How important is Scotland to UK manufacturing?

Posted on 16 Jul 2019 by Maddy White

Aside from its oil and gas industry, Scotland’s industrial sector is perhaps best known for its shipbuilding, whisky production, and smoked salmon. With rumours of a second independence referendum growing, we explore how important Scottish manufacturing is for the whole of the United Kingdom.

Scots rejected independence in the 2014 referendum, with the ‘no’ side securing more than two million votes, or 55.3% of the ballot. However, current first minister Nicola Sturgeon has said Scotland will start preparing for another independence referendum to take place before May 2021.

What’s triggered this call for a second Scottish vote? Almost certainly, Brexit concerns have played a big part, with Scots having voted to stay part of Europe by a sizeable majority (62%) in 2016’s EU referendum, while the UK overall narrowly voted to leave.

Scotland is known for its whisky production - image courtesy of Depositphotos.
Scotland is known for its whisky production – image courtesy of Depositphotos.

“It’s unclear when or if there will be a vote on Scottish independence and it’s too early to say what the potential impact could be on our Scottish food and drink industry,” David Thomson, CEO of Food and drink Federation (FDF) Scotland told The Manufacturer.

“For now, the UK and Scottish governments must focus on getting the best possible Brexit deal to ensure our vital industry continues to thrive,” he adds.

Scotland’s biggest manufacturing sector is food and drink, with the industry’s exports worth £5.8bn last year. Food and drink accounts for 30% of manufacturing by turnover and employs 45,000 people, or 25% of the Scottish manufacturing workforce.

Crucial to the UK economy

Dr Liam Fox, International Trade Secretary, said recently that “Scottish businesses are crucial to the UK economy and play a key role in securing our shared prosperity, so I urge more food and drink companies to take advantage of the global demand for their high-quality products.”

Goods exports from Scotland also grew faster than any other part of the UK in the last financial year, and are now worth £32.8bn, according to the government’s own figures.

“Scotland’s food and drink manufacturers have a great deal of success exporting their much-loved products around the world. This success is a vital part of the economy and will continue to be so,” added Thomson.

Brexit limbo must end

“The calamitous struggle of Brexit must end, whoever the Prime Minister,” said Ian Wright CBE, Chief Executive of the Food & Drink Federation, the voice of UK food and drink manufacturing.

“Then we must look to the future and how to deliver success for the UK’s largest manufacturing sector, the four million people who work in food and drink, and this industry which is at the heart of our national life,” he added.

“The Scottish brand is incredibly important,” a spokesperson for Scottish manufacturer Macphie told The Manufacturer. “It is a huge signifier of quality around the world, conjuring images of fresh superior produce.” Macphie trades on its reputation for quality products, they argue, which is reinforced by being based in Scotland.

“However, less than 10% of our sales are in Scotland and around a third of our overall sales come from overseas markets. We have a substantial presence in Europe, are well established in the Middle East, and are seeing significant business wins in the Far East,” they added.

The chart shows people in Gibraltar spend the most (£76.70) on Scottish food and drink every year, followed by Latvia (£62.10) and then Ireland (£46.60).