EU referendum: 150 days on

Despite voting overwhelmingly to remain in the EU, Scotland now faces the prospect of a hard Brexit, which would see us taken out of the single market. 

While it’s become apparent that the UK government has no plan, and are completely unable or unwilling to set out what Brexit means, others have. Here’s what they have to say.

• The Institute for Fiscal Studies (IFS) estimated that, by 2019-20, there will be a £25 billion black hole in the UK’s finances as a result of the economic impact of Brexit. 

  The IPPR calculated that, based on the black hole identified by the IFS, Scotland could face further budget cuts of up to £1.3 billion a year – if Philip Hammond chooses to tackle the Brexit hole in public finances through spending reductions.

• Analysis published by the Scottish Government shows the potential cost of leaving the EU to the Scottish economy as a whole is up to £11.2 billion per year by 2030.

• Evidence submitted to the Scottish Parliament’s Economy Committee by 4-consulting concluded that EU workers currently contribute £7.3 billion to Scotland’s economy.

• A recent report by NIESR economic think-tank, says UK exports from the services sector could be cut by up to 60 per cent. For Scotland this would be equivalent to a £2.3 billion hit.

• The independent Fraser of Allander Institute forecast that Brexit could cost Scotland up to 80,000 jobs within a decade.

• The OECD found that Brexit will harm direct investment in the UK. They say: “if access to the single market was lost, lower FDI inflows would seem unavoidable, reducing the inflows of new ideas and knowledge into the UK. This would weaken fixed investment, reduce export capacity and hit innovation and productivity (technical progress) over time.”

• A business survey carried out by YouGov and the Centre for Economic and Business research found that nearly half of large companies had cancelled investment plans since July, with more than £65bn of investment abandoned since the EU referendum

• The British Retail Consortium, the organisation that represents UK shops, has said that a hard Brexit could lead to higher prices on food and clothes.

• The Bank of England expects a sharp rise in inflation next year due to the falling value of the pound pushing up import costs and driving up prices.

• Trade experts have warned that there has been a lack of action in recruiting negotiators ahead of important talks with the EU.

• Credit ratings agency Standard & Poors stripped the UK of its top AAA rating, and has warned of further downgrade in the future.

• Credit agency Moody’s too said that the UK’s credit rating is at risk of downgrade if there is a loss of single market access that weakened growth.

• Analysis by PwC found that the impact on the financial services sector would be negative, reducing the sector’s output in both the medium and longer term. In Scotland, the financial services sector employed around 86,300 people in Scotland in 2014.
  

• NIESR estimated that Brexit could lead to a cut in disposable incomes as early as 2017.

• The Japanese government produced a fifteen-page dossier that sets out in detail the potential implications of leaving the single market: a loss of company headquarters; a hit to exports; turmoil in labour markets; damage to financial services, and cuts to research and development investment.

• Australia’s trade minister told the UK that there will be no free-trade deal with the UK until Brexit is settled. He also said a trade deal with the EU would be placed first – ahead of a deal with the UK.

• The EU Trade Commissioner said there would be no trade talks with the UK until Brexit is complete.

• Figures from the UK government spending watchdog, the Office of Budget Responsibility, are expected reveal a £100 billion black hole in UK public finances due to Brexit.

• The German Finance Minister warned that the UK could still have to make financial contributions to the EU after Brexit and that the financial services sector would lose access to the single market.

• A leaked memo said that Whitehall is working on over 500 Brexit-related projects and could need 30,000 extra staff. The document also confirmed that the UK Government had no plan for Brexit and that it was mired in chaos and confusion over the issue – and still has no plan, five months on.

• A report by the Institute for Government think-tank stated that the UK government does not have “the capacity to deliver Brexit on top of everything else to which it is already committed.” The report also states that the  government’s approach to Brexit has been “chaotic and dysfunctional” and attacked Theresa May’s “secretive approach”.