Critical EU funding that supports the Scottish economy must be made up in full following Brexit, according to Economy Secretary Keith Brown.

Mr Brown called on the UK Government to safeguard European Structural Funds, currently worth £828 million, and European Territorial Cooperation funding worth up to £50m, for the long term.

Speaking during the ‘Opportunities for Growth’ debate on the economy, he highlighted the £250 million SME Holding Fund, which helps companies to access finance for growth, as one project that would be affected without long term funding commitments from the UK Government.

He said:

“The foundations of Scotland’s economy remain strong. 2016 was a record breaking year for foreign direct investment into Scotland and this week’s State of the Economy report confirms that business sentiment has improved, particularly in the manufacturing sector.

“Scotland’s unemployment rate is at record low levels – equalling the previous all-time low – and is also at its lowest rate since the recession. With the employment rate rising, it’s clear this is hugely positive news for our economy and the jobs market.

“The main risk facing Scotland’s economy continues to be the prospect of a hard Brexit. It presents a huge threat to jobs, trade, investment and living standards. European Structural Funds, worth £828 million to Scotland, and European Territorial Cooperation funding worth up to £50m, are vitally important to Scotland’s economy. They boost SME growth, support research and innovation, improve education and skills and support digital connectivity across rural Scotland.

“The UK government must commit to ensuring this funding is made up in full following Brexit. Otherwise key initiatives, for example the £250 million SME Holding Fund, will be at risk.”

Background

The SME Holding Fund is based on £40m European Regional Development funding matched 60:40 by public and private sector delivery partners, bringing an additional £60m alongside other private sector investors so that at least £250m is available for Scotland’s SMEs.  It enhances the resources available, and gives SMEs greater choice. The Fund is expected to support at least 500 companies and create 2,000 jobs. It is part of the European Structural Funds that help to support the Scottish economy. More info on the SME Holding Fund