Scotland business

Scottish business activity 'hit by Brexit uncertainty'

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A third of Scottish firms have reported that their recruitment and investment activity has been harmed by uncertainty over the UK government's Brexit plans.

More than four in 10 firms also told a survey that their future investment plans had been negatively affected.

However, 49% of about 350 respondents said the Brexit decision had so far had no impact on their business activity.

The UK government said it was confident a "mutually beneficial deal" would be struck between the UK and the EU.

Only 3% of the businesses who responded to the Fraser of Allander Institute survey said recruitment had been helped by the prospect of leaving the European Union.

The same percentage of firms told surveyors their investment plans had been increased as a result.

The most positive finding from the survey was that 28% of firms said there might be positive benefits from Brexit if they no longer had to apply EU regulations.

Just over a quarter (26%) said they looked forward to the possible addition of funding from the Scottish or UK governments once payments to Brussels ended, while 18% thought Brexit would lead to new opportunities in markets beyond the EU.

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Reviewing the findings, the Strathclyde University-based economists said it was "hard to believe UK ministers are openly talking about not just a hard Brexit, but no deal".

They said it was extremely difficult for businesses to plan, with only one in eight of those firms surveyed saying the information provided on Brexit had been at least adequate to help with planning.

Only one in 20 said they had approached the government for information.

The Fraser of Allander Institute said the uncertainty about Brexit had been holding back Scotland's economic recovery.

A blog from the institute stated: "Two years on from the referendum outcome, simply kicking the can down the road, or sleep walking into a no-deal outcome, is simply no longer a credible economic strategy to adopt."

The report conceded that some economists have said the results of Brexit will be positive, but argued that they were in a minority.

'Pragmatic plan'

In a statement, the UK government said: "Our White Paper outlined our vision for a principled and pragmatic plan which will ensure that all of the UK, including Scotland, is well placed to capitalise on the opportunities of Brexit.

"We firmly believe it is in the interests of both the EU and the UK to strike a mutually beneficial deal.

"That remains the goal on both sides and we are confident that this will be achieved."

A full version of the Brexit survey is to be published by the Fraser of Allander next month.

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