A complicated legacy – Scottish SMEs voice mixed reactions to Sturgeon’s resignation

Nicola Sturgeon, First Minister of Scotland and leader of the SNP, unexpectedly announced her resignation on Wednesday, claiming, “In my head and my heart, I know that time is now.”

Sturgeon is stepping down following a record-breaking administration that saw her win eight elections and spend 16 years in Holyrood.

Her tenure has seen staunch policies, plus its share of controversies, and has been marked by an unceasing support for Scottish independence and for the European Union. But, what has Sturgeon’s impact for the Scottish business community been? SMEs have a wide range of opinions when it comes to defining this aspect of her legacy.

Dr Liz Cameron CBE, Chief Executive of the Scottish Chamber of Commerce, says, “Regardless of political persuasion, we can all agree that the First Minister has been a committed, dedicated, and passionate public servant for Scotland.

We have agreed and disagreed on economic policies, but we have always found common ground on the importance of promoting Scotland on the world stage to boost our exports and promote investment.”

Keeping Scottish SMEs front and centre

Sturgeon championed initiatives that kept SMEs front and centre, adding positive economic contributions to the legacy she leaves behind. Back in 2016, Sturgeon stressed that small businesses were vital to Scotland and, accordingly, decided to create a new business cabinet role to separate the business and economy briefs.

Most recently, in August of 2022, the First Minister offered energy help to small businesses, bringing in industry leaders at Bute House to find a solution to the mounting energy price crisis that was crippling small enterprises in the nation.

Some believe Sturgeon has good reason to leave with her head held high due to her leadership during the COVID-19 pandemic. She advanced a lifeline worth £100 million to support businesses experiencing cancellations during the spread of the Omicron variant, helping keep many in the hospitality sector afloat.

Ryan Crighton, Director of Policy and Marketing of Aberdeen & Grampian Chamber of Commerce, says, “You can argue with many of her policy choices, but you cannot argue that she is motivated by anything other than a desire to make Scotland better.”

Andrew McRae, Scotland Policy Chair for the Federation of Small Businesses (FSB), echoes a similar sentiment. “We always enjoyed a constructive relationship with the First Minister throughout her record-breaking term,” says McRae, “A period which was dominated by some of the greatest challenges our economy and communities have faced in decades.”

A mixed legacy for business

Despite numerous demonstrations of economic goodwill towards the SME community, her relationship with businesses was fragile and unstable during her administration at times, complicating her legacy.

Sturgeon leaves at a time when small businesses face a deeply debilitating economic climate. The Scottish Fiscal Commission is forecasting the Scottish economy will contract by 1.2% in 2023 and will not recover to its pre-recession peak until the first quarter of 2025. Moreover, ICAEW’s Business Confidence Monitor for Scotland placed business confidence at -27.8, the lowest score since 2009 and the second weakest in the UK, behind Yorkshire and the Humber.

Crighton says, “Repeated attempts to ‘reset’ the relationship between government and business have never lasted more than a few weeks before being undermined by policy decisions.

“For all she has sought to do right by Scotland, I think it is a fair criticism to say she has been tin-eared to the concerns of businesses, particularly in recent years.”

Andrew Lindsay, Head of Communications and Public Affairs for FSB Scotland, highlights “the constant battle just to survive during this cost-of-doing-business crisis means it is no surprise that small business confidence levels are now at their lowest on record outside Covid lockdowns.”

The Post-Sturgeon Era – What happens next?

As the hunt begins for Sturgeon’s successor, the SME community is hoping that its main set of priorities that should be addressed by the next Holyrood leader.

Lindsay stresses, “There won’t be a wider economic recovery until there’s a small business recovery. With margins [staying] wafer-thin, if in existence at all, and reserves long-exhausted, small businesses need some financial breathing space.”

There is a tangible demand to break away from poorly designed regulation by pausing the introduction of new regulations, make overheads more manageable, and make business investment easier.

“Urgency, action, and partnership will be the watchwords from the business community,” says Cameron. “These will be essential parameters to create a business environment in Scotland which is growth-led and competitive.”

During this turbulent economic period, it looks as if small businesses will be looking to support a First Minister to play a protagonist role in upholding the Scottish economy.

“It is worth bearing in mind that 9-in-10 of those who re-entered the labour market after the 2008 financial crisis did so by starting or joining a small business,” explains Lindsay.

“Supporting small businesses means supporting the jobs and opportunities they bring to communities across Scotland, which must surely be a priority for the incoming First Minister, whoever they may be.”