Scotland faces £9 billion economic hit over Brexit trade deal

Scotland's economy is facing a £9 billion hit as a result of the Brexit trade deal struck between the UK and EU, according to the Constitution Secretary.

Mike Russell says Scots economy faces £9 billion hit
Mike Russell says Scots economy faces £9 billion hit

All goods and and services will face higher costs of trading with the EU, despite the free trade arrangement agreed on Christmas Day, Michael Russell has warned.

Manufacturing, food and drink, agriculture and forestry all face a major risk of becoming uncompetitive, while justice and policing could also be jeopardised.

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The SNP minister has now stepped up calls for Scotland to given the right to stage an independence referendum, after almost two-thirds of Scots rejected Brexit in the 2016 referendum.

“A no deal outcome has thankfully been avoided but in the midst of a pandemic and economic recession Scotland is now being forced to cope with a hard Brexit in less than one week’s time," Mr Russell said today.

“Leaving the European Single Market and Customs Union would be damaging at any time but in the middle of the current crisis it is unforgiveable and completely unnecessary.

“We are doing everything we can to mitigate against the consequences of the UK Government’s actions.”

The Scottish Government says modelling estimates that the type of free trade deal has been agreed could cut Scotland’s GDP by around 6.1%, the equivalent of about £9 billion in 2016 cash terms, by 2030 compared to EU membership

All goods sectors will face the impact the higher costs of trading with the EU as a result of the additional customs and borders procedures and paperwork, according to a statement issued today by the Scottish Government.

Extra costs could make Scottish businesses uncompetitive in some markets, the statement adds, such manufacturing, food and drink, agriculture and forestry are particularly at risk. Lamb and beef exports will be hard hit by the extra costs of exporting to the EU.

There will also be "additional bureaucracy and costs" for businesses trying to access UK and EU markets. The seafood sector will require new certificates and changes to business practices to continue to export to the EU.

Justice and security cooperation will be seriously impacted, with British involvement in the European arrest warrant regime coming to an end. Scottish ministers say this will mean Police Scotland and the Crown Office must use "slower and less effective tools" in the fight against crime

EU migration is also likely to reduce under the new points based system being introduced for the UK, meaning labour shortages in key areas like health and social care

Scottish students will no longer be able to participate in Erasmus, along with a number of other EU programmes which the UK decided to exclude from the deal.

“People in Scotland voted overwhelmingly to remain in the EU and have the right to determine their own future rather than face the long-term damage of a hard Brexit," Mr Russell added.

“Scotland is at heart a European nation, and shares it values. The UK Government has ignored our calls for a continuing close relationship with the EU and it is clearer than ever that the only way to regain the benefits of EU membership is for Scotland to become an independent country.”

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