Good Brexit could bring investment ‘wall of cash’

Scottish banknotes

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Scottish firms could release a “wall of cash” for investment if Brexit is “done well”, a business leader has said.

Scottish Chambers of Commerce (SCC) president Tim Allan said investment had been “stymied” by uncertainty over the UK’s departure from the EU.

But he added that money that been held back could be released once Brexit was completed.

His comments came as an SCC economic study found a decline in overall business performance in the last year.

Mr Allan said this had happened “as companies take on board extra uncertainties caused by the tortuous progress of the Brexit process”.

He said: “We continue to affirm the view that a disorderly, no-deal departure from EU will have painful, long-lasting consequences for the economy in Scotland and the UK.

“But we also believe that, if Brexit is not just done but done well, there is significant potential for an upside.”

He added: “We believe there is a wall of cash that has been pent up while the process of leaving the EU has unfolded which can and will be unleashed.”

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The research, carried out in conjunction with the Fraser of Allander Institute economic think tank, covered the period from June to September 2019.

It found more than three quarters of firms in the tourism sector were looking to take on workers, with half of these companies reporting recruitment difficulties.

In the construction sector, sales had slowed, while less than a quarter of companies reported investment was rising.

And in manufacturing, total sales revenue fell back, with sales trends described as being “significantly lower than recorded for the for the same quarter of 2018”.

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Manufacturing is facing “severe challenges”

Mr Allan said the challenges facing businesses were “laid bare” in the report.

He added: “As the UK faces yet another deadline in the Brexit process, construction and manufacturing have reported severe challenges in terms of future orders, exports and investment.

“Meanwhile companies in sectors including retail and tourism face continued challenges in recruiting people with the right skills as the number of available workers from Europe continues to decline.”

Fraser of Allander Institute director Prof Graeme Roy said: “A ‘no-deal’ Brexit remains the greatest immediate risk to the Scottish economy.

“It is misguided to argue that ‘no deal’ is better than further delay.

“A ‘no-deal’ would not only act as a major economic shock but will do little to curb uncertainty, with the UK’s future relationship with the EU still needing resolved.”

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