Support will be needed in Scotland for businesses impacted by Brexit, a Holyrood committee has said.
With less than three weeks to go before the end of the transition period, the Culture, Tourism, Europe and External Affairs Committee has said that Brexit will impact small and medium companies most.
The committee called for a six month “grace period” to be negotiated with the EU before the implementation of the future relationship, effectively extending the transition period.
Members of the committee, excluding Tory MSPs Gordon Lindhurst and Dean Lockhart, also said there may be a need for extra funding from the UK Government to counteract the short-term effects of leaving the European Union.
Negotiations between the UK Government and EU officials remain open but Prime Minister Boris Johnson has said leaving with no deal is “very, very likely”.
The committee said the lack of clarity over the future trading relationship was “of great concern to them”.
Recommendations within the report call for financial assistance to be put in place, noting that a funding boost from the UK Government may be needed.
“The committee notes that evidence the committee has taken has emphasised that the impact of Brexit is likely to be, proportionately, most severe for small and medium-sized enterprises,” the report said.
“The committee agrees that it is important that companies that require it can access financial support when the transition period ends. This may require additional funding from the UK Government.”
Convener Joan McAlpine said: “2020 has been a year of challenges like none of us have experienced before.
“In these times, we need the UK Government to step up and provide support and reassurance for both businesses and livelihoods. Instead, we are facing a leap into the unknown.”
Deputy convener Clare Baker said: “At a time like this we need governments to support businesses and livelihoods so that they have a fighting chance of surviving and going on to prosper.
“However, the evidence we have heard, combined with an unprecedented global pandemic, has left our businesses struggling to find the capacity to adapt to rapidly changing situations.
“With an exit from the EU imminent, businesses face a perfect storm and they need an urgent Government response to their concerns.”