The impact of Brexit on Scotland's growth sectors

Author: Tena Prelec

PDF Published: Tuesday 20 Mar 2018 (SB 18-21)

Expand
Overview
Report

Hide

Hide

Overview
Report
- Executive Summary
- Growth Sectors: where are they?
- Introduction: Brexit and the Scottish Economy
- Overall dimensions of analysis
  - Trade
  - Workers
  - Investment
- Growth Sectors
  - The underpinning rationale of the Growth Sectors
  - Food and Drink
    
    Trade
    
    Workers
    
    Investment
    
    Box: FDF Scotland
    
    Box: The red meat industry
  - Sustainable Tourism
    
    Trade
    
    Workers
    
    Investment
    
    Box: Tourism
  - Life Sciences
    
    Trade
    
    Workers
    
    Investment
    
    Box: Scottish Life and Chemical Sciences
  - Creative Industries
    
    Trade
    
    Workers
    
    Investment
    
    Box: Festivals
  - Energy
    
    Trade
    
    Workers
    
    Investment
    
    Box: Renewable Energy
  - Financial and Business Services
    
    Trade
    
    Workers
    
    Investment
- Conclusions
Sources

Image: Growth Sectors: where are they?

Image: Figure 1. Growth Sectors: Exports by destination, 2016

Image: Figure 2. Qualification of workers in Scotland: UK, EU and non-EU nationals

Image: Figure 3. Growth Sectors: Are they growing?

Image: Figure 4. Growth Sectors as a proportion of the Scottish Economy (2015)

Image: Figure 5. Growth Sectors: Approximate Gross Value Added (GVA) at Basic Prices (£million), 2015

Image: Figure 6. Growth Sectors: Number of registered enterprises by type, 2017

Image: Figure 7. Growth Sectors: Employment by size of enterprise, 2017

Image: Figure 8. Food and Drink: Approximate GVA at Basic Prices (£million), 2008-2015

Image: Figure 9. Tourism: Approximate GVA at Basic Prices (£million), 2008-2015

Image: Figure 10. Reasons for hiring non-UK EU workers – Hospitality industry

Image: Figure 10. Life Sciences: Approximate GVA at Basic Prices (£million), 2008-2015

Image: Figure 11. Creative Industries: Approximate GVA at Basic Prices (£million), 2008-2015

Image: Figure 12. Energy: Approximate GVA at Basic Prices (£million), 2008-2015

Image: Table 1. Heatmap - Brexit and the Scottish economy: issues across the Growth Sectors

Scottish Government. (2007). The Government Economic Strategy. Retrieved from http://www.gov.scot/Publications/2007/11/12115041/0 [accessed 2018 March 16]

Scottish Government. (2018, January 4). Employment in Scotland’s Seafood Processing Sector: UK, European Economic Area and Non-European Economic Area Nationals. Retrieved from http://www.gov.scot/Publications/2018/01/5760

Scottish Government. (2018, February). Growth Sector Statistics Database. Retrieved from http://www.gov.scot/Topics/Statistics/Browse/Business/Publications/GrowthSectors/Database [accessed 18 March 2018]

Scottish Government. (2018, January 15). Scotland's Place in Europe: People, Jobs and Investment. Retrieved from http://www.gov.scot/Publications/2018/01/6407 [accessed 16 March 2018]

Sparrow, A. (2018, January 15). Sturgeon publishes Brexit impact report saying staying in single market best option. Retrieved from https://www.theguardian.com/politics/blog/live/2018/jan/15/brexit-impact-analysis-nicola-sturgeon-to-publish-scottish-governments-brexit-impact-analysis-politics-live [accessed 16 March 2018]

House of Commons, Exiting the European Union Committee. (2018, January). EU Exit Analysis – Cross Whitehall Briefing. Retrieved from https://www.parliament.uk/documents/commons-committees/Exiting-the-European-Union/17-19/Cross-Whitehall-briefing/EU-Exit-Analysis-Cross-Whitehall-Briefing.pdf [accessed 16 March 2018]

Chu, B. (2017, August 15). Sadly, it's become clear this week that the Government is making it up as it goes along with Brexit. Retrieved from http://www.independent.co.uk/voices/brexit-customs-union-transition-deal-david-davis-boris-johnson-hardline-brexiteers-making-it-up-a7894741.html [accessed 15 March 2018]

Institute for Fiscal Studies. (2018, January 8). Firms’ supply chains form an important part of UK-EU trade: what does this mean for future trade policy?. Retrieved from https://www.ifs.org.uk/publications/10302 [accessed 16 March 2018]

Scottish Government. (2018, February). Exports Statistics Scotland 2016: Key Findings. Retrieved from http://www.gov.scot/Resource/0053/00530491.pdf [accessed 16 March 2018]

Full Fact. (2015, November 9). Do half the UK's exports go to Europe?. Retrieved from https://fullfact.org/europe/do-half-uks-exports-go-europe/ [accessed 16 March 2018]

Borchert, I., & Tamberi, N. (2018, January). Brexit and regional services exports: A heatmap approach. Briefing paper 14, UK Trade Policy Observatory. Retrieved from http://blogs.sussex.ac.uk/uktpo/files/2018/01/Briefing-paper-14-Heatmap-final.pdf [accessed 16 March 2018]

Boswell, C. (2017). Brexit: Challenges and Opportunities. Migration, Diversity, Rights and Social Protections. Royal Society of Edinburgh.

Hudson, N., & Aiton, A. (2016, November 3). EU Nationals Living in Scotland, SPICe Financial Scrutiny Unit briefing. Retrieved from http://www.parliament.scot/ResearchBriefingsAndFactsheets/S5/SB_16-86_EU_nationals_living_in_Scotland.pdf [accessed 16 March 2018]

Scottish Government. (2017). Age Demographics. Retrieved from http://www.gov.scot/Topics/People/Equality/Equalities/DataGrid/Age/AgePopMig [accessed 16 March 2018]

Tindal, S., Findlay, A., & Wright, R. (2014). “The changing significance of EU and international students’ participation in Scottish higher education”, Working paper 49. Centre for Population Change.

Bell, D., Findlay, A., & Wright, R. (2014). Labour migration policies and constitutional change in Scotland. Oxford Review of Economic Policy..

Fraser of Allander Institute. (2017, November). Brexit and the Sectors of the Scottish Economy. Retrieved from https://pure.strath.ac.uk/portal/files/70630513/FAI_2017_Brexit_and_the_sectors_of_the_Scottish_economy_a_report_for_GMB_Scotland.pdf [accessed 16 March 2018]

Allen, W. (2013, September 18). Geographical distribution and characteristics of international migration flows to Scotland. Retrieved from http://www.migrationobservatory.ox.ac.uk/resources/briefings/geographical-distribution-and-characteristics-of-international-migration-flows-to-scotland/ [accessed 16 March 2018]

Boswell, C., Kyambie, S., & Smellie, S. (2017, June 20). Scottish and UK Immigration Policy after Brexit Evaluating Options for a Differentiated Approach. Retrieved from https://www.scer.scot/database/ident-2735 [accessed 16 March 2018]

KPMG. (2017, August 25). The Brexit effect on EU nationals. Retrieved from https://home.kpmg.com/uk/en/home/insights/2017/08/the-brexit-effect-on-eu-nationals.html [accessed 16 March 2018]

Government of Jersey. (2017, September 4). Brexit Residents’ Survey 2017 – Research report. Retrieved from https://www.gov.je/Government/Pages/StatesReports.aspx?ReportID=3091 [accessed 16 March 2018]

Knott, E. (2017, September 13). EU in the UK survey - Report. Retrieved from https://www.dropbox.com/s/wqedkj41u6vi0kj/euintheUK_general%20report_2017.pdf?dl=0 [accessed 16 March 2018]

Bruno, R., Campos, N., Estrin, S., & Tian, M. (2016). The FDI premium from EU membership. Retrieved from https://voxeu.org/article/fdi-premium-eu-membership [accessed 16 March 2018]

EY. (2017, May). EY’s Scotland Attractiveness Survey 2017: Standing Strong in Uncertain Times. Retrieved from http://www.ey.com/uk/en/issues/business-environment/ey-uk-attractiveness-survey-2017-scotland [accessed 2018 March 2018]

Written answer by Marina Curran, Scottish Government. (2018). -.

Boyle, S. (2017). 'Economic Policy Performance' in The Scottish Economy: A Living Book, edited by K. Gibb et al.. London and New York: Routledge.

Audit Scotland. (2016, July). Supporting Scotland's Economic Growth. Retrieved from http://www.audit-scotland.gov.uk/uploads/docs/report/2016/nr_160714_economic_growth.pdf [accessed 16 March 2018]

Scottish Parliament. (2018). Economy, Jobs and Fair Work Committee 27 February 2018. Retrieved from http://www.parliament.scot/parliamentarybusiness/report.aspx?r=11393&i=103565 [accessed 16 March 2018]

O'Connor, A. (2018, February 23). A Guide to Gross Value Added (GVA) in Scotland. Retrieved from https://digitalpublications.parliament.scot/ResearchBriefings/Report/2018/2/23/A-Guide-to-Gross-Value-Added--GVA--in-Scotland [accessed 16 March 2018]

Fraser, D. (2017). “The Scottish Economy, the SNP and the Absence of Economic Nationalism”, in A Nation Changed? The SNP and Scotland Ten Years On, edited by G. Hassan and S. Barrow. Edinburgh: Luath Press Limited.

Scottish Enterprise. (2018). “Scottish Enterprise Economic Trends Survey”, based on 429 completed surveys between 1 November and 31 January.. [No description].

Scottish Enterprise. (2017, October 18). Research into the Scottish Food and Drink Innovation Landscape, final discussion document. Retrieved from http://www.evaluationsonline.org.uk/evaluations/Search.do?ui=basic&action=showPromoted&id=635 [accessed 16 March 2018]

UK Parliament. (2018, January). EU Exit Analysis - Cross Whitehall Briefing. House of Commons, Exiting the European Union Committee. Retrieved from https://www.parliament.uk/documents/commons-committees/Exiting-the-European-Union/17-19/Cross-Whitehall-briefing/EU-Exit-Analysis-Cross-Whitehall-Briefing.pdf

Cadywould, C. (2018, January). The future of farming: UK Agricultural Policy after Brexit. Retrieved from http://policynetwork.org/wp-content/uploads/2018/01/The-Future-of-Farming_FINAL.pdf [accessed 16 March 2018]

Cadywould, C. (2018, January 31). Michael Gove’s agricultural utopia: a hard Brexit would cause a race to the bottom. Retrieved from http://blogs.lse.ac.uk/politicsandpolicy/post-brexit-agricultural-policy/ [accessed 16 March 2018]

Keating, M. (2018, January). The Repatriation of Competences in Agriculture after Brexit. Retrieved from http://www.centreonconstitutionalchange.ac.uk/sites/default/files/papers/Keating%20Agriculture%20Report.pdf [accessed 16 March 2018]

Keating, M. (2018, March 8). Agriculture post-Brexit: a battleground for the UK’s constituent nations. Retrieved from http://blogs.lse.ac.uk/politicsandpolicy/agriculture-post-brexit-a-battleground-for-the-uks-constituent-nations/ [accessed 16 March 2018]

Kenyon, W. (2017, March 22). Implications of leaving the EU – Fisheries. Retrieved from http://www.parliament.scot/ResearchBriefingsAndFactsheets/S5/SB_17-21_Implications_of_Leaving_the_EU-_Fisheries.pdf [accessed 16 March 2018]

Scottish Fishermen's Federation. (2016, September 13). Scottish Fisheries Post-Brexit: A Sea of Opportunities. Retrieved from http://www.sff.co.uk/scottish-fisheries-post-brexit-sea-of-opportunities/ [accessed 2018 March 2018]

Carpenter, G. (2017). Not in the same boat: The economic impact of Brexit across UK fishing fleets. Retrieved from http://neweconomics.org/wp-content/uploads/2017/11/Not-in-the-Same-Boat-PDF.pdf [accessed 2018 March 2018]

House of Lords. (2016, December 17). Brexit: Fisheries. Retrieved from https://publications.parliament.uk/pa/ld201617/ldselect/ldeucom/78/78.pdf [accessed 2018 March 2018]

Thomson, D. (2018). Interview with the author. Food and Drink Federation Scotland.

Scottish Parliament. (2018, March 15). Minutes of the 7th meeting, 2018, of the Culture, Tourism, Europe and External Relations Committee. Retrieved from http://www.parliament.scot/S5_European/Minutes/CTEER_minutes_2018.03.15.pdf [accessed 16 March 2018]

FDF & NABIM. (2018). Rules of origin in an EU-UK FTA: A ‘hidden hard Brexit’ for food and drink exporters?. Retrieved from https://www.fdf.org.uk/corporate_pubs/FDF-Rules-of-origin-report.pdf [accessed 2018 March 2018]

NFU Scotland. (2017, December 18). Seasonal Workers Still Vital to Scottish Agriculture as Brexit Approaches. Retrieved from https://www.nfus.org.uk/news/news/seasonal-workers-still-vital-to-scottish-agriculture-as-brexit-approaches [accessed 16 March 2018]

SRUC. (2018). Seasonal Workers in Scottish Agriculture. Retrieved from https://www.sruc.ac.uk/seasonalworkers [accessed 16 March 2018]

NFUS. (2017). A New Agricultural Policy After Brexit: Change – A discussion document. Retrieved from https://www.nfus.org.uk/userfiles/images/Policy/Brexit/Brexit%20Doc%20-%20pages.pdf [accessed 16 March 2018]

NFA. (2017, June 22). Drop in seasonal workers leaves some farms critically short. Retrieved from https://www.nfuonline.com/news/latest-news/drop-in-seasonal-workers-leaves-some-farms-critically-short/ [accessed 16 March 2018]

Swindon, P. (2018, February 4). Fruit and vegetables left to rot in fields after fall in farm workers from the EU after Brexit vote. Retrieved from http://www.heraldscotland.com/news/15918694.Fruit_and_vegetables_left_to_rot_in_fields_as_Brexit_vote_sees_fall_in_EU_workers/ [accessed 16 March 2018]

Carrington, D. (2018, June 22). Farms hit by labour shortage as migrant workers shun 'racist' UK. Retrieved from https://www.theguardian.com/environment/2017/jun/22/farms-hit-by-labour-shortage-as-migrant-workers-shun-racist-uk [accessed 16 March 2018]

NFU. (2017). Comment: Immigration minister hints at post-Brexit SAWS. Retrieved from https://www.nfuonline.com/news/latest-news/comment-immigration-minister-hints-at-post-brexit-saws/ [accessed 16 March 2018]

Marine Scotland. (2018, January). Employment in Scotland’s seafood processing sector: UK, European Economic Area and Non-European Economic Area Nationals, Marine Scotland. Retrieved from http://www.gov.scot/Resource/0053/00530017.pdf [accessed 16 March 2018]

Scottish Tourism Alliance. (2017, September). Tourism businesses – confident or concerned? Report on the factors affecting tourism businesses in Scotland. Retrieved from http://scottishtourismalliance.co.uk/page/research/ [accessed 2018 March 2018]

Interview with Leon Thompson. (2018). Visit Scotland.

Visit Scotland. (2017, October). Scotland's Tourism Performance: Summary Report 2016. Retrieved from http://www.visitscotland.org/pdf/2016_Stats_Summary_v2.pdf [accessed 19 March 2018]

KPMG. (2017, March). Labour migration in the hospitality sector: A KPMG report for the British Hospitality Association. Retrieved from http://www.bha.org.uk/labour-migration-hospitality-sector/ [accessed 16 March 2018]

UK House of Commons, Digital, Culture, Media and Sport Committee. (2018, January 23). The potential impact of Brexit on the creative industries, tourism and the digital single market. Retrieved from https://publications.parliament.uk/pa/cm201719/cmselect/cmcumeds/365/365.pdf [accessed 16 March 2018]

Recruitment & Employment Confederation. (2017, July). Building the Post-Brexit Immigration System: An analysis of shortages, scenarios and choices. Retrieved from https://www.rec.uk.com/news-and-policy/policy-and-campaigns/brexit/building-the-post-brexit-immigration-system [accessed 2018 March 2018]

Chalmers, G. (2018). CEO of International Hotel Jobs, interview with the author, Alloa, 5 February 2018. -.

Green, A., Atfield, G., Adam, D., & Staniewicz, T. (2013). Determinants of the composition of the workforce in low skilled sectors of the UK economy. Warwick Institute for Employment Research.

UK Government, Department for Exiting the EU. (2017, December). Life Sciences Sector Report. Retrieved from http://www.parliament.uk/documents/commons-committees/Exiting-the-European-Union/17-19/Sectoral%20Analyses/21-Life-Sciences-Report.pdf [accessed 16 March 2018]

Tudor, D. (2017). Industry Chair, Life Sciences Scotland Industry Leadership Group. Submission to the Scottish Government. Life Sciences Scotland.

Scottish Enterprise. (2018). Scottish Enterprise Economic Trends Survey, February 2018. -.

UK Parliament, Commons Select Committee on Health. (2017, December 19). Impact of Brexit on patients and the life science industry examined. Retrieved from https://www.parliament.uk/business/committees/committees-a-z/commons-select/health-committee/news-parliament-2017/brexit-medicines-substances-evidence-17-192/ [accessed 16 March 2018]

Withers, I. (2018, January 7). Pharma firms encounter overseas talent shortages amid Brexit vote. Retrieved from https://www.telegraph.co.uk/business/2018/01/07/pharma-firms-encounter-overseas-talent-shortages-amid-brexit/ [accessed 16 March 2018]

DHR International. (2018, January 10). UK Life Sciences firms struggle in post-Brexit war for EU talent. Retrieved from http://www.dhrinternational.com/about/news-media/uk-life-sciences-firms-struggle-post-brexit-war-eu-talent [accessed 10 March 2018]

Convention Edinburgh. (2018). Creative Capital. Retrieved from http://www.conventionedinburgh.com/edinburgh/get-to-know-edinburgh/creative-capital/ [accessed 16 March 2018]

Eurostat. (2018). International Trade in Cultural Goods. Retrieved from http://ec.europa.eu/eurostat/statistics-explained/index.php/Culture_statistics_-_international_trade_in_cultural_goods [accessed 16 March 2018]

Creative Scotland. (2017). Update on Brexit Implications, by Alastair Evans. -.

Festivals Edinburgh. (2016, October). Written evidence submitted to the House of Commons, to the Digital, Culture, Media and Sport Committee. Retrieved from http://data.parliament.uk/writtenevidence/committeeevidence.svc/evidencedocument/culture-media-and-sport-committee/impact-of-brexit/written/42168.pdf [accessed 16 March 2018]

House of Commons. Digital, Culture, Media and Sports Committee. (2018, January 23). The potential impact of Brexit on the creative industries, tourism and the digital single market. Retrieved from https://publications.parliament.uk/pa/cm201719/cmselect/cmcumeds/365/365.pdf [accessed 16 March 2018]

Arts Council England. (2016). Research on Brexit conducted in Autumn 2016. -.

ICM. (2018, February 20). Impact of Brexit on the Arts and Culture Sector: 2018. A report by ICM and SQW on behalf of Arts Council England. Retrieved from http://www.artscouncil.org.uk/publication/impact-brexit-arts-and-culture-sector-2018 [accessed 16 March 2018]

Creative Industries Federation. (2016, October). Brexit Report: The impact of leaving the EU on the UK’s arts, creative industries and cultural education - and what should be done. Retrieved from https://www.creativeindustriesfederation.com/sites/default/files/2017-05/Brexit%20Report%20web.pdf [accessed 16 March 2018]

Horizon 2020 projects. (2018). Horizon 2020 application success rate drops. Retrieved from http://www.horizon2020projects.com/policy-research/horizon-2020-application-success-rate-drops/ [accessed 16 March 2018]

Armstrong, J., & Mclaren, J. (2017). 'The Oil and Gas Sector' in The Scottish Economy: A living Book (ed. by Kenneth Gibb et al.). London and New York: Routledge.

Nasdaq. (2018). End of day Commodity Futures Price Quotes for Crude Oil WTI (NYMEX). Retrieved from https://www.nasdaq.com/markets/crude-oil.aspx?timeframe=3y [accessed 16 March 2018]

Interview with Gareth Wynn and David Hoy. (2018). Oil and Gas UK.

Oil & Gas UK. (2017). Economic Report 2017. Retrieved from http://oilandgasuk.co.uk/wp-content/uploads/2017/09/Economic-Report-2017-Oil-Gas-UK.pdf [accessed 19 March 2018]

Brexit: Energy Security”, European Union Committee. (2018, January 29). Retrieved from https://publications.parliament.uk/pa/ld201719/ldselect/ldeucom/63/6308.htm [accessed 16 March 2018]

PwC. (2017, December). How much do the UK’s largest businesses pay in tax?. Retrieved from https://www.pwc.co.uk/services/tax/total-tax-contribution-100-group.html [accessed 16 March 2018]

Written submission to SPICe by Claire Mack, Chief Executive. (2018). Scottish Renewables.

Scottish Government. (2018, February 9). Growth Sectors briefings – Financial and Business Services. Retrieved from http://www.gov.scot/Topics/Statistics/Browse/Business/Publications/GrowthSectors/Briefings [accessed 17 March 2018]

Peat, J., & Kelly, O. (2016, October). Brexit and the Scottish Financial Services Sector”, Policy brief, International Public Policy Institute, University of Strathclyde. Retrieved from https://strathprints.strath.ac.uk/58278/1/Peat_Kelly_IPPI_2016_BREXIT_and_the_Scottish_financial_sector.pdf [accessed 17 March 2018]

Rankin, J. (2017, December 18). UK cannot have a special deal for the city, says EU’s special negotiator. Retrieved from https://www.theguardian.com/politics/2017/dec/18/uk-cannot-have-a-special-deal-for-the-city-says-eu-brexit-negotiator-barnier [accessed 16 March 2018]

Oliver Wyman. (2016). The impact of the UK’s exit from the EU on the UK-based Financial Services sector. Retrieved from http://www.oliverwyman.com/content/dam/oliver-wyman/global/en/2016/oct/OW%20report_Brexit%20impact%20on%20Uk-based%20FS.pdf [accessed 17 March 2018]

Dhingra, S., Machin, S., & Overman, H.G. (2017). The Local Economic Effects of Brexit. Brexit paper n. 10, Centre for Economic Performance, London School of Economics and Political Science. Retrieved from http://cep.lse.ac.uk/pubs/download/brexit10.pdf [accessed 17 March 2018]

Gordon, S. (2017, November 17). Edinburgh financial sector optimistic about life after Brexit. Retrieved from https://www.ft.com/content/415e30a2-cacf-11e7-ab18-7a9fb7d6163e [accessed 17 March 2018]

Macpherson, S. (2016, October 13). Brexit: Higher Education in Scotland. Retrieved from http://www.parliament.scot/ResearchBriefingsAndFactsheets/S5/SB_16-79_Brexit_Higher_Education_in_Scotland.pdf [accessed 17 March 2018]

Treanor, J. (2017, August 4). RBS plans to move to Amsterdam for post-Brexit EU hub. Retrieved from https://www.theguardian.com/business/2017/aug/04/rbs-plans-move-to-amsterdam-for-post-brexit-hub [accessed 17 March 2018]

Settle, M. (2018, January 23). UBS plans to implement contingency plan soon with up to 1,000 job losses. Retrieved from http://www.heraldscotland.com/politics/15889609.UBS_to_implement_Brexit_contingency_plans_soon_with_up_to_1_000_job_losses/ [accessed 17 March 2018]

Written submission to SPICe by Graeme Jones, Chief Executive of Scottish Financial Enterprise. (2018). Private archive.

Noonan, L. (13, December 2017). Banks set to move fewer than 4,600 City jobs over Brexit. Retrieved from https://www.ft.com/content/931b1b1a-df49-11e7-a8a4-0a1e63a52f9c [accessed 13 March 2018]

E&Y. (2017, December 11). Financial Services Brexit Tracker: Thousands of financial services jobs to be relocated as firms plan for Day One of Brexit. Retrieved from http://www.ey.com/uk/en/newsroom/news-releases/17-12-11-financial-services-brexit-tracker-thousands-of-financial-services-jobs-to-be-relocated-as-firms-plan-for-day-one-of-brexit [accessed 17 March 2018]

Treaty establishing the European Economic Community. (1957, March 25). Retrieved from https://www.cvce.eu/obj/treaty_establishing_the_european_economic_community_rome_25_march_1957-en-cca6ba28-0bf3-4ce6-8a76-6b0b3252696e.html [accessed 19 March 2018]

Last Updated: 8/4 3:08pm

An error occured while loading, please try again in a few minutes.