THE Scottish Government has rejected the findings of an academic report that claimed independence would hit the Scottish economy harder than Brexit.

Researchers from the London School of Economics (LSE) said the country would lose between £2000 and £2800 per person by leaving the EU and the UK.

However, Economy Secretary Fiona Hyslop said the researchers had not considered other effects of independence, such as changes in investment flows, fiscal arrangements or Scotland’s currency.

In their report, the academics, based in the LSE’s Centre for Economic Performance said the losses from independence would be similar even if a newly independent Scotland was to rejoin the EU.

They estimated Brexit and independence would reduce long-run Scottish income per capita by around 6.5% in an optimistic scenario and 8.7% in a pessimistic scenario.

The LSE academics said that as the rest of the UK accounts for more than 60% of Scotland’s imports and exports, they noted, the impact of any trade barriers would be far greater than those between Scotland and the EU.

The rest of the UK would be likely to remain Scotland’s largest trading partner for decades after independence, they said, meaning that rejoining the EU would only become attractive if independence damaged trade south of the border to a sufficient degree.

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Authors Hanwei Huang, Thomas Sampson and Patrick Schneider said the economic impact of Brexit would become clear after 10 to 15 years, but the economic impact of Scottish independence could take even longer to gauge.

Their report said: “Adjustment to Scottish independence is likely to be even slower and may take a generation or more, as border costs gradually increase due to divergence between economic policy and regulations in the two countries and the erosion of existing cultural, social and business ties.

“This slow adjustment means that in the initial decades after independence the rest of the UK will continue to be Scotland’s most important trade partner.

“Consequently, even if in the long run there is an economic case for an independent Scotland to rejoin the EU, we conclude that Scotland’s medium-run priority following independence should be keeping border costs with the rest of the UK as low as possible.”

Huang said: “This analysis shows that, at least from a trade perspective, independence would leave Scotland considerably poorer than staying in the United Kingdom.

“While many considerations will play a role in shaping the outcome of a second referendum, voters need to know what the likely costs and benefits of each course will be.”

Sampson said: “We find that the costs of independence to the Scottish economy are likely to be two to three times greater than the costs of Brexit.

“Moreover, rejoining the EU following independence would do little to mitigate these costs, and in the short run would probably lead to greater economic losses than maintaining a common economic market with the rest of the UK.”

Hyslop said: “As an independent member of the EU, free from the damage of Brexit, Scotland would be part of the huge single market which is seven times the size of the UK.

“There is no reason whatsoever that Scotland could not emulate the success of independent countries of our size which are far wealthier per head than the UK.

“Denmark’s GDP per head is around 20% higher than the UK’s and Norway’s is nearly 40% higher.

“In the real world, through membership of the EU, independent Ireland has dramatically reduced its trade dependence on the UK, diversifying into Europe and in the process its national income per head has overtaken the UK’s.”

She continued: “The study is also clear that it takes no account of any changes in migration policy, inward investment or any economic levers the Scottish Government would have control of in an independent Scotland to do things better and boost the economy.

“With our economic resources and advantages, control of economic policy and membership of the EU, Scotland would be very well placed to grow the economy.

“It is still too early to calculate the long-term damage that Brexit will do to Scotland’s economy, but the disruption it is already causing is deeply concerning.”