Post-Brexit Scottish Economy Could Shrink by £8bn, Thinktank Warns
October 7, 2016
The UK leaving the European Union could do serious damage to the Scottish economy and cost the country tens of thousands of jobs over the next 10 years.
That’s according to the Fraser of Allander Institute (FAI), which has suggested that a so-called ‘hard Brexit’ scenario, whereby the UK is no longer a part of the EU single market, could see Scotland’s national economy shrink in scale by as much as £8 billion a year.
The thinktank estimates that a hard Brexit would hinder Scotland’s economy to the effect of anywhere between 2 per and 5 per cent of its GDP over the course of a decade.
Fears are that this shrinking of the economy would lead to the loss or failure to create between 30,000 and 80,000 jobs during that same timeframe.
It has been suggested that the stark warnings in the FAI’s report might bolster efforts within the Scottish parliament to retain Scotland’s membership of the European single market even if the UK formally leaves the EU on the basis of a hard Brexit approach.
However, the FAI is convinced that the Scottish economy will be negatively impacted by the fallout from Brexit regardless of how the process unfolds.
“Our conclusion is that under all modelled scenarios, Brexit is predicted to have a negative impact on Scotland’s economy,” a statement from the thinktank explained.
“The range of impacts is driven by the nature of any post-Brexit relationship between the UK and the EU – the stronger the economic integration with the EU, the smaller the negative impact.”
The FAI’s report was created for the Scottish parliament, with most reports published so far about the potential ramifications of Brexit having focussed on the possible impacts on the UK as a whole rather than specific areas.
Despite most economists saying that Brexit will be bad news for the Scottish economy in the long term, the overall view is that its impact will be worse for the UK as a whole than for Scotland as a nation.
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