As a small, open economy, Scotland has benefitted from many aspects of EU membership, including tariff-free and frictionless trade with the EU, free movement of people and access to EU funding. Some industries in Scotland have flourished on the basis of these advantages, for example chemicals and food and drink. A no deal Brexit will challenge the patterns of trade that have been established between the EU and Scotland. This will pose risks to the profitability and the viability of some key activities in Scotland across all sectors in some form.
In the Scotland’s Place in Europe suite of publications, Scotland’s position on Brexit is for continued EU membership. Short of continued EU membership, a compromise plan is to keep Scotland and the UK in the European Single Market and Customs Union to limit the impact of Brexit as much as possible. SG and SG agencies have also undertaken campaigns which may address some Brexit risks (Scotland is Now) and released materials (Prepare for Brexit toolkit) to ensure that Scottish businesses start preparing for Brexit. In terms of next steps, SG should continue to focus on the possibility of a no deal Brexit to make sure that the Scottish economy is prepared for the worst-case scenario. The key themes to focus on include:
- Promote Scotland as open for business, seek both domestic opportunities for reshoring, and new international markets, and emphasise Scotland’s attractiveness as a place to do business to shore up FDI, and to protect economic activity in Scotland.
- Secure access to talent, making sure that Scotland can still recruit workers from the EU for key sectors (e.g. food and drink, life sciences, financial services) through any new UK immigration policy, and ensure that domestic talent is nurtured to meet the needs of business.
- Support SMEs through Brexit, identifying support mechanisms and helping them harness their smaller size as an advantage in responding to the risks of Brexit.
- Build on Scotland’s existing transport infrastructure (e.g. ports and airports) to support and facilitate continued EU trade, as the current infrastructure is predicated on the basis of free movement of goods between the UK and the EU (a significant proportion of which is currently transported via road and the short straits).
Email: Central Enquiries Unit