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Scottish Gov't To Push For UK To Stay In EU Single Market

by Jason Gorringe, Tax-News.com, London

16 January 2018


As Brexit talks turn to tax and trade matters, the Scottish Government has released analysis of three "realistic" Brexit policy options, emphasizing a "hard" Brexit would be crippling for Scotland's economy.

The findings, released January 15, look at the three outcomes that the SNP consider are realistic: staying in the Single Market, a "Canada type" deal, and leaving with no EU trade deal.

The report warns that leaving the EU Single Market would see Scotland's economy shrink by up to GBP12.7bn (USD17.5bn) by 2030, compared with continued EU membership.

The SNP notes that the European Commission has already made clear that, if the UK Government's "red lines" remain in place, the only deal that could be achieved is one similar to the EU–Canada free trade deal - the UK being outside of the Single Market and Customs Union (a so-called "hard Brexit") with an EU trade deal.

The SNP said: "The Canadian deal removes some barriers to trade but took seven years to be agreed and is far from comprehensive. For example, Canadian financial services firms do not benefit from 'passporting' that would allow them to trade with countries in the EU."

According to the Party's analysis, such an arrangement would result in a reduction in Scottish GDP of 6.1 percent by 2030 or GBP9bn in cash terms, compared with continued EU membership. There would be a reduction in real disposable income of 7.4 percent by 2030.

Staying in the Single Market is by far the preferred option for the SNP. It said "being in the Single Market gives Scottish businesses unfettered access to a market of around 500 million consumers. The aim of the Single Market, put simply, is to make it as easy to trade between Edinburgh and Dusseldorf as it is between Edinburgh and Dundee. If the UK were to stay in the Single Market, Scotland's GDP will fall by 2.7 percent by 2030, or by about GBP4bn, compared to continued EU membership, and disposable incomes would fall by 1.4 percent.

"The analysis confirms that if we are to mitigate the impact of Brexit we must stay in the Single Market and Customs Union. If the UK were to remain in the Single Market, Scotland's GDP would be GBP8.7 billion higher than leaving the EU with no deal," the SNP said.

TAGS: tax | business | European Commission | value added tax (VAT) | financial services | United Kingdom | Canada | trade | European Union (EU) | services | Europe | Scotland

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