Three quarters of Scottish businesses want to remain in single market

Almost three quarters (70 per cent) of Scottish businesses want to remain in the Customs Union and the single market (64 per cent in the rest of the UK), according to a new survey by HLB International Accountancy Network, of which French Duncan LLP is the Scottish member.

The survey revealed that half (50 per cent) of Scottish businesses believe their business will be financially worse off after Brexit compared to 46 per cent in the rest of the UK with 64 per cent of Scots firms stating that the economy will get worse over the next decade compared to 59 per cent of their UK counterparts.

The survey found that two thirds (66 per cent) of Scottish respondents believed the negotiations were going badly compared to 58 per cent in the rest of the UK. Just 9 per cent of Scottish firms thought the negotiations were going well compared to 12 per cent in the rest of the UK and 71 per cent believe the UK government is handling negotiations poorly compared to 62 per cent in the rest of the UK. Almost three quarters (73 per cent) of Scottish business owners think that Theresa May is not showing strong leadership compared to 60 per cent across the UK.

Graeme Finnie, French Duncan’s managing partner, explained: “We can see that Scottish firms are very concerned about Brexit and see little benefit for their business if the UK leaves Europe. This is undoubtedly due to uncertainty about the impact of Brexit, concern over a loss of access to markets, and wariness of a process that appears to be mired in confusion and a lack of planning. Scottish business owners are not interested in the politics of Brexit but are genuinely worried about how it will impact on the financial position of their businesses and the wider effect on the Scottish economy.”

Interestingly 47 per cent of Scottish respondents believe the EU is behaving fairly in the Brexit negotiations compared to 40 per cent in the rest of the UK. 56 per cent of Scots firms believe that Michel Barnier will negotiate the better deal compared to 49 per cent in the UK. Just 8 per cent of Scots believe that David Davis will negotiate the best deal compared to 17 per cent in the rest of the UK.

The lack of an economic forecast by the Government on the impact of Brexit, which David Davis admitted to the Parliamentary Brexit Committee, was widely condemned (78 per cent in Scotland 71 per cent in the rest of the UK) as bad business practice.

Mr Finnie continued: “Our survey highlights the discomfort Scottish business owners feel at the way the negotiating process is going, the timetable, and the lack of any proper economic forecasting which they believe are fundamental to any major change like this.

“Owners understand that business planning is key in all circumstances but for such an enormous transformation it is essential. With just over a year to go before the UK is set to transition out of the EU many business owners feel they have little information to help them plan, little understanding of the way trade will work in the future, and little assurance on the outlook for the post-Brexit marketplace or its impact on the economy.”

Nearly three quarters (71 per cent) of Scottish respondents said they had voted to remain compared to 65 per cent in the rest of the UK so it is perhaps no surprise that 59 per cent of Scots firms want a second referendum compared to 50 per cent.

In every question in this survey Scottish businesses believed that the market, the economy, and their business would be worse after Brexit than before and the margin was higher in Scotland in all questions compared to the rest of the UK.

Graeme concluded: “We can see that there is concern, and there is even bemusement among Scots business owners about where we will be after Brexit. Most didn’t vote to leave the EU, but like all business owners will work with the situation to the best of their abilities. But they think there is little progress in the negotiations, even less understanding of the post-Brexit economic landscape, and very little planning for the next year let alone the next five or ten years.

“Everybody understands that negotiations are never clear cut but some idea of the direction of travel, of the potential risks involved, and the method for getting through to the other side of Brexit is clearly required for most Scottish business owners who feel that leaving the EU may be casting the country adrift from one of their most important markets.”