Billions of pounds would be wiped from a Scottish economy already
hit hard by Coronavirus (COVID-19) if the UK Government refuses
to extend the Brexit transition period, according to new
analysis.
The transition arrangements currently keep the UK close to the EU
and can be extended for two years – beyond 31 December - if the
UK Government asks for an extension by the end of this month.
But a new study from the Scottish Government says if an extension
is not agreed, Scottish GDP could be up to 1.1% lower after two
years. The cumulative loss of economic activity from leaving the
EU would be up to £3 billion over those two years – on top of the
devastating effects of the Coronavirus outbreak.
The paper indicates there will be further major costs from Brexit
for years to come and also highlights that without an extension
or having a free trade deal in place, Scotland’s agriculture,
fisheries and manufacturing sectors will be especially badly hit.
Cabinet Secretary for Constitution, Europe and External Affairs
called for maximum pressure
to be applied to the UK Government to change policy, as the study
concludes an extension was now essential to aid any post-pandemic
economic recovery.
Mr Russell said:
“Given the huge economic hit caused by Coronavirus it would be an
act of extraordinary recklessness for the UK Government to refuse
to seek an extension.
“The Scottish Government believes the best future for Scotland is
to be an independent member of the EU - but regardless of
people’s views on independence or Brexit, it makes no sense to
impose additional damage on Scotland’s economy at this, of all
times.
“I believe there is a growing common-sense coalition to press for
an extension to avoid such a disastrous outcome and the needless
damage it would do to Scottish jobs and our economy.
“The paper we are publishing today suggests if there is no
extension, then even if a basic trade deal can be reached with
the EU by December, there will be a cumulative loss over
just two years of nearly £2 billion, rising to almost £3 billion
if there is no deal.
“And the actual impact will be worse because the Brexit shock
would come hard on the heels of Coronavirus hitting businesses at
their most vulnerable and giving business and government,
currently rightly focussed on this pandemic, insufficient time to
prepare.
“The Scottish Government itself has been entirely focussed on
helping people in Scotland through the Coronavirus crisis, and
extending the transition period should be seen is an essential
component of the economic recovery. Time is running out and now
is the time to speak up to avoid a double disaster.
“The impacts of leaving the Single Market – whenever we leave -
are bad for our economy in the long term. The UK Government
should do the responsible thing and rule out now a disastrous ‘no
deal’ outcome.”
Background
Read Brexit transition
study.
