Brexit problems mount for Scots firms, says minister

[ February 3, 2021   //   ]

Problems for Scottish companies have multiplied in the first four weeks after Brexit, said Europe and External Affairs Secretary, Michael Russell.

In a statement to parliament he said companies had been left “toothless” following the UK Government’s move to make itself a third country with respect to its former EU partners.

He backed a call from the food and drink industry for a six month grace period to allow companies more time to cope with the changes. He also urged the UK Government to improve the information it shared on emerging issues at ports.

He said that exporters faced new customs controls and suffered IT systems failures leading to stock being  and spoiled at ports in the UK and EU , with up to £1 million a being lost by the seafood industry alone. There were also significantly reduced freight flows across the Channel with evidence that hauliers are avoiding the UK.

The UK Government’s own Reasonable Worst Case Scenario predicts that 142,000 tons of perishable goods including food, feed and drink could be wasted over the next six months because of Brexit border disruption. Estimated losses to Scottish seed potato farmers no longer able to export to Europe could be £11 million.

Mr Russell said: “Four weeks into the new trading arrangements, the problems for businesses are not diminishing, but multiplying and spreading across different sectors of the economy. He added: “The disruption to the seafood sector has resulted in the damaging delays, huge costs and devastating losses which we feared would be the outcome of becoming an EU third country and dealing with new and untested processes.

“Unfortunately it is not just the fishing part of the food industry that is being impacted. A whole new category of prohibited and restricted goods has been created, meaning Scottish exporters can no longer trade their produce freely with the EU.

“Even the UK Government has now admitted that these are not ‘teething issues’ – they are a permanent exclusion from the single market that leaves many businesses in Scotland toothless in a competitive modern economy.

“What we ended up with was the hardest of Brexit deals, recklessly pursued at the very depths of the pandemic. That was bound to be a disaster, and it has been.”