Euan Smith

The first Scottish-German Business Exchange Conference (SGBEC) was attended by high-profile business executives, civil servants and politicians and laid the foundations for a closer business relationship between the two countries regardless of what type of Brexit the UK ultimately faces.

Hosted in Pinsent Masons’ Edinburgh office, SGBEC is a new forum initiated by the British Chamber of Commerce in Germany, Europe’s largest foreign chamber, and was established to enhance dialogue between Scottish and German businesses after Brexit.

In Scotland an estimated 18,000 people are employed by 155 German companies and with annual exports of goods of around £2 billion, Germany is our fourth largest export market. Germany is also one of the biggest foreign investors in Scotland, putting in an estimated £8 billion over the last decade.

Jens-Peter Voss, Consul General from the German Consulate in Edinburgh attended the conference in which the keynote speech was delivered by David McAllister, a Member of the European Parliament for Germany, former Minister-President of Lower Saxony and currently chair of the European Parliament Foreign Affairs Committee.

The son of a Scottish father and German mother, Mr McAllister made clear the overall sentiment of the European Parliament was that it did not want the UK to leave, emphasised the many commonalities between Scotland and Germany and stressed the importance of forums such as SGBEC to underpin future relations.

Representatives from the Scottish Government and UK Government in Scotland discussed the UK economic outlook, touching on Scotland’s need for more migration, not less, and highlighting how our economy is at risk of stagnation if we limit the number of foreign nationals who come to work and live here.

In a technical presentation, Simon Sutcliffe, a partner in accountancy firm Blick Rothenberg, made some interesting points regarding movement of people post-Brexit, suggesting that there are a number of work-arounds and systems in place, and if businesses know where they are and how to use them to their benefit, this could minimise the impact of a hard Brexit.

Graeme Littlejohn, director of strategy at the Scotch Whisky Association, discussed how the UK’s food and drink industry would likely fare once we leave Europe, while Ralph Saelzer, managing director of German owned crane manufacturers Liebherr-Sunderland Works, outlined issues facing the UK’s manufacturing industry.

It was interesting to hear Mr Saelzer explain how German companies are traditionally more likely to take a long-term view regarding economic prospects, over five or ten years for example, to determine the future strategy of a business rather than make knee-jerk decisions based on current and arguably more volatile trading conditions. This should benefit the Sunderland works and the business has already made changes in their supply chain, allowing for longer lead-in times for parts and putting new systems in place to mitigate disruption.

From my perspective, as an immigration law specialist, I outlined that in the short to medium term there are satisfactory fixes in place which will allow businesses to continue to employ EU citizens. Those measures mean employers will be able to protect their existing European workforce (for a time yet) and will be able to bring in new staff from Europe without too much difficulty. The serious challenges lie in the long term where it will be difficult to maintain that status quo and businesses will be operating in an environment with greater uncertainty, higher costs, a larger administrative burden and will have a reduced labour pool from which to recruit people.

The conference was a most welcome initiative by German businesses to reach out to Scottish counterparts and our politicians and to establish mutual relationships and connections which will continue to develop, whether Brexit happens or not.

In addition, a number of speakers emphasised that German business was particularly impressed when last year First Minister Nicola Sturgeon led a Scottish Development International (SDI) trade delegation to Berlin. The First Minister’s visit followed the opening of the Germany Innovation and Investment Hub which is aimed at promoting investment and encouraging collaboration between the two countries.

The message appears to be that this visit and the Scottish presence in Berlin was really appreciated by the Germans who have noted Scotland is making a concentrated effort to maintain relations as best we can, despite the uncertain circumstances ahead.

• Euan Smith is a partner and corporate immigration specialist at Pinsent Masons.