Scotland is facing economic havoc under Brexit with major foreign investment in the country now “on hold” and a £1,600-per-head loss looming with Theresa May’s EU withdrawal deal, the First Minister has said.
Nicola Sturgeon warned the UK government’s plan, which has been ratified by EU leaders, is the “worst of all possible worlds” and would leave Scots poorer.
The Prime Minister will visit Scotland today as part of a tour of the UK to sell her plans to the people, but the deal looks increasingly likely to be rejected in the Commons.
Hardline Brexiteers fear it could leave the UK locked into the EU indefinitely through the “backstop” arrangement for Northern Ireland, while Remainers like Ms Sturgeon say that leaving the single market and customs union is unacceptable.
The SNP leader repeated calls for the deal to be rejected and set out her support for a second referendum on Brexit at her official Bute House residence in Edinburgh yesterday as the Scottish Government published a withering report on Mrs May’s plan. “No Scottish Government with the interests of this and future generations at heart could possibly accept the deal on offer,” Ms Sturgeon said.
“That deal will take Scotland out of the European Union against our will, it would remove Scotland from a European market of 500 million – around eight times the size of the UK market. It would also take us out of the customs union and possibly deprive us of the benefits of EU trade deals with more than 40 other countries.
“In short, as the analysis demonstrates, this deal will make Scotland and indeed the whole of the United Kingdom poorer.”
The revised version of Scotland’s Place in Europe published yesterday includes economic analysis, first published in January, which suggests the free trade expected under the Mrs May’s withdrawal proposal could leave Scottish GDP about £9 billion lower by 2030 than if the country had stayed in the EU – the equivalent of £1,600 per person.
The Northern Ireland “backstop” could also potentially keep it in the EU single market after the UK leaves.
Ms Sturgeon said she feared this could leave Scotland at a disadvantage in competing with Ulster for overseas investment.
The First Minister indicated she was ready to support a so-called “Norway plus” deal, which appears to be gaining traction at Westminster and would see the UK remain in the EU single market and customs union, as well as maintaining freedom of movement. It has been proposed by former Tory minister Nick Boles, but remains unclear if it would win government support.
The First Minister is also supportive of a “People’s Vote” or a general election being staged to bring about a change of direction in the UK’s approach to Brexit.
The end of freedom of movement will have a particularly acute impact on Scotland, which is more reliant on migration to maintain population growth and plug labour shortages in key sectors of the economy.
While the number of people of working age in Scotland is forecast to grow by 1.1 per cent, the report warned a 50 per cent fall in migrants coming from Europe could instead lead to a 1 per cent decline.
The analysis also suggests investment will suffer a 7.7 per cent hit by 2030 compared with staying in the EU. But the First Minister insisted that inward investment was already suffering.
“We’ve seen and heard anecdotal evidence of that for quite some time now,” she said.
“We hear anecdotal evidence every day of universities finding it harder to recruit people from other European countries because they’ve already decided to make judgments about what they’re hearing and feeling about the Brexit process, so there is, I think, growing evidence of the adverse impact this kind of deal will have.”
Scottish Brexit secretary Michael Russell also warned the situation was now starting to bite.
“I don’t think I ever meet with business organisations without them saying that investment is by and large now on hold,” he said.
“They are, of course as individuals, reluctant to out themselves because they think it would attract undue publicity.”
He added: “When you meet them – and I met last week with a prominent Japanese company – they indicate that decisions on investment, for example being driven in Japan, by their head offices are decisions that are now very difficult to get concluded.
“People simply don’t know particularly about accessing the single market. There is real evidence of money not being spent and companies will frequently tell you that until there is a clarity on single market issues, then they will not be investing either.”
The paper set out yesterday also warns a “gap will likely emerge” between the UK and Europe on security issues “putting at risk Scotland’s direct links to EU partners in Europol and Eurojust, as well as access to tools such as the European Arrest Warrant”.
Scottish Secretary David Mundell said the deal secured by the Prime Minister would “protect the future prosperity of all parts of the UK”.
He said: “That’s why the deal has been welcomed by key sectors in the Scottish economy, including farming, fishing and whisky.
“They have made it clear a no-deal Brexit would be a disaster for Scotland and the whole of the UK. The Scottish Government should start listening to them.
“The Scottish Government must stop playing constitutional politics with Brexit, they must drop their support for no deal and they must get behind the Prime Minister’s deal.”