Rural businesses 'not preparing adequately for Brexit'

Many small rural businesses are not preparing adequately for the impact of Brexit, according to Scotland's National Council of Rural Advisors.

The panel said in its first report a smaller labour pool will increase competition for workers, increasing costs - particularly for family firms.

While much focus has been on seasonal labour, the report says many jobs are highly skilled and permanent posts.

The panel was set up to advise the Scottish government on rural policy.

The report says 95% of vets in red meat processing plants are foreign nationals.

A weakened pound has seen a tourism boost in the Highlands, but the group warns of a "real possibility" of insufficient labour to meet the needs of visitors.

The report said: "A smaller labour pool will increase competition and result in increased costs to business as wages rise.

"Micro/family owned businesses that are so dominant in more remote, rural areas could find it difficult to compete with their larger counterparts.

"All sectors from agriculture to service provision in areas such as health, education, research may also be potentially impacted by loss of free movement of people.

"Local authorities are also concerned about their ability to secure key workers such as teachers, community support workers, care workers, particularly in areas where there is a smaller labour market and/or they are already experiencing depopulation.

"It is the most rural and peripheral parts of Scotland that could be worst affected by the shortage of workers."

As well as labour, the report looked at trade, funding, legislation and standards.

It made 31 calls for action including greater flexibility on immigration rules and a framework for financial support for rural communities, much of which currently comes from the EU.

On funding, the report said the loss of EU cash was a "major concern to communities and businesses alike".

But it identified flaws in the existing model which don't receive adequate support such as former coalfield and heavy industrial areas in Fife, Ayrshire and Lanarkshire.

It said: "Regardless of the funding source there is an opportunity going forward to put in place a territorial policy and delivery framework that is better targeted, better reflects the needs of rural Scotland and is better focused on outcomes."

Rural Economy Secretary Fergus Ewing said: "In establishing this National Council, the first task I gave its members was to provide advice for government on the potential implications of Scotland leaving the EU as part of the UK

"What their report makes clear is the scale of the challenge and the enormity of the threat posed by Brexit to Scotland's rural economy. But they also indicate clear priorities for action as we discuss with the UK government and other devolved administrations how best to protect rural Scotland's interests.

"I will now consider the recommendations carefully and set out how we might respond and take them forward in due course."