New figures show possible cost of increased trade barriers.
Analysis published today by the Office of the Chief Economic
Advisor has estimated Brexit trade barriers could impact
Scotland's economy by £4 billion.
This estimated economic cost is from the reduction in trade alone
– not counting changes to productivity, investment or migration.
Business Minister said the report
demonstrated the urgent need to reverse the damage of Brexit to
boost living standards and revenue for the NHS.
According to the Trade Modelling Report, Scottish exports could
be lower by 7.2% or £3 billion compared to continued EU
membership.
The chemical and pharmaceutical sector is estimated to be one of
the hardest hit by post-Brexit trade barriers, with an estimated
9.1% reduction in output, followed by the computer and
electronics sector with an estimated 7.7% fall. The 4.9%
output drop estimated for the agrifood sector represents a loss
of £827 million.
Business Minister said:
“On the eve of the fifth anniversary of Brexit, these new figures
highlight the urgent need to change course to boost the economy
and increase public revenue for the NHS.
“This is the latest in a long line of studies highlighting how
badly Brexit continues to impact Scotland and should cause the UK
Government to consider its approach to economic growth.
“The Scottish Government has been clear that Scotland's place is
in the EU and the huge European single market. But we are also a
voice for greater co-operation with the EU right now and we urge
the new UK Government to forge a much closer relationship with
our fellow Europeans.”
Background
Scottish Government's Brexit
Trade Modelling Report
The report is the first to specifically analyse the impact of the
UK's post-Brexit trade agreements on Scotland's economy. It
examines the expected effect of actual or potential free
trade agreements between the UK and Australia, India,
Switzerland and Turkey, as well as the Trade and Cooperation
Agreement between the UK and EU. It then compares that with the
trade benefits Scotland would have received from continued EU
membership.
This report makes estimates based on the impact of trade barriers
and does not account for changes in productivity and investment
due to Brexit. This means that some of the headline figures
differ from those in other reports – such as in modelling by the National
Institute of Economic and Social Research, which showed that
UK GDP could be 5.7% lower – as they look at the overall impact
of Brexit on the economy.
