The report, from the Fraser of Allander Institute, estimated that between 500 and 1,500 jobs would be lost in Scotland when the UK leaves the EU, even if the UK negotiated access to the EU’s 500M consumers. That would cost the industry at least £75M, which could reach up to £120M. The report said Scotland would fare better than the rest of the UK.
The report used three possible scenarios to predict the UK’s future after Brexit, including a Norway scenario (soft Brexit), Switzerland scenario and a World Trade Organisation (WTO) scenario (hard Brexit). The Norway scenario allowed the UK access to the Single Market, while the Switzerland model only allowed the UK partial access to the market. The hard Brexit scenario did not allow the UK access to the Single Market.
The researchers said Scotland would lose between £40M and £90M in a Switzerland-style deal, and would lose as much as £150M in a hard Brexit scenario.
‘GDP between 2% and 5% lower’
- Scotland to lose between 500 and 1,500 jobs in food and drink sector
- Sector to lose as much as £150M post-Brexit
- Between 30,000 and 80,000 job losses in total
- Scotland would still fare better than the rest of the UK
Fraser of Allander Institute head of economic modelling Katerina Lisenkova told FoodManufacture.co.uk: “In our scenarios in the long term, the food and drink sector could potentially lose between 500 and 1,500 jobs. But there could be other jobs related to food and drink in adjacent sectors, such as in retail.”
The report said: “Brexit is predicted to have a negative impact on Scotland’s economy. Over the long-term, a reduced level of trade is expected to result in Scottish GDP [Gross Domestic Product] being between 2% and 5% lower than would otherwise be the case.
The food and drink manufacturing – Scotland’s largest export sector – was identified as needing particular attention.
“We recommend that focus is now given to sectors that have close trading links with the EU – such as food and drink and some manufacturing sectors – to fully understand the particular issues facing them on a product-by-product basis.”
Overall, Scotland could lose between 30,000 and 80,000 jobs in total across all sectors after Brexit, the researchers said. They added that the rest of the UK would have more job losses.
‘A grim picture of Scotland’
Scottish National Party’s Joan McAlpine MSP said: “This report paints a grim picture of Scotland’s economy 10 years after Brexit.
“Our committee has already found that maintaining access to the Single Market is key for business and industry in Scotland. If the UK government leads us into a ‘hard Brexit’, the evidence presented in this report indicates that there could be disastrous consequences for jobs, exports and production.”
Read the full report here.
Norway scenario (Soft Brexit)
- Member of the European Economic Area (EEA)
- Full access to Single Market (outside customs union and subject to ‘economic border’)
- Financial contribution to EU
- Free movement
- Member of the European Free Trade Association, but not EEA
- Partial access to Single Market
- Smaller financial contribution to EU
- Free movement
WTO scenario (Hard Brexit)
- World Trade Organisation rules for international trade
- No obligation to apply EU laws
- Some tariffs to trade with EU
- Services trade restricted
- No financial contribution to EU
- No free movement