Economy to lose billions if May fails on Brexit deal
The Scottish economy would be dealt a crippling financial blow by losing up to £30 billion within five years if a successful Brexit deal is not reached, a leading financial institution has warned.
The London School of Economics has intensified the pressure on Prime Minister Theresa May, claiming Britain’s economic output could shrink by as much as £430bn if she fails to strike an agreement with European Union leaders as part of Brussels talks.
Scotland’s cities would bear the full brunt of any ongoing stalemate. Aberdeen would shed 7 per cent of its Gross Value Added, while Edinburgh and Glasgow would plummet 6 per cent and 5.5 per cent respectively.
Almost £30 billion will be wiped off the Scottish economy in the five years after Brexit if the UK government fails to agree a deal with the European Union, new analysis has suggested.
The bombshell study by the London School of Economics suggested that UK economic output could contract by as much as £430bn, putting further pressure on Prime Minister Theresa May to break the deadlock in Brussels talks.
Scotland’s cities would feel the greatest impact, with the Gross Value Added (GVA) of the Aberdeen economy falling by 7 per cent, while Edinburgh and Glasgow would see output fall by 6 per cent and 5.5 per cent respectively.
The warning about a nodeal scenario comes after the Prime Minister told MPS she has a “degree of confidence” that progress towards trade talks with the EU can be made by December. However, she refused to abandon her threat to walk away from talks in Brussels without a deal.
Liberal Democrat leader Sir Vince cable said :“this work by the LSE brings out the extent to which Scotland would be seriously damaged economically by a no-deal Brexit. These economic modelling exercises are necessarily approximate, but if anything they understate the damage once we take into account the knock-on effects.
“And the damage to cities such as Edinburgh and Aberdeen will hit the whole of the UK because they are central to Britain’s prosperity.”
The Lib Dem Scotland spokeswoman, Edinburgh West MP Christine Jardine, said the figures supported the party’s call for a referendum on the terms of Brexit.
She said: “This situation is potentially disastrous for the economies of Edinburgh and Scotland as a whole, and not what the Brexiteers claimed and continue to claim.”
Meanwhile, Foreign Secretary Boris Johnson urged European leaders to press ahead with Brexit negotiations, saying a deal could be done if both sides “think very creatively and very positively”.
His comments came after a letter to Brexit Secretary David Davis from five of Britain’s biggest business lobby groups warned that firms are preparing to make “serious decisions” with consequences for jobs and investment unless there is clarity on post-brexit trade and transition terms.
Updating the House of Com- mons on last week’s meeting of the European Council, Mrs May was yesterday urged by Labour, the SNP and some of her own backbenchers to rule out a no-deal Brexit.
Mrs May said: “I was very clear that the implementation period was something that business was very keen on having and ensuring that they had that smooth and orderly process of withdrawal.
“But we are in a negotiation with the EU 27 and I think it is important to remember as part of that negotiation that if we want to get a good deal for the United Kingdom, I think the best way to get a bad deal for the UK is to say that we will accept anything that they give us, regardless.”