Brexit uncertainty has cost Scottish economy £3 billion

Think tank research points to risks of ‘no deal’ Brexit and impact of political uncertainty on the economy

  • Think tank analysis of economic forecast finds Scotland £3 billion worse off as a result of Brexit uncertainty
  • Report suggests ‘harder’ Brexit under Boris Johnson will be more challenging for economy
  • SNP MSP Tom Arthur says findings make case for independence and calls for a general election before Brexit deadline
  • UK has requested deadline extension till 31 January 2020 after MPs voted against three-day limit on scrutiny of deal

A NEW report by the Fraser of Allander Institute has found that uncertainty around Brexit has left the Scottish economy around £3 billion worse off than where it would have been otherwise.

The research by the University of Strathclyde-based think tank finds that growth has remained slow over the past year as companies have put off investment as they await the outcome of Brexit negotiations.

The Institute also points out that, even when the UK’s exit from the EU is finally ratified, there will be continuing challenges to Scottish businesses.

Director of the Fraser of Allander Institute Professor Graeme Roy said: “There are signs that Boris Johnson may be able to secure safe passage of his new deal with the EU, albeit perhaps not by the 31 October deadline, so that the UK will finally leave the EU three-and-half years from the referendum.

“Securing a deal will help lift some of the fog of uncertainty that has hung over the Scottish economy in recent times. As a result, in the short-run, the economic outlook should improve. By avoiding a ‘no deal’ outcome, and all that would entail, growth is likely to move ahead of previous forecasts.

“However the nature of the ‘deal’, and in particular the intention to move to one of the ‘hardest’ forms of Brexit means that the long-term challenges for the Scottish and UK economies will be considerable.”

READ MORE: Holyrood faces recall to vote on Brexit deal as Nicola Sturgeon slams ‘outrageous’ timescale for scrutiny

The report suggests that the ‘harder’ Brexit represented by Boris Johnson’s deal, compared with Theresa May’s, means that the longer-term outlook for the economy could be more challenging.

The publication of the research follows another defeat for Prime Minister Boris Johnson in the House of Commons on Tuesday (22 October), when MPs rejected his attempt to fast-track his Brexit deal.

While MPs voted in principle to back the deal by a majority of 30, they rejected a proposed three-day limit on scrutinising the agreement by 14 votes.

Now it seems that Brexit will be delayed until next year. European council president Donald Tusk has said he will support a three-month extension to the withdrawal deadline, taking it up to 31 January 2020.

Commenting on the findings by the Fraser of Allander Institute, SNP MSP Tom Arthur said: “Scotland is already paying a heavy price for Brexit, businesses are putting off investment and Boris Johnson's damaging 'deal' fails to offer a solution.

READ MORE: Nicola Sturgeon on new Brexit agreement: ‘Hard to imagine a deal that could be worse’ for Scotland

“Tory plans will see tens of thousands of jobs lost, with the least well off hit the hardest – and the Tories have admitted that their deal would put Scotland at a competitive disadvantage compared to Northern Ireland.

“It becomes increasingly clear that Scotland faces a clear choice of two futures: more chaos and economic self-harm with the Tories as we crash out of the EU, or seizing the opportunity to build a fairer, more prosperous country with the full powers of independence.”

An unnamed source from 10 Downing Street told the Press Association on Tuesday that “if parliament’s delay is agreed by Brussels, then the only way the country can move on is with an election”.

The SNP has been pushing for an extension to the Brexit deadline to allow for a general election.

Arthur added: “We need a way out of this mess – and a general election is an opportunity to boot Boris Johnson out of office and stop the Tories from saddling Scotland with their damaging plans.”

Picture courtesy of Descrier 

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