Brexit ‘could cost Scotland 80,000 jobs’

Written by Tom Freeman on 6 October 2016 in News

Fraser of Allander institute warns Brexit process could result in a seven per cent drop in wages, but an increase in migrants coming to Scotland from elsewhere in the UK

Leaving the European Union could cost Scotland up to 80,000 jobs and damage economic growth, according to economic researchers.

In a report for Holyrood’s Culture, Europe and External Relations committee, the Fraser of Allander Institute examines a number of alternative scenarios.

The ‘hard Brexit’ approach involving leaving the single market, apparently favoured by Theresa May this week at Conservative conference, is labelled “pessimistic” by the report, warning it could result in a two per cent drop in Scottish GDP, with loss of between 30,000 and 80,000 jobs and a reduction in wages.


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However, it also says Scotland may benefit from some migration from other parts of the UK.

"Throughout all scenarios, the estimated negative impact of Brexit on the rest of the UK is greater than it is on Scotland, in terms of GDP, employment and other measures," said the report.

The Committee’s SNP convener Joan McAlpine said: "Our committee has already found that maintaining access to the single market is key for business and industry in Scotland. If the UK government leads us into a 'hard' Brexit, the evidence presented in this report indicates that there could be disastrous consequences for jobs, exports and production."

Scottish Labour said the report revealed the dangers of ‘hard Brexit’. Finance spokeswoman Jackie Baillie said: “When Theresa May hinted at a hard Brexit earlier this week, sterling crashed to a 31-year low. Even the most blinkered of Brexiteers cannot ignore the huge risk this poses to our economy.”

Scottish Conservative shadow economy secretary Dean Lockhart said the report showed how the UK market was more important to Scotland than the EU.

“No-one doubts the impact of Brexit will be challenging on a range of levels,” he said. “However, this report also makes clear that the impact on Scotland will be comparatively less than the rest of the UK. So the SNP’s go-to excuse for Scottish economic under-performance has been completely blown out the water.”

Hopes by the SNP that the Scottish Government would play a formal role in exit negotiations with the European Union were dashed yesterday by the Prime Minister earlier this week. While she will consult devolved governments, she said, it would be the UK Government negotiating.

“There is no opt-out from Brexit. I will never allow divisive nationalists to undermine the precious union between the four nations of our United Kingdom,” she said.

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