Scotland ‘has suffered £3bn Brexit blow as uncertainty hits economy’
● Think tank issues stark warning ● Business leaders demand ‘wake-up call’
Scotland’s economy has already suffered a £3 billion hit as a result of Brexit as investment is choked off and growth slumps, a leading think tank has found.
And there are warnings the country is facing one of the “hardest forms of Brexit” under the deal struck by Boris Johnson with EU leaders which will leave “considerable challenges” in the years ahead, according to the Fraser of Allander Institute. Scotland’s GDP has remained sluggish over the past year, with firms putting off investment as they await the outcome of the negotiations over the UK’S exit from the EU, the think tank’s latest Economic Commentary finds.
Mairi Spowage, the institute’s deputy director, said: “We estimate that the Scottish economy is around 2 per cent, or £3 billion, smaller than it otherwise would have been.
“Some of this hit to Scotland’s economy may be clawed back as businesses see a clearer path ahead. But nothing within this Brexit process can be taken for granted.
“And whilst a deal to leave maysoonbeagreed,thenature of the UK’S future relationship with the EU is far from certain. Debates over Scotland’s future constitutional status are likely to intensify.”
The institute has previously estimated that the Brexit could cost the Scottish economyanywherebetween30,00080,000 jobs within ten years, with a slump in growth of 2-5 per cent.
Professor Graeme Roy, institute director, said that leaving the EU with a deal could help lift some of the “fog of uncertainty” which has hung over the Scottish economy.
“By avoiding a no-deal outcome, and all that would entail, growth is likely to move ahead of previous forecasts,” he said. “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.”
It emerged last month that Scotland’s economy has fallen into a downturn after GDP shrunk by 0.3 per cent betweenaprilandjune,while unemployment has been steadily rising.
Dr Liz Cameron, chief executive of the Scottish Chambers of Commerce, said the latest figures must act as a “wake-up call” to Westminster.
“It is high time that the uncertainty caused by the vote to leave the EU three years ago was sorted once and for all,” she said.
“It also underlines what we have been saying for years – there is an urgent need for political leaders to enable policies that will help us deliver sustainable economic growth and meet the fundamental challenges we all face.”
A Scottish Government spokesman said any form of Brexit brings the “threat of further damage” to Scotland’s economy.