Monday, 6 February 2017

Holyrood Committee Publishes Report on Economic Impact of Leaving the European Union

BBC News - The Scottish government "must do more" to support local businesses exporting across the world in the wake of Brexit, Holyrood's economy committee have said.

MSPs want the government to review its strategy due to the "changing economic landscape" since the EU referendum.

The committee argues that it is "time to maximise opportunities in growing markets such as China and India".

The Scottish government said it was "working on an ambitious programme of internationalisation" and trade.

A spokeswoman described Brexit as "by far the biggest threat to Scotland's jobs, prosperity and economy".

Meanwhile Scottish Brexit minister Mike Russell has denied there would be a "bonfire of regulations" for exporting firms after the UK leaves the EU.

'Vitally important'

Holyrood's economy, jobs and fair work committee is one of several which have been taking evidence on the potential economic impact of leaving the European Union.

The committee's report on the topic calls on the Scottish government to do more to boost trade within the EU and beyond, in particular for small and medium-sized enterprises (SMEs).

It reads: "Trade promotion must be the focus of the Scottish government going forward, both within the EU and beyond.

"More needs to be done to support businesses in exporting across the world. Now is the time to maximise opportunities in growing markets such as China and India."

They said access to the single market was "vitally important" to many exporting business in sectors across Scotland, calling on the government to prioritise supporting businesses throughout the Brexit negotiations.

Members asked to see a strategy for dealing with import inflation "as a matter of urgency", and for work to "address issues of skills gaps and workforce planning" in relation to EU migrant workers.

Committee convener Gordon Lindhurst said the group was "calling on the Scottish government to redouble its efforts in encouraging and supporting businesses to export".

He said: "The need to support SMEs is more crucial than ever. The committee cannot over-state the importance of continuing to promote the growth of indigenous businesses, and it is vital that the right balance is struck between supporting foreign direct investment and home grown businesses."

"The committee is urging the Scottish government and enterprise agencies to engage with businesses based in Scotland to understand what specific support is needed from sector to sector and region to region."

'Ambitious programme'

The Scottish government has argued in Brexit talks that exporting firms are "more likely to innovate and grow faster", highlighting membership of the single market as being helpful to this.

Scotland's economy secretary Keith Brown recently welcomed an increase in international exports as "hugely encouraging".

A spokeswoman said: "The Scottish government is working on an ambitious programme of internationalisation, including measures to broaden Scotland's export base and grow exports beyond traditional markets, such as establishing a new trade board, that will take forward this important work alongside new hubs in Dublin, Brussels, London and Berlin and our planned network of trade envoys.

"The Scottish government will continue to work to mitigate and overcome the damage Brexit will cause before and after the UK government triggers Article 50.

"In everything it does, the Scottish government will continue to seek agreement in the best interests of the people of Scotland."

Meanwhile, leading Brexit campaigner and Conservative MP Michael Gove argued that the European Union had not created a good environment for businesses in the UK.

Speaking at an event sponsored by the Times newspaper in Edinburgh, he said there would be "opportunities" for Scottish businesses in sectors ranging from brewing and distilling to technology.

He said: "At the moment, the European Union not only imposes a tariff wall on outside nations, it's also the case that the European Union has not created an environment which we'd like to see in our country to encourage innovation.

"There's no European equivalent of Google, or Uber, or Amazon, all of these companies operate or started outside the EU."

He also said Brexit would remove regulatory barriers to trade, pointing out that UK businesses have to abide by EU rules even when just trading within the UK market - something he called "running with a handicap we don't need to".

No regulatory 'bonfire'

However, at the same event Scottish Brexit minister Mike Russell denied that there would be a "bonfire of regulations" for Scottish businesses, as many of them would go on selling into European markets after Brexit and would need to recognise EU regulations at the point of sale.

He argued that regulations can "enhance our lives", highlighting environmental and employment protection measures, asking for control over these to be devolved post-Brexit.

And Mr Russell highlighted freedom of movement as particularly key for Scottish business, adding that he was "happy to do more" to support SMEs.

Mr Gove also said First Minister Nicola Sturgeon would be "foolish" to call a second independence referendum in the wake of the Brexit vote.

He said: "The people of the United Kingdom, having voted to leave one union that didn't work, the people of Scotland are not going to vote to leave another union that works."

The former UK education secretary argued that rather than "agitating" for another vote on independence, the Scottish government should use the powers it has to "enhance the lives of Scottish people".

Although he would not be drawn on whether the UK government should actually block any bid for a second independence poll, he said one would be "destabilising and wrong".

Mr Russell replied that the UK government appeared to be closing off options to Scotland, but said there was "still time for a negotiated agreement".

He said the best deal would have been for the UK to remain in the single market, but noted that as "that's not going to happen" the Scottish government was now looking for a differentiated solution within the UK-wide Brexit deal.

Source: BBC News

The paper “Report on the Economic Impact of Leaving the European Union” can be read here

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