A paper by a panel of experts concluded that a “differentiated deal” as proposed by First Minister Nicola Sturgeon is neither “deliverable” nor in Scotland’s “self-interest”.
Their findings will be considered by the UK government and inform Theresa May, who is faced with Scottish Government demands for Scotland to remain in the single market.
The report – Scotland’s Trading Future – said that apart from the legal, political and technical obstacles to such a plan, a Scottish deal would “break our integrated domestic UK market, whose economic importance to Scotland is paramount”.
It said that unless the Scottish Government agreed to adopt the same immigration policy as the rest of the UK, it is “inevitable” that internal UK border controls would be introduced under their plan.
Even in the absence of tariffs between Scotland and the rest of the UK, the flow of goods and services across the Border – which are four times more important to Scotland than EU exports – would “inevitably be affected” by more restrictive controls.
There would be a gradual “divergence” between Scotland and the rest of the UK as Scotland, through EU or EEA membership, was forced to adopt more EU regulations and laws, while the rest of the UK did not. It also argued that if Scotland capitalised on the opportunities of Brexit – while maintaining EU growth – exports to the rest of the world could be double that of those to the EU.
Under that scenario, rest of the world exports would be worth £10 billion more than if there was no change.
Ms Davidson said: “This report makes a compelling argument that, as we embark on our departure from the EU, the protection of our own Union is vital to Scotland’s self-interest.”
The group was chaired by Conservative MEP Ian Duncan and comprised Allan Hogarth of AH Strategies; Rhona Irving, a retired PwC partner; Sir Iain McMillan, former director of CBI Scotland; and the Conservative MSPs Alexander Stewart and Professor Adam Tomkins.
Brexit minister Michael Russell’s spokesman said: “It’s hardly a surprise that a Tory commission including a heavy dose of Tory politicians backs the Tory government’s plan to drag Scotland out of Europe against its will – despite Ruth Davidson backing our continued place in the single market immediately after the Brexit vote.”