Scotland's place in Europe: assessment of the revised EU withdrawal agreement and political declaration

Summary Assessment of the Revised Deal

• Under a basic trade agreement of the type the UK Government wants to negotiate Scottish GDP is estimated to be 6.1% lower by 2030 compared to continued EU membership.^[1] This equates to a cost to each person in Scotland equivalent to £1,600.
• No future relationship deal has yet been agreed. Rather than being avoided, a 'No Deal' crash out may well just be postponed until, potentially, as soon as December 2020.
• The Withdrawal Agreement and Political Declaration taken together make it clear that Scotland will be removed from the European Single Market and Customs Union. One of the unique features of the Single Market and Customs Union is that in combination they eliminate both tariff and non-tariff barriers, based on harmonised regulation and shared standards, therefore enabling the complex and dispersed EU and global just in time supply chains that are an important feature of our manufacturing sector.
• In 2018 around 6,900 companies operating in Scotland exported goods to the EU and around 11,000 companies were reliant on imports from the EU.^[2] All are likely to be adversely impacted by a decision to leave the single market and customs union through a combination of higher costs, lost competitiveness and production and distribution delays. These impacts will in turn feed through to suppliers, jobs and the wider Scottish economy.
• Scotland will not only be removed from the European Single Market and EU Customs Union, it will be placed at a competitive disadvantage in relation to Northern Ireland.
• The deal undermines the UK Government's claim that EU fishing access to Scottish waters will be a matter for annual negotiation and that there will be no link between access to UK waters and access to EU markets. Access is explicitly connected to the wider economic relationship.
• This will not only directly damage our economic prospects, not least across rural Scotland, it could have serious adverse consequences for the viability of some of our remoter communities.
• There are significant risks for Scotland's services sector, given the increasing importance of the EU as an export destination for services, worth £5 billion to Scotland in 2017. Services make up 75% of the Scottish economy.
• Commitments have been weakened across a range of standards and rights derived from EU membership - for example in environmental protection and the rights of working people. The deal paves the way for a deregulation agenda by the UK Government.
• The deal ends freedom of movement of people. In a scenario of 50% less EU migration, the working age population will decline by almost 2% rather than the current projection of remaining flat. The proportion of children would decline by 12.8%.