EDINBURGH (Reuters) - Curbing migration after Britain leaves the European Union would be “catastrophic” for Scotland’s economy, the devolved Scottish government said on Wednesday.

The Union flag,The Scottish Saltire and The European flag fly at the Scottish Parliament in Edinburgh Scotland, Britain March 21, 2017. REUTERS/Russell Cheyne

Sparsely populated Scotland says it needs immigrants to shore up its economy and the Edinburgh government has been arguing for more say in policy, if not a made-to-measure arrangement, something the British government rejects.

Scotland voted in a 2016 referendum to stay in the European Union. More populous England, however, voted to leave, partly due to concerns over large-scale immigration from other EU countries.

Prime Minister Theresa May says she aims to cut the numbers of immigrants to the tens of thousands from the present hundreds of thousands.

“The UK government’s policy of pursuing a reduction in net migration to only tens of thousands across the whole UK would be catastrophic for Scotland’s economy and do serious damage to our future prosperity,” Scottish foreign minister Fiona Hyslop said in a statement.

By producing a study on the economy and lower migration, Scotland is seeking to draw a contrast with what it sees as a dearth of data provided by the British government. May is struggling to overcome internal divisions in her party and agree on the terms of Brexit with the EU.

Forecasts show that over the next 25 years the working population of Scotland will grow by only 1 percent, compared with an increase of 25 percent in the pension age population.

There was an overwhelmingly strong case for Scotland to create a different immigration system from the rest of the UK, Hyslop said.

The paper forecasts that, by 2040, lower migration is likely to reduce Scotland’s gross domestic product by 4.5 percent, the equivalent to a fall of almost 5 billion pounds ($7 billion) a year, compared to a reduction of 3.7 percent for the UK as a whole.

The study suggests the British government should abolish its net migration target, or exclude Scotland from it, and review an immigration skills charge - a fee employers pay when they sponsor a worker from outside the European Economic Area - which it said was a burden on employers.

One of the solutions for Scotland’s migration problems, it added, could be to use the existing framework of a points-based system, “in a way that restricts migrants to living in Scotland and enables Scottish ministers to determine criteria and thresholds, (to) start to meet Scotland’s needs.”