Publication - Research and analysis

Coronavirus (COVID-19): the case for extending the Brexit transition period

Published: 3 June 2020
From: Cabinet Secretary for Constitution, External Affairs and Culture
Directorate: External Affairs Directorate
Topic: Business, industry and innovation, Communities and third sector, Constitution and democracy, +13 more … Economy, Education, Energy, Environment and climate change, Farming and rural, Health and social care, International, Law and order, Marine and fisheries, Public safety and emergencies, Public sector, Transport, Work and skills
ISBN: 9781839607981

This paper sets out why it is vital, if we are to ensure the most rapid recovery possible from the COVID-19 crisis, that the UK Government immediately seeks an extension to the Brexit transition period (scheduled to finish on 31 December 2020) for two years.

Supporting documents

Footnotes

1. World Trade Organisation Press Release, Trade set to plunge as COVID-19 pandemic upends global economy

2. Official economic forecasts for Scotland are undertaken by the Scottish Fiscal Commission

3. This analysis is based on the same scenarios as the Scottish Government report, State of the Economy: April 2020, which assumed three months of physical distancing. It is likely that scenarios will be updated or new scenarios published as data emerges on the extent of COVID-19 impacts and the path for resumption of economic activity.

4. Scotland's Place in Europe: People, Jobs and Investment

5. State of the economy: April 2020

6. The aim of this analysis is to explore how the economy could be further impacted through EU trade and migration channels. All modelling was carried out separately, and as such no assumptions have been made about how the economic impact of COVID-19 could worsen or dampen the impact of a no-deal Brexit. For SGGEM modelling of COVID-19 see: https://www.gov.scot/publications/state-economy-april-2020/pages/6/. For similar CGE Brexit modelling used here see supporting file of: https://www.gov.scot/publications/state-economy-february-2019/

7. Examples include Ebell, M., Hurst, I., & Warren, J. (2016). Modelling the Long-Run Economic Impact of leaving the European Union National Institute of Economic and Social Research; OECD. (2016) The Economic Consequences of Brexit Taxing Decision & FAI (2016) - Long-term Economic Implications of. Brexit. A report for the Scottish Parliament

8. National Institute Economic Review No. 252 May 2020

9. Scotland's Place in Europe: People, Jobs and Investment

10. State of the Economy: April 2020

11. This refers to a scenario in which the UK starts trading on World Trade Organisation terms with the EU following departure from the EU. See Annex A for further technical details of this analysis.

12. State of the Economy: April 2020

13. https://www.wto.org/english/res_e/statis_e/daily_update_e/tariff_profiles/E28_E.pdf

14. BBC News article, Varadkar: EU will have stronger team in trade talks with UK

15. Brexit: Social and Equality Impacts

16. See for example https://www.resolutionfoundation.org/publications/risky-business/ and https://www.ifs.org.uk/publications/14791

17. https://www.spi.ox.ac.uk/sites/default/files/Barnett_Paper_13-03__2_.pdf

18. Ibid, also https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/earningsandworkinghours/articles/thecommutinggapwomenaremorelikelythanmentoleavetheirjoboveralongcommute/2019-09-04

19. After the 2008 recession there was a significant rise in the minority ethnic employment gap (the difference between employment rates of white and minority ethnic groups, ages 16-64), from 8.2 percentage points (Annual Population Survey, Jan-Dec 2007) to 14.8 percentage points (Annual Population Survey, Jan-Dec 2009). The employment rate of disabled people in Scotland was increasing prior to 2008, but the recession halted progress (Annual Population Survey).

20. See for example https://blogs.sussex.ac.uk/uktpo/publications/winners-and-losers-from-international-trade-what-do-we-know-and-what-are-the-implications-for-policy/

21. See for example http://documents.worldbank.org/curated/en/820801468156898298/Sticky-feet-how-labor-market-frictions-shape-the-impact-of-international-trade-on-jobs-and-wages

22. https://www.equalityhumanrights.com/sites/default/files/research-report-47_the-equality-impacts-of-the-current-recession_0.pdf

23. Brexit: Social and Equality Impacts

24. Scotland's Place in Europe: People, Jobs and Investment

25. European Commission Technical Note on the Implementation of the Protocol on Ireland/Northern Ireland

26. House of Lords European Union Committee Report "The Protocol on Ireland/Northern Ireland"

27. Institute for Government report, "Implementing Brexit: The Northern Ireland Protocol"

28. BBC News Article, IMF head warns on Brexit trade deal failure

29. Wave 15 of the Highlands and Islands Enterprise (HIE) business panel survey

30. Article by The Guardian, 'There's no plan B': academics race to safeguard research against Brexit

31. https://www.markiteconomics.com/Public/Home/PressRelease/c2c5efa8283e40a4b780ff8f45d9c9e2