If you thought the Brexit vote marked the end of ‘Project Fear’, you’ll be saddened to know it’s back. This time it takes the form of a warning from Nicola Sturgeon about what leaving the EU might cost Scotland. The Scottish Government report into the ‘economic risk’ to the country of Brexit, on which Sturgeon’s prediction is based, doesn’t appear to be worth the paper its written on however. It puts the bill as between £1.7bn and £11.2bn – a range so huge as to render it virtually meaningless.
The report also suggests a similar, although thankfully, slightly smaller chasm in possible tax revenue, this time between £1.7bn and £3.7bn down after Brexit. It’s difficult to know where to start in picking the report to pieces: but that’s precisely the point of this sequel to Project Fear. Nicola Sturgeon said in the wake of the referendum that Scotland was being dragged, kicking and screaming, out of the EU ‘against our will’ (despite nearly four in ten Scots voting for ‘Leave’). And she is using today’s report to try and extend that narrative; the maths which contribute to the report is by-the-by, it’s the headline announcement that matters. Here’s how she greeted the report today:
‘It is simply unacceptable that Scotland faces the prospect risk being dragged out of the EU against its will, and today’s paper shows the possibly massive costs that would entail, with all the wider repercussions that would be likely to ensue in terms of jobs, investment and long-term prosperity.’
Sturgeon might not like the comparison, but it’s certain George Osborne would be proud of a document like this. Firstly, the analysis attempts the impossible task of gazing way, way ahead into the future – as far away as 2030. As anyone who has followed the various travails of economists over the last few years (not least in the run-up to the referendum), predicting weeks into the future is difficult enough; the less said about trying to work out how the economy will be shaping up in more than 13 years’ time, the better.
The report borrows from Osborne’s Project Fear in more ways than that though. The former Chancellor tried to spook Brits in the run-up to the referendum by arguing Brexit would cost each family £4,300. Osborne compared his concoted figures for 2030 with the population figures from today – ignoring the fact the number of people in the UK is almost certain to rise considerably over the next few years. And the Scottish Government report – in suggesting Brexit could cost Scots anything between £2,100 and £300 each in the most favourable Brexit scenario (i.e. staying in the EEA) – does the same. So, whilst the economic prediction attempts to map out a picture of what will happen more than a decade in the future, the population estimate on which the breakdown cost is based are from last year – an almost exact replica of the model used in the widely discredited Treasury analysis published in the run-up to the referendum.
But it’s not only maths where the document falls down. The report is even politically loaded in the way its written. Instead of referring to the referendum outcome as a democratic decision, its painted alternatively as ‘the UK Government’s intention of taking the UK out of the EU (which) could.. have implications for Scotland’s future economic performance’. Forget the fact that 17million people in the UK backed Brexit, leaving the EU is just the fault of the Government, the document suggests.
If you just read this report, you’d also be forgiven for thinking the EU is the only market for Scottish goods. In reality, the UK remains the most likely destination for goods made in Scotland. As Alex Massie pointed out in his blog last month, access to the UK’s single market is much more important to Scotland than access to the EU’s.
As a different, more sober-than-today’s, report from the Scottish Government in 2014 also pointed out, rest of UK exports account for 64 per cent of all exports from Scotland, compared to around 40 per cent to the EU. And for the service sector, the UK remains much more crucial as a market than the EU does (accounting for £27bn worth of business, compared to £10.5bn internationally). Perhaps that’s why, last week, hotel giant Hilton said Brexit would have no impact at all on Scottish investment. But you won’t read any of that in today’s report. Instead this document is all about painting a one-sided and biased version of the doom and gloom facing Scotland after Brexit to try and give Sturgeon ammunition in her campaign. This is Project Fear, plain and simple. And it’s a sorry sight to witness it carrying on even after the referendum.
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