Scottish firms 'not prepared' for Brexit By Douglas Fraser

Business and economy editor, Scotland Published duration 28 March 2019 Related Topics Brexit

image caption The chairman of Scotland's biggest employee-owned company, Aquascot, has expressed alarm over Brexit

Many of Scotland's companies have made little or no plan for Brexit or have even carried out a risk assessment.

A survey of 250 company managers for the law firm Anderson Strathern found more than half are concerned about the loss of European recruits.

The intention to impose border controls on migrant workers was also identified as a major worry.

Glasgow firms were found to be more exposed to the loss of European recruits than those in Edinburgh.

Among smaller firms, a quarter had not even started a risk assessment for Brexit, and only 56% had completed plans for departure without a deal.

Last month, the chairman of Scotland's biggest employee-owned company said uncertainty over Britain's future in the EU is setting off "big red flashing lights" for business.

The survey also found more than a third of companies represented rely heavily on EU nationals and nearly a quarter look to them for low-skilled roles.

Challenges and opportunities

Bruce Farquhar, chair at Anderson Strathern, said: "We commissioned the survey to take the pulse of our business leaders, to really understand how ready Scotland is for Brexit, revealing the challenges and the opportunities.

"Whilst the research shows that domestic business continues to be the main driver for the Scottish economy, it is clear that the EU market and its workforce will remain a key part of business through Brexit and beyond.

"Our survey has produced clear evidence that Scottish organisations need time, help and advice in preparing for the path ahead."

The survey found half of Scotland's smaller firms and large corporates combined rate the European Union (EU) as their most important market, behind Scotland (86%) and the rest of the UK (57%).

Kenneth Russell, sales and marketing director at John G Russell (Transport) Ltd, said: "Two of our main concerns, when it comes to Brexit, are supply chain disruption and export and import red tape.

"We've also been looking at what happens to our cost base, fuel and drivers wages.

"While we have less than 2% non UK nationals, the overall UK driver makeup is very different.

"A current driver shortage in the south and a hard Brexit may result in considerable price impact across the industry."

'Little to prepare'

Of the companies surveyed more than a third (35%) of all respondents indicated that they rely heavily on highly-skilled EU staff, while 24% rely heavily on low-skilled EU staff.

And 45% of respondents said the future of the EU workforce was a "significant" concern.

Norman Provan, associate director at the Royal College of Nursing, said: "In the case of a no-deal Brexit there would be no transition period which would likely cause significant challenges for the health and social care sector.

"We would also like to see regulatory requirements aligned with the EU to create a level playing field between the remaining member states, the UK and the wider international sphere.

"This will be especially beneficial for developing a coherent UK workforce strategy."

Stuart Patrick, chief executive of Glasgow Chambers of Commerce, said: "The survey confirms British Chambers of Commerce evidence that the majority of small and medium sized businesses have done little to prepare for Brexit."