We have to stay in the single market to protect our trade with the world, because our UK trade is very vulnerable with Brexit
It is remarkably simple, really. The choice Scotland faces is this: should we stay with the UK and see 100% of our trade negatively affected, or should we stay with the EU or EFTA and only see 60% of our trade affected?
If we accept the official figures, then then there are two portions of our trade with other countries. One goes to the rest of the UK. The other goes to the EU and the rest of the world.
With the epic shambles that Brexit is showing itself to be, we can be certain that the tariffs and non-tariff barriers that the UK is going to face will lead to a dramatic contraction of the UK’s economy. The Treasury has put that contraction at 7.5% of the UK’s GDP in a leaked report.The UK’s GDP in 2016 is estimated to be £2,249 billion. 7.5% of that is £168bn.
Scotland’s GDP was £189.8 billion in 2015. The damage done by Brexit is almost the entire GDP of Scotland. A 7.5% drop in GDP is worse than the financial crisis crunch in 2008 when, over 5 quarters, UK GDP dropped “only” 5.6%. The Brexit crunch will be worse than that, a lot worse, if the Treasury report comes true.
Sceptics might argue that the dire predictions before Brexit haven’t come true, so this is just “fearmongering”. But the really damaging parts of Brexit — the non-tariff trade barriers — haven’t kicked in yet. Under the surface, things are already going badly wrong in the economy. University ecosystems are falling apart. I say ecosystem because university research is an ecosystem rather than individual companies. EU nationals are repatriating to the continent. We’re heading into a vicious circle. And this is the situation Scotland will find itself in — shackled to the UK.
So, in that situation, the trade with the rest of the UK is looking very vulnerable, and when Brexit really kicks in, that trade will contract. By how much I don’t know, but probably by quite a lot. So, the “we trade 60% with the rUK” rhetoric is deeply dangerous because it asks us to focus on it without thinking about the state of the other 40%, the trade with the EU and the non-EU.
If our main trading partner is heading to the sewage drain, then it is completely irresponsible to dive in and follow the rUK down into it. Because not only will we lose the rUK trade, we’ll also lose the EU and non-EU trade. Our best option is to stay with the EU or EFTA and protect the 40% trade we have with them. That pot is far, far more secure than the 60% trade we have with the rUK.