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As Barnier warns of no-deal...

Factory bosses call for UK compromise on Brexit

Paul Sheerin

Paul Sheerin: ‘disbelief’ (pic: Terry Murden)

Scottish Engineering companies are calling on Britain’s Brexit negotiators to reach a compromise deal with the EU to avoid adding to pressures caused by the recession.

A new survey says that if no trade deal is in place at the end of transition, 61% of companies state their business will suffer further adverse financial impact.

The trade body has said it is “deeply concerned” that time is running out to secure the trade deal that would minimise some Brexit financial impacts at the end of the transition period.

Its third quarterly report shows a slowing rate of decline in the sector as Covid-19 reaches “a sort of balance” but shows a manufacturing sector still a long distance from recovery.

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Scottish Engineering’s chief executive Paul Sheerin said there is evidence that the sector is showing the resilience it needs to survive by taking hard decisions on costs, and seeking out available and alternate business streams.

But he says the Brexit negotiations are coming back into focus as a real threat to companies’ finances.

“In the midst of this biting recession it still raises disbelief that in four months we will choose to add the further financial penalties of Brexit, with impact regardless of whether a trade deal is reached or not,” he said.

Michel Barnier

Michel Barnier: ‘difficult to be optimistic’

“A trade deal would reduce at least some of those headaches, so if the UK Government want to help this sector and the wider UK export economy, now is the time for compromise to deliver that.”

His comments come as the EU’s chief negotiator Michel Barnier calls on European leaders to lobby Prime Minister Boris Johnson to drop his negotiating red lines in a final bid to break the months of bitter deadlock.

Mr Barnier said his efforts to broker a free-trade agreement are on the verge of failure because he cannot convince his opposite number in the UK David Frost to move closer to the bloc’s demands for a regulatory level-playing field and access to Britain’s fishing waters for EU vessels.

“It’s difficult to be optimistic at the moment,” said Mr Barnier ahead of talks which are due to resume on 7 September.

Confidence rises

Another survey shows business confidence in Scotland rose two points during August.

According to the latest Business Barometer from Bank of Scotland Commercial Banking the majority of firms continued to see demand negatively affected during August.

Two-thirds (65%) experienced a fall in demand for their products and services, up one point on the month before. Meanwhile, 10% experienced an increase in demand, up one point from July.

Of the 57% of businesses reporting disruption to their supply chain during August, 27% expected the situation to improve within three months, while 7% expected it would take more than 12 months to return to normal levels.

Fraser Sime, regional director for Scotland at Bank of Scotland Commercial Banking, said: “August marks the second consecutive month where we’ve seen a slight improvement in overall business confidence.

“However, Scottish firms remain more pessimistic than their counterparts across the English regions and Wales – largely a reflection of the fact that Scotland is behind the rest of the UK in its emergence from lockdown.”

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