EU exit is impacting business and investment

Scotland’s Economy Secretary has warned that the UK’s departure from the European Union is already impacting on businesses and economic investment.

Derek Mackay said many small and medium sized businesses remained unprepared to deal with the consequences of Brexit and urged all businesses to engage with the Prepare for Brexit campaign, which offers practical business support and access to grants. 

Addressing leading industry experts at the Edinburgh Chamber of Commerce Annual Dinner, he warned that Scotland’s continued economic growth and record low unemployment was now at risk as a result of Brexit. Mr Mackay said that heightened uncertainty could push the Scottish economy into a deep recession, similar in scale to the financial crash of 2008.

Mr Mackay said:

“Scotland’s economic growth is higher than in the rest of the UK. Our GDP grew by 1.5% in the year to September 2018 – compared to 1.1% in the UK and our unemployment rate fell to 3.6% - the lowest on record. Significantly, Scotland’s productivity growth has been higher than any other country or region of the UK – including London – between 2006 and 2017.

“This progress is under threat as a result of Brexit which is the biggest and most immediate economic challenge we face. Analysis published by Scotland’s Chief Economic Adviser shows that the scale of likely damage to the economy as a result of A ‘No Deal’ Brexit is profound, leading to a potential shrinking of our economy by up to 7%, a drop in exports by up to 20% and reduced business investment in Scotland by £1 billion in 2019.

“Last year we launched Prepare for Brexit,  a multi-agency campaign aimed at creating a sense of urgency around preparing for Brexit, to raise awareness among businesses and translate that into action.

“This is practical business support available through Scottish Enterprise’s website, offering readiness self-assessment tools and expert advice as well as access to learning and networking events, and grants for consultancy support.

“Latest figures suggest 27,000 unique visitors have already accessed the site, but we know the campaign can help many more businesses to take steps to enhance resilience despite the uncertainty ahead.

“We will continue to call on the UK Government to immediately rule out the possibility of a ‘No Deal’ Brexit and extend the Article 50 process. As a responsible government we are also continuing - and indeed intensifying - our work to prepare for all outcomes as best we can. However, whilst we will do everything possible to prepare, we will not be able to mitigate all of the impacts of the UK Government’s approach.”

Mr Mackay also announced that Edinburgh Chamber of Commerce has become the 600^th organisation to sign up to the Scottish Business Pledge.

He said:

“The Scottish Government will take forward changes to make the Business Pledge more dynamic and more impactful.  We will introduce a business-led leadership group to put business in the driving seat of promoting the values and benefits of adopting the best practices that boost productivity and competitiveness.

“I’m pleased to recognise Edinburgh Chamber of Commerce as the 600th business to make their commitment to these shared values and ambition.  A warm welcome to the network and great role model for others once again.”