The Courier & Advertiser (Fife Edition)
Leadership call as fears over No Deal Brexit grow
EUROPE: Fraser of Allander warns of harmful impacts of ‘sleepwalking’ into No Deal outcome
An influential think tank has warned against “sleepwalking” into a No Deal Brexit that will bring economic hardship for firms, workers and families across the UK.
The Fraser of Allander Institute at Strathclyde University said it remained “cautiously optimistic” over Scotland’s prospects this year and next, with respective GDP growth of 1.3% and 1.4% predicted. However, it said there was a “heightened degree of uncertainty” around the estimates given they assumed a broad-based agreement between the EU and UK and such a deal is far from certain.
Professor Graeme Roy, director of the Fraser of Allander Institute, said firms needed to be given the data they needed to prepare.
“Whether you agree or disagree with the decision to leave the EU – and irrespective of the nature of the final settlement – it is essential that we have an orderly transition,” Professor Roy said.
“To enable firms to prepare and develop contingency plans it is vital that a deal is reached. Should this require more time to negotiate a workable solution then so be it. Extending the Article 50 negotiation period – but maintaining the same transition timescale to 2020 – may be unpalatable for some but could be essential to protect jobs and livelihoods.”
The report states Scottish gross GDP grew by 0.5% in the second quarter of 2018 – continuing the outpacing of the wider UK economy seen in the first three months of the year.
Growth was relatively broad based with a particularly strong performance in manufacturing, tourism and the continued recovery of the oil and gas sector from 2016’s crash.
However, the Institute said growth remained below trend, with structural challenges such as weak productivity growth remaining an issue.
Professor Roy said: “Our latest work shows that most businesses in Scotland are unprepared for Brexit, with the lack of certainty over any final deal being a key stumbling block.
“As the Chancellor, Governor of the Bank of England and head of the IMF have all warned, leaving the EU in March next year with no agreement in place has the potential to cause serious disruption to the UK and Scottish economies.”