BREXIT has shown the UK can no longer be trusted as a financial “safe harbour”, Nicola Sturgeon said yesterday, as she warned Scotland would be billions of pounds worse off outside the EU and dropped fresh hints about a second independence referendum.
Repeating her belief that a second referendum was “highly likely” because of June’s vote, the First Minister said: “Those who have previously argued that the UK somehow gives financial security and certainty to Scotland - that argument is bust, frankly.
"We know that Brexit, if we don't find a way of protecting our relationship with EU and particularly our membership of the single market, will deliver a significant hit to our economy and our public finances and that is the reality."
Opposition parties accused her of using Brexit to distract from today’s publication of the 2015-16 Government Expenditure and Revenue in Scotland (GERS) figures, expected to show a deficit of more than £15bn.
Ms Sturgeon instructed her officials to begin work on legislation for a second referendum within hours of the UK voting 52-48 to leave the EU and Scots voting 62-38 to remain.
Asked about its progress, she said the legislation was “underway and progressing” and promised more details in her annual Programme For Government statement in a fortnight.
However she is not expected to introduce a bill at this stage.
She also said she would appoint a new dedicated Brexit minister to work with Westminster before the Article 50 withdrawal process is triggered process and in ensuing negotiations.
The post is likely to go to an existing member of her cabinet in a mini-reshuffle.
Ms Sturgeon was speaking after the Scottish Government issued a report on the impact of Brexit on GDP and taxes based on projections from the Treasury and economic think tanks.
In the worst case scenario, Scottish GDP would be £11.2bn or 7.9 per cent a year lower than it would be without Brexit by 2030, and tax revenues could be £3.7bn or 13 per cent down.
The most benign scenario was for the UK to become a member of the European Economic Area, like Iceland or Norway, retaining access to the single market while contributing to the EU budget and bound by, but no longer influencing, EU regulations.
Bilateral trade agreements, such as those struck by Canada and Switzerland, were seen as worse, with the direst outcome a “hard Brexit” in which the UK was forced back onto World Trade Organisation rules and UK exports attracted EU tariffs.
The report, the first in a series planned by the SNP government on Brexit, concluded every alternative would mean lower economic growth than “full EU membership”.
Ms Sturgeon said: "The old argument that the UK somehow offers financial security for Scotland no longer holds water. Brexit will be deeply damaging to Scotland's economy and to our finances. I said the morning after the referendum that we would pursue all options, including the option of independence to achieve this, and that remains the case.
"If it turns out not to be possible to protect Scotland's interest through the UK, it must be open to the Scottish people to consider afresh, and in this very different context, the question of independence. However, I am very clear that we will enter these UK discussions in good faith."
She said the “deafening silence” from Prime Minister Theresa May and Chancellor Philip Hammond on Brexit was “increasingly negligent”.
Scottish Tory leader Ruth Davidson said the SNP was preparing another "constitutional war with Westminster" to deflect from the "underlying fragility" of Scotland's economy.
She said: “People didn't vote for a Government so it could work up ways to reheat an independence referendum whose result it promised to respect. Nor to suddenly declare a political union in Brussels as sacrosanct in order to trash a union here."
Scottish Labour Leader Kezia Dugdale said: "The publication of GERS figures will make clear the benefit Scotland gets from the pooling and sharing of resources across the UK."
“It is completely and utterly misleading to suggest otherwise."
Scottish LibDem leader Willie Rennie said: “Instead of offering bogus solutions to the Brexit chaos the First Minister should solve the problems of poor mental health services, a faltering education system and a police service under real strain,” adding Ms Davidson had “a brass neck to talk about Brexit without apologising for the chaos that her party has inflicted”.
Alastair Cameron, director of Scotland in Union, added: "By rushing out these speculative Brexit figures in a cynical attempt to muddy the waters ahead of GERS, Nicola Sturgeon has all but admitted she has no answers to the economic questions about independence."
Grant Allan, deputy director of Glasgow University's Fraser of Allander Institute, said there was "little that is new" in the Scottish Government analysis.
A UK Government spokeswoman said: "The analysis warns of short-term economic uncertainty. But the real uncertainty for Scotland's economy is being caused by Nicola Sturgeon's talk of a second independence referendum."
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules hereLast Updated:
Report this comment Cancel