JUST LIKE GREECE... WITHOUT THE SUN

Think-tank’s damning verdict on economic misery awaiting an independent Scotland

AN independent Scotland would look ‘like Greece without the sun’, a withering think-tank report has warned.

The Centre for Policy Studies’s assessment is a devastating appraisal of the crumbling economic case for Scotland leaving the UK in order to stay in the EU.

The SNP has reacted furiously, calling it ‘unforgivable hypocrisy’. However, Nicola Sturgeon has already seen one independence bid fail because of fears of the impact on jobs and the country’s finances.

And experts agree the economy is in a far worse state now than it was when voters went to the polls in 2014 – following an oil price crash that has cost tens of thousands of

jobs. The think-tank’s report said Scotland’s £15billion deficit is three times higher than the UK average. At 9 per cent of GDP, it is also proportionately higher than Greece.

Yesterday, political opponents urged the SNP to abandon plans for a ‘knee-jerk’ second independence vote and focus on fixing the fragile economy. Meanwhile, as British politics continued to reel from Boris Johnson’s shock exit from the Tory leadership race:

Momentum was building behind Theresa May’s bid to become the UK’s second female Prime Minister, with 77 endorsements from Tory MPs – more than all four other candidates combined.

Rival Michael Gove promised to ‘reboot and renew’ the Union and talked down the prospect of a second independence referendum.

The Brexit recovery continued apace, with the FTSE 100 hitting a ten-month high and the pound strengthening against the dollar and the euro.

And Labour’s descent into chaos continued under Jeremy Corbyn, with the appointment of an English MP as Shadow Scottish AND Northern Ireland secretaries.

The findings of the Centre for Policy Studies (CPS) report were backed by opposition politicians.

Dean Lockhart, Scottish Tory economy spokesman, said: ‘Although departure from the EU may cause some difficulties, those difficulties won’t be addressed by leaving the UK too. We must remember that the UK economy is four times more valuable to Scotland than the EU’s.

‘Calling another knee-jerk independence referendum would make the uncertainty even greater.’ Scottish Lib Dem leader Willie Rennie said: ‘Liberal Democrats are clear that Scotland’s economy and finances are stronger as part of both the UK and European Union.’

Miss Sturgeon had promised to explore all options as she seeks to safeguard Scotland’s place in the EU, after 62 per cent of the country rejected Brexit.

However, her charm offensive has failed to win over EU member states, several of which have rejected her requests for talks. Spanish Prime Minister Mariano Rajoy said: ‘If the United Kingdom leaves… Scotland leaves.’

The First Minister has said a second independence referendum is ‘highly likely’ and has instructed officials to draw up legislation.

That would see Scots forced to choose between two unions – with the UK or the EU.

But the CPS report warned forsaking Scotland’s biggest trading partner would be damaging for jobs and businesses.

It said: ‘Revenues from North Sea oil have collapsed, leaving Scotland with a budget deficit that is three times higher than the UK average.

‘Indeed, Scotland’s budget deficit today is nearly equivalent to the UK’s budget deficit in the immediate aftermath of the financial crisis.

‘There are also other major economic issues associated with Scottish independence at this time.

‘Scotland trades over four times more with the rest of the UK compared to other EU countries.

‘Why therefore would you break ties with the UK for the purpose of restoring ties with the rest of the EU via European Union membership?’

Economists have said an independent Scotland in the EU would probably end up ditching the pound for the euro, although drastic cuts would be needed to bring the deficit down to the required level of less than 3 per cent.

The CPS report said this would ‘present huge risks for a newly independent Scotland’, leaving the country vulnerable to Eurozone ‘economic shocks’, and with less protection from the European Central Bank than Scotland currently enjoys from the Bank of England.

Comparisons with the Greek economy will infuriate the SNP, which insists the economy remains strong despite the huge deficit, slow growth and higher unemployment levels than the UK average.

Greece’s national debt is 180 per cent of GDP – twice the EU average – while unemployment is now just below 25 per cent.

If an independent Scotland joined the EU it would probably be a net contributor, effectively sending money to Greece, despite having a higher deficit.

The CPS report said: ‘Of course, it would be impertinent to suggest that Scotland’s circumstances are directly equivalent to those of Greece, but it does undoubtedly serve as a useful reminder that countries with challenging public finances can end up suffering inside the euro.

‘This will undoubtedly be on the minds of the Scottish electorate should there be a second independence referendum.’

An SNP spokesman said: ‘This is unforgivable hypocrisy, coming from a Right-wing Tory think-tank founded by Margaret Thatcher and backed by Brexiteers who have taken the UK economy to the edge of a cliff.’