BRACED FOR

FI­NANCE EX­PERT ON HOW U.K. WILL SUF­FER Warn­ing over dent in wages ev­ery per­son will face af­ter EU divorce

Sunday Mail (UK) - - News -

Fraser of Al­lan­der In­sti­tute di­rec­tor Graeme Roy also warned that crash­ing out of the EU with­out a deal would cre­ate an “un­prece­dented struc­tural shock” with the im­pact on jobs and liv­ing stan­dards diff icult to even quan­tify.

He spoke to the Sun­day Mail days af ter the Prime Min­is­ter’s own Trea­sury of­fi­cials re­vealed leav­ing the trad­ing bloc will rip £139bil­lion out of the UK econ­omy and dam­age pub­lic ser­vices.

Roy, whose team at Strath­clyde Uni­ver­sity have used com­puter mod­el­ling to pre­dict dif­fer­ent Brexit deal out­comes, said: “The big­ger the bar­ri­ers you put up be­tween you and your largest trad­ing part­ners, the greater the hit to your econ­omy in the long run.

“If you’re in a Nor­waystyle model where you are still in the sin­gle ma rk e t , then the bar­ri­ers are less and the hit to the econ­omy is less than it would be if you go down a no-deal route with World Trade Or­gan­i­sa­tion ( WTO) rules.

“In a Nor­way model, we’d be look­ing at a two per cent hit to GDP and in terms of wages, that is be­tween £800 and £1200 per per­son on av­er­age full-time earn­ings.

“If you look at the WTO model, you’re into a hit of five per cent to wages and that is about £2000 a year. The deal May is sug­gest­ing is in the mid­dle of that.

“If you take the Trea­sury fig­ures they’re say­ing no deal could lead to a nine per cent hit and a free trade deal sim­i­lar to May’s could mean a four per cent hit. So their pre­dic­tions are a bit worse than ours.”

Roy warned that greater trade bar­ri­ers would im­pact on jobs as well as earn­ings with no deal lead­ing to the pos­si­bil­ity of up to 90,000 posts go­ing across the coun­try.

He added: “Our stud­ies have mod­elled the num­ber of jobs sup­ported by the EU and we found that 130,000 jobs in Scot­land and 40,000 in the Glas­gow re­gion are sup­ported by the EU.

“There will still be trade so they won’t all be lost but these are the jobs which have a risk fac­tor at­tached to them.

“An­other study we ran found that a Nor­way model ar­range­ment with the EU could cost around 30,000 af­ter 10 years with ap­prox­i­mately 90,000 un­der the most ex­treme sce­nario. Again, May’s deal will lieie some­where be­tween those two fig­ures.”res.”

Roy said: “Scot­land is slightly less ex­posedd to Brexit in that we ex­port a smaller amount to the EU than the rest of the UK does.

“But this varies greatly from sec­tor to sec­tor.

“Fish­ing is very much con­nected to the EU and, while Brexit may get rid of quo­tas, it could cre­ate d amag i n g e x p or t bar­ri­ers.

“Im­mi­gra­tion i s a lso a big con­cer n for fu­ture eco­nomic growth.

“We have a shrink­ing pop­u­la­tion pro­jec­tion for com­ing yea rs and , if mi­gra­tion be­comes more dif­fi­cult, then Scot­land will be dis­pro­por­tion­ately hit.

“Over­all, the im­pact of Brexit wi l l be negat ive and any dif­fer­ence with the UK will be at the mar­gins.”

Wh i le none of t he pre­dic­tions made by Roy’s team paints a pos­i­tive pic­ture, he re­fused to even spec­u­late on the po­ten­tial im­pact of crash­ing out of the EU in March with­out a deal and with­out a tran­si­tion pe­riod. He added: “These pro­jec­tions are all based on what hap­pens over the long term. If there is no deal and we crash out in March, it would be very hard to pre­dict how that would go be­cause there’s no prece­dent for the sort of struc­tural shock to the econ­omy that dis­lo­cat­ing process would in­volve.

“Any­one brave enough to put a num­ber to that is braver than me – but it would be neg­a­tive.

Ever y thing would get

AT RISK Wages, jobs, fish­ing and im­mi­gra­tion are set to be hit what­ever is the out­come

Newspapers in English

Newspapers from UK

© PressReader. All rights reserved.