Brexit will cost economy up to £11.2bn a year, says Sturgeon
And quitting the EU ‘will hit tax revenue’
NICOLA Sturgeon yesterday unveiled her own ‘Project Fear’ dossier that claims the Brexit result will cost the Scottish economy up to £11.2billion each year.
The document was rushed out ahead of the publication of Scotland’s annual balance sheet today, which is expected to show that the nation has plunged further into the red.
The figures will demonstrate the economic importance of remaining in the UK following the collapse of the North Sea oil industry.
But Miss Sturgeon claimed the argument that the UK offers a ‘safe harbour’ for Scotland’s economy is ‘bust’ after the recent Brexit vote.
Leaving the EU will also hit tax revenues by up to £3.7billion annually, according to the Scottish Government document.
However, the dossier is largely based on collating evidence from the Treasury and groups of economists.
Incredibly, before the EU referendum in June, the First Minister claimed the Treasury’s data was ‘overblown’ when it warned Brexit could create a deep recession.
But yesterday she claimed: ‘Brexit will be deeply damaging to Scotland’s economy and finances.’
Miss Sturgeon confirmed she expects the latest Government Expenditure and Revenue Scotland (GERS) publication, out today, to show a deficit as the economy struggles with low oil prices.
‘What has changed from the last GERS publication is the context, the fact we now face being taken out of the EU,’ she said.
‘What the publication today shows very clearly is that if we are removed from the EU, that challenge gets harder.
‘So Scotland faces a choice. Do we allow that by being taken out of the EU, or do we seek ways of protecting our EU membership?
‘What I think the Brexit vote means is the argument that some have used in the past – that the UK is somehow a safe harbour for Scotland – is no longer true.’
The Government paper forecasts a drop in Scottish gross domestic product (GDP) of anything between £1.7billion and £11.2billion by 2030 if Brexit proceeds.
Tax revenue is also expected to be £1.7billion to £3.7billion lower.
The economy stood still in the first three months of this year – the last full quarter before the June 23 vote – following 0.3 per cent growth in the last quarter of last year.
Economists have warned that prospects for growth are ‘probably bleaker now than at any time since’ the financial crash of 2008. However, unemployment fell by 26,000 from April to June, with the number out of work – 143,000 – the lowest since 2009.
Alastair Cameron, director of Scotland in Union, said: ‘By rushing out these selective Brexit figures to muddy the waters ahead of the GERS report, Nicola Sturgeon has all but admitted she has no answers to the economic questions about independence.’
Scottish Conservative leader Ruth Davidson accused the First Minister of using Brexit to deflect from the economy’s ‘fragility’.
A UK Government spokesman said estimates in the SNP’s document ‘vary wildly’. ‘The analysis warns of short-term economic uncertainty. But the real uncertainty is being caused by talk of a second independence referendum.’
‘Nation will be badly damaged’
SNP financial sophistry was exposed when its much-vaunted White Paper – its prospectus for the 2014 independence referendum, no less – turned out to be a farrago of wishful thinking and outright misinformation.
Nothing daunted, the Nationalists press on. Nicola Sturgeon unveiled figures yesterday that purport to show Brexit will cost the Scottish economy as much as £11.2billion a year by 2030. Scary stuff – how ironic it comes from a party quick to condemn financial warnings from the No camp in 2014 and from the Brexit campaign this year as so much scaremongering under the ‘Project Fear’ banner.
But just as the White Paper stood no scrutiny, so Miss Sturgeon’s anti-Brexit propaganda rapidly falls apart. The conclusion is liberally peppered with weasel words. The overall figure is an ‘illustration’ that ‘potentially’ ‘suggests that’ the damage could be in billions.
The subplot here is obvious. The Government Expenditure and Revenue Scotland (GERS) figures are out today and so Miss Sturgeon’s report yesterday is a distraction.
Once upon a time the SNP seized on anything in the GERS figures that propped up its separation agenda. But now, as North Sea oil revenue dwindles, today’s figures are expected to show Scotland running a deficit larger than the £15billion of 2014-15. That equated to 9.7 per cent of GDP, compared to 4.9 per cent for the rest of the UK.
The message from GERS is likely to be that remaining part of the greater UK is a better fiscal bet than trying to go it alone with a modest tax base and oil in its sunset years.
In a remarkable about-face, Nationalists who once praised GERS are now trying to denigrate the figures, questioning how they are compiled. Their effrontery is breathtaking but will fool no one.
Independence is still touted as the panacea for all our ills but the economic case is in tatters. The SNP still talks of taking control of all the ‘fiscal levers’ as though that will turn things around for a go-italone Scotland. In truth, it is fiscal magic wands that would be required.
Ruth Davidson, Scottish Tory leader, is right that Scotland gets a dividend by being in the UK. She has also urged the First Minister to give up her dangerous flirtation with a second independence referendum and concentrate on maximising the opportunities Brexit holds out.
In short – as Miss Davidson so succinctly put it – ‘Get on with the day job.’ Hear, hear!