Leaving the European Union without a deal will have a “catastrophic” impact on the Scottish economy, with measures to mitigate a hard Brexit not fully funded by the UK Government, Holyrood’s Finance Secretary said.
Derek Mackay warned that in these circumstances, there would have to be “choices in government” which could result in spending cuts.
While he said the Scottish Government has allocated cash it received from Westminster to help mitigate the impact of the UK leaving the EU, Mr Mackay added: “The information I have to date is the cost of Brexit, both to the Scottish Government and our agencies, to execute our no-deal plan will not be covered by the UK Government.
READ MORE: Boris Johnson speech to deliver no delay message to EU at Tory Conference
“So it will mean choices within Government as to how far we can go in terms of our contingency plans or what else is re-prioritised, or indeed cut, to be able to pay to help mitigate the impact of that no-deal Brexit – which feels more likely, maybe more likely than ever, as a consequence of the Prime Minister and the UK Government’s handling of the situation.
“So it will have a catastrophic effect on our economy and have a negative impact on the fiscal position of Scotland as well.”
Addressing Holyrood’s Finance Committee on Wednesday about the economic uncertainty the country is facing as a result of Brexit, Mr Mackay said: “I don’t know when the UK Budget is going to be.
READ MORE: Alister Jack suggests creation of Union Day bank holiday
“I don’t know if the UK Government knows when the UK Budget is going to be, I don’t think they fully know the content of that.
“I’ve seen rhetoric in the public realm about the Chancellor (Sajid Javid) talking about having an economic response (to a no-deal Brexit).
“I can only envisage that what he means by that is he understands the economic consensus is that if there’s a no-deal Brexit, we will be entering a recession.
“There will be business failure, there will be soaring unemployment, communities and the most disadvantaged in communities will be affected.
“There will be impacts of course on transport and supply and demand. And that contraction in the economy, I think, will be severe, and exports will be affected.
“All of that, in itself of course, is a negative economic consequence and would feed into the fiscal decisions that the UK Government and the Scottish Government would have to make.”
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