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Report: No-deal Brexit would cost Scotland £14bn a year

Economy set to suffer massively if UK leaves EU without deal, businesses say.

Bad for business: Companies concerned about Brexit (file pic). <strong>© STV</strong>
Bad for business: Companies concerned about Brexit (file pic). © STV

A no-deal Brexit could cost Scotland £14bn a year, new analysis by business organisation the CBI has indicated.

The study of the UK Government figures points to Scotland being among the areas of the UK “significantly exposed” to the economic effect of the UK leaving the EU without a deal.

The CBI estimates the UK Government’s predicted 8.1% drop in real gross value added (GVA) in Scotland by 2034 following a no-deal Brexit could amount to an annual loss of output worth £14bn by that date.

A drop of this magnitude would hit jobs and living standards, the CBI warns, and is more than the annual amount spent on hospitals, GP surgeries and other health services in Scotland.

Farming and food production is singled out as being at risk of being “severely impacted” in the event of a no-deal Brexit, as it is said to be “particularly exposed to the risk of higher tariffs and trade costs”.

Ed Monaghan, chief executive officer of CBI Scotland member luxury home builder Mactaggart and Mickel, said: “Like most businesses, the prospect of leaving the EU with no-deal is unimaginable.

“Not because we are able to predict the likely impact better than anyone else. Put simply; a wait-and-see strategy will most likely engulf decisions, from business investment to individual purchases, invoking a national pause on activity and making the resulting impact on our economy easy to predict.”

CBI Scotland director Tracy Black said: “CBI Scotland members are clear: if the new approach to finding a Brexit deal continues to be a game of who blinks first, the whole economy will pay the price.

“The deadlock will only be broken by a genuine attempt by all politicians to find consensus and compromise, not stick to rusting red lines and political conditions. Scotland is not – and cannot be – ready for no deal.

“The projected impact on our economy would be devastating and while business will do all it can to reduce some of the worst aspects, a no-deal scenario is unmanageable.”

She said without compromise “the whole country faces the unforgivable prospect of a disorderly Brexit which will affect jobs and livelihoods in Scotland for decades to come” and urged politicians to put prosperity before party politics in their Brexit decisions.

Labour MP Martin Whitfield, who backs the Best for Britain campaign to keep the UK an EU member, said: “This study highlights the catastrophic economic impact of a ‘no deal’ Brexit, with Scotland among the worst affected parts of the UK.

“It poses a clear and present danger to places like Edinburgh and East Lothian, where many jobs are dependent on the EU.

“The Prime Minister should rule out a ‘no deal’ Brexit and the best way to do that is to offer the public a people’s vote with the choice of accepting her withdrawal deal or keeping the best deal we have by remaining in the EU.”

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