THREE-quarters of Scottish information technology companies fear Brexit will have a detrimental impact on their access to skilled staff, a survey reveals.
And 62 per cent predict the UK’s exit from the European Union will hamper their ability to increase exports, with only six per cent seeing a benefit, the survey from industry body ScotlandIS shows.
Meanwhile, a separate survey published today by Scottish Chambers of Commerce shows sizeable proportions of companies north of the Border want cuts in business rates from Holyrood and reductions in value-added tax from Westminster to help the economy following the Brexit vote.
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The ScotlandIS survey shows 22 per cent of Scottish information technology companies are considering relocating their business in the wake of the Brexit vote, with the US, Ireland, the Netherlands. Belgium, Germany, France and Poland cited as potential new locations.
The Scottish information technology sector, asked to rate the desirability of four potential scenarios after the UK leaves the EU, gave the highest score, an average 3.86 on a scale where one is “not preferable at all” and five is “very preferable”, to a “Norway model”. Such a model would secure access to the European single market, while requiring the UK to accept free movement of people.
The sector gave the second-highest score, of 3.43 out of five, to an independent Scotland within the EU. Information technology companies, overall, rated this scenario way ahead of Canada’s planned model of partial access to the single market without free movement of people, scored at 2.15. The option of no trade deal with the EU was given a score of 1.35.
Asked what reassurance they required as employers of non-UK citizens, in terms of current staff and hires in the next 24 months, 70 per cent said they needed to know these people would retain their right to live and work in the UK. Meanwhile, 44 per cent said they wanted no changes to visa arrangements for at least 24 months.
Polly Purvis, chief executive of ScotlandIS, said: “The vast majority of our member companies will have [non-UK] Europeans in their workforce working in Scotland already. There is a challenge in making those people feel secure, to stay on. We need more of these people to come and work in the Scottish sector as well.”
Of the ScotlandIS survey respondents, 50 per cent said they expected Brexit would have a “negative impact” on access to staff with the required skills and an additional 25 per cent anticipated the effect would be “very negative”.
Ms Purvis also noted that universities that were members of ScotlandIS brought in many research staff from other EU countries and elsewhere in the world.
ScotlandIS estimates about 84,000 people work in professional roles in the information technology sector north of the Border.
The Scottish Chambers survey shows that, following the Brexit vote, 46.4 per cent of companies north of the Border believe there should be a cut in business rates to enhance the economy over the next three years.
Meanwhile, 36.8 per cent are calling for a cut in VAT from the UK Government, with 35.7 per cent wanting a further reduction in corporation tax.
The Scottish Chambers survey shows maintaining free trade with the EU single market is viewed by 29.7 per cent of businesses north of the Border as most important to them in terms of negotiations about the UK’s future relationship with the EU.
Clarification on changes to UK implementation of EU legislation, such as TUPE (transfer of undertakings, protection of employment) regulations, the working time directive or employment rights, is viewed by 27.9 per cent of Scottish businesses as most important to them in the Brexit negotiations.
Access to the EU single market without the imposition of non-tariff barriers, such as quotas, customs delays or technical barriers, is viewed as most important by 19.1 per cent of Scottish businesses. And 17.8 per cent believe a deal on the continued free movement of workers between the UK and the EU is most important to them.
Liz Cameron, chief executive of Scottish Chambers, said: “The Scottish economy was faltering even before June’s EU referendum and the result has sparked another period of uncertainty. Businesses, however, are clear in terms of the support they need and the expectations they have of the Scottish and UK Governments at this time.
“This support is required in order to address Scotland’s underlying economic needs, and is consistent with the views expressed by the business community over recent years.”
She added: “A reduction in business rates would deliver a clear boost to a wide spectrum of businesses, reducing business costs and freeing up resources to invest for future growth. This is an area where the Scottish Government has the powers to deliver for Scottish business and, with a rates revaluation coming up in just seven months, the timing could be perfect to provide a boost to Scotland’s businesses.
“The UK Government can also play a part by targeting reductions in VAT, which is a particular priority from Scotland’s tourism sector, and by continuing the recent downward trend of corporation tax rates.”