Dramatic fall in number of new business start-ups in the Borders shows more government action needed (Aberdeen South & North Kincardine Liberal Democrats)

Aberdeen South & North Kincardine Liberal Democrats <info@aberdeensouthlibdems.org.uk>

Dramatic fall in number of new business start-ups in the Borders shows more government action needed

December 16, 2008 1:47 PM
Originally published by Scottish Liberal Democrats

Borders MP Michael Moore and Tweeddale, Ettrick and Lauderdale MSP Jeremy Purvis have voiced concern over new figures which show that the number of new businesses starting up in the Borders has fallen by 50% between the first quarter of 2008 and the third quarter of 2008.

The figures, which are published on a quarterly basis by the Committee of Scottish Clearing Banks, representing the four Scottish clearing banks, show that, in the first quarter of this year, 160 new businesses registered in the Borders. That number dropped to just 80 in the third quarter of 2008.

The drop of 50% was the second largest decline between these quarters in all the regions of Scotland. Overall in Scotland, there was a fall of 17% in the number of new businesses registering with the banks.

Mr Moore and Mr Purvis believe that the figures show that the Borders is being hit hard by the economic downturn, and that the governments in London and Holyrood are not doing enough to support the area.

Mr Moore said:

"These figures are further proof, coming on the back of recent mass redundancies, that the Borders economy is being adversely - and disproportionately - affected by the economic decline.

"I am receiving complaints on a weekly basis from small, local companies with strong track records who feel they are being let down by the banks. If existing companies are facing sudden demands for renegotiations of business loans, it is no wonder that new businesses are finding it hard to get off the ground.

"The Chancellor should be using the Government's new influence on the banks to ensure that they do not penalise the small businesses that play such an important role in rural economies such as in the Borders."

Mr Purvis also called upon the Scottish Government to take action. He said:

"While Scottish Ministers will blame the global economic downturn for the drop in new business start-ups, they cannot run away from the fact that the Borders is experiencing a particularly stark decline.

"The removal of Scottish Enterprise support to small businesses was spectacularly badly timed. It is particularly disappointing that, while Wales has established loan support for small businesses through Finance Wales, the Scottish Government is dragging its feet when we need urgent action for small business lending.

"I will be following up the Finance Minister's recent visit to the Borders to ensure that his words are followed by real action to support businesses in our area."

Notes:

The figures on new business start-ups in Scotland can be found here:

http://www.scotbanks.org.uk/media/new_business_to_q3_2008.pdf

The breakdown by region is on page 4.