Revealed: what hard Brexit would cost Scotland

Nicola Sturgeon urges continued single market access after commissioning economic assessments of the impact of leaving the EU

Scotland will lose almost 10% of its GDP with no Brexit deal
(Image credit: Oli Scarff/Getty Images)

Nicola Sturgeon has called for the UK to stay in the single market after economic analysis published by her government estimated that Scotland would be £16bn a year worse off in the event of a hard Brexit.

Unveiling the SNP’s economic assessment of the impact of Brexit, the First Minister said the average household income north of the border would fall by almost 10%, or £2,263, if the UK left the EU without a trade deal and fell back on World Trade Organisation rules.

By contrast, she said staying in the EU could result in the UK economy growing by 2.4% if integration of Europe’s single market in digital industries, energy and services intensified.

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The report analysed the potential impact of three scenarios: membership of the European Economic Area (EEA), a Canada-style free-trade agreement, and reverting to basic WTO rules.

“Retaining single market membership on a basis similar to non-EU member Norway would reduce the cost to £4bn or 2.7 per cent,” the Financial Times reports.

Despite growing support for a second EU referendum, Sturgeon “said the greatest opportunity to prevent a hard Brexit came from the coalition of opposition parties and anti-Brexit Conservatives who backed continued single market membership”, reports The Guardian.

The Government insists it is seeking a Brexit deal that will work for the whole of the UK but is committed to leaving both the single market and customs union, a position also supported by Jeremy Corbyn, although not by a majority of his MPs or Labour members.

Meanwhile, Scottish Conservative constitution spokesman Adam Tomkins accused the Scottish government of “completely over-the-top scaremongering", saying the SNP had proved with their 2014 white paper on independence that "their financial forecasts simply cannot be trusted”.

A Downing Street spokesman said the economy of the rest of the UK was worth an estimated £48bn to Scotland, four times as much as the EU.

Saying her preferred option was for the whole UK to remain in the EU, Sturgeon called for continued single market access, dropping her previous position that Scotland should have a bespoke trade deal with the EU.

Her U-turn comes after recent polling showed this option was unpopular among Scottish voters, with 67% of those questioned by NatGen saying the country should have the same trade rules as the rest of the UK.

Unlike the other home nations, Scotland suffers from a significant shortfall in workers. The SNP said that “demographic challenges” facing Scotland mean that “without immigration, the number of people of working age, working and paying towards public services in Scotland, is likely to fall”.

Speaking to the BBC’s Andrew Marr Show on Sunday, the First Minister said she would make her judgement in the autumn as to whether to pursue a second Scottish independence referendum, based on the details of the Brexit deal.

Immediately after the EU referendum, the SNP called for a second independence vote, arguing there had been a “material change” in circumstances since the 2014 refererndum.

But the SNP leader was forced to scale back her plans for a fresh vote when Theresa May blocked them and then the party lost 21 of its 56 MPs in the snap Westminster election last June.

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