Brexit done well could have major cash upside
Study: Process could unleash funds
Brexit could release a “wall of cash” to companies if it is “done well”, the Scottish Chambers of Commerce (SCC) claimed yesterday.
With uncertainty over the UK’s departure from the European Union having “stymied” investment, the organisation said money that had been held back could be released once it is finally completed.
SCC president Tim Allan said that if “Brexit is not just done but done well, there is significant potential for an upside”.
He spoke out after the latest SCC quarterly economic study showed overall business performance had declined in the last year.
Mr Allan said this had happened “as companies take on board extra uncertainties caused by the tortuous progress of the Brexit process”.
He said: “We continue to affirm the view that a disorderly, no-deal departure from the EU will have painful, long-lasting consequences for the economy in Scotland and the UK. But we also believe that, if Brexit is not just done but done well, there is significant potential for an upside.
“Uncertainty has undoubtedly stymied corporate investment. We put a direct challenge to political leaders today – deliver a positive outcome to Brexit and the economy will benefit.
“We believe there is a wall of cash that has been pent up while the process of leaving the EU has unfolded which can and will be unleashed.”
He continued: “What employers need more than ever is for Scottish and UK governments to hone their focus on the needs of the economy.
“Scotland in particular suffers a long-standing problem of slower economic growth relative to England and poor productivity compared to global peers. We urgently need to correct these trends if Scotland is to deliver an inclusive economy that provides the jobs, skills and prosperity for the current and future generations.”
The research, carried out together with the Fraser of Allander Institute economic think-tank, covered the period June to September 2019.
More than three-quarters of firms in the tourism industry are looking to take on workers, it found, with half these companies reporting recruitment difficulties. However, according to the study, the sector demonstrated the most resilience in the third quarter, with increases in revenue and investment underpinning confidence. Mr Allan said there was some “cautious optimism” for the fourth quarter.
In the construction sector, sales had slowed, while less than a quarter of companies reported investment was rising.
And in manufacturing total sales revenue fell back, with sales trends described as being “significantly lower than recorded for the same quarter of 2018”.
Mr Allan added: “As the UK faces yet another deadline in the Brexit
“Uncertainty has undoubtedly stymied corporate investment ”
process, construction and manufacturing have reported severe challenges in terms of future orders, exports and investment.
“Meanwhile companies in sectors including retail and tourism face continued challenges in recruiting people with the right skills as the number of available workers from Europe continues to decline.”
Professor Graeme Roy, director at the University of Strathclyde’s Fraser of Allander Institute, said: “Scottish businesses appear to be treading water as they await clarity on the terms of the UK’s exit from the EU.”
Prof Roy added: “The data suggests that Scotland should avoid a ‘technical recession’ – defined as two consecutive quarters of negative growth – when the next set of official figures are released later on this year.
“However, growth remains fragile and investment levels remain weak.
“A ‘no-deal’ Brexit remains the greatest immediate risk to the Scottish economy. It is misguided to argue that ‘no deal’ is better than further delay. A ‘no-deal’ would not only act as a major economic shock but will do little to curb uncertainty, with the UK’s future relationship with the EU still needing resolved.”
OUTLOOK: Tim Allan has challenged politicians to deliver a positive Brexit outcome