Scotland ‘ faces £ 9billion economic hit from Brexit’
● Trade deal will saddle business with major extra costs, warns SNP Minister
Scotland's economy is facing a £ 9 billion hit as a result of the Brexit trade deals truck between the UK and EU, according to the Constitution Secretary.
All goods and and services will face higher costs of trading with the EU, despite the free trade arrangement agreed on Christmas Day, Michael Russell has warned.
Manufacturing, food and drink, agriculture and forestry all face a major risk of becoming uncompetitive, while justice and policing could also be jeopardised. The warning comes after the Prime Minister hailed the historic trade deal struck with the EU as a "new beginning" for Britain that resolves the European question that has "bedevilled" British politics for generations.
The 27 European Union states are expected to formally back the postBrexit trade deal within days. In the wake of the agreement, the SNP has
now stepped up calls for Scotland to given the right to stage an i ndependence r eferendum, after almost two- thirds of Scots rejected Brexit in the 2016 referendum.
“A no deal outcome has thankfully been avoided but in the midst of a pandemic and economic recession Scotland is now being forced to cope with a hard Brexit in less than one week’s time," Mr Russell said on Christmas Day.
“L e a v i n g t h e E u r o p e a n Single Market and Customs Union would be damaging at any time but in the middle of the current crisis it is unforg i v e a b l e a n d c o mpl e t e l y unnecessary.
“We are doing ever ything we can to mitigate against the consequences of the UK Government’s actions.”
The Scottish Government says modelling estimates that the type of free trade deal has been agreed could cut Scotland’s GDP by around 6.1 per cent, the equivalent of about £ 9 billion in 2016 cash terms, by 2030 compared to EU membership
All goods sectors will face the impact of higher costs of trading with the EU as a result of t he additional customs and borders procedures and paper work, according to a statement issued today by the
Scottish Government.
Extra costs could make Scottish businesses uncompetitive in some markets, the statement adds, such manufacturing, food and drink, agriculture and forestry are particularly at risk. Lamb and beef exports will be hit by the extra costs of exporting to the EU.
There will also be "additional bureaucracy and costs" for businesses trying to access UK and EU markets, the nationalists statement said. The seafood sector will require new certificates and changes to business practices to continue to export to the EU.
The SNP also raised concern about reduced cooperation on justice and security arrangements, including British involvement in the European arrest warrant regime coming to an end; the impact reduced migration from the EU is likely to have on key areas like health and social care; and the fact Scottish students will
no longer be able to participate in Erasmus, along with a number of other EU programmes whi c h t h e UK d e c i d e d t o exclude from the deal. Boris Johnson said Erasmus will be replaced by a worldwide study exchange programme.
“People in Scotland voted overwhelmingly to remain in the EU and have the right to determine their own future rather than face the long- term damage of a hard Brexit," Mr Russell added.
“Scotland is at heart a European nation, and shares it values. The UK Government has ignored our calls for a continuing close relationship with the EU and it is clearer than ever that the only way to regain the benefits of EU membership is for Scotland to become an independent country.”
B o r i s Jo h n s o n u s e d h i s Christmas message to sell the deal to a public weary of Brexit after years of sometimes acrimonious wrangling since the 2016 referendum. The Prime Minister has claimed the deal meets the goals set out during the 2016 campaign to "take back control".
He said it covers trade worth a r o u n d £ 6 6 0 b i l l i o n a n d means:
- Goods and components can be sold without tariffs and quotas in the EU market.
- The share of fish in British waters that the UK can catch rises from around half now to two- thirds by the end of the five - and- a- half- year transition.
- Allegations of unfair competition will be judged by an independent third- party arbitration panel with the possibilit y of a "proportionate" response.
However, there are warnings that the Conservatives will face a backlash at the Scottish elections in May after the deal appeared to allow the EU fleet access to Scottish waters for “effectively” the next six years.
Scots fishing leaders have said the trade deal is "hugely disappointing" and does not deliver on promises to regain control of Scotland’s waters.
Elspeth Macdonald, chief executive of the Scottish Fishermen’s Federation, said that - on the surface - the Fisheries Agreement did not appear to deliver on the industry’s aspirations.
“What has been outlined so far is that full access will be granted to EU vessels for effectively six years from January,” she said.
“Over the same timescale the increase in quota shares for UK vessels will be 25 per cent.
“The Government has not yet provided the full text of the agreement or how this increase will apply to particular species, so it is very difficult to make a detailed assessment of the impact on our industry.
“However, the principles that the Government said it supported – control over access, quota shares based on zonal attachment, annual negotiations – do not appear to be central to the agreement.
“After all the promises given to the industry, that is hugely disappointing. We expect to be able to study the detail in the coming days and will issue a further statement when we have been able to do so.”
The SNP'S Moray MSP Richard Lochhead, whose constituency takes in much of the country's fishing fleet, warned the Tories face a reckoning at next year's Holyrood election
"I expect our fishing communities are preparing t o gut the Scottish Conservative Party who chased their votes with outlandish promises they knew they couldn’t honour," he said on Twitter.
"History repeating itself on way out of the EU just as they sold out the sector on the way in the 1970s."