SCC QUARTERLY ECONOMIC INDICATOR: Q3 2024 REPORT & PRESS RELEASE

TAX FEARS GROW IN SCOTTISH ECONOMY

Fears over increased taxes and uncertainty over the impact of the Autumn Budget are hitting Scotland’s businesses.

The Scottish Chambers of Commerce’s survey flagged taxation concerns among 55% of businesses – up from 35% last year. Anxiety, particularly around Labour’s Autumn Budget, saw both the tourism and retail sectors reach five-year survey highs of 77% and 70% for taxation respectively.

The survey of hundreds of Scottish businesses, carried out in partnership with the Fraser of Allander Institute, also shows that pressures on cashflow and profit margins are limiting and squeezing growth.

Four out of the five business sectors surveyed reported a fall in profits, with only the services sector showing an increase but still significantly down on the same quarter last year.

Douglas Smith, Vice-President of the Scottish Chambers of Commerce said: “General business confidence is uncertain given recent government rhetoric on how painful this budget will be and taxation is a significant concern.

“How this will impact business and employees is a huge worry and the lack of clarity has stalled investment and undermined confidence.

“In addition, employees worry about personal taxation with fuel duty, pension tax relief and the impact of fiscal drag all taking cash from their pockets. That will lead to increased wage demands as 7 in 10 firms now cite labour costs as their top cost pressure.

Mr Smith added: “Businesses understand that the fiscal backdrop for the Chancellor is challenging. We are willing to work in partnership to overcome these challenges and help grow the economy. However, any changes made must not be at the expense of investment and growth.”

The report also warned that cashflow remains a considerable challenge for firms with three out of five sectors seeing a contraction with only services and tourism reporting growth on balance.

Mr Smith added: “The widespread cashflow issues which are impacting most sectors are concerning.

“Many are about to come out of longer-term energy deals and are looking at hefty increases, with some gas bills alone set to rise 50% this month.

“We will also be looking for help in the forthcoming Scottish Budget to address costs, particularly in business rates which remains a major pressure on almost two thirds of retail firms surveyed.

“Businesses, particularly in the leisure, hospitality and tourism sectors simply cannot endure any further tax burdens.”

The report also highlighted continuing issues on recruitment with difficulties being experienced by half of businesses.

Dr Liz Cameron CBE, Chief Executive of the SCC, said: “We are now 100 days into the new UK government, and we have still not had positive action on the many issues we face.

“One of those is employment and businesses are still being held back by the inability to recruit experienced and skilled staff and the expense of securing and retaining them in a highly competitive, under supplied marketplace.

“We need the Chancellor to help ease that pressure by unlocking targeted investment in training with skills aligned to business demand and a clear international workforce strategy to help fill skill gaps.”

Commenting on the new Employment Rights Bill, Fiona McKee, founder of The HR Practice said: “There is no doubt that good employment practices benefit both employers and employees, and should be encouraged, but there needs to be balance and perspective.

“We welcome the consultation on the introduction of statutory probationary periods to ensuring employees and companies can properly assess suitability in the role, enabling businesses to take chances on hires while giving more people confidence to re-enter the job market or change careers.”

Concern around escalating energy costs remain significant for just over half of firms surveyed although inflation worries have fallen from last year’s 75%.

Dale Harris, Chief Executive of ATL Turbine Services said: “It’s difficult to make investment decisions when there is confusion and ambiguity about the direction of taxation, particularly around the energy sector.

“We can’t move forward until we know what the tax burdens and fuel duties will be and how any changes will impact our business and also on our employees where skilled jobs are at a premium.”

Dr Cameron said: “The Autumn Budget is a chance to reset the relationship with business and work in partnership to create jobs and stimulate growth. We have put forward many realistic solutions to encourage investment and ease business pressures, but the test is whether the new government is truly listening as they promised pre-election.”

Professor Mairi Spowage, Director of the Fraser of Allander Institute, said:

“Following a positive start to 2024, economic growth in the summer months has been more hesitant for the UK and Scotland. After a strong start to the year, with growth rates reaching 0.6% in the first quarter and 0.5% in the second quarter, Scotland seemed poised for a sustained recovery.

“However, growth faltered in May and June, reflecting broader economic trends, with only a slight recovery in July at 0.3%. Despite the dip, these figures still reflect a more consistent growth pattern compared to the volatile year of 2023, although Scotland remains just behind the UK in terms of overall performance for 2024 to date.

“The changing pathway for interest rates, for example, is likely to be weighing on business expectations for growth: the latest decision by the Bank of England is likely to yet again temper expectations of the trajectory for interest rates coming down over the next year. These expectations have been continually redrawn as we have moved through 2024.

“The news about the probable increases in energy bills is also likely to impinge on consumer confidence about the Autumn. Overall, though it does feel like many consumers, and certainly many businesses, are holding their breath to see what is announced in the UK Budget at the end of October.”

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A new entry category has been added into the mix for this year’s Taste North Challenge.

As part of the annual Taste North festival held in Wick on 3rd November, the regional culinary competition celebrates the use of ingredients produced in Caithness and Sutherland. This year, the challenge has four entry categories: 15 and under, 16-24, Open and new for this year, a Commercial Operator category which is open to anyone who makes and sells food or baking products. A £50 Taste North voucher prize and trophy will be awarded to each category winner.

Tony Singh MBE will be a special guest and will be judging the entries, alongside his cookery  demonstrations throughout the day.

Tony commented: “The Taste North Challenge is a fantastic competition, and I can’t wait to try some amazing baking creations, made with your favourite local ingredients from Caithness and Sutherland. Get your aprons on and submit your entry forms by 28th October. I’ll see you at Wick High School on 3rd November with your entries!”

The online entry form must be completed by Monday 28th October and baked entries submitted at Taste North by 11am to be included in the judging process.

The Taste North Challenge is sponsored by Developing the Young Workforce North Highlands and Mackays Hotel in Wick.

Trudy Morris, Chief Executive Officer, Caithness Chamber of Commerce and DYW North Highland Lead said “It’s hard to believe that Taste North is entering its ninth year. The growth and success of this event are a testament to the dedication of the organisers, businesses, and supporters who have made it a flagship occasion in the local calendar. Taste North offers a fantastic opportunity for communities and visitors to come together and celebrate the richness and abundance of food and drink in the North Highlands.

We are thrilled to be once again sponsoring the Taste North Challenge. At DYW North Highland, we are passionate about providing opportunities and platforms for our young people to thrive. Initiatives like this build confidence and encourage young people to explore new skills which will benefit them immensely as they prepare to enter the world of work.

We are also excited about the introduction of the new Commercial Operator category for 2024. The competition promises to be fierce, with the exceptional talent of our local bakeries and food businesses in our region!”

The winners of the 2023 Taste North Challenge were:

• Fifteen and under – Robyn Speirs (Firework Night Cake, using home-grown carrots and local eggs)
• Sixteen to 24 – Iona Simpson (Hamish the Highland Coo cake, using Caithness Chocolate)
• Open – Emma Gordon (Scottish Lamingtons, using Old Pulteney and home-grown raspberries)

For more information on the Taste North Challenge and to submit an entry form before the 28th October, visit www.venture-north.co.uk/taste-north.

On Thursday, 12th September 2024, the highly anticipated Caithness Chamber of Commerce 50th Annual Dinner and Awards Ceremony took-place at the Norseman Hotel, Wick. This prestigious event has become a cornerstone of the local business calendar, annually attracting the region’s most prominent business figures. In honour of this milestone, the evening’s theme was 1974 – the year the first chamber of commerce was founded in Caithness.

Guests from across the UK were warmly welcomed by Stephen Sutherland, Chair of the Caithness Chamber of Commerce. His speech reflected on the Chamber’s pivotal role in shaping the local business landscape, highlighting key moments over the past five decades that have contributed to the region’s growth. This was followed by an address from Stuart McAuley, Project Director of the West of Orkney Windfarm and the event’s principal sponsor. He commended the county’s welcoming nature and praised the Chamber’s support, as well as the high calibre of skilled businesses in the region.

The evening featured a keynote speech by The Rt. Hon. Lord Thurso, long-standing Patron of the Chamber, who delivered an inspiring address in celebration of the Chamber’s 50th anniversary. His speech centred on the people of Caithness. Reflecting on past events, Lord Thurso read an extract from the Caithness Courier, published on 6th November 1974, during the Friends of the London-Caithness Association gathering. He noted that this had been his maiden public speech.

“The basic Caithnessian was what made Caithness tick. They possessed an openness and hospitality that was unrivalled and had an adaptability and ingenuity borne of many years of simply having to manage or make up for what was needed but unobtainable. They had a wonderful ability to turn a sassenach visitor into a spiritual native of Caithness in a very short space of time. The way in which the “Atomics” had become such a vital and important part of the community was only one example of this work. He believed that the true basic wealth of any county, or for that matter any country, could be measured in terms of its inhabitants. It was the people that were a country’s greatest asset.”

The highlight of the evening was the glittering Business Awards Ceremony, offering a platform for innovative companies and entrepreneurs to showcase their achievements. This celebration of success brought the community together to recognise and applaud the region’s brightest talents.

The Young Entrepreneur of the Year Award 2024 was presented to Megan Love of Studio Wellness, Halkirk, by award sponsor Coll Murchison-MacDonald, Partner at Saffery Inverness. Specialising in remedial and sports massage, cupping, and kinesiology taping, Studio Wellness distinguishes itself as the only business in Caithness offering Instrument-Assisted Soft Tissue Mobilisation and Spinal and Peripheral Joint Mobilisation. Megan’s warm, compassionate nature and dedication to continuous learning have earned her a loyal client base and an excellent reputation. She was commended by the judges for her passion, commitment, and holistic, client-focused approach, as well as her ambition to expand into wellbeing coaching.

Trudy Morris, CEO of Caithness Chamber of Commerce, presented the Community Business Award 2024 to Wick River Campsite, which was reopened under the management of Wick Development Trust in June 2022. Under the Trust’s stewardship, the campsite has undergone a remarkable transformation, securing £450k in funding for a state-of-the-art, fully accessible, energy-efficient, net-zero toilet and facilities building, which opened in June 2024. The judges were highly impressed by the extensive renovation of the campsite and praised the dedication of the board and team, who have successfully led this transformative social enterprise, creating jobs and significantly enhancing the town of Wick for both visitors and residents.

Matthew and Chloe Mackay, the husband-and-wife team behind Cakes and Bakes at Comlifoot, received a Highly Commended recognition in the Young Business of the Year 2024 category, presented by award sponsor Andrew Mackay, Director of the Caithness Collection. Since opening their cake honesty box in Halkirk in 2022, the pair have transformed their passion for home baking into a thriving business that has become a local favourite. The judges were impressed by the tenacity of this growing venture and captivated by the ambition and enthusiasm that Chloe and Matthew have demonstrated. Their journey highlights how, with a strong work ethic and creative thinking, a small initiative can be turned into a successful enterprise.

The Young Business Award 2024 was presented to Fresh Favourites, founded in 2022 by Derek Balloch and Debbie Mackay, by Richard Copeland, Director of Pentland Floating Offshore Windfarm and sponsor of the award. Fresh Favourites has transformed the takeaway experience by maintaining an unwavering commitment to quality and freshness, ensuring that each meal is crafted from the finest ingredients and bursting with flavour. The judges also praised the business for its strong community focus, including its initiatives supporting local senior citizens. Looking ahead, Fresh Favourites plans to open a storefront, which will not only enhance the customer experience but also showcase products from local suppliers.

Adding to the evening’s excitement, guests were treated to a surprise performance by renowned magician, scientist, and comedian Kevin Quantum. His captivating show left the audience mesmerised with seemingly impossible illusions and mathematical wizardry. The evening concluded in style with a live performance by vocalist Sara Mackay, celebrating some of the best hits of 1970’s – including Abba’s iconic 1974 Eurovision-winning song “Waterloo”.

Trudy Morris, CEO of the Caithness Chamber of Commerce commented:

“We are thrilled by the success of the evening and were delighted to see such positive energy in the room. It’s amazing to bring together so many business leaders to celebrate 50 years of business excellence in our region. The. Rt. Hon Lord Thurso himself couldn’t have said it better—the North Highlands is a place full of ingenuity and an unrivalled welcoming spirit.

Congratulations to our young entrepreneur and all of our business award winners. We look forward to what the future holds for our region in the next 50 years!”

Photography by Colin Campbell Photography & Videography by Local Lens Media.

The Defence and Security Accelerator (DASA) is excited to announce the launch of a new Early Market Engagement (EME) pilot initiative, on behalf of The MOD Innovation Directorate on the theme of Uncrewed Systems. This pilot aims to collaboratively challenge MOD problem areas and identify potential solutions that could rapidly deliver capability for defence and determine whether a full competition in this area is required.

The initial pilot will concentrate on two critical sub-systems of Uncrewed Systems:

• Position, Navigation and Timing in Highly Contested Environments
• Low-cost, Fast Engines

In short:

• DASA is running an Early Market Engagement (EME) pilot activity on behalf of the Ministry of Defence (MOD) on the theme of Uncrewed Systems.
• The EME pilot will take a collaborative approach to problem curation with industry/academia to establish the requirement for a full competition.
• Workshops will be held in Bristol, London and Newcastle and welcome participants from both industry and academia. Applications for workshop attendance closes 12:00pm midday 31 October 2024 (GMT)

Learn more and apply to attend a workshop here

This month, we’re thrilled to welcome our new Business Members Caithness Pest Control, MacDonald Landscaping, Wick Development Trust, Fresh Favourites, and Wick Laundry.

We look forward to working with them all!

To discuss membership, please reach out to our Business Development manager, Fiona Levack. You can contact Fiona by email: fiona@caithnesschamber.com. You can read about membership on the website using this link.

If you’re already a member but would like a reminder of how to get the most from your membership, Fiona will gladly go over that with you too.

Architects HRI Munro are celebrating their first 5 years trading in Caithness. HRI opened an office in Thurso, based in the Naver business centre, in August 2019.

The Inverness based firm have projects across the County and on Orkney. The Thurso office, run by Associate Alan Gray assisted by Technologist Ruth Gunn, has been key to an expanding workload.

“The Thurso office has gone from strength to strength since it opened in 2019” said Alan, “and we are now involved in a wide range of projects in Wick, Thurso and along the north coast together with a number of jobs on Orkney. HRI Munro are also appointed as framework Architects to Orkney Islands Council and we service a significant percentage of that workload from Thurso”.

HRI Munro’s work in Caithness has included the operation and maintenance base for the Beatrice Offshore Windfarm at Pulteneytown in Wick, residential projects along the north coast, onshore facilities for MeyGen at Canisbay and current early stage involvement in future offshore windfarms in the north.

HRI Munro Director Vicky Hazell is similarly optimistic about future growth in the firms work in Caithness and Sutherland. “We opened the Thurso office in 2019 as we were convinced that Caithness and Sutherland have a bright future both in terms of renewable development, tourism and hospitality and consequential residential and visitor facilities”. The steady growth of the Thurso office, evidenced by their recent move to a larger unit within the Naver business centre, bears this out. “We are happy that our Thurso office is now well consolidated and growing” said Vicky “and we continue to be optimistic for business development over the next several years”.

Tony Singh MBE, one of the UK’s best loved celebrity chefs is returning to Taste North, a festival celebrating quality food, drink and craft produce in the North Highlands.

The annual festival which has been shortlisted in this year’s Highlands and Islands Thistle Awards and attracted over 1700 visitors last year, returns to Wick High School on Sunday 3rd November 2024 with a large exhibitor marketplace, family friendly activities, the Taste North Challenge and chef cookery demonstrations.

Tony Singh MBE last attended Taste North in 2018 and said “I can’t wait to be back at Taste North again this year! Caithness, you lot really know how to put on a show – the food, the drink, the craic, it’s fantastic! I’m looking forward to getting stuck into all the amazing local produce, meeting some of the incredible people behind it, and of course, cooking up a storm at the cookery theatre. It’s going to be a brilliant day out, so make sure you come along, have a nibble, and say hello. See you there on Sunday 3rd of November!”

A second-generation Scottish Sikh, Tony was born and raised in Leith, Edinburgh, and learned at his mother’s knee the cookery skills which would see him create the unique fusion of Scottish and Asian flavours for which he is so well known. Known for his quick-fire wit and cheeky personality, Tony is a firm favourite on British television, starring in BBC2 programmes, A Cook Abroad: Tony Singh’s India, and The Incredible Spice Men, with Cyrus Todiwala. Alongside this, Tony makes regular appearances on cookery shows including The Great British Menu, Saturday Kitchen and Ready Steady Cook, as well as guest spots on Pointless, Celebrity Eggheads, Celebrity Mastermind and many others.

Ellie Lamont, Chairperson of Venture North and owner of Mackays Hotel in Wick said “We’re thrilled to welcome Tony Singh back to Taste North, looking forward to enjoying his infectious sense of humour and culinary passion. We can’t wait to show him the vast array of produce we have at Taste North 2024. It’s a great gathering for people to come along and shop to their heart’s content!”

Taste North is organised by Venture North, the Destination Management Organisation for Caithness and Sutherland, and provides a premium pre-Christmas opportunity for communities and visitors to gather and enjoy the wealth of Highland food and drink with a strong Support Local ethos.

Taste North is grateful to the following funds for their support: RWE Camster Wind Farm Community Fund, Stroupster Wind Farm Community Benefit Fund, and RWE Bad a Cheo Wind Farm Community Fund (Latheron, Lybster and Clyth), all administered by Foundation Scotland, and to sponsors Developing the Young Workforce North Highland, Dunrobin Castle, and Mackays Hotel Wick.

For more information on Taste North including confirmed exhibitors, see www.venture-north.co.uk/taste-north

• SSEN Transmission is delighted to announce that contracts have been signed with the Siemens Energy and BAM Joint Venture, Nexans and RJ McLeod for key elements of the construction of the Orkney-Caithness 220kV link, connecting Orkney to the Scottish mainland for the first time
• Construction is set to get underway this month.

Significant progress has been made on a project that will see the Orkney Islands connected to the GB electricity transmission network for the first time, with contracts awarded to key supply chain partners and work set to get started in September.

The Orkney-Caithness Link project, an estimated capital investment of more than £900m, will see the installation of a new high voltage alternating current (HVAC) subsea cable between Orkney and the Scottish mainland, enabling the connection of up to 220MW of new renewable electricity to the national grid, providing another boost to delivering the UK’s ambitious energy security and net zero targets.

The link will consist of a new substation at Finstown in Orkney, along with around 14km of underground cable to where it makes landfall at Warebeth, then 53km of subsea cable, which will connect into a new substation at Dounreay in Caithness where connection will be made to the GB electricity transmission network.

Over the last few weeks, contracts have been awarded to the key supply chain partners that will help in the delivery of this project. The substations will be constructed by the Siemens Energy and BAM Joint Venture (JV) who bring significant experience of delivering transmission substations on our network, including in island environments. RJ McLeod will install the underground cable ducting, including horizontal direction drilling to minimise impact at landfalls and water courses. Nexans will be manufacturing the cable in Halden, Norway, and will install the 14km land and 53km subsea cable system between the substations.

Deputy Project Director at SSEN Transmission, Ian Clark, said:
“We’re delighted to have awarded these crucial contracts to the Siemens Energy and BAM JV, Nexans and RJ McLeod for the delivery of the Orkney-Caithness Link project. All three have a strong track-record of project delivery and we’re looking forward to continuing our relationship with them.

“Early development and initial public consultation on this project started in 2017 and reaching this point – where we’re ready for construction to begin – is a testament to the hard work by the entire team at SSEN Transmission and our supply chain partners.”

“We’re now ready to get started with construction work at each end of the link in Finstown and Dounreay and will keep the communities informed as we make progress.”

As the project moves into mobilisation, at SSEN Transmission we’re asking for locals from neighbouring communities to be part of our Community Liaison Group (CLG). The CLG helps us to form a close link with the community and is vital for information sharing and two-way engagement between the project team and the community. To find out more and get involved, email orkney.engagement@sse.com.

Acknowledging the award of the contract, RJ McLeod’s North Director, Sandy Osborne, said:
“We are very pleased to be able to continue working with SSEN Transmission through the award of this major grid connection project. This follows the successful delivery of various energy projects, such as substations dating back around 20 years, as well as other energy sector projects for the wider SSE Group across the Highlands and Islands including large wind farms such as Viking on Shetland”

“These works will provide us with the opportunity to deliver a boost to the local economy, not only in terms of employment with a local highland contractor, but also in terms of the extensive and valuable local supply chain of goods and services. An integral part of the project will be community and landowner liaison and protection of the environment, and we will follow and build on the good practices deployed and refined on our previous Highland and Island projects.”

Mark Pilling, Vice President of Grid Solutions Europe at Siemens Energy, said:
“We’re pleased to be part of this project which helps unlock the potential of renewable energy in Scotland’s islands. I’m proud that substations and grid stabilisation technology from Siemens Energy will connect 220MW of clean energy to the grid, enough to power 250,000 homes. This project marks the continuation of a fantastic relationship with our Joint Venture Partner BAM, and our customer SSEN Transmission.”

Huw Jones, Executive Director, BAM Nuttall said:
“We’re delighted to get the green light for this vital upgrade to the UK’s energy network and to be working with our longstanding partner Siemens Energy to deliver sustainable energy infrastructure for SSEN Transmission. This project marks another important step in the journey to decarbonise our electricity grid, and we are looking forward to working alongside our partners to create a lasting legacy for the local community via the delivery of this critical infrastructure.”

Pascal Radue, Executive Vice President of Nexans’ Generation and Transmission Business Group:
“We are excited to collaborate with SSEN Transmission on this critical step toward ensuring the reliable exchange of energy between the Orkney Islands and the UK mainland. Transmission links are a pivotal piece of the sustainable energy puzzle, delivering electricity from regions with the greatest supply to those with the greatest demand.”

With the supply chain in place, the Orkney-Caithness connection project now moves into its construction phase, with full energisation anticipated in 2028.

DASA is delighted to bring you their latest Case Study – the story of an innovation designed to combat a serious modern threat – that of the Unmanned Air System (UAS) or drone.

Cheap, off-the-shelf drones present a serious challenge to defence and security due to their easy accessibility and very limited radar signature. As their use continues to rise, they pose more of a threat to both military forces and national infrastructure. Therefore, it has become more important than ever to develop an effective counter-UAS innovation.

With the help of DASA funding, West Sussex-based SME LiveLink Aerospace has risen to the challenge, spearheading a consortium to develop a low cost, easy to integrate counter UAS solution.

The consortium developed a flexible and scalable sensor unit for tracking multiple UAS – called Passive Detection & Ranging (PDAR).

This technology has proved to be so successful in field trails, that the Royal Navy has purchased the sensor for use on frontline ships.

Aleks Kowalski, LiveLink Aerospace’s Business Director said:

“Not only did DASA have the vision to support a high risk project where the commercial market was failing, but working with DASA provided wider benefits. The project liaison staff provided by DASA were excellent. They provided constructive criticism when required, represented the ‘voice of the customer’ to challenge the development team, and much appreciated enthusiasm and encouragement throughout. Additionally, compared with other grant awarding bodies, the whole paperwork and process was streamlined and well thought through – we didn’t need to employ additional staff for their paperwork!”

Read the full LiveLink Case Study here