THE economic reality of Scotland leaving the EU will be “stark, catastrophic and unavoidable,” according to Professor Anton Muscatelli, the principal of Glasgow University.
Speaking last night, the economist warned that losing freedom of movement in Scotland would massively undermine the country’s tax base, hampering the ability of Holyrood to spend of vital services. He also said said it was essential those in public life did not shy away from talking about why Scotland desperately needed immigration.
Professor Muscatelli (below), who has been a consultant to the World Bank and the European Commission, and was a member of the Panel of Economic Advisers to the Secretary of State for Scotland from 1998 to 2000, chairs First Minister Nicola Sturgeon’s Standing Council on Europe.
He told a packed Bute Hall at the University of Glasgow : “There are three possible Brexit scenarios – the most negative of which is the cliff-edge Brexit, seeing the UK exit the EU without an agreement and reverting to WTO rules, which some estimates suggest could cost the UK economy as much as 9.4 per cent of GDP by 2030. If this is the route the UK is forced to take, the economic consequences would be stark, catastrophic and unavoidable.
“The UK Government’s idea of a Goldilocks Brexit would see a standalone free trade agreement and a new strategic partnership – but even this would still constitute as hard Brexit in economic terms, and it is difficult to see why the EU would agree to a bilateral system it has avoided in other situations.
“The other option is a European Single Market Brexit which has seemingly been ruled out – but could come back into play at least as a transitional measure.
“While this would involve serious political costs for the UK Government and entail a reinterpretation of their own red-lines – it may be the only way the Prime Minister can avoid the UK economy falling over the Brexit cliff-edge.”
On immigration, he warned that it was people coming to Scotland who were helping to stabilise the country’s demographic challenges. EU immigration, he said, had simply benefited Scotland.
“If we see a significant decline in the number of EU nationals in Scotland post-Brexit, this could impact severely on our tax base and limit the resources the Scottish Parliament has it its disposal,” said Muscatelli.
“We have often been told by anti-immigrant politicians that they simply want a ‘debate’ on migration – the facts are absolutely clear, and those of us who believe in the economic and social benefits of an open, welcoming society should not be shy about using them.”
There are around 2500 EU students at Glasgow University.
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