The Scottish economy faces the prospect of considerable damage if the UK votes to leave the EU.
According to a new commentary from the University of Strathclyde’s Fraser of Allander Institute, ‘there is a high probability that output and growth in the Scottish economy will be damaged if the United Kingdom votes to leave the EU’. It added:
‘First, the likelihood would be that trading arrangements would be less favourable than in the EU.
Not only would actual and potential Scottish exporters have to overcome a potentially weaker competitive position due to lower labour and total factor productivity, they may also have to face the additional hurdle of less favourable trading arrangements.
Secondly, uncertainty attaching to a Brexit and the terms of any subsequent arrangements might worsen Scottish productivity growth through the negative effects on trade competition, inward investment and financial integration.’
Publishing the commentary, Brian Ashcroft, Emeritus Professor of Economics at the Institute, warned that leaving the EU could place more of a burden on Scottish companies and the economy. He explained:
‘At a time when there is increasing policy concern about Scotland’s productivity and growth performance a vote to leave the EU would place an unnecessary burden on Scottish companies and economic policy.’