Cost of UK exit twice that of Brexit, LSE
Independence would hit the Scottish economy harder than Brexit, and rejoining the EU would make little difference, a team of academics has said.
The economic damage from leaving both unions would be the equivalent of an income loss of between £2,000 and £2,800 per person, according to an analysis of trade by the London School of Economics.
Its Centre for Economic Performance says the economic costs of independence would be two or three times greater than Brexit due to the volume of Scotland's trade with the rest of the UK.
Independence would hit the Scottish economy harder than Brexit, and rejoining the EU would make little difference, a team of academics has said.
The economic damage from leaving both unions would be the equivalent of an income loss of between £2,000 and £2,800 per person, according to an analysis of trade by the London School of Economics (LSE).
Academics from the LSE'S Centre for Economic Performance say the economic costs of independence are two or three times greater than Brexit due to the volume of Scotland’s trade with the rest of the UK.
The report concludes the losses from independence are similar regardless of whether an independent Scotland rejoins the EU or maintains a common market with the UK.
They found that together, Brexit and independence (without rejoining the EU) are estimated to reduce long-run Scottish income per capita by around 6.5 per cent in an optimistic scenario and 8.7 per cent in a pessimistic scenario.
However, they said these were both likely to be underestimates as there could also be impacts on productivity.
The LSE team did not consider other effects of independence such as changes in investment flows, fiscal arrangements or Scotland's currency.
As the rest of the UK accounts for more than 60 per cent of Scotland's imports and exports, they noted, the impact of any trade barriers would be far greater than those between Scotland and the EU. The rest of the UK would be likely to remain Scotland's largest trading partner for decades after independence, they said, meaning that rejoining the EU would only become attractive if independence damaged trade south of the border to a sufficient degree.
Authors Hanwei Huang, Thomas Sampson and Patrick Schneider said the economic impact of brexit would become clear after ten to 15 years, but the economic impact of Scottish independence could take even longer to gauge.
Their report said: "Adjustment to Scottish independence is likely to be even slower and may take a generation or more, as border costs gradually increase due to divergence between economic policy and regulations in the two countries and the erosion of existing cultural, social and business ties.
"This slow adjustment means that in the initial decades after independence the rest of the UK will continue to be Scotland's most important trade partner.
"Consequently, even if in the long run there is an economic case for an independent Scotland to rejoin the EU, we conclude that Scotland's medium run priority following independence should be keeping border costs with the rest of the UK as low as possible."
The Scottish Government's Economy Secretary Fiona Hyslop responded to the report, saying: "As an independent member of the EU, free from the damage of Brexit, Scotland would be part of the huge Single Market which is seven times the size of the UK.
"There is no reason whatsoever that Scotland could not emulate the success of independent countries of our size which are far wealthier per head than the UK.”