Task force set up as Edinburgh faces '˜Brexit blow'

Patricia Da Silva came to Edinburgh from Portugal two years ago and opened Portuguese cafe Casa Amiga on Leith Walk.

The special committee will assess the “risks and uncertainties” for Edinburgh arising from leaving the EU – with a “community forum” also formed to help city chiefs understand the impact on neighbourhoods.

It comes 100 days after the vote, which sent global financial markets reeling and caused the pound to plunge to its lowest level in more than 30 years.

At the weekend, Prime Minister Theresa May announced the government would trigger Article 50 and begin formal Brexit negotiations before the end of March next year.

Prime Minister Theresa May says Article 50 will be triggered by next March.

But business leaders told the Evening News there was a “risk of the economy stalling” amid an atmosphere of “growing uncertainty”.

And a report drawn up by council officials lays bare the huge scale of the challenge facing the Capital in the aftermath of the result.

Listing potential problems in stark succession, officials said any economic slowdown could result in less cash – but a greater demand for services.

And they noted EU nationals account for a “sizeable share” of the council’s workforce, as well as that of “key service areas such as health and social care”.

Some estimates, they said, suggest the referendum result could lead to a 2.5 per cent reduction in the total UK workforce over the next five years – with “considerable potential impacts on key areas of current skill shortages”.

Council officials also insist EU citizens “are currently experiencing considerable uncertainty and anxiety concerning their immigration status, particularly in the absence of guarantees related to such residents’ right to remain”.

They add: “At this early stage, mapping and understanding the full range of implications arising from the referendum result for the city, the council and its services is a complex task.

“It is clear, however, that the result brings potential uncertainty and disruption for citizens and communities across Edinburgh.”

Officials raised concerns over foreign investment – which currently creates more than 1200 new jobs each year in Edinburgh – and insisted businesses could be hammered by increased wage costs, increased inflation, the increased cost of imports and a significant drop in domestic demand for goods and services.

EU funding streams could also be suspended or cancelled, hitting council budgets and threatening future development projects.

Edinburgh University has received an estimated £256 million of EU research funding over the past five years – higher than any other UK city outside London and Oxbridge.

Council bosses hope the new community forum will smooth concerns among EU communities in Edinburgh that they are now unwelcome in the city.

Meanwhile, the working group – expected to be made up of around a dozen councillors, officers and figures from outside agencies – will allow them to tackle the strategic issues raised above using a “top down” approach.

Edinburgh is home to the largest concentration of EU nationals in Scotland, with up to 32,000 living in the city. This includes 500 pre-school children and 2000 school pupils, figures suggest.

A separate report drawn up by council officials notes that “anecdotal evidence and third party reporting” indicates a rise in hate crime against these groups.

Councillor Maureen Child, who hopes to sit on the new Brexit working group, said there was a worry among Edinburgh’s Polish, Spanish, French and other EU communities that they were no longer welcome.

And she added that among the Muslim community, reports of hate crime to third-party groups have risen from one a month to one every week.

She said: “Anecdotally, there’s an increase – it’s just that it’s not reaching the police directly, and that’s worrying.”

The council’s concerns around Brexit are echoed elsewhere.

Liz Mcareavey, acting chief executive of the Edinburgh Chamber of Commerce, told the Evening News many businesses felt “nervous” about the result.

She said: “A key economic driver for the city is tourism and culture, worth £1.4 billion annually, and [it] is heavily dependent on migrant workers.

“Clarity on movement and the status of EU workers will be critical to businesses, some of whom currently employ 75 per cent of their workforce from mainland Europe.

“There are currently over 6000 EU students and a number of academic staff at our universities who all contribute to the life of the city, our economy and skilled workforce. Similarly, the tech sector in particular recruits a number of skilled workers from Europe meaning Brexit and continued uncertainty could deter individuals – and recruiters – considering a move.

“The industry could see a significant impact sooner than summer 2019.”

While insisting that “change brings opportunity”, she said: “I think it’s safe to say that many businesses feel nervous towards a pending Brexit. Particularly within the education, scientific and research sectors, funding is a massive issue and there are concerns about a possible short term funding gap as a consequence of longer term uncertainty.

“A large proportion of budget for many of these institutions and businesses relies on EU funding streams.

“This sense of ‘unknown’ continues to have a significant impact on businesses’ growth ambitions, with many likely to play it safe ahead of Brexit. While none of us want to experience another recession, there is a risk of the economy stalling.”

She said “social cohesion” had also been raised as a concern within the Edinburgh business community, adding: “Some EU nationals no longer feel wanted in our country, and we feel this needs to be addressed to ensure we maintain our reputation as a socially inclusive society, which celebrates diversity.

“There is growing uncertainty in some key sectors. We would encourage the Scottish Government to engage with businesses operating in this country to seek re-assurances on their commitment to Scotland.”

It is understood Edinburgh Council’s new Brexit working group – which will include city leader Andrew Burns among its members and will be chaired by SNP group leader Frank Ross – will meet for the first time in a matter of weeks.

It will then meet every six weeks until at least May next year.

Gordon Henderson, of the Federation of Small Businesses, said it was “up to our decision makers to decide what Brexit means for the Edinburgh economy”.

He added: “We need an environment that helps small businesses thrive.

“Tourism businesses need access to people who are free to come here and work in the busy seasons.

“Industry needs access to overseas markets. We also need to continue to support Edinburgh’s small business owners who may not have been born here.”