The Tory Government have played a dangerous game of roulette with Scotland’s economy.
Despite Scotland voting emphatically to Remain, the impact of the UK decision to leave the EU could be long and painful for the Scottish economy, unless we move quickly to secure our place in the EU and retain access to the single market.
It is abundantly clear that Westminster had no plan in place and as political panic runs through the British establishment, the UK and Scottish economies are suffering. The morning after the Brexit vote, £137bn was wiped off UK blue chip stocks within minutes of markets opening. By Monday, the £ had dropped to a thirty year low of only $1.32 and the £:€ to €1.20. The UK lost its AAA credit-rating and changed from a ‘stable’ to a ‘negative’ outlook. We have seen major firms lose substantial orders, graduates having offers of employment withdrawn, major banks indicating they will relocate from London to the continent to effect continuity in their businesses.
Let there be no doubt, European Union membership has been and is good for Scotland. It has supported over 300,000 Scottish jobs directly and indirectly and provides access to £58 billion of research and innovation funding. The EU is the top destination for Scottish exports (42%) worth around £11.6 billion in 2014. The Scotch Whisky industry was unanimous in its desire to see Scotland remain inside the EU. Scotland’s farmers and those involved in tourism were in no doubt that being part of the EU was good for business. Scotland is the most attractive part of the UK for Foreign Direct Investment in the UK with 72% of investors citing access to the internal market as an important factor. Yet despite voting overwhelming to Remain, Scotland faces being taken out of the EU against our will.
In 2015, there were over 2,310 foreign-owned companies in Scotland, employing around 314,000 with a combined turnover of £90 billion, around 42% of these companies were ultimately owned by firms based in the EU. This is why it has been essential for the Scottish Government to engage immediately with our European partners to reassure them that we did not vote for this outcome.
The value of being part of the EU trading bloc cannot be underestimated as the economic bargaining power of 28 sovereign nations allows formidable safeguards in procuring public services and maintaining safety standards. With the UK effectively outside and isolated, all of this is in jeopardy.
It is becoming clearer by the day that Brexit was a slogan, not a plan. We now have a United Kingdom government that is in complete disarray and an official Labour Party opposition who would rather exploit the chaos to settle personal quarrels and tear itself apart in the process. In short, Westminster has, this week, been in a state of political paralysis; rudderless, leaderless and absolutely hopeless.
By their actions, this Tory government has played a dangerous game of roulette with Scotland’s economy. Thankfully our First Minister has, uniquely among British politicians, seized the initiative and shown stable leadership, with Scotland’s best interests her priority.
As the First Minister said, the single market is crucial for Scotland’s trade, exports, innovation and productivity. The SNP at Westminster and Holyrood have committed to explore all options to secure Scotland’s place in the European Union; as I said to the Prime Minister on Monday, being forced to leave the EU against our will, is a “democratic outrage”.
We have called on the UK Government to take urgent action to provide the reassurance needed by the markets and to produce a comprehensive strategy to rebalance the economy.
The ramifications of Brexit, which Scotland did not want and did not vote for continue to unfold before us.
Brendan O’Hara MP