Scotland would ‘rather be in the EU’ says SNP MP

And the First Minister has been told she cannot expect a huge dividend even if Scotland rejoined the EU either – with the London School of Academics analysis suggesting such an outcome would make no difference. Academics from the London School of Economics’ Centre for Economic Performance say the economic costs of independence are two or three times greater than Brexit due to the volume of Scotland’s trade with the rest of the UK.

Study authors Hanwei Huang, Thomas Sampson and Patrick Schneider said the economic impact of Brexit would become clear after 10 to 15 years – but the economic impact of Scottish independence could take even longer to gauge.

Professor Huang said: “This analysis shows that, at least from a trade perspective, independence would leave Scotland considerably poorer than staying in the United Kingdom.

“While many considerations will play a role in shaping the outcome of a second referendum, voters need to know what the likely costs and benefits of each course will be This briefing contributes to that knowledge.”

Prof Sampson said: “We find that the costs of independence to the Scottish economy are likely to be two to three times greater than the costs of Brexit.

“Moreover, rejoining the EU following independence would do little to mitigate these costs, and in the short run would probably lead to greater economic losses than maintaining a common economic market with the rest of the UK.”

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The report concludes the losses from independence are similar regardless of whether an independent Scotland rejoins the EU or maintains a common market with the UK.

Together, Brexit and independence (without rejoining the EU) are estimated to reduce long-run Scottish income per capita by around 6.5 percent in an optimistic scenario and 8.7 percent in a pessimistic scenario  – equal to between £2,000 and £2,800.

However, they said these were both likely to be underestimates as there could also be impacts on productivity.

The LSE team did not consider other effects of independence such as changes in investment flows, fiscal arrangements or Scotland’s currency.

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As the rest of the UK accounts for more than 60 percent of Scotland’s imports and exports, the authors noted, the impact of any trade barriers would be far greater than those between Scotland and the EU.

The rest of the UK would be likely to remain Scotland’s largest trading partner for decades after independence, the report said, meaning that rejoining the EU would only become attractive if independence damaged trade south of the border to a sufficient degree.

Campaigners opposed to the idea of an independent Scotland have frequently argued that any No campaign in a future independence referendum should focus on the financial impact of going it alone.

Speaking to Express.co.uk in November, Joe Ray, a regular contributor to the Sceptical Scot website, proposed such a strategy.

He said: “The SNP wants a campaign based around the future of Scotland, being a positive, progressive, European nation – they want to keep it at a really high level.

“But what the currency issue does, and the prospect of the risk that it will induce for everyone’s personal finances, is it means things like people’s mortgages, people’s mortgage repayments, the weekly grocery shop, the importance of that, and how much that could increase, people’s pensions, people’s savings, debts – all these will become centre-stage.

“A pro-UK campaign when it comes to financial issues and economic issues can focus on bread-and-butter issues.

“That is what this strategy offers. ‘If Scotland leaves the UK and we have a new currency, will that send prices flying?’ Same with utility bills, train fares – all these are very emotive issues.

“It brings the whole campaign down to day-to-day, bread-and-butter political issues.

“They want to have a big campaign focused on why Scotland needs to be independent, the grand future we can have.

“We are bringing it right down to the actual reality of it, and how it will impact people directly.”

Pamela Nash, chief executive of Scotland in Union, said: “This devastating report exposes the economic damage the SNP wants to inflict on people with its negative vision for Scotland’s future.

“Leaving the UK would take money away from vital public services like the NHS and schools for the sake of a border with England.

“That would be unforgivable at any time, let alone in the difficult years ahead as we recover from the pandemic.

“And this report confirms that even if a separate Scotland joined the EU, the negative impact of leaving the UK would be far worse because we trade far more with the rest of the UK.

“Remaining in the UK means we not only avoid building a trade barrier with our largest market; it means we don’t build a border between friends and families.

“We are stronger together as part of the UK, ensuring we can rebuild our country together.”

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