Scotland facing £3.7bn black hole from Brexit shocks

Bruno Cirelli
Agosto 22, 2017

Scotland must start setting emergency funds aside to cope with the economic "shocks" likely to be caused by the UK's departure from the European Union, financial experts have warned.

Scotland's First Minister will meet her Welsh counterpart in Edinburgh to discuss their opposition to the Brexit Repeal Bill.

In a submission to the Holyrood Finance Committee's inquiry into the Brexit impact on Scotland's public finances, CIPFA urges the Scottish Government to begin planning now to mitigate as best it can the Brexit blows in prospect.

The experts cite research suggesting that Scottish GDP could be reduced by up to £11.2 billion by 2030, with a reduction in tax revenues of between £1.7bn and £3.7bn annually.

The talks will be the latest in a series held between senior Scottish and Welsh government figures in recent weeks as the two administrations join forces in an attempt to secure a greater say.

The group, one of the UK's leading professional accountancy bodies, also highlights a number of Brexit-related factors that are likely to have an impact on Scotland's public services. "Scottish public spending is significantly vulnerable to the impacts of Brexit", said CIPFA Scotland head Don Peebles.

"A new funding mechanism for farmers requires to be identified before 2020", the CIPFA paper warns.

"As it is likely that numerous fiscal risks predicted will be realised in future years, the Scottish Government must begin to budget for Brexit so that it will be in the best position to sustain any financial shocks".

Finance Secretary Derek Mackay said: "This report further highlights the danger posed by the United Kingdom government's extreme Brexit plans, which threaten jobs, investment and living standards".

In July, a report from a committee of lawmakers in Britain's upper house said Brexit was a fundamental challenge to the future of the United Kingdom, and called on the government to set aside party politics and adjust its Brexit approach.

"As it stands, it is inconceivable that we would recommend that the Scottish parliament gives its consent to the legislation", Sturgeon said in a statement.

The European Union (Withdrawal) Bill is created to transpose EU law into British law so the same rules apply on the day of Brexit as the day before and involves EU responsibilities in devolved areas being initially transferred to Westminster.

The UK government said this will allow common frameworks to be put in place where necessary before further devolution, but the Scottish and Welsh governments believe it is a "power grab".

Ahead of their meeting on Tuesday, Sturgeon said: "Both during and after the European Union referendum, new powers were promised to Holyrood but instead the UK Government is planning to impose new restrictions on the Scottish Parliament".

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