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Independence from the UK would cost Scotland’s economy two to three times as much in lost trade than Brexit will, according to the London School of Economics (LSE).

The report from a team of academics at the LSE’s Centre for Economic Performance also argued that Scotland rejoining the EU would make little difference.

The study comes as the Scottish National Party (SNP) said it would push ahead with a referendum if it wins a majority at the Scottish Parliament at the election scheduled for 6 May.

The research will step up the pressure on the SNP to set out a case for separation that takes account of the UK’s departure from the EU.

The LSE report stated that Brexit will cut Scotland’s long-term per capita income by 2%, but independence would cut income by a further 4.5 to 6.7%, even if an independent Scotland stayed in a ‘common market’ with the remainder of the UK.

However, the report’s authors said that these are likely to be underestimates as productivity would be affected.

Report co-author Hanwei Huang, assistant professor at Hong Kong’s City University, said: “This analysis shows that, at least from a trade perspective, independence would leave Scotland considerably poorer than staying in the UK.”

Huang, along with co-authors Thomas Sampson and Patrick Schneider, said that the effects of Brexit would be clear after 10 to 15 years – but gauging the effects of Scottish independence could take longer.

The report said: “Adjustment to Scottish independence 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.”

Sampson added: “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.”

But Scottish Economy Secretary Fiona Hyslop responded that an independent Scotland could run a successful economy, citing as examples Denmark and Norway, whose GDP per capita was higher than the UK.

She said: “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 an independent Scotland to do things better and boost 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.”



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Post Author: EDONS