BREXIT trade barriers could impact Scotland’s economy by £4 billion, fresh analysis has shown.
The analysis published by the Office of the Chief Economic Advisor has said this estimated cost is from reduction in trade alone, not counting changes to productivity, investment or migration.
According to the Trade Modelling Report, Scottish exports could be lower by 7.2% or £3bn compared to continued EU membership.
The chemical and pharmaceutical sector is estimated to be one of the hardest hit by post-Brexit trade barriers, with an estimated 9.1% reduction in output, followed by the computer and electronics sector with an estimated 7.7% fall.
The 4.9% output drop estimated for the agrifood sector represents a loss of £827 million.
Business Minister Richard Lochhead (below) said the report demonstrated the urgent need to reverse the damage of Brexit to boost living standards and revenue for the NHS.
He said: “On the eve of the fifth anniversary of Brexit, these new figures highlight the urgent need to change course to boost the economy and increase public revenue for the NHS.
“The Scottish Government has been clear that Scotland’s place is in the EU and the huge European single market. But we are also a voice for greater co-operation with the EU right now and we urge the new UK Government to forge a much closer relationship with our fellow Europeans.”
The report is the first to specifically analyse the impact of the UK’s post-Brexit trade agreements on Scotland’s economy.
It examines the expected effect of actual or potential free trade agreements between the UK and Australia, India, Switzerland and Turkey, as well as the Trade and Cooperation Agreement between the UK and EU. It then compares that with the trade benefits Scotland would have received from continued EU membership.
It comes after the Scottish Government called for closer links with Europe in a bid to bring down energy bills.
Ahead of upcoming UK Government talks with the EU, the Scottish Government has published a report identifying a number of opportunities to more closely align with the EU on energy matters.
These include accelerating the adoption of more efficient UK-EU electricity trading arrangements to bring down energy costs for consumers and linking the UK and EU Emissions Trading Schemes (ETS) to help reduce costs and barriers to trade.
Estimates from the UK energy industry predict that unless the UK moves toward closer co-operation with the EU on energy and climate, it may lead to additional costs of up to £10bn in 2024/25, through higher energy bills and lower Treasury revenues.
