Economy secretary slams single market uncertainty

Keith Brown has warned that Westminster's failure to give a position on single market membership is 'untenable'. Picture: John Devlin

Keith Brown called for assurances that Scotland’s interests would be at the heart of Brexit negotiations as he argued leaving the single market would “severely damage” the economy.

The warning comes more than six months after the vote to leave the European Union (EU) and following publication last week of the Scottish Government’s proposals for protecting Scottish interests in Europe.

First Minister Nicola Sturgeon set out options that would allow Scotland to remain in the single market if the rest of the UK leaves through the European Free Trade Association (EFTA) and the European Economic Area (EEA).

Mr Brown urged the UK Government to explore options for a differentiated outcome north of the border, after Prime Minister Theresa May played down the prospect of a separate Scottish Brexit deal.

He highlighted research from The Fraser of Allander Institute, the National Institute of Economic and Social Research and the Centre for Economics and Business Research which has suggested leaving the single market could reduce Scottish GDP by £11 billion per year by 2030, cost the country 80,000 jobs over 10 years and mean an average reduction in income of almost £2,000 per person.

The Economy Secretary said: “Independent research has estimated the cost of leaving single market at more than £11 billion annually which could mean Scotland’s public services revenues would be £3.7 billion per year lower than they are now.

“The EU is also the main destination market for Scotland’s international exports, accounting for 42% of trade in 2014. Losing membership of the world’s largest single market would mean forfeiting the right to buy goods and services from other parts of this union free from import taxes and would also seriously impact on the ability of Scottish companies to export to other EU member nations.

“Research from the National Institute of Economic and Social Research recently estimated that losses in bilateral trade with other EEA countries from leaving the single market could be as much as 60% for the service sector and up to 44% for manufacturers, which would be disastrous to our economic prosperity as a nation.

“More than six months on from the EU referendum, it is completely untenable that the UK Government are unable to give even an indicative position on whether it supports remaining in the single market.

“The people of Scotland voted to remain within the EU and a ‘hard Brexit’ would severely damage our economic and social interests.

“That is why I want an assurance from the UK Government that Scotland’s interests will be at the heart of any negotiations on the future of the UK within the EU.

“Should the rest of the UK leave the Single Market we want to see a differentiated outcome for Scotland, one that permits us to remain inside the European Single Market and protect the jobs and economic benefits it brings.”

A UK Government spokeswoman said: “The UK has chosen to leave the EU and we are working closely with the governments of Scotland, Northern Ireland and Wales in making a success of it.

“The Prime Minister has repeatedly made clear that we want to ensure British companies have the maximum freedom to trade with and operate in the single market.

“We are determined that the UK will continue to be a global leader of free trade and that it will remain the best place in Europe to run and grow a business.”