Scotland counts Brexit costs

Leaving the EU will sap Scotland’s economy by £1.7bn to £11.2bn (€13bn) by 2030, depending on which new trade relationship Britain chooses, the Scottish government said yesterday.

Presenting the figures, Scotland’s first minister, Nicola Sturgeon, said she was seeking “in good faith” to negotiate the Scottish chapter of the terms under which Britain leaves the EU, but would keep Scottish independence from the UK as an option.

“The old argument that the UK somehow delivers financial security for Scotland no longer holds water,” she told a news conference.

The economic estimates were based on studies by think-tanks and Britain’s finance ministry, looking at the different trade agreements Britain might select after its vote to leave the EU, as well as the uncertainty facing the economy until its choice is clear.

“Pursuing an option short of full EU membership risks damaging Scottish exports, makes the country a less attractive location for overseas investors and reduces future economic growth and prosperity,” the Scottish government said.

Ms Sturgeon has vowed to seek ways to keep Scotland’s EU membership, even though Britain as a whole voted to leave the EU two months ago. Scotland voted to remain by 62% to 38%.

The Scottish government summarised the potential impact on the economy of Britain’s different trade options: joining the European Economic Area, seeking a Free Trade Agreement or a World Trade Organisation membership, as estimated by different think-tanks.

Researchers from the University of Strathclyde’s Fraser of Allander Institute have revised down their forecasts for Scottish GDP growth in 2017 to 0.5% from 1.9% after the referendum result, factoring in economic uncertainty and depleted consumer confidence.

Scotland’s exports to the EU were almost £12bn in 2014, or 42% of all the goods it sends abroad.

The first official data covering the post-referendum period showed no immediate big hit to Britain’s economy as retail sales surged in July and claims for unemployment benefits fell. However, economists expect rising inflation from a weak pound and worsening business confidence.

Ms Sturgeon is not ruling out another independence referendum as part of its efforts to keep Scotland in the EU. The timing of a new vote, however, would hinge on when the UK’s Brexit position is clear, she said.

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