John Macintosh, Tax Partner, Deloitte
As we await the outcome of negotiations, heightened economic uncertainty continues. Whatever the outcome of Brexit, profound change is ahead and businesses need to be agile to respond. From engaging with staff and addressing the potential of legal and regulatory change to ensuring supply chains are robust and ready - there are a number of factors that can be built into contingency plans.
There are also wider, longer-term issues to consider, many of which have been sidelined by the current political climate but will have considerable impact on the Scottish economy, such as stagnant productivity growth, our ageing population and the potential impact of automation.
One exception that has undeniably captured public attention is climate change. The subject is now central on many agendas and at Deloitte we see both our people and our clients wanting action; it is no longer a CSR issue and is now a key business risk.
This is an area where Scotland has been taking a lead. There has been broad agreement on setting some very ambitious targets, including net zero by 2045, and this has been backed-up with a range of Government policy announcements.
This quarter’s report suggests that Scotland has made good progress in certain areas – most notably renewable electricity generation – but in many others – such as transport and heat – we are at an earlier stage.
As the Institute notes, arguably many of the changes we have seen so far have been ‘quick-wins’. Future changes will have a much more direct impact on our day-to-day lives and will likely require a radical change to our behaviours and attitudes. Not all of these will be easy or politically popular.
The significant changes will create economic opportunities and we need to do all that we can to ensure that Scotland gains from the economic opportunities that the low carbon transition will provide.
This quarter’s report highlights the different scenarios for growth in Scotland over the next few years, with a central forecast based on an orderly departure at some point in 2019, predicting growth of 1.0% in 2019, 1.2% for 2020, and 1.3% for 2021.
Please read the full Commentary here.
If you would like to discuss any elements of the report or have any comments, please do get in touch.