areas stands at about 2,872 - or 3% of the working age population.

That figure rose by 296 in just one month and 959 compared with the same period in 2007.

The statistics reflect David's gloomy expectations as far as the prospects for his business are concerned.

He said: "It's not in my nature to just give up and not pay my bills, but I have a corporation tax bill for more than 2,000 to pay which I cannot afford.

"I don't want to fold the business because I have put about 9,000 worth of my savings into it and it would mean that I would lose all that.

"But I can't afford things to go on like that.

"It feels like the country's going to collapse. If things keep going the way they have been. I can't see it any other way."

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