BREXIT puts almost £12 billion a year worth of Scotland's exports to Europe at risk, a devastating new report has warned.

A briefing by Holyrood researchers highlights the significance of access to the single market for some of the country’s key sectors including manufacturing, food and drink and financial services.

It also pointed to the results of a major survey of companies, revealing that 65 per cent say leaving the EU would have a negative impact on their business.

The briefing by the Scottish Parliament’s Information Centre (Spice) was published yesterday ahead of a meeting tomorrow by Holyrood’s European and external relations committee, which has set up an inquiry into the implications to Scotland of Brexit.

“Scottish exports to the EU were worth £11.56 billion in 2014,” the report said. “They have grown by six per cent (£670 million) since 2002 and by 36 per cent (£3,070 million) since their lowest point in 2005.”

It said the three biggest recipients of Scottish exports in 2014 were the Netherlands, France and Germany, together accounting for just under half of Scottish exports to the EU.

Food and drink and services made up the bulk of exports.

“A greater proportion of exports to the EU are in manufacturing (58 per cent)... with food products, beverages and tobacco products making up the biggest share of manufacturing exports to the EU. Services make up 34 per cent of exports to the EU.”

The Fraser of Allander Institute survey, carried out between July 5 and 12 July and covering 320 firms in Scotland, reported that 33 per cent of firms thought Brexit would have a “very negative impact”, while a survey carried out by the Institute of Directors between June 24 and 26 covering 1,092 reported that 65 per cent of firms believed Brexit would have a negative impact on their business.

Joan McAlpine, the SNP MSP and convener of the European and external relations committee, told The National: “There is no doubt that there is a huge amount at risk as a result of the Brexit vote, particularly in relation to our economic prospects.

“In 2014 Scottish exports to the EU reached almost £12 billion – and this is why we are hearing from a number of different key sectors in the Scottish economy about the impact that the Brexit vote will have on them and their businesses.

“It is clear that access to the single market is of key importance and all the statistics reflect that.

“As the research by the Fraser of Allander Institute shows, over 33 per cent of businesses think the EU exit will have negative impact on Scotland; it is our role as politicians to listen to the evidence, hear people’s concerns and to provide a platform for debate about the best way forward.”

Scottish Greens’ co-convener, Patrick Harvie, added: “Greens were at the forefront of the campaign to keep Scotland in the European Union where we made the economic case for our membership, a campaign that Remain won in Scotland after all.

“We’ve given the Scottish Government our full support in exploring every option to ensure that we stay in Europe and this report underlines the importance of that.”

The report also revealed that almost 4,600 business sites in Scotland are owned by non-UK European-owned companies, which added £15.8 billion to the Scottish economy in 2013.

It added: “According to the figures for 2009-2013, Scotland had the highest share of its business economy accounted for by European companies of any UK country or region, with nearly one in every six pounds in the Scottish business economy generated by companies based in the rest of Europe.”

The report follows in the wake of a series of worrying economic developments since the Brexit vote on June 23.

The day after the vote, Moody’s credit rating agency warned that Britain’s economic growth will be weaker, its economic policymaking may be diminished and the government’s fiscal strength reduced.

The agency said: “Moody’s expects a negative impact on the economy unless the UK government manages to negotiate a trade deal that largely replicates its current access to the single market.

“However, at the moment there is substantial uncertainty over the type of trade agreement that could be achieved.”

Following the referendum result, the value of sterling fell by almost seven per cent on June 24, and is 15 per cent lower on average in July 2016 than it was a year ago.


EU research boost for unis

SCOTLAND has received more than €217 million (£181.5m) of research funding from Horizon 2020, the EU’s main funding programme for research and innovation.

Universities and research institutes secured almost 80 per cent of the money with the remainder going to Scottish businesses, including small and medium sized enterprises.

Figures up to February this year showed that the University of Edinburgh has received €59m (£49.4) in EU funding, placing it the sixth biggest beneficiary among institutions across the EU.

The University of Glasgow ranks 18th in the EU having gained over €35m (£29.3m).

Figures were provided to the Scottish Parliament staff compiling the briefing by the organisation Scotland Europa. 


Food and drink top export

FOOD and drink is Scotland’s biggest export in terms of sector. The value of food and drink exports to the EU was £1,775 million in 2014, an increase of 57 per cent (£645m) since 2002.

Whisky makes up the majority of food and drink exports, 83 per cent, with 32 per cent of all Scotch whisky exports going to the EU.

Based on 2014 figures, the top five importers of Scotch whisky in the EU are: France (£450m), Spain (£170m), Germany (£140m), Latvia (£80m) and the Netherlands (£60m).

Some of Scotland’s food products also benefit from participating in the EU protected food name scheme, meaning these products are given legal protection against imitation throughout the EU.

Examples of Scottish protected food names include Scotch Lamb and Scottish Farmed Salmon.


Scots farmers to get £3.3bn from EU

SCOTLAND’s farmers are on course to receive £3.3 billion in European Union funding between 2014 and 2020 via the common agricultural policy, the Scottish Parliament briefing reported.

Grants include assistance for beef and sheep farmers as well as for land and flood management. There is also help for tree planting projects to make rural businesses more environmentally-friendly and help promote increased biodiversity.

The briefing said that around 65,400 people work in the country’s agricultural sector which was vital in terms of sustaining rural communities and supporting employment in remote areas.

It highlighted research which revealed that if grants and subsidies for farmers were withdrawn, many of them could face having no income.

It said: “Farm Business Income (FBI) is a business-level measure of total farm income, or the profit made.

“It represents the return to the whole farm business, that is, the total income available to all unpaid labour and their capital invested in the business.

“The average FBI falls below zero when grants and subsidies are excluded.”

It added that according to the Scottish Government’s Economic Report for Scottish Agriculture the sector makes up about one per cent of the economy.