Scotland politics

Brexit 'could hit Scottish growth by 9%'

flags at Holyrood Image copyright PA

The UK leaving the EU without a trade deal in place would hit Scottish economic growth by 9%, according to leaked UK government analysis.

The figure, calculated over a 15-year period, compares with the 8.5% hit to GDP predicted by a Scottish government study last month.

It is contained in reports analysing the economic impact of Brexit that was first obtained by Buzzfeed last week.

MPs have now viewed the documents in the House of Commons library.

The study suggests that in three different scenarios - staying in the single market and customs union, negotiating a free trade agreement and leaving the EU with no deal - the UK economy as a whole would grow more slowly than if it stayed in the EU.

A regional breakdown of the analysis emerged on Wednesday as Theresa May chaired the first of two key Brexit meetings with senior ministers as the government faces more calls to clarify the UK's position.

Regional breakdowns

The breakdown predicted that every part of the UK would have slower growth under all three scenarios.

For Scotland, the UK government analysis predicted:

  • Single market membership - growth 2.5% lower than projected
  • Free trade deal - 6% lower
  • No deal - 9% lower

The figures are remarkably similar to those produced by the Scottish government last month - which were dismissed at the time as "completely over-the-top scaremongering" by the Scottish Conservatives.

The Scottish government figures were:

  • Single market membership - GDP 2.7% lower than projected
  • Free trade deal - 6.1% lower
  • No deal - 8% lower

The 8% figure for "no deal" was said to amount to Scotland's economy being £12.7bn a year worse off by 2030 than it would be under full EU membership.

The UK government's breakdown predicts that the north east of England would be worst hit by Brexit, with growth 3% lower under single market membership, 11% with a free trade deal and 16% under a "no deal" scenario.

London would fare least badly, with its growth slowing just 1% under single market membership, 2% through a free trade deal and 3.5% if there is no deal.

The figures for Scotland in all three scenarios are worse than for the UK as a whole, which was predicted to have 8% lower growth with no deal, 5% lower if the UK negotiated a free trade deal, and 2% lower if it adheres to the rules of the single market.

The UK government said the leaked document "does not represent UK government policy and does not consider the outcome we are seeking in the negotiations".

A spokesman added: "As ministers clearly set out in the House, this is provisional internal analysis, part of a broad ongoing programme of analysis, and further work is in progress.

"We are seeking an unprecedented, comprehensive and ambitious economic partnership - one that works for all parts of the UK. We are not expecting a no deal scenario."

The UK government had argued that releasing the analysis to the public could damage its negotiations with the EU.

But Downing Street later announced that MPs and peers would be able to see the report on a confidential basis, after initially refusing to do so.

It said the analysis would also be shared with the devolved administrations, but that it would need to be "handled with appropriate confidentially".

'Grim reading'

Scotland's Brexit secretary, Michael Russell, said he would publish the analysis if it was given to him, arguing that the public "has a right to know the impact on jobs and living standards of the UK government's decision to pursue the UK's exit from the EU".

The SNP has now called on the UK government to publish its Brexit analysis in full following the leak.

The party's spokesman on Europe, Peter Grant MP, said: "The leaked UK government's internal Brexit analysis makes for utterly grim reading, and Theresa May must now end the shameful secrecy surrounding the UK government's Brexit plans and publish the papers in full - which we now know will have catastrophic consequences for Scotland and the UK's economy.

"The Tories must now explain why they accused the Scottish government of scaremongering when their own government was covering up similar findings.

"The leak underlines the case that remaining in the single market and customs union is the only way to minimize that economic harm.

"It's time Theresa May stood up to the Brexit hard-liners and started putting jobs and living standards first."

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