Scottish business community reacts to Brexit shock

The result prompted First Minister Nicola Sturgeon to declare Scotland had delivered a “strong, unequivocal vote” to remain in the EU.

But global stock markets plummeted as it emerged early this morning that 52 per cent of the UK as a whole had to leave.

The news sparked chaos on the markets as what could be the start of brutal sell-offs began as money fled to relative risk havens, such as gold and the yen.

Stirling fell to its lowest point in 30 years as it sunk at one point to $1.3232.

It then rebounded marginally to stand at $1.3659, an 8.2 per cent decline on the day.

Oil prices have also fallen sharply, with Brent crude down 5.2 per cent.

The price of Brent crude fell by $2.68 to $48.24 a barrel, its biggest fall since February. At the same time, US crude was down 5.4 per cent, or $2.69, to $47.52 a barrel.

Futures on the FTSE 100, which indicate early signs of trading on the market, indicate a drop of 8.3 per cent.

Meanwhile US equity futures show that the S&P 500 may drop by 5.1 per cent, while the Hong Kong Hang Seng is falling 4.6 per cent and Japan’s Nikkei 225 plunged 7.9 per cent.

And the price of gold has jumped by more than 6 per cent, rising to its most expensive point in two years.

The yen has also seen safe haven status, and has risen 4.5 per cent, marking a near three year high.

Following the official declaration of the referendum result, Prime Minister David Cameron spoke publicly in front of 10 Downing Street to announce that he will step down by October.

He said he would “steady the ship” until then - but would hand over to a new leader in time for the Conservative Party conference.

Scottish Conservative leader Ruth Davidson tweeted: “Right for the Prime Minister to offer stability while the country plots its course. Honorable to the last.”

Voices from Scotland’s business community have already began appealing for strong political leadership to address uncertainty as the British economy braces itself for Brexit fallout.

Lindsay Gardiner, PwC’s Scotland regional chairman said the global accountancy firm was already working with its clients to deal with the blow.

He said: “The UK’s decision to leave the EU will have significant implications for businesses and we are already working with our clients and people to support them as those implications are understood.

“History has taught us that Scottish businesses are adaptable and innovative when confronted with new challenges and opportunities. There will be significant uncertainty over the coming months as the detailed political and legal issues are worked out, and business confidence may be impacted. PwC is committed to helping its clients as they adapt to new market conditions and opportunities.”

But Ed Molyneux, CEO and co-founder of Edinburgh-based accounting firm FreeAgent, has already spoken of the trepidation with which Scottish business leaders will now be viewing the future.

He said: “This result is a big blow to the UK’s micro-business sector and I think that a lot of people will be very concerned about what the future will hold.

“It was clear during the run up to the referendum that the overwhelming majority of micro-business owners and freelancers were in favour of the UK remaining in the EU, and that they did not think a ‘Brexit’ would be beneficial for their own businesses or the economy in general.

“The ramifications of leaving the EU are going to be huge - especially for small businesses who sell products and services worldwide, rather than just domestically. And we now look set for a lengthy

period of uncertainty while negotiations presumably take place over the terms of the UK’s exit.

“I would therefore urge the government to be as swift as possible in providing updates about how these discussions are progressing, and give every business owners in the UK clear, up-to-date information about what the effects of Brexit will be on important issues such as trade and tax. The last thing the business sector needs is to be kept in the dark.”

The call for decisive and immediate political leadership was echoed by Andy Willox, Scottish policy convenor of the Federation of Scottish Businesses.

He said: “Scottish smaller businesses now need decision-makers to focus on economic stability. Firms in Scotland will look to the Scottish Government, as well as the UK Government and the Bank of England, to provide leadership during this period.

“We welcome the Prime Minister’s assurance that the Scottish Government, and the other devolved administrations, will be fully involved in the negotiations associated with the UK’s departure from the EU.

“While questions about a second independence referendum will inevitably dominate the headlines, there are more immediate matters for small firms – from clarity over access to the single market to the free movement of people.”

David Watt, executive director of the Institute of Directors in Scotland, said: “It is now crucial that the transition out of Europe is handled as smoothly as possible, and that stability is maintained in the meantime. What business leaders need is a combination of calm and clarity, which will assist them in getting on with business during the weeks and months to come, alongside establishing a new basis for relationships with our international partners.

“It is important to remember that Scottish businesses are robust. We have weathered uncertainty and change before, and we will do it again. It is now beholden on politicians to get past the campaigning, and work together to negotiate a strong deal with European leaders which preserves the ability of British firms to trade easily with the remaining member states and to guarantee the position of EU citizens working for UK businesses at present.

“Of course in Scotland, the outcome has raised additional constitutional questions, and in this regard an unambiguous response from the Scottish Government is necessary.”

Steve Williams, Senior Partner for Scotland and Northern Ireland at Deloitte, said: “These are unprecedented times and, with everyone getting to grips with the consequences, we are likely to witness a period of political and economic uncertainty, which will also impact on growth.

“Whatever the case, Scotland, and the UK as a whole, remains a competitive, innovative and highly-skilled economy. It will continue to be an excellent place to do business, with all the necessary attributes to compete and succeed in the global economy – whatever challenges lie ahead.

“The resilience and dynamism of the Scottish economy, led by its world-class food and drink, oil and gas, financial services and technology sectors, will be a huge advantage as we start to navigate towards a prosperous future outside of the EU.”