Brexit could lead to the loss of between 30,000 and 80,000 jobs in Scotland, according to a report by the Fraser of Allander Institute commissioned by the Scottish Parliament’s European and External Relations Committee.
The report analysed a number of post-Brexit potential scenarios, ranging from an “optimistic” model like Norway’s arrangements with the EU to the “pessimistic” model of a “hard” Brexit outside the single market and adhering to World Trade Organisation rules.
The report estimated that Scottish gross domestic product (GDP) could fall by 2% in 10 years with 30,000 jobs lost under the most optimistic scenario.
Under the most pessimistic model , Scottish GDP would fall 5%, with up to 80,000 jobs lost.
“Our conclusion is that under all modelled scenarios, Brexit is predicted to have a negative impact on Scotland’s economy,” said the report.
“Based on the modelling and assumptions set out in the report, over the long-term a reduced level of trade is expected to result in Scottish GDP being between 2% and 5% lower than would otherwise be the case.
“The range of impacts is driven by the nature of any post-Brexit relationship between the UK and the EU – the stronger the economic integration with the EU, the smaller the negative impact.
“We also find that the impact on Scotland, whilst significant, is estimated to be smaller than for the UK as a whole.
“Our modelling suggests that ultimately, the size of the relative impact by sector depends on a complex interplay between the EU-export intensity of sectoral sales and how responsive particular sectors are to changes in competitiveness.
“We recommend that focus is now given to sectors that have close trading links with the EU – e.g. food & drink and some manufacturing sectors – to fully understand the particular issues facing them on a product-by-product basis.
“However, we also find that other sectors which at first glance may not be thought as immediately at risk from a change in the UK’s relationship with the EU – e.g. professional services – should also be considered.
“This analysis makes clear that Brexit is not going to be straightforward. “