Analysis shows Single Market essential for Scotland

New economic impact analysis by the Scottish Government confirms that in the event of Brexit taking place, the best way to protect the economy would be to remain in the Single Market and the Customs Union.

A failure to remain in the Single Market or to secure a free trade agreement would see Scotland’s GDP around £12.7 billion lower by 2030 than it would be under continued EU membership.

This would mean a loss equivalent to £2,300 per year for each person in Scotland.

The analysis takes account of the impact on trade, productivity and migration of different future relationships. It shows that a so called ‘Canada-type’ deal with the EU would still leave Scotland’s GDP £9 billion lower by 2030 – or £1,610 per head.

Other key findings include:

• Remaining within the Single Market could see an additional benefit to Scotland’s economy  if the EU makes progress on completing the Single Market in services, energy and the digital economy
• Continued migration from the EU in line with Freedom of Movement is required to support continued economic growth, with each additional EU citizen working in Scotland currently contributing an average of £10,400 in tax revenue
• Any relationship with the EU short of remaining in the Single Market could have a significant impact on social protections, environmental and consumer policies

Publishing the new analysis Scotland’s Place in Europe: People, Jobs and Investment, First Minister Nicola Sturgeon said:

“By insisting on hard-line pre-conditions the UK Government is itself closing the doors on what can be achieved in talks with the EU on the future relationship.

“The aim of the Scottish Government, and the evidence presented in this paper, is to start opening those doors again.

“For the sake of jobs, the economy and the next generation, today we are calling on the UK Government to drop its hard Brexit red-lines so that Scotland and the UK can stay inside the Single Market and Customs Union.

“Scotland is particularly well-placed to take advantage of the developing and deepening Single Market – the world’s biggest economy of 500 million people, eight times the size of the UK.

“Our brilliant world-class universities, our unrivalled potential in renewable energy, our life sciences industry, our digital sector and other key areas of the Scottish economy are all in prime position to reap the rewards of these developments.

“That will mean more jobs and higher wages. It would be a tragedy for future generations if we let that opportunity pass us by.

“The fact that the Prime Minister wants to leave not only the political structures of the EU but come out of the European Economic Area shows just how extreme the UK Government position is. With just weeks to go before the opening of talks on the future relationship that extreme stance must be dropped.”

Minister for Negotiations on Scotland’s Place in Europe Michael Russell said:

“People in Scotland voted decisively to remain in the European Union and we continue to believe this is the best option for Scotland and the UK as a whole. Short of EU membership, the Scottish Government believes the UK and Scotland must stay inside the Single Market and Customs Union.

“The decisions taken in the next few months will be crucial for jobs, wages and opportunities for generations to come and it is vital that the Scottish Government are properly engaged in these decisions.”

Background

Read the full analysis paper Scotland's Place in Europe: People, Jobs and Investment