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First analysis of the impact of a Customs Union Brexit on Scotland released by Business for Scotland

Written by Claire Elliott

Around 47,000 jobs could be lost over the next 10 years as a result of a Customs Union Brexit.

New research by BfS reveals that a May-Corbyn Brexit deal will devastate Scotland’s most vulnerable, increasing the unemployment rate by around 1.3% by 2029.

It is widely believed that Theresa May and Jeremy Corbyn are close to reaching a Customs Union compromise that will allow Brexit to pass through Parliament. This is despite overwhelming evidence that any type of Brexit will cause more damage to Scotland’s economy than other parts of the UK.

BfS CEO Gordon MacIntyre-Kemp comments:

“A Customs Union would be better than a No Deal Brexit but necessitate separate trade deals that include common EU tariffs, thus making the promised trade deals more difficult to deliver.  

Trade deals are an aggregation of national trade priorities – post-Brexit the UK and Scotland’s priorities are different. EU trade deals after Brexit will no longer protect Scottish products.

Would they protect Scotch whisky or Scottish fishing rights? Would they fight to protect Scotch beef and lamb or Scottish salmon if the alternative were to negotiate a win for London’s finance sector?”

According to the National Institute of Economic and Social Research and the UK Government’s own research a Customs Union style Brexit deal is also set to;

  • Cost Scotland £5.9bn by 2029
  • Cut GDP in Eastern Scotland by 3.7% by 2029. Of all UK regions, it will be the most affected. For instance, the negative effect on GDP will be 1% higher than outer London
  • Reduce investment by around 18% UK-wide compared with staying in the EU. Given that Scotland is the second highest winner of FDI projects in the UK, it can be expected to have a higher than average impact on Scotland
  • Reduce real average wages in the UK by around 6%.

The analysis conducted by BfS, published online, also comments on a number of political barriers to such a deal being a success and leads to the conclusion that a Customs Union Brexit causes more damage to Scotland than other parts of the UK.

Macintyre-Kemp says:

“When any form of Brexit is enacted then The Scottish Government will be able to claim impunity that Scotland’s status in the Union will have reached the end of its generational journey from being a partner in the Union, to being a victim of it.”

You can read the full analysis here

About the author

Claire Elliott

Claire is a political science graduate of the Central European University with a particular interest in EU politics and environmental issues. She is an economics and policy research executive with Business for Scotland.

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