Scottish economy would be damaged by Brexit, says new report

Trade, labour force and economic uncertainty in the balance for Scotland


The Scottish economy faces the prospect of considerable damage if the UK votes to leave the EU.

According to a new commentary from the University of Strathclyde’s Fraser of Allander Institute, ‘there is a high probability that output and growth in the Scottish economy will be damaged if the United Kingdom votes to leave the EU’. It added:

‘First, the likelihood would be that trading arrangements would be less favourable than in the EU.

Not only would actual and potential Scottish exporters have to overcome a potentially weaker competitive position due to lower labour and total factor productivity, they may also have to face the additional hurdle of less favourable trading arrangements.

Secondly, uncertainty attaching to a Brexit and the terms of any subsequent arrangements might worsen Scottish productivity growth through the negative effects on trade competition, inward investment and financial integration.’

Publishing the commentary, Brian Ashcroft, Emeritus Professor of Economics at the Institute, warned that leaving the EU could place more of a burden on Scottish companies and the economy. He explained:

‘At a time when there is increasing policy concern about Scotland’s productivity and growth performance a vote to leave the EU would place an unnecessary burden on Scottish companies and economic policy.’

The warning comes amidst a notable fall in support for membership across Scotland.

According to a poll for STV by Ipsos Mori, of all those Scots expressing a preference, 53 per cent support remaining in the EU – 13 points down from the last time Ipsos questioned Scottish voters on the issue at the end of April.

This comes after Ipsos and IPPR Scotland last week published results of focus groups suggesting the Remain vote across Scotland could be much softer than first thought.

Irish Taoiseach Enda Kenny meanwhile today embarks on a two-day visit to Liverpool, Manchester and Glasgow to urge the Irish community in the UK to vote Remain.

In a statement issued ahead of his visit, Kenny’s office noted that while the vote was a matter for the UK, the impact on Irish citizens meant he felt compelled to campaign. The statement says:

‘While recognising that this is a matter for the UK electorate, he will acknowledge that Irish citizens living in the UK form part of that electorate and restate the reasons why the Irish Government wants the UK to Remain in the EU including

(a) the support that the EU provides to Northern Ireland and the peace process

(b) the common travel area and free movement between the islands

(c) the importance of the UK as an ally in the EU

(d) the inter-dependence of our economies, particularly regarding trade.’

Ed Jacobs is a contributing editor to Left Foot Forward

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