CBI warns no deal Brexit could cost Scotland £14 billion a year

A no-deal Brexit could cost Scotland £14 billion a year, new analysis by business organisation the CBI has ­indicated.

By The Newsroom Tuesday, 22nd January 2019, 10:20 am Updated Tuesday, 22nd January 2019, 10:23 am

The study of the UK government’s figures points to Scotland being among the areas of the UK “significantly exposed” to the economic effect of the UK leaving the European Union without a deal.

The CBI estimates the UK government’s predicted 8.1 per cent drop in real gross value added (GVA) in Scotland by 2034 following a no-deal Brexit could amount to an annual loss of output worth £14bn by that date.

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A drop of this magnitude would hit jobs and living standards, the CBI warned, and is more than the annual amount spent on hospitals, GP surgeries and other health services in Scotland.

Farming is among the sectors singled out for a warning by the CBI (Photo by Jeff J Mitchell/Getty Images)

Farming and food production is singled out as being at risk of being “severely impacted” in the event of a no-deal Brexit, as it is said to be “particularly exposed to the risk of higher tariffs and trade costs”.

Ed Monaghan, chief executive officer of CBI Scotland member luxury home builder Mactaggart and Mickel, said: “For some months now, the uncertainty around the UK’s departure from the EU has resulted in a lack of confidence around our own business investment plans and more importantly to our customers when buying one of our new homes.

“Like most businesses, the prospect of leaving the EU with no-deal is unimaginable. Not because we are able to predict the likely impact better than anyone else. Put simply: a wait-and-see strategy will most likely engulf decisions, from business investment to individual purchases, invoking a national pause on activity and making the resulting impact on our economy easy to predict.”

CBI Scotland director Tracy Black said a “disorderly Brexit” could affect jobs and livelihoods in Scotland “for years to come”.

She said: “CBI Scotland members are clear: if the new approach to finding a Brexit deal continues to be a game of who blinks first, the whole economy will pay the price.

“The deadlock will only be broken by a genuine attempt by all politicians to find consensus and compromise, not stick to rusting red lines and political conditions. Scotland is not – and cannot be – ready for no deal. The projected impact on our economy would be devastating and while ­business will do all it can to reduce some of the worst aspects, a no-deal scenario is unmanageable.

“The message from CBI Scotland to our politicians is clear – we must see compromise or the whole country faces the unforgivable prospect of a disorderly Brexit which will affect jobs and livelihoods in Scotland for decades to come.”