Belfast Telegraph

All eyes on Scotland as Brexit grows closer

By John Simpson

The outcome of the negotiations between the UK and the European Council on the Brexit arrangements is important not just to the UK as a nation, but to the devolved administrations such as Scotland and Northern Ireland.

In the absence of a functioning Northern Ireland administration, there is interest in the actions of the Scottish Government since, substantially, Scottish interests also reflect Northern Irish interests.

The Scottish Government argues that, to ensure that UK policy takes account of the opinions of the devolved nations, there is a need for an active role by the Joint Ministerial Council in the European negotiations. In preparation for that council, the Scottish Government has published a 60-page review called Scotland's Place in Europe.

To protect the Scottish economy, the Scottish Government outlines the reasons why it wishes to keep the UK in the single market and the customs union. A Northern Irish reader of the Scottish document would recognise, but not necessarily agree, with the conclusion that it might have been a submission from any local pro-Remain group. The value of this Scottish document is that it articulates the scale of the impact of each of three options which are possible outcomes of the Brussels negotiations.

Many differing preferences are being debated. At the risk of over-simplification, the arguments for the preferred outcome divide among people who prefer Brexit simply because of the politics of separate national authority for governance and others not swayed by the politics of independent sovereignty who regard the economic consequences as decisive.

For the latter group, the widely repeated assessment that Brexit will have negative economic effects is a determining factor, provoking the question, how can negative economic effects be reduced or minimised?

Admittedly, this is not necessarily the only factor influencing opinions on Brexit.

The Scottish Government has a clear line of argument: the negative economic cost of Brexit should be avoided or, at least, minimised.

The discussion focuses on the implications of the Brexit negotiations either (a) ending with no EU-UK agreement and the UK resorting to World Trade Organisation rules, or (b) an EU agreement around a separate UK free trade agreement, or (c) an agreement that (even if the UK leaves the EU) keeps the UK within the customs union and the single market agreement, akin to the arrangements for Norway.

For the Scottish Government, the easy preference is C. Even allowing for the special articles in the first stage which express the EU-UK agreement for the avoidance of a hard border on this island, much of the evaluation for Scotland could equally point to the same conclusion for Northern Ireland,

The possible impact of the three options, when compared to a baseline forecast of the UK remaining in the EU, has been quantified using professional sources.

For the different options, starting with the deal as agreed last December, the outcome relative to what might have been if not leaving the EU (for Scotland and by extension to Northern Ireland) by 2030 could be:

Option c: GDP down 8.5%, GDP per head down £2,260.

Option b: GDP down 6.1%, GDP per head down £1,610.

Option a: GDP down 2.7%, GDP per head down £690.

The Scottish Government examines this range of different consequences of Brexit which it considers relevant to Scotland.

It examines a possible loss of business investment, an adverse impact on the labour market of any restriction on immigration and, particularly as a disadvantage for the renewable energy industry, the inability to develop adequately the capacity in Scotland to build a viable renewable sector in the absence of an integrated EU energy market.

The conclusions of the Scottish Government are all of relevance to Northern Ireland. There may be concerns that the impact here may be slightly worse.

Company report: Woodside Haulage

Woodside Haulage Holdings is the parent company consolidating seven Woodside subsidiaries.  The business provides haulage contracting with a wide range of destinations and sources mainly in the UK, but also into other EU countries.

The group also includes a warehousing subsidiary.

Woodside is one of the four largest freight haulage companies based at Ballynure in Northern Ireland.

The directors, in assessing performance, consider the key measures to be turnover and gross profit ratio. 

In the year to March 2017, both measures showed improvements, with turnover up 9% and gross profit margin up from 17.1% a year ago to 18.8% recently. 

Operating profits have risen in recent years, and in the latest year were nearly 6.7% of turnover.

Pre-tax profits, which are lower than operating profits after deduction of net interest payments, have shown a significant increase.

Much of the equipment and vehicles used in the business are purchased on a leasing or hire-purchase basis. 

The outstanding obligations on finance leases and hire purchase at March 2017 were just over £6m. 

Changes in these obligations, placing new borrowing alongside the repayments schedule, mean that capital spending on vehicles has been averaging over £3m each year.

In recent years, the group has retained post-tax profits in the business and there have been no recent dividend payments to shareholders.

As a result, the end year value of shareholders’ funds has increased again in

each recent year to reach £21.3m in March 2017. 

Employment has shown some year-to-year changes but averaged 462 people in 2016-17, up slightly from 438 people the previous year.

The net cash flow, at £566,000, was positive in 2016-17. In the previous year, the net cash flow was £3.153m.

Belfast Telegraph

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