SCOTTISH firms have more faith in the SNP than Labour, according to a major survey on business confidence in Scotland.

The latest Understanding Business report, which surveys more than 500 firms from across every region in Scotland, found that Labour’s efforts to be viewed as the best party for business had so far failed to convince the majority of businessowners.

The quarterly independent survey produced by Diffley Partnership and 56° North found that 32% of those surveyed believed the SNP best represented the interests of Scottish business.

Meanwhile, Labour sat on 29% while the Conservatives lagged behind on 19%.

When asked who has the best business policies, Labour was ahead on 31% with the SNP close behind on 30%.

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The poll also asked businesses of varying different sizes whether the Scottish Government or UK Government was doing more to address the concerns of the sector.

The Scottish Government came in ahead at 29% while the UK trailed behind on 22%.

“Our research shows that there is still much to play for when it comes to winning business support ahead of the next couple of elections at UK and Scottish levels,” said John Penman, manging partner at 56° North.

“While Labour’s efforts are bearing fruit, the Scottish Government will be pleased that they remain neck and neck and it will be interesting to see whether that stays the same as the General Election nears.”

The results of the survey show that businesses remain anxious about increased taxation and business rates, with 43% believing that a reduction in taxation was one of the most important factor in boosting growth.

The National: Humza Yousaf said he would make no apology for asking higher earners to pay more in taxHumza Yousaf said he would make no apology for asking higher earners to pay more in tax

The call for reduced taxation comes as 42% said rising operational costs are a barrier to growth with economic uncertainty just behind on 38%.

High taxation (28%) and lack of skilled workforce (20%) are the next most cited.

Nearly a third of respondents (31%) also claimed that recent changes to taxation in Scotland – which introduced a 45% income tax band for earnings between £75,000 and £125,140 - would make things “very or extremely challenging” when competing with businesses in England and Wales.

The figures also showed that recruiting staff remained challenging for businesses across Scotland and that wage demands (45%) were one of the biggest hurdles as well as a lack of skilled applicants (61%) for those recently recruiting.

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The increasing price of utilities and workforce costs are cited as the biggest factors on why business may have to increase prices.

“Businesses cite reducing taxation and business rates as key measures to drive their growth while rising operational costs and economic uncertainty are viewed as presenting barriers for their growth,” said Scott Edgar, senior research manager at Diffley Partnership.

“In line with previous waves of the study, skills continue to be a major issue for businesses with a lack of skilled applicants remaining the biggest when it comes to recruitment.”

Last month, First Minister Humza Yousaf said he would make “no apology” for asking the top 5% of earners to pay more so that there can be investment in public services.