Leaving the Single Market could cost Scotland £2.2billion

Leaving the European Economic Area could wipe £2.2billion-a-year from Scotland’s economy by 2030, according to major new research.
The study shows that Labour’s proposal to stay in a Customs Union but not the EEA – which would enable membership of the Single Market – would cost the entire UK £29billion-a-year with the loss of more than 300,000 jobs.
Lords amendments on the Brexit Withdrawal Bill are to be voted on by MPs on Tuesday and Wednesday, including a vote on EEA membership. But the Labour frontbench has so far refused to back the amendment and save jobs, even though there is an opportunity to defeat Theresa May’s government.
The new figures come from a report prepared by Cambridge Econometrics for the Greater London Authority on the difference in growth forecasts for a scenario in which the UK stays within the Customs Union and EEA – compared to just staying in the Customs Union.
Based on the research, campaign group Open Britain has prepared estimates for the financial losses for each part of the UK every year by 2030.

Labour MP Ian Murray said:

“Labour needs to stand up for workers in Scotland and across the UK, and these figures show that leaving the EEA will result in enormous economic harm.
“There is still time for the Labour leadership to reconsider its position and to get behind the growing number of MPs who want to vote for the cross-party amendment.
“The Government’s Brexit strategy in a complete mess, and it would be ridiculous for Labour to bail out Theresa May when so many Conservative MPs are prepared to rebel.
“Refusing to vote for the cross-party amendment in favour of EEA membership would be a historic mistake that would cost jobs, and we won’t be forgiven if we let the Tories get away with a hard Brexit when we have the power to stop it.”

 

NOTES

The model developed by Cambridge Econometrics shows that significantly more economic growth is lost from leaving the EEA than from leaving the Customs Union – reflecting the fact that 80 per cent of the UK’s GDP is in services which are covered by the EEA. The Customs Union essentially covers manufactured goods.
Based on the research, Open Britain has prepared estimates for the financial losses for each part of the UK every year by 2030:

Scotland £2.2bn lost by 2030
North East England £1.1bn lost by 2030
West Midlands £2.4bn lost by 2030
Northern Ireland £766m lost by 2030
North West £3.0bn lost by 2030
Wales £1.3bn lost by 2030
East Midlands £1.9bn lost by 2030
East of England £2.5bn lost by 2030
South East £3.7bn lost by 2030
Yorkshire and the Humber £2.2bn lost by 2030
South West £2.2bn lost by 2030
London £6.3bn lost by 2030.

The model was prepared for the GLA by Cambridge Econometrics. The report is here:
https://www.london.gov.uk/sites/default/files/preparing_for_brexit_final_report.pdf

The GLA report says that the UK’s GDP will be 1.6% smaller in 2030 if the UK left the EEA and remained under a Customs Union agreement than if we stayed in both the Customs Union and EEA. Cambridge Econometrics estimate this will lead to a £6.3 billion loss (with 54,000 fewer jobs) in London and a £23.4 billion loss (and 249,000 fewer jobs) in the rest of the UK.
For the regional and national figures, Open Britain has modelled the distribution of losses on a per head basis based on the projection in the GLA report for population in 2030. In order to calculate the regional figures, Open Britain used the same population percentages per region as exist on the latest ONS figures for UK population, on a regional basis, from mid-2016.

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