Scots economy may suffer £3billion hit without Brexit extension

Scotland's beleaguered economy could be facing a £3 billion hit if the UK does not extend the Brexit transition period beyond the end of this year, a new report today finds.

Mike Russell warned no Brexit extension will be disastrous for Scotland

Scottish GDP could be up to 1.1% lower after two years as a result of the loss of economic activity from leaving the EU, it adds. This would be on top of the impact of the current COVID-19 lockdown which has seen the economy grind to a halt.

The Scottish Government report indicates there will be further major costs from Brexit for years to come.

But the UK Government insisted last night ruled out an extension, insisting it would only “prolong” Brexit negotiations.

It also highlights that without an extension or having a free trade deal in place, Scotland’s agriculture, fisheries and manufacturing sectors will be especially badly hit.

The transition period is due to end on December 31. The UK Government must request an extension by the end of June from EU, but has so far ruled this out.

The Scottish Government's Constitution Secretary Michael Russell said it would be an "act of extraordinary recklessness" for the UK Government to maintain this position.

He said: “The Scottish Government believes the best future for Scotland is to be an independent member of the EU - but regardless of people’s views on independence or Brexit, it makes no sense to impose additional damage on Scotland’s economy at this, of all times.

“I believe there is a growing common-sense coalition to press for an extension to avoid such a disastrous outcome and the needless damage it would do to Scottish jobs and our economy."

He warned that the impact of fully severing ties with the EU on top of the COVID lockdown would be severe.

"Time is running out and now is the time to speak up to avoid a double disaster," he added

“The impacts of leaving the Single Market – whenever we leave - are bad for our economy in the long term. The UK Government should do the responsible thing and rule out now a disastrous ‘no deal’ outcome.”

But Scotland Office Minister David Duguid said: “At the end of year when the transition period ends, we will have control over our own laws and trade and will become an independent coastal state.

“We will be able to design our own rules to suit the best interests of Scottish businesses and industries and our vital fishing industry will be strengthened.

“Extending the transition period would simply prolong the negotiations and increase uncertainty for business. It would bind us into future EU legislation, without us having any say in designing it, but still having to foot the bill as we would still have to make payments into the EU budget.”

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